Deemed withdrawal under the Kar Vivad Samadhan Scheme applies only after payment and issue of the statutory certificate.

An appeal under the Kar Vivad Samadhan Scheme cannot be treated as deemed withdrawn under Section 90(4) unless the declarant first pays the amount determined under Section 90(2) within the prescribed time and the designated authority issues the statutory certificate. The deeming fiction of withdrawal operates only after these mandatory conditions are satisfied. In the absence of payment and issuance of the certificate, deemed withdrawal is not attracted, and the appeal must be heard on merits by the appellate authority.

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Issues: Whether the appeal filed by the assessee could be treated as deemed withdrawn under Section 90(4) of the Finance Act, 1998 in the absence of payment of the amount determined under the Kar Vivad Samadhan Scheme and issuance of the requisite certificate under Section 90(2) of the Finance Act, 1998.

Analysis: Section 90(4) provides for deemed withdrawal of an appeal where the declarant has filed an appeal and the conditions of the scheme are satisfied. Under Section 90(2), the declarant is required to pay the sum determined by the designated authority within the stipulated time and intimate proof of such payment, whereupon the designated authority issues the certificate. The deeming fiction of withdrawal operates only after compliance with the payment requirement and issuance of the certificate. Since payment had not been made and the certificate had not been issued, the appeal could not be treated as withdrawn.

Conclusion: The finding of deemed withdrawal was unsustainable and the matter was required to be heard on merits by the Commissioner (Appeals).

Ratio Decidendi: An appeal under the Kar Vivad Samadhan Scheme cannot be deemed withdrawn unless the declarant has paid the determined amount and the designated authority has issued the statutory certificate.

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