AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (4) TMI 822
X X X X Extracts X X X X
X X X X Extracts X X X X
....s clearing of the arrears in its entirety for all assessment years. The issue that arises for consideration is whether under the said scheme, can an appeal filed by the Revenue, relating to one assessment year and pending consideration before Tribunal be included for settlement, if the assessee does not opt for that to be settled. 2. Appellant opted for the benefit of the Scheme for the assessment year 2014-15. Though appellant expressed its willingness to settle the entire arrears, as contemplated under the Scheme, for the assessment year 2014-15, the 1st respondent directed the appellant to settle the alleged arrears in respect of the assessment year 2012-13 also. Appellant expressed its disinterestedness to settle the alleged arrears fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e included for settlement under the Scheme terming an amount as arrears of tax. 5. We have heard Adv.Santhosh P. Abraham on behalf of the appellant as well as Adv.Mohammed Rafiq, learned Senior Government Pleader on behalf of the respondents. 6. The Scheme introduced through section 10 of the Kerala Finance Act, 2020 is intended as a beneficial scheme for settlement of arrears of tax or other amounts due under the Kerala Value Added Tax Act, 2003 and under the Central Sales Tax Act, 1956. For easier reference section 10 of the Kerala Finance Act, 2020 dealing with the Scheme is extracted as below: "10. Special provision for Reduction of arrears in certain cases.-(1) Notwithstanding anything contained in sub-section (1) of section 174 of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of 1968) reduction of arrears under subsection (1) shall be applicable to those cases in which revenue recovery proceedings have been initiated and the assessing authorities shall have the power to collect such amounts on settlement under sub-section (1) and where the amount is settled under subsection (1) the assessing authorities shall withdraw the revenue recovery proceedings against such assessee which will then be binding on the revenue authorities and such assessee shall not be liable for payment of any collection charges. (3) The assessee shall withdraw all the cases pending before any appellate or revisional authority, tribunal or courts for opting for settling the arrears under this section and shall file a declaration to this e....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (8) Notwithstanding anything contained in section 91 of the former Act, if an assessee who opts to settle his arrears under sub-section (1) has remitted or deposited any amount relating to the arrears after the service of demand notice, including the tax paid under clause (a) of sub-section (1) of section 74, of the former Act such amount shall be given credit as tax before reckoning the arrears to be settled under sub-section (6) and the assessee shall furnish the proof of payments made in this regard: Provided that any amount paid towards penalty or its interest shall not be given credit. (9) Notwithstanding anything contained in this Act, or in any judgment, decree or order of any court, tribunal or appellate authority, there shal....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under section 10 and retained by him." 7. A perusal of the above provisions will reveal that the scope, purport and intent of the Scheme is to settle the entire arrears of tax. It is intended to effectuate recovery of the entire amount of tax in arrears by giving certain reductions or waivers. The conditions stipulated for availing the benefit under the Scheme have to be strictly complied with. It is a complete code in itself and is exhaustive of the matters dealt with. A few of the highlights of the Scheme propounded by the Government in 2020 are hundred percent waiver of interest and penalties, 60% waiver of the balance tax arrears if the outstanding dues are paid in a lump sum and 50% waiver of the balance tax arrears, if outstanding ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t is owed and has not been paid at the right time. 10. In cases where dispute arises whether tax is in arrears or not, the same can be determined only through assessment orders. Tax falls in arrears only after an assessment order and consequent demand is made. When the assessment order is set aside in appeal and consequential orders have not been passed by the assessing officers determining tax as due, no amount of tax can be said to be in arrears. 11. In the absence of any alleged amount coming within the scope of the words "arrears of tax', as per the scheme, the authorities cannot compel settlement of the same, unless such settlement is at the volition of the assessee himself. Sub-clause (4) and (6) of section 10 of the Act also re....