TMI Blog2010 (9) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... nding litigation is not permissible - order of the Designating Authority rejecting declaration is quashed and set aside. - 8 OF 1999 - - - Dated:- 29-9-2010 - CORAM : V.C. DAGA AND R.M. SAVANT, JJ. Ms.Anjali Chandurkar with Ms.Akanksha Thakkar i/b. Purnanand Co. for the petitioners. P.S. Jetly for the respondents. JUDGMENT : (Per V.C.Daga, J.) 1. Perused petition. Heard learned counsel for the petitioners and learned counsel for the respondents. 2. The petitioners have filed this petition to challenge the order/communication dated 2nd December, 1998, whereby and whereunder the declaration filed by the petitioners pursuant to the notice issued under section 72 of the Customs Act, 1962 ("Act" for short) was rejected by the Commissioner of Customs (Adjudication) and Designated Authority, Kar Vivad Scheme, 1998 holding that the declaration filed travels beyond the scope of the Kar Vivad Samadhan Scheme, 1998. The Facts : 3. The petitioner-company is in the business of manufacturing chemical and pharmaceutical machineries, and in the normal course of business it sought to import hot rolled SS Plates. Specification 904L 2 REIO from Sweden. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Commissioner (Appeals) and the first petitioner is otherwise not debarred under section 95 of the KVS Scheme, as such the petitioners are entitled to take advantage of the KVS Scheme. 6. Learned counsel for the petitioners submits that the respondent No.2 found that the declaration filed by the petitioners was complete in all respect. He, however, rejected the declaration only on the ground that no dispute existed between the petitioners and the department since the notice of demand was issued under section 72 of the Act which the petitioners were bound to pay, as such declaration was not covered under the KVS Scheme. Learned counsel submits that once the petitioners have complied with all the prerequisites and filed declaration under section 90(1), which is complete in all respects, then the respondent No.2 is duty bound to determine the tax payable by the petitioners and not required to go into the merits of the case. She further submits that the impugned order passed by the respondent No.2 rejecting declaration filed by the petitioners is based on the extraneous reasons not covered under the KVS Scheme and is liable to be set aside in exercise of writ jurisdiction of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme : 11. Section 86 specifies that the Scheme may be called the Kar Vivad Samadhan, 1998. It shall come into force on the first day of September, 1998. Section 87 defines a few terms unless the context otherwise requires. The relevant ones are : "(f) "disputed tax" means the total tax determined and payable, in respect of an assessment year under any direct tax enactment but which remains unpaid as on the date of making the declaration under section 88; xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx (m) "tax arrears" means, (i) in relation to direct tax ..... (ii) in relation to indirect tax enactment, _ (a) the amount of duties (including drawback of duty, credit of duty or any amount presenting duty), cesses, interest, fine or penalty determined as due or payable under that enactment as on the 31st day of March, 1998 but remaining unpaid as on the date of making a declaration under section 88; or (b) the the amount of duties (including drawback of duty, credit of duty or any amount representing duty), cesses, interest, fine or penalty which constitutes the subject matter of a demand notice or a showcause notice issued on or before the 31st day of March, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed to the declarant setting forth therein the particulars of the tax arrear and the sum payable after such determination towards full and final settlement of tax arrears : Provided that where any material particular furnished in the declaration is found to be false, by the designated authority at any stage, it shall be presumed as if the declaration was never made and all the consequences under the direct tax enactment or indirect tax enactment under which the proceedings against the declarant are or were pending shall be deemed to have been revived : Provided further that the designated authority may amend the certificate for reasons to be recorded in writing. (2) The declarant shall pay, the sum determined by the designated authority within thirty days of the passing of an order by the designated authority and intimate the fact of such payment of the designated authority along with proof thereof and the designated authority shall thereupon issue the certificate to the declarant. (3) Every order passed under subsection (1), determining the sum payable under this Scheme, shall be conclusive as to the matters stated therein and no matter covered by such order shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme is required to file a declaration in the prescribed form before the designated authority notified for this purpose. The designated authority shall pass an order within sixty days of the declaration determining the amount payable in accordance with the provisions of the Scheme and grant a certificate indicating the particulars of tax arrears and the sum payable and intimate the same to the declarant. The declarant will pay the sum payable as determined by designated authority within thirty days of the passing of such order. The order passed by the designated authority shall be conclusive and shall not be reopened in any other proceedings or under any law for the time being in force. Where the declarant has filed an appeal or reference before any Authority, Tribunal or Court, notwithstanding anything contained in any other provision of law for the time being in force, such appeal, reference or reply shall be deemed to have been withdrawn. Where writ petitions have been filed before the High Court or Supreme Court the declarant shall move an application for withdrawing such petitions and furnish the proof of the same Along with the intimation. Any amount paid in pursuance of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l well within the definition of tax arrears in relation to the indirect tax enactment, the petitioners have placed reliance on section 72 of the Act which provides that in any of the cases falling under clauses (a) to (d) of subsection (1) thereof, the proper officer may demand, and the owner of such goods shall forthwith pay, the full amount of duty chargeable on account of such goods together with all penalties, rent, interest and other charges payable in respect of such goods. Thus, section 72(1) contemplates payment of full amount of duty along with penalty and interest and other charges which are well within the sweep of the definition of tax arrears in relation to indirect tax enactment. In the circumstances, in our considered view, no sub-classification can be made in respect of the class of litigating assessees in arrears with reference to the assessment of duty arising out goods warehoused. Once the liability to pay duty is incurred and determined on or before 31st March, 1998, the assessee would be treated to be in tax arrears irrespective of the nature of the duty demanded. All the litigating assessees who are in tax arrears belong to one class. Any attempt to carve out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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