2002 (2) TMI 7
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.... the appellant set out the details of the matters in dispute in the said appeals requesting the Department to indicate or compute the tax arrears as per the Kar Vivad Samadhan Scheme, 1998 (for short "the KVSS") so that all disputes in relation to these three assessment years can be resolved. As there was no response from the Department till January 30, 1999, the appellant submitted three separate declarations under sections 88 and 89 of the Kar Vivad Samadhan Scheme. The appellant had also pointed out the mandatory nature of section 245 of the Act and the decision of the Allahabad High Court in the case of U.P. State Mineral Development Corporation Ltd. v. Addl. CIT which held that refunds adjusted without notice to the assessee is not val....
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....t of the entire amount demanded by respondent No. 1 as per the Kar Vivad Samadhan Scheme for these assessment years a communication was addressed on behalf of the appellant dated March 22, 1999, for issue of certificate under section 90(2) of the Kar Vivad Samadhan Scheme and for the deemed withdrawal of the appeals filed on behalf of the appellant for these three years which were pending adjudication. Respondent No. 1 issued a certificate in Form 3 as required under rule 5(a) and section 90(2) of the Kar Vivad Samadhan Scheme on March 31, 1999, in favour of the appellant certifying the receipt of payments from the appellant towards full and final settlement of the tax arrears determined in the order dated February 26, 1999, and granting im....
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....e the Commissioner when the matter is taken up for further consideration and it would be proper for the Commissioner to decide the question as to whether he has jurisdiction under the second proviso to section 90(1) of the Kar Vivad Samadhan Scheme to act in the manner as proposed by the Commissioner in the impugned notice. The High Court did not express any opinion on the facts of the case and disposed of the writ petition. Hence this appeal by special leave. The Kar Vivad Samadhan Scheme was introduced by the Central Government with a view to collect revenues through direct and indirect taxes by avoiding litigation. In fact the Finance Minister while explaining the object of the Kar Vivad Samadhan Scheme stated as follows : "Litigation....
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....f the Kar Vivad Samadhan Scheme, another certificate is issued under section 91 of the Kar Vivad Samadhan Scheme on the basis of which immunity is granted to the declarant from instituting any proceeding, for prosecution for any offence under any direct tax enactment or indirect tax enactment. The basis upon which the notice dated June 23, 2000, impugned in these proceedings is as under: "As noticed in order under section 90(1) dated February 26, 1999, the tax arrears have been determined on disputed income for the assessment years 1988-89, 1989-90 and 1991-92 without considering the collections already adjusted against demands raised. The adjustments already made should have been taken into account when calculating the tax arrears. As s....
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....e, except on the ground of false declaration by any declarant. Therefore, before issue of a notice, there should be satisfaction that the declarant has made a false declaration. There is no such allegation in the course of the notice issued. All that is stated is that "adjustments already made should have been taken into account when calculating the tax arrears. As such there is a mistake in calculation, which needs rectification". The whole basis of the notice is only that adjustments already made had not been taken note of. If this is the basis of the issuance of the notice and not the false declaration and that information was available with the Department even at the time of the finalisation of the proceedings under section 90 of the Ka....
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....nnexure B)." The appellant in the course of the declarations filed specifically stated that any adjustment of refunds towards tax arrears of the appellant by the Department in the earlier years without following the mandatory procedure of section 245 of the Act would still remain as tax arrears for the purpose of Kar Vivad Samadhan Scheme and it is on that basis the declarations were accepted by the Department. Having accepted the claim of the appellant on that basis, it will not be permissible for the respondents now to turn around and take a different stand. Even assuming that the authorities under the Kar Vivad Samadhan Scheme have inherent powers to correct an error of clerical or arithmetical nature, the same should be so obvious, ....