LexSHATRUSAILYA DIGVIJAYSINGH JADEJA versus COMMISSIONER OF INCOME TAX, RAJKOT
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SHATRUSAIL YA DIGVIJA YSINGH JADEJA A v. COMMISSIONER OF INCOME TAX, RA.IKOT SEPTEMBER l, 2005 [B.P. SINGH AND S.H. KAPADIA, JJ.] B Kar Vivad Samadhan Scheme, 1998-Section 90, 87 & 88-Dec!arations > filed by assessee under the 1998 scheme rejected-He filed writ petition before High Court which holding the declarations to be competent, directed the Designated Authority (DA) to determine amount payable under S. 90 as c also interest payable thereon-Additional direction for payment of interest- - Challenge to-Held: High Court erred in directing the assessee to pay interest, particularly when the department had wrongly rejected the declarations filed under S. 88-DA had to determine the amount payable and for that purpose, had to determine the tax arrears as well as the disputed amount as D defined undr S. 87(j}-Till completion of such exercise, assessee could not have paid tax, hence was not liable to pay interest as his liability accrued only after ascertainment of the amount payable under S. 90. Appellant-assessee filed writ petition in High Court against rejection E of the declaration made by it under the Kar Vivad Samadhan Scheme, 1998. The High Court held the declaration to be competent and directed the Designated Authority (DA) to determine the amount payable under S. 90 of the Scheme. However it gave an additional direction making the appellant liable to pay interest on the amount payable under S. 90. F -.. The question which arose for consideration in the present appeals is whether the additional direction given by the High Court was illegal and without authority of law. Allowing the appeals, the Court G HELD: The Finance (No. 2) Act, 1998 introduced a Scheme called Kar Vivad Samadhan Scheme 1998. It was recovery scheme. Under the Scheme, the tax arrear had to be outstanding as on 31.3.1998. Under Section 87(f), "disputed tax" was defined to mean total tax determined and •L payable under the IT Act/Wealth Tax Act in respect ofan assessment year H 1115 1116 SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R. A but which remained unpaid as on the date of making of the declaration from which TDS, self-assessed tax, advanced tax paid, if any, had to be deducted under Section 90; the DA had to determine the amount payable and for that purpose, he had to determine the tax arrear as well as the disputed amount as defined under Section 87(1). Thus, the DA had to make B an assessment of tax arrears, disputed amount and amount payable for each year of assessment; that appeal was barred against the order under section 90 that such determination had to be done within 60 days from the receipt of the declaration and based thereon the DA had to issue a certificate. In other words, till the completion of the aforestated exercise, the appellant could not have paid the amount of tax and, therefore, the appellant was not C liable to pay interest as his liability accrued only after the ascertainment of the amount payable under Section 90. Hence, the additional directio·n given by the High Court directing the appellant to pay interest is set aside, particularly when the department had wrongly rejected the declarations filed under Section 88. [1117-G-H; 1118-A-B-C-D] D E CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4403-4410 of 2003. From the Judgment and Order dated 25.9.2002 of the Gujarat High Court in S.C.A. No. 2020 of 1999. · M.L. Vanna, Bhargava V. Desai, Sanjeev Kr. Singh, Ms. Sheenam Parwanda and Satya Mitra for the Appellant. K.P. Pathak, Additional Solicitor General, Harish Chander, Tufail A. F Khan and B.V. Balaram Das for the Respondent. The Judgment of the Court was delivered by KAPADIA, J. : These appeals by special leave have been filed against an additional direction given by the Gujarat High Court vide judgment dated G 25.9.2002 holding the appellant liable to pay interest un.der the Kar Vivad Samadhan Scheme, 1998 (for short "the Scheme") on the tax arrears to be determined by the designated authority (for short "DA"). The appellant filed a writ petition in the Gujarat High Court against H the rejection of the declarations made by the assessee under the said Scheme. • -· - SHATRUSAILYA DIGVIJAYSINGH JADEJA r. COMMR. OF I.T., RAJKOT [KAPADIA, J.j 1117 By the impugned judgment, the High Court held that the declarations A filed by the appellant herein were competent as the assessee's revision applications were pending on the date of filing of
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