Case Note & Summary
The case involved appeals filed by the appellant against a direction from the Gujarat High Court regarding interest liability under the Kar Vivad Samadhan Scheme, 1998. The appellant challenged the High Court's judgment which held that the declarations made under the Scheme were competent and directed the designated authority to determine the amount payable. The appellant contended that the additional direction to pay interest was illegal, arguing that the Scheme did not provide for interest in cases where the designated authority had wrongly rejected declarations. The court analyzed the provisions of the Scheme, particularly sections 87(f) and 90, noting that the designated authority was required to ascertain the tax arrears and disputed amounts before any liability for interest could arise. The court found that the appellant could not be held liable for interest on an amount that was not ascertainable due to the designated authority's error. Consequently, the court set aside the additional direction to pay interest and allowed the appeals without costs.
Headnote
A) Tax Law - Interest Liability - Non-ascertainable Tax Amount - Kar Vivad Samadhan Scheme, 1998, Section 90 - The court held that the appellant was not liable to pay interest on the amount payable under section 90 until the designated authority determined the tax arrears and disputed amount, as the liability to pay interest only accrued after ascertainment. The additional direction by the High Court imposing interest was set aside due to the department's erroneous rejection of the declarations filed under section 88. (Paras 1-2).
Issue of Consideration
Whether the appellant was liable to pay interest on the amount payable under section 90 of the Kar Vivad Samadhan Scheme, 1998.
Final Decision
The Supreme Court set aside the additional direction to pay interest, allowing the appeals without costs.
Law Points
- Interest liability
- Kar Vivad Samadhan Scheme
- 1998
- declaration acceptance
- tax arrears ascertainment
