Case Note & Summary
The petitioner, M/s. Kuber Builders, a registered partnership firm, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court against the Union of India through the Chief Commissioner of Income Tax. The dispute pertained to the appropriation of Rs.3,11,206/- by the Tax Recovery Officer (TRO) towards the tax demand for Assessment Year 1987-88 out of a sum of Rs.6,00,000/- deposited by the petitioner under a High Court order dated 13/8/1991. The petitioner also sought a declaration that they were entitled to the benefit of the Kar Vivad Samadhan Scheme (KVSS) under the Finance (No.2) Act, 1998 for the tax arrears of A.Y. 1987-88, and sought quashing of the Certificate of Intimation dated 26/2/1999 issued under Section 90(1) of the said Act. The court examined the facts and submissions, including the arguments of Mr. C.M. Kothari for the petitioner and Mr. Suresh Kumar with Ms. Sumandevi Yadav for the respondent. The court held that the appropriation of Rs.3,11,206/- was illegal and that the petitioner was entitled to the benefit of the KVSS for A.Y. 1987-88. The court allowed the petition, setting aside the Certificate of Intimation and directing the respondents to adjust the illegally appropriated sum towards the tax liability under the KVSS for A.Y. 1987-88.
Headnote
A) Taxation - Kar Vivad Samadhan Scheme - Entitlement to Benefit - The petitioner sought declaration that appropriation of Rs.3,11,206/- by TRO towards tax demand for A.Y. 1987-88 out of Rs.6,00,000/- deposited under High Court order dated 13/8/1991 was illegal, and that petitioner is entitled to benefit of Kar Vivad Samadhan Scheme, 1998 for tax arrears of A.Y. 1987-88. Court held that the appropriation was illegal and petitioner is entitled to benefit of KVSS for A.Y. 1987-88. (Paras 1-19) B) Taxation - Certificate of Intimation under Section 90(1) Finance (No.2) Act, 1998 - Validity - Petitioner sought quashing of Certificate of Intimation dated 26/2/1999 issued under Section 90(1) of Finance (No.2) Act, 1998 under Kar Vivad Samadhan Scheme Rules, 1998. Court set aside the Certificate of Intimation. (Paras 1-19) C) Constitutional Law - Writ of Mandamus - Direction to Consider KVSS Benefit - Petitioner sought writ of mandamus directing respondents to consider petitioner's case for Kar Vivad Samadhan Scheme and accord benefit thereunder. Court directed respondents to adjust the illegally appropriated sum of Rs.3,11,206/- towards tax liability under KVSS for A.Y. 1987-88. (Paras 1-19)
Issue of Consideration
Whether the appropriation of Rs.3,11,206/- by the Tax Recovery Officer towards tax demand for Assessment Year 1987-88 out of the sum of Rs.6,00,000/- deposited by the petitioner under a High Court order dated 13/8/1991 was illegal; and whether the petitioner is entitled to the benefit of the Kar Vivad Samadhan Scheme, 1998 for the tax arrears of A.Y. 1987-88.
Final Decision
The court allowed the writ petition, declared the appropriation of Rs.3,11,206/- illegal, declared the petitioner entitled to benefit of Kar Vivad Samadhan Scheme for A.Y. 1987-88, set aside the Certificate of Intimation dated 26/2/1999, and directed the respondents to adjust the illegally appropriated sum towards tax liability under KVSS for A.Y. 1987-88.
Law Points
- Kar Vivad Samadhan Scheme
- 1998
- Section 90(1) Finance (No.2) Act 1998
- Appropriation of tax arrears
- Writ of Mandamus
- Article 226 Constitution of India
