Gulam Ahmed Dastagir Vs. Deputy Commnr. of Customs & Ors.
EmailAppeal: Civil Appeal No. 6865 of 2000
Petitioner: Gulam Ahmed Dastagir
Respondent: Deputy Commnr. of Customs & Ors.
Apeal: Civil Appeal No. 6865 of 2000
Judges: S.P. Bharucha, CJI., U.C. BANERJEE & BISHESHWAR PRASAD SINGH, JJ.
Date of Judgment: Jan 15, 2002
Head Note:
CUSTOMS
Kar Vivad Samadhan Scheme, 1998
Sections 90, 88 (B) – Declaration filed on 4.1.99 – Orders to deposit half of penalty passed on 5.2.99 – Before the declaration, revision applications filed against orders of dismissal of appeal against orders of penalty – No compliance of deposit – Revisions dismissed on 13.4.99 – Dismissal of writ by High Court. Held that orders passed under section 88 (B) (i) were to be complied with and revision was rightly dismissed as declaration has been made under section 90 (4), all remedies, which may have been invoked, are deemed to have been withdrawn on filing declaration appeal dismissed. (Paras 4, 8)
JUDGEMENT:
ORDER
1. The order under appeal was passed by a division bench of the High Court at Bombay. It dismissed the writ petition filed by the present appellant. The appellant is here by way of appeal by special leave.
2. On 9th April, 1995, the appellant flew into Bombay Airport. His baggage was examined and cleared after he had paid Rs. 33,600/- as customs duty. Before he left the airport, however, at the behest of the assistant commissioner of customs, the goods that the appellant had imported were seized because it was suspected that they were undervalued. The appellant gave a statement under section 108 of the customs act on 18th April, 1995. On 8th March, 1996, a show cause notice was issued to the appellant. He was asked why the goods under detention should not be confiscated and penal action should not be taken. After his reply, the Deputy Commissioner of customs confirmed the show cause notice on 23rd May, 1997 and ordered the confiscation of the goods. He also imposed upon the appellant a penalty in a sum of Rs. 2 lakhs. An appeal was filed by the appellant, which was dismissed on 9th September, 1998.
3. On 4th January, 1999, the appellant filed a declaration under the Kar Vivad Samadhan scheme, 1998. On 5th February, 1999, an order was passed under section 90 of the scheme which required the appellant to make payment of a sum of Rs. 1 lakh within thirty days, the sum of Rs. 1 lakh being fifty per cent of the penalty amount of Rs. 2 lakhs. The said order made it clear that upon settlement of the case, the duty on the confiscated goods would have to be paid before their release. On 24th March, 1999, the designated authority under the scheme informed the appellant that his declaration under the scheme had been rejected because he had failed to make payment of the sum of Rs. 1 lakh as aforementioned.
4. Before the declaration by the appellant under the scheme he had filed a revision application before the Government of India against the order dated 9th September, 1998 passed in appeal by the commissioner of customs. On 13th April, 1999, the joint secretary to the Government of India passed an order on the revision application. It said, “In view of the deeming provision in sub-section (4) of section 90 of the finance act (no. 2 of 1998), the revision application filed by the two applicants are treated as withdrawn on 5.2.99 in respect of Shri G.A. Dastagir…….., i.e., the date (s) on which the designated authority passed the orders referred to in sub-section (2) of sec. 90 ibid.”
5. The order passed on the revision application was assailed by the appellant in the writ petition that he filed before the Bombay High Court. That writ petition, as aforementioned, was dismissed.
6. Learned counsel for the appellant drew our attention to section 88 (f) of the scheme. Section 88 requires the applicant under the scheme to file a declaration before the designated authority in respect of his tax arrears and to make payment of the amount determined as payable thereon. Sub-section (f) of section 88 applies to tax arrears payable under indirect tax enactments. It reads as follows :
“(f) Where the tax arrear is payable under the indirect enactment —–
(i) In a case where the tax arrear comprises fine, penalty or interest but does not include duties (including drawback of duty, credit of duty or any amount representing duty) or cesses, at the rate of fifty per cent, of the amount of such fine, penalty or interest, due or interest, due or payable as on the date of making a declaration under section 88.
(ii) In any other case, at the rate of fifty per cent, of the amount of duties (including drawback of duty, credit of duty or any amount representing duty) or cess due or payable on the date of making a declaration under section 88.”
It was the contention of learned counsel for the assessee that the determination of the amount payable under the scheme ought to have been made under item (ii) of sub-section (f) of section 88 inasmuch as the duty on the goods confiscated was required to be paid, and that the determination of the amount under item (i) of sub-section (f) was invalid and, for that reason, the appellant had not paid the amount. In his submission, therefore, it was obligatory for the authority to decide the revision application which had remained outstanding.
7. The answer to the submission is to be found in section 90 of the scheme. Section 90 reads thus :
“Time and manner of payment of tax arrear 90, (1) Within sixty days from the date of receipt of the declaration under section 91, the designated authority shall, by order, determine the amount payable by the declarant in accordance with the provisions of this scheme and grant a certificate in such form as may be prescribed 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 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 and intimate the fact of such payment to the designated authority along with proof thereof and the designated authority shall thereupon issue the certificate to the declarant.
(3) Every order passed under sub-section (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 be reopened in any other proceeding under the direct tax enactment or indirect tax enactment or under any other law for the time being in force.
(4) Where the declarant has filed an appeal or reference or a reply to the show-cause notice against any order or notice giving rise to the tax arrear before any authority or tribunal or court, then, notwithstanding anything contained in any other provisions of any law for the time being in force, such appeal or reference or reply shall be deemed to have been withdrawn on the day on which the order referred to in sub-section (2) is passed :
Provided that where the declarant has filed a writ petition or appeal or reference before any High Court or the Supreme Court against any order in respect of the tax arrear, the declarant shall file an application before such High Court or the Supreme Court for withdrawing such writ petition, appeal or reference and after withdrawal or such writ petition, appeal or reference with the leave of the court, furnish proof of such withdrawal along with the intimation referred to in sub-section (2).”
8. The effect of sub-section (4) of section 90, in our view, is that once a declaration has been made and an order has been passed thereon requiring payment from the applicant, all remedies that the applicant may have invoked prior to the making of the declaration under the scheme abate and are “deemed to have been withdrawn on the date on which the order of payment under sub-section 2 is passed.” Upon the determination of the amount payable upon the declaration of the appellant under the scheme, made on 5th February, 1999, the revision application that the appellant has filed before the government of India was deemed to be withdrawn.
9. In our view, therefore, the revision of the appellant was correctly dismissed and the High Court was not in error in not interfering therewith.
10. The civil appeal is dismissed, with costs.
1. The order under appeal was passed by a division bench of the High Court at Bombay. It dismissed the writ petition filed by the present appellant. The appellant is here by way of appeal by special leave.
2. On 9th April, 1995, the appellant flew into Bombay Airport. His baggage was examined and cleared after he had paid Rs. 33,600/- as customs duty. Before he left the airport, however, at the behest of the assistant commissioner of customs, the goods that the appellant had imported were seized because it was suspected that they were undervalued. The appellant gave a statement under section 108 of the customs act on 18th April, 1995. On 8th March, 1996, a show cause notice was issued to the appellant. He was asked why the goods under detention should not be confiscated and penal action should not be taken. After his reply, the Deputy Commissioner of customs confirmed the show cause notice on 23rd May, 1997 and ordered the confiscation of the goods. He also imposed upon the appellant a penalty in a sum of Rs. 2 lakhs. An appeal was filed by the appellant, which was dismissed on 9th September, 1998.
3. On 4th January, 1999, the appellant filed a declaration under the Kar Vivad Samadhan scheme, 1998. On 5th February, 1999, an order was passed under section 90 of the scheme which required the appellant to make payment of a sum of Rs. 1 lakh within thirty days, the sum of Rs. 1 lakh being fifty per cent of the penalty amount of Rs. 2 lakhs. The said order made it clear that upon settlement of the case, the duty on the confiscated goods would have to be paid before their release. On 24th March, 1999, the designated authority under the scheme informed the appellant that his declaration under the scheme had been rejected because he had failed to make payment of the sum of Rs. 1 lakh as aforementioned.
4. Before the declaration by the appellant under the scheme he had filed a revision application before the Government of India against the order dated 9th September, 1998 passed in appeal by the commissioner of customs. On 13th April, 1999, the joint secretary to the Government of India passed an order on the revision application. It said, “In view of the deeming provision in sub-section (4) of section 90 of the finance act (no. 2 of 1998), the revision application filed by the two applicants are treated as withdrawn on 5.2.99 in respect of Shri G.A. Dastagir…….., i.e., the date (s) on which the designated authority passed the orders referred to in sub-section (2) of sec. 90 ibid.”
5. The order passed on the revision application was assailed by the appellant in the writ petition that he filed before the Bombay High Court. That writ petition, as aforementioned, was dismissed.
6. Learned counsel for the appellant drew our attention to section 88 (f) of the scheme. Section 88 requires the applicant under the scheme to file a declaration before the designated authority in respect of his tax arrears and to make payment of the amount determined as payable thereon. Sub-section (f) of section 88 applies to tax arrears payable under indirect tax enactments. It reads as follows :
“(f) Where the tax arrear is payable under the indirect enactment —–
(i) In a case where the tax arrear comprises fine, penalty or interest but does not include duties (including drawback of duty, credit of duty or any amount representing duty) or cesses, at the rate of fifty per cent, of the amount of such fine, penalty or interest, due or interest, due or payable as on the date of making a declaration under section 88.
(ii) In any other case, at the rate of fifty per cent, of the amount of duties (including drawback of duty, credit of duty or any amount representing duty) or cess due or payable on the date of making a declaration under section 88.”
It was the contention of learned counsel for the assessee that the determination of the amount payable under the scheme ought to have been made under item (ii) of sub-section (f) of section 88 inasmuch as the duty on the goods confiscated was required to be paid, and that the determination of the amount under item (i) of sub-section (f) was invalid and, for that reason, the appellant had not paid the amount. In his submission, therefore, it was obligatory for the authority to decide the revision application which had remained outstanding.
7. The answer to the submission is to be found in section 90 of the scheme. Section 90 reads thus :
“Time and manner of payment of tax arrear 90, (1) Within sixty days from the date of receipt of the declaration under section 91, the designated authority shall, by order, determine the amount payable by the declarant in accordance with the provisions of this scheme and grant a certificate in such form as may be prescribed 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 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 and intimate the fact of such payment to the designated authority along with proof thereof and the designated authority shall thereupon issue the certificate to the declarant.
(3) Every order passed under sub-section (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 be reopened in any other proceeding under the direct tax enactment or indirect tax enactment or under any other law for the time being in force.
(4) Where the declarant has filed an appeal or reference or a reply to the show-cause notice against any order or notice giving rise to the tax arrear before any authority or tribunal or court, then, notwithstanding anything contained in any other provisions of any law for the time being in force, such appeal or reference or reply shall be deemed to have been withdrawn on the day on which the order referred to in sub-section (2) is passed :
Provided that where the declarant has filed a writ petition or appeal or reference before any High Court or the Supreme Court against any order in respect of the tax arrear, the declarant shall file an application before such High Court or the Supreme Court for withdrawing such writ petition, appeal or reference and after withdrawal or such writ petition, appeal or reference with the leave of the court, furnish proof of such withdrawal along with the intimation referred to in sub-section (2).”
8. The effect of sub-section (4) of section 90, in our view, is that once a declaration has been made and an order has been passed thereon requiring payment from the applicant, all remedies that the applicant may have invoked prior to the making of the declaration under the scheme abate and are “deemed to have been withdrawn on the date on which the order of payment under sub-section 2 is passed.” Upon the determination of the amount payable upon the declaration of the appellant under the scheme, made on 5th February, 1999, the revision application that the appellant has filed before the government of India was deemed to be withdrawn.
9. In our view, therefore, the revision of the appellant was correctly dismissed and the High Court was not in error in not interfering therewith.
10. The civil appeal is dismissed, with costs.
