ORDER
D.V. Shylendra Kumar, J.
1. The writ petition by the dealer under the Karnataka Sales Tax Act whose request for availing the benefit under what is known as ‘Kara Samadhan Scheme’ in terms of Government order No. FD 291 CSL 03 dated 3-10-2003 was denied by the authorities under the Act meant to implement the scheme with a complaint that the petitioner has been unjustly and illegally deprived the benefit of the scheme though petitioner had fully complied with the necessary requirements under the scheme for availing of the relief.
2. The brief facts are that the petitioner had suffered penalties for the years 1995-96-Rs. 3 lakhs, 1996-97-Rs. 75,000/- and 1997-98-Rs. 3 Lakhs. In the appeal before the first appellate authority, petitioner was able to get such penalties reduced to Rs. 1 lakh, Rs. 10,000/- and Rs. 1 lakh respectively.
3. The petitioner had pursued his efforts for further reduction by filing second appeals before the Tribunal. Such appeals were filed on 7-9-2000. The petitioner attempted to seek an interim order to stay recovery of the amount pending appeals before the Tribunal. Being not successful, had approached this Court by filing writ petitions Nos. 27295-97/2001. In terms of the order passed by this Court on 20-7-2001 in those petitions, petitioner was permitted to pay 50% of the amount in dispute before the Tribunal and recovery was stayed in respect of the balance. It is the case of the petitioner that in fact, total of such deposits conies to Rs. 1,05,000/- and the petitioner as per the order has remitted this amount.
4. It was at this stage, when the appeals were pending before the Tribunal the scheme was mooted by the Government in terms of the Government order referred to above. The petitioner thought it fit to avail the benefit under the scheme and accordingly made an application to the concerned authority. The requirement under the scheme is that the person seeking relief should withdraw the appeal and should have deposited or paid atleast 10% of the penalty amount-subject matter of the appeal as also 10% interest payable on such amount and on such compliance, the balance payable on the subject matter of appeal becomes waived.
5. Petitioner pointed out that he had already deposited 50% of the penalty amount, much more than 10% contemplated and he would like to avail of the benefit of the scheme. However, the authorities would not agree with the version of the petitioner. The authorities took the view that having regard to the condition/para 7 of the Government order, so far as payments made in excess of specified amount i.e., if the amount had already been paid even before the scheme came into operation, while the amount is to be adjusted to the Government and the scheme should be made applicable in respect of the balance amount payable i.e., 50% of the subject matter of the appeal which has been paid by the petitioner can be retained by the Government and in respect of the balance of Rs. 1,05,000/-, the petitioner was required to comply by depositing 10% of this towards penalty and 10% on the interest payable on the same and then only petitioner can avail the benefit of the scheme. The authority took the view that the petitioner not having complied with this condition, petitioner was not eligible for the benefit under the scheme and has accordingly issued the endorsement at Annexure-G indicating that due to non-compliance by the petitioner with the requirement of the scheme, application under Kara Samadhan scheme was not available to the petitioner. It is aggrieved by this endorsement, the present writ petition.
6. I have heard Sri Narendra Gandhi, Learned Counsel appearing for the petitioner and Smt. Niloufer Akbar, Learned AFA appearing for the respondents.
7. Submission of Learned Counsel for the petitioner by drawing reference to condition No. 4 is that requirement under the scheme is for deposit of 10% of the amount of penalty and 10% of the interest payable and that the amount which had been paid by the petitioner earlier pursuant to the order passed by this Court in writ petitions was much more than this amount and therefore, even though amount had been paid before the scheme came into operation and on a day when a person seeking benefit is required to comply with the condition, payment being over and above the amount required under the scheme, the petitioner is one who has already complied with the condition and therefore a person eligible for the benefit under the scheme.
8. It is also further submitted that the authorities have erroneously understood the scope of condition No. 7 under which the amount, if any, paid prior to the scheme would get extended upto the amount required to be paid under the scheme, in the sense that instead of condition for payment of 10% of penalty and 10% of interest, it gets extended upto to the amount that had already been paid. It is on such basis Learned Counsel for the petitioner submits that the petitioner was very much entitled to avail the benefit under the ‘Kara Samadhan Scheme’ and the authorities failed in refusing the benefit under the scheme and the endorsement is bad in law and deserves to be quashed with suitable directions to the respondent.
9. Respondents have filed statement of objections. Submission of Smt. Niloufer Akbar, Learned AGA appearing for the respondents is that condition 4 of the scheme cannot be read in isolation. It should be read in conjunction with condition 7; that condition 7 makes it very clear that while the amount already paid is adjusted, in respect of the balance, the scheme becomes applicable and if so, condition of payment of 10% towards penalty and 10% towards interest has to be worked out on the balance of the amount.
10. I have considered the rival submission and looked into the pleadings and the provisions of the scheme. Condition Nos. 4 and 7 of the scheme reads as under:
“Condition-4: In cases where penalties have been levied under Section 12(4) or 12-(A)(1-A) or 12-B(4) of the KST Act, 1957 or Section 5(5) or 6(2) or 7(3) of the KTEG Act, 1979 if the taxes admitted have already been paid without being disputed in any appeal and 10% of the penalty levied is paid on or before 31-12-2003 along with 10% of the interest payable. If the appeal was filed on or before 31-3-2000 or 50% of the interest payable, if the appeal was filed later, then the balance amount of penalties levied and interest accrued would stand waived.”
“Condition-7: If in any case the assessee has paid tax, penalty or interest in excess of the amounts specified in this scheme, then the amounts modified in this scheme shall stand modified to that extent and the scheme shall apply to the balance amounts.”
11. Reading of these conditions leaves one with no doubt that the benefit under the scheme is extended if 10% of the penalty payable-subject matter of the appeal and 10% of the interest payable on that amount is paid, if the appellant should have paid the amounts after 31-12-2003 requirement of payment towards interest gets extended upto 50%. While the requirement of payment on deposit is up to 10% in respect of the appeal to that of the petitioner filed before 31-12-2003.
12. Under condition No. 7, such amount is sought to be extended upto amount that had already been paid or deposited i.e., that requirement of 10% deposit gets extended in case of person like the petitioner up to the amount that had been deposited. In the present case, it extends upto the amount of Rs. 1,05,000/- that the petitioner had paid during the pendency of the appeals. The amount being much more than 10% under the scheme, nevertheless it being adjusted, it has to be inevitably held that petitioner has complied with the condition meant to be complied and if that has been done, the only other part of the scheme that operates thereafter is waiver of the balance. In fact, the words and the scheme shall be applied to the balance amount and last part of the condition of the scheme means only that, that concession given or waiver given can be in respect of the balance in the case of the petitioner namely, in respect of Rs. 1,05,000/- only i.e., only Rs. 1,05,000/- is waived, what amount becomes payable is Rs. 1,05,000/- which has already been paid.
13. Condition No. 7 ensures that a person seeking for the benefit or concession under the scheme does not become entitled to refund also if he had earlier paid any amount over and above 10% contemplated under the scheme. It definitely does not mean that a person is required to pay an additional amount of 10% over and above what had already been paid and even if what was earlier paid itself was more than 10%.
14. Understanding of this nature will only amount to penalising a person who had made payment over and above 10% earlier, while extending the benefit to one who makes payment later giving relief up to 90%. In fact, a pereson like petitioner gets a lesser relief under the scheme than what other persons who opt for the scheme and make payment thereafter. Such a person should not be further penalised, called upon to pay further amount by an erroneous understanding as is sought to be placed by the authority. Endorsement issued at Annexure-G is definitely not in consonance with the terms, object and intention of the scheme. The authorities have unnecessarily declined the benefit of the scheme to the petitioner.
15. In the circumstances, the endorsement Annexure-G is quashed. A writ of mandamus is issued to the respondents directing that the amount that had been deposited by the petitioner earlier is to be treated as the amount required to be deposited by the petitioner for availing the benefit in term of condition No. 7 and that the petitioner shall be given the benefit of waiver in respect of the balance. Rule issued made absolute. Petition allowed with costs quantified at a sum of Rs. 5,000/.