In Writ Petition No. 20035 of 2019 -KAR HC- Karnataka High Court sets aside rejection of M/s. Ge T & D India Limited's application for benefits under the Karasamadhana Scheme, orders reconsideration by Authority
Justice S. Sunil Dutt Yadav [25-05-2023]

Read Order: M/s. Ge T & D India Limited V. State of Karnataka

Chahat Varma

New Delhi, June 21, 2023:  The High Court of Karnataka has ruled that the Endorsement dated 05.01.2019, which rejected M/s. Ge T & D India Limited’s (petitioner) application for benefits under the Karasamadhana Scheme, should be set aside and held that the matter should be reconsidered by the authority after giving the petitioner an opportunity to be heard.

Briefly stated, the petitioner argued that the rejection of their application by the Authority was solely based on the grounds of ineligibility for refund of any excess amount resulting from the adjustment of penalty or interest paid during the appeal.  The petitioner also argued that the subsequent recovery of the entire demand from the petitioner's banker during the pendency of the appeal should not be considered for adjustment under Clause 2.4 of the Scheme. On the other hand, the Revenue submitted that as on the date of the Scheme coming into force i.e., on 04.08.2018, the entirety of the tax, penalty and interest having been recovered, the Scheme was inapplicable.

The court noted that there was ambiguity in the Endorsement, and if it was interpreted as rejecting the application solely based on Clause 2.4, which relied on the Circular dated 13.08.2018, there was no clarity regarding the satisfaction of Clause 2.4.

The court remarked, “In this case, the peculiar facts are that the petitioner has paid 30% of the amount due on 17.01.2013. If that were to be so, the question that requires adjudication by the Authority is whether a subsequent recovery from the banker of the petitioner after the appeal was taken on record and payment was made is an amount that could be taken note of.”

Noting that the matter required reconsideration, the court clarified that if the petitioner's application was rejected, the petitioner cannot be placed in a worse position, and their appeal would be restored as a logical course of action.