JUDGMENT
1. The petitioner is a wholly owned corporation of the State of U. P. which now seems to be in the red and is facing closure. For the assessment years 1991-92, 1993-94 and 1994-95 to which this petition relates, the liability of the petitioner was to pay income-tax to the tune of about Rs. 3,20,36,286 after adjusting the tax already paid by way of advance tax, deductions at source (TDS), adjustments and refund, etc. The petitioner has preferred appeals for the assessment years 1991-92 and 1993-94 before the Tribunal which are pending. In those appeals, the petitioner has not so far moved any application for staying the recovery of tax. The petitioner has preferred appeal for the assessment years 1994-95 before the Commissioner of Income-tax (Appeals) which is pending in which it is stated by Dr. R.K. Srivastava, learned counsel for the petitioner, that he has moved an application for stay but no order has been passed thereon.
2. However, it has been rebutted by the Department by stating that no such application is pending.
3. The Income-tax Department recovered the amount of Rs. 3,34,35,490, by attaching the bank account of the petitioner. This amount was actually received by the Department on August 29, 1998. Under the Finance (No. 2) Act, 1998, under Section 86 and onwards the scheme known as the Kar Vivad Samadhan Scheme, 1998, was introduced which shall be in operation from September 1, 1998, to December 31, 1998, which provides some relief to those assessees who are in tax arrears. Now this writ petition has been preferred mainly for two reliefs ; firstly, it has been prayed that the Income-tax Department be directed to refund a sum of Rs. 3,34,45,490 which it has recovered by attaching the bank account of the petitioner and the second relief is that the Income-tax Department be directed to treat the petitioner as a defaulter for the purpose of availing of the benefit of the Kar Vivad Samadhan Scheme, 1998.
4. We have heard Dr. R.K. Srivastava, learned counsel for the petitioner, and Sri Pradeep Agarwal, learned standing counsel for the Income-tax Department.
5. So far as the first relief for issuing the order in the nature of mandamus to the Department directing the refund of Rs. 3,34,45,490 which has already been recovered from the petitioner as arrears of tax is concerned, the tax recovered from the petitioner and the Department was legally entitled to recover the same and, therefore, this relief cannot be granted.
6. So far as the second relief that the Income-tax Department be directed to treat the petitioner as a defaulter for the purpose of availing of the benefit of the Kar Vivad Samadhan Scheme, 1998, is concerned, under Section 87(m) "tax arrear" has been defined as follows : "(m) 'tax arrear' means,--
(i) in relation to direct tax enactment, the amount of tax, penalty or interest determined on or before the 31st day of March, 1998, under that enactment in respect of an assessment year as modified in consequence of giving effect to an appellate order but remaining unpaid on the date of declaration ;
(ii) in relation to indirect tax enactment,--. . . . Explanation.--Where a declarant has already paid either voluntarily or under protest, any amount of duties, cesses, interest, fine or penalty specified in this Sub-clause, on or before the date of making a declaration by him under Section 88 which includes any deposit made by him pending any appeal or in pursuance of a court order in relation to such duties, cesses, interest, fine or penalty, such payment shall not be deemed to be the amount unpaid for the purposes of determining tax arrear under this Sub-clause."
7. According to learned counsel for the petitioner (sic--respondent), the petitioner cannot avail of the benefit of this scheme because the Income-tax Department has realized the tax amount and no amount of tax can be said to be due as arrear on September 1, 1998, when the Kar Vivad Samadhan Scheme, 1998, came into operation because tax amount was actually received by the Department from the petitioner on August 29, 1998. This argument is not correct because if we read the definition of "tax arrear" along with the Explanation, it becomes clear that the petitioner had neither voluntarily paid the amount nor had paid the amount under protest nor he had deposited the amount pending any appeal nor this amount was paid in pursuance of the court's order and, therefore, the petitioner shall be deemed to be in arrear of tax for the purpose of the said scheme and it is entitled to avail of the benefit of the same in accordance with the provision of the said scheme.
8. With these observations, the petition is disposed of finally.