Law:

Section:

Section 88, read with section 90, of the Finance (No. 2) Act, 1998 - Kar Vivad Samadhan Scheme, 1998 - Respondent by its letter dated 7/8-1-1999 communicated amount to be paid by petitioner towards full and final settlement of its tax arrears under KVSS - Letter was received on 13-1-1999 and petitioner, accordingly, made payment by cheque dated 10-2-1999 which was credited to revenue's account on 13-2-1999 - Respondent held that since payment was made on 13-2-1999, i.e., on 31st day and not within 30 days, petitioner was not entitled to benefit of Scheme - Whether payment by cheque realised, subsequently, on cheque being honoured and encashed relates back to date of receipt of cheque and, in law, date of payment is date of delivery of cheque - Held, yes - Whether impugned communication should, therefore, be quashed and respondent directed to issue necessary certificate giving benefit of Scheme to petitioner - Held, yes FACTS In the year 1998, when the Central Government came up with Kar Vivad Samadhan Scheme, 1998, the petitioner-assessee filed a declaration under section 88, claiming benefit under the said Scheme. In accordance with the said Scheme, the respondent determined the amount payable by the assessee towards the full and final settlement of its tax arrears and communicated the same vide letter dated 7/8-1-1999. The said certificate was received by the petitioner on 13-1-1999 pursuant to which it made payment vide cheque dated 10-2-1999 in favour of the revenue. The same was credited into the account of the revenue on 13-2-1999. The respondent contended that as per the provisions of 'Kar Vivad Samadhan Scheme 1998', the settlement amount should be paid to the revenue within 30 days from the date of order, but as the petitioner had paid the amount on 13-2-1999, i.e., on the 31st day from the date of order, the benefit of the scheme could not be given to the assessee. The petitioner thereupon filed the instant petition praying for quashing and setting aside the communication of the respondent in that regard and declaring that the petitioner was entitled to the benefit of the KVSS. HELD A cheque is a bill of exchange drawn on a bank and payable on demand…

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