The main legal point established in the judgment is the limited scope of the Kar Vivad Samadhan Scheme, 1998 to enactments made by the Parliament and its inapplicability to the assessment of sales tax under a State legislature. The judgment emphasizes the exclusive legislative field of a State Legislature in enacting laws relating to sales tax and the jurisdiction of assessing authorities under the State Act.

JUDGMENT:

CIVIL APPEAL NO. 2407 OF 2007

[Arising out of SLP (Civil) No. 111 of 2007]

S.B. SINHA, J :

1. Leave granted.

2. Legality of a notice issued by the Deputy Commissioner of Commercial Taxes, Kollam vis-a-vis the provisions of the Kar Vivad Samadhan Scheme, 1998 (for short "the Scheme") framed under the Finance Act, 1998 is in question in this appeal which arises out of a judgment and order dated 3.08.2006 passed by a Division Bench of the Kerala High Court.

3. Appellant is engaged in business of manufacture and sale of insulated electrical cable. It is registered under the Kerala General Sales Tax Act, 1963 (for short "the Act"). Assessment proceedings in respect of the assessment years 1995-96 and 1996-97 were completed relying upon or on the basis of the books of accounts maintained by it. An inspection, however, was carried out in the premises of the appellant. Certain amount of

unaccounted production and sale of goods was found.

4. Appellant admittedly took recourse to the provisions of the said Scheme. Declaration made by it thereunder was accepted.

By an order dated 14.01.2003, the earlier assessment order was set aside. Appellant filed an appeal before the Kerala Sales Tax Appellate Tribunal. The matter was remitted to the Deputy Commissioner for its re-examination. By an order dated 20.05.2003, the assessment in respect of the Assessment Year 1996-97 was set aside. The said authority directed re-assessment for the year 1995-96 by an order dated 7.11.2003. Questioning the said orders, appeals were filed by the appellant before the Tribunal which by reason of a common judgment dated 21.12.2005 were dismissed. Two Sales Tax revisions wee filed thereagainst before the High Court, which by reason of the impugned judgment have been dismissed.

5. Before we embark upon the contentions raised by the appellant, we may notice that by an order dated 15.01.2007, this Court observed:

"The question which inter alia arises for consideration in this petition is as to whether by reason of sub-section (3) of Section 90 of the Kar Vivadh Samadhan Scheme, 1998, as contained in the Finance Act, 1998, the State legislation relating to the imposition of the sales tax by re-opening an assessment under the State Sales Tax laws shall be affected or not, having regard to Article 246 of the Constitution of India. With a view to pronounce an authoritative judgment on the said issue, we are of the opinion that the Union of India should also be impleaded as a party."

Pursuant thereto Union of India was impleaded as a party herein. It has filed a counter-affidavit.

6. Mr. Huzefa Ahmadi, learned counsel appearing for the appellant, in support of this appeal, submitted:

(i) Having regard to the provisions of Sub-section (3) of Section 90 of the Scheme, the term "any other law for the time being in force must be given a wide meaning so as to cover not only the direct tax or indirect tax envisaged thereunder but also the Sales Tax laws of the State in the light of the provisions of Clause (3) of Article 286 of the Constitution of India and Sub-clauses (c) and (d) of Clause (29A) of Article 366 thereof.

(ii) In any event, the purported exercise of suo motu revisional power by the Deputy Commissioner must be held to be wholly without jurisdiction.

7. The Scheme was enacted with a view to achieve the purposes mentioned therein, viz., recovery of tax arrears by way of settlement. It applies provided the conditions precedent therefor are satisfied. Sub-section (3) of Section 90 of the Scheme, whereupon reliance has been placed, reads as under:

"(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."

8. "Immunity", however, is provided under Section 91 of the Sch