The Hindu : SC ruling on Kar Vivadh Samadhan scheme

Online edition of India's National Newspaper
Wednesday, May 21, 2003

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SC ruling on Kar Vivadh Samadhan scheme

By J. Venkatesan

NEW DELHI MAY 20. The Supreme Court has held that once an assessee avails an option under the Kar Vivadh Samadhan Scheme, he obtains immediate immunity against any proceeding under all laws in force and he cannot be prosecuted for recovery of any liability.

Under the scheme, introduced in 1998, whoever takes the benefit is granted immunity from prosecution from any offence under the Customs Act, including the offence of evasion of duty.

A Bench, comprising Justice Brijesh Kumar and Justice A.R. Lakshmanan, quashed the proceedings continued by the CBI against the office-bearers of Gujarat Cancer Society after it availed the benefit of the samadhan scheme.

Writing the main judgment for the Bench, Justice Lakshmanan said that after going through the scheme, it was clear that the GCS was immune from any criminal proceedings and the appellants were being prosecuted in their capacity as office-bearers of the GCS.

The Bench noted that as Customs duty had already been paid, the Central Government had not suffered any financial loss. Moreover, the Bench said as per the scheme, whoever was granted the benefit was granted immunity from prosecution and hence the complaint against the appellants was unsustainable.

Further, the Bench pointed out that it was a voluntary scheme whereby if the disputed demand was settled by the Authority and pending proceedings were withdrawn, he shall be immune from penal proceedings under any law in force.

The alleged criminal liability stood compounded on a settlement with respect to the civil issues and therefore the FIR was erroneously issued and was totally unwarranted.

The Bench observed that the High Court had not appreciated the fact that continuance of the proceedings in the instant case would not only tantamount to driving the appellants to double jeopardy when they had been honourably exonerated by the Customs Collector.

Cases were registered against appellants alleging that they had conspired with the GCS Director and evaded customs duty in the import of two machines though they were not entitled to any duty exemption.

Even as the case was pending they availed the samadhan scheme and settled the arrears and they were granted immunity from criminal proceedings.

But the Delhi High Court did not accept the contention of the appellants that the proceedings could not be continued against them and dismissed their plea and the present appeals were directed against this judgment.

Setting aside the High Court order, the Bench observed that it was settled law that once the duty demanded had been paid and the alleged offence had been compounded, to continue the criminal proceedings would be an abuse of the judicial process.

Justice Brijesh Kumar, while concurring with Justice Lakshmanan, gave additional reasons.

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