Delay in Assessment Not Assessee’s Fault: Madras HC Allows Samathana Scheme Benefit for Commercial Tax Arrears [Read Order]
The Apex Court in Union of India vs. Onkar S. Kanwar held that the phrase "pending adjudication" could not be interpreted to exclude cases where appeals were pending.
![Delay in Assessment Not Assessee’s Fault: Madras HC Allows Samathana Scheme Benefit for Commercial Tax Arrears [Read Order]](https://images.taxscan.in/h-upload/2025/06/13/2043570-madras-hc-delay-assessment-samathana-scheme-commercial-tax-arrears-taxscan.webp "Delay in Assessment Not Assessee’s Fault: Madras HC Allows Samathana Scheme Benefit for Commercial Tax Arrears [Read Order]")
The High Court of Madras,allowed the benefit of the New Samathana Scheme 2023 to the assessee for commercial tax arrears relating to the assessment years 2015-16 to 2017-18, noting that the delay in completing the assessment was not attributable to the petitioner.
RR Hotel,petitioner-assessee,ran a hotel in Cumbum and opted for the Samathana Scheme introduced by the State Government under the Tamil Nadu Taxes (Settlement of Arrears) Act, 2023. The scheme was in effect from 16.10.2023 to 15.02.2024 and covered tax arrears up to the assessment year 2017-18.
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The petitioner availed the scheme for the years 2012-13 to 2014-15 but was not allowed to do so for 2015 onwards. Although the pre-assessment notice was issued in 2018, the final assessment order was passed only in 2023. The petitioner claimed the delay was not on their part and made representations on 21.02.2024 and 21.02.2025, seeking extension of the scheme’s benefit.
As the representations were not considered, the petitioner filed the writ petition.
The assessee counsel relied on the judgment of the Supreme Court in Union of India and Others vs. Onkar S. Kanwar and Others [2000 (7) SCC 591], wherein it was held that a settlement under the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order would be deemed full and final not only in respect of the declarant but also for others against whom show cause notices had been issued on the same matter.
The Apex Court noted that the Order, when read as a whole, indicated that the phrase "pending adjudication" could not be interpreted to exclude cases where appeals were pending. It clarified that proceedings remain pending during appeal and, therefore, eligible for settlement under the Scheme.
It was further held that denying the benefit of settlement to co-noticees merely because the adjudication had concluded and appeal was pending would lead to an unreasonable and discriminatory classification, which must be avoided.
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Applying this principle, the Court held that the ratio laid down in the Onkar S. Kanwar case was squarely applicable to the present matter. Accordingly, the petitioner was held entitled to avail the benefit of the New Samathana Scheme 2023 for the assessment years 2015-16, 2016-17, and 2017-18.
A Division Bench of Justice Vivek Kumar Singh directed the first respondent to consider the petitioner’s request under the New Samathana Scheme 2023 for the years 2015-16, 2016-17, and 2017-18, and to pass appropriate orders as per law.
The writ petition was accordingly disposed of.
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