Supreme Court Judgments — 2002

The Supreme Court found that the scope of the ITSC's powers was a serious issue with conflicting stands. The Court noted that the Settlement Commission's powers are limited to the case before it and do not automatically set aside lower authority orders. The Court decided to refer the matter to a larger bench for detailed consideration.

The Supreme Court held that a certificate issued under Section 90(1) of the KVSS is conclusive as to the matters stated therein and cannot be reopened in any proceedings, except on the ground of a false declaration. The Court found that the Revenue's notice was based on the premise that adjustments already made had not been taken into account, not on any allegation of a false declaration. The Court noted that this information was available to the Department even at the time of finalising proceedings under Section 90. Furthermore, the assessee had specifically stated in her declarations that refunds adjusted without following the mandatory procedure of Section 245 would remain tax arrears, and the Department accepted the declarations on this basis. Therefore, the Revenue could not take a different stand. Even if the KVSS authorities had inherent powers to correct clerical or arithmetical errors, such errors must be obvious and patent, not requiring debate or investigation of facts, which was not the case here. The appeal was allowed, the High Court's order set aside, and the notice issued by the Department quashed.

The Supreme Court held that the KVSS settlement order, once issued, is conclusive and cannot be reopened except for false declarations. The notice to amend was issued without jurisdiction as it was based on a calculation error, not a false declaration.