2003 (8) TMI 517 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to endorsement dated May 21, 2001 (annexure C) and seeking direction for extension of benefits as per circular dated April 9, 1999 (annexure A).

Analysis:
The petitioner, a dealer, challenged annexure C, an endorsement dated May 21, 2001, and sought direction regarding benefits under circular dated April 9, 1999 (annexure A). The petitioner, a dealer under sales tax laws, faced delays in tax payments for certain assessment years. Respondent No. 1 issued annexure A for waiver of penalty and interest on tax up to 1996-97 as one-time relief. The petitioner applied under annexure B following annexure A, but the application was rejected through the impugned endorsement (annexure C).

The respondents justified their action, stating that the relief under the scheme was limited to tax arrears only, excluding other outstandings. The High Court analyzed annexure A, highlighting the government's intention to reduce litigations and recover revenue through a one-time relief measure. The court noted that the scheme provided for waiver if arrears were paid before a specified date. The court found the respondents' interpretation limiting relief to the period 1986-87 contradictory to the scheme's purpose of reducing litigations and recovering revenue locked in disputes.

The court emphasized that the term "outstanding" should encompass amounts payable under sales tax laws, including penalties and interest related to due taxes. Therefore, restricting relief to a specific year based on the absence of "outstandings" for other years was deemed inappropriate. The court concluded that such a narrow interpretation would defeat the purpose of the scheme, leading to more litigations and revenue disputes.

Consequently, the court set aside annexure C and directed the respondents to reconsider the petitioner's application under annexure B comprehensively in line with annexure A, within three months from the date of the court order. The judgment highlighted the need to interpret the scheme broadly to achieve its objective of reducing litigations and recovering revenue effectively.