2007 (12) TMI 440 - AT - VAT and Sales Tax

Issues Involved:
1. Challenge to the order of the Deputy Commissioner of Commercial Taxes (DCCT/NC).
2. Discrepancy in the amount of tax in dispute.
3. Eligibility for settlement under the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 (SOD Act, 1999).
4. Interpretation of "arrear tax" and its implications.
5. Applicability of the principles from the V.J. Suraiya case.
6. Equality and uniformity within the same class of taxpayers.
7. Direction for reconsideration of the application by DCCT/NC.

Detailed Analysis:

1. Challenge to the Order of DCCT/NC:
The petitioner, proprietor of Pappu Traders, challenged the order dated June 27, 2007, by the DCCT/NC, communicated on August 29, 2007, which refused his application for settlement of dispute for the assessment period ending March 31, 2004, under section 8(2) of the SOD Act, 1999. The petitioner also challenged the show-cause notice dated June 15, 2007, issued by the DCCT/NC.

2. Discrepancy in the Amount of Tax in Dispute:
The petitioner had initially disputed the entire amount of Rs. 95,038.54 (including Rs. 93,038.54 as tax and Rs. 2,000 as purchase tax) in his appeal before the ACCT/NC. However, in the application for settlement under the SOD Act, 1999, he showed the arrear tax in dispute as Rs. 15,039, leading to the issuance of a show-cause notice by the DCCT/NC for showing two different figures.

3. Eligibility for Settlement under the SOD Act, 1999:
The petitioner contended that he was eligible for settlement under section 4 of the SOD Act, 1999, as his appeal was pending on August 31, 2006. The Tribunal noted that the petitioner fulfilled the eligibility conditions by filing the application on June 14, 2007, and hence his eligibility could not be questioned.

4. Interpretation of "Arrear Tax" and Its Implications:
The Tribunal clarified that "arrear tax" in dispute does not necessarily mean the difference between the tax paid and the assessed tax. It can include the difference between the tax admitted to be payable and the tax payable according to the assessment order. The Tribunal provided an illustration to explain that arrear tax in dispute can be higher than the amount paid under protest or due to a misconception.

5. Applicability of Principles from the V.J. Suraiya Case:
The Tribunal referred to the case of V.J. Suraiya v. Additional Commissioner, Commercial Taxes, West Bengal, to emphasize that equals should not be treated differently. The Tribunal observed that the differential treatment in the SOD Act, 1999, could lead to discrimination against taxpayers who had already paid a higher amount of tax.

6. Equality and Uniformity within the Same Class of Taxpayers:
The Tribunal noted that the SOD Act, 1999, should not discriminate between taxpayers who have paid different amounts of tax before filing an application for settlement. The Tribunal emphasized that there should be equality and uniformity within the same class of taxpayers.

7. Direction for Reconsideration of the Application by DCCT/NC:
The Tribunal set aside the order of the DCCT/NC communicated on August 29, 2007, and the show-cause notice dated June 15, 2007. The Tribunal directed the DCCT/NC to reconsider the petitioner's application afresh, allowing a reasonable opportunity of hearing. The Tribunal clarified that for the purpose of settlement of arrear tax in dispute, only the amount disclosed by the petitioner in his application under the SOD Act, 1999, should be considered, and not the amount disputed before the appellate authority.

Conclusion:
The petition was disposed of, with no order as to costs. The Tribunal emphasized the importance of fairness and non-discrimination in the application of the SOD Act, 1999, and directed the DCCT/NC to reconsider the petitioner's application based on the principles discussed.

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