2010 (1) TMI 1117 - HC - VAT and Sales Tax

Summary

Issues:
- Appeal against revenue recovery proceedings for arrears of sales tax and other dues for specific assessment years.
- Dispute regarding demand for certain years under an amnesty scheme.
- Interpretation of statutory provisions and circular guidelines.
- Justification for forfeiture of amnesty benefit due to default in payment.
- Assessment of procedural inadequacies in the communication of reduced amounts.
- Restoration of benefit under certain conditions.

Analysis:
The appeal before the Kerala High Court involved challenging revenue recovery proceedings for arrears of sales tax and other dues for the assessment years 1998-99, 1999-2000, 2005-06, 2006-07, and 2007-08. The dispute primarily revolved around the demand for the years 1998-99 and 1999-2000 under an amnesty scheme provided under section 23B of the Kerala General Sales Tax Act, 1963. The appellant contended that the reduced amounts communicated by the assessing officer did not align with the circular guidelines issued by the Commissioner of Commercial Tax. The learned single judge upheld the revenue recovery proceedings, citing the appellant's failure to remit the amount within the stipulated time under section 23B(4) of the Act.

Upon hearing both sides and examining the statutory provisions and circular guidelines, the High Court found no justification to interfere with the learned single judge's decision on the forfeiture of the amnesty benefit due to default in payment. The court noted that while there was no explicit provision for automatic revocation of orders granting amnesty, non-payment of 25 per cent within 15 days rendered the benefit ineffective. The court upheld the finding that the appellant forfeited the benefit under the amnesty scheme.

However, the court identified mistakes in the communication of reduced amounts by the assessing officer, as they did not adhere to the circular guidelines. Due to these inadequacies and the absence of proceedings revoking the orders, the court decided to extend the benefit granted under exhibits P5 and P5(a) to the appellant under certain conditions. The appellant was required to pay additional interest amounts for the belated payments for the years 1998-99 and 1999-2000 to avail of the restored benefit. If the appellant failed to meet these conditions, the recovery proceedings could be continued based on exhibit P6.

The court clarified that its judgment only covered arrears for the years 1998-99 and 1999-2000, allowing for the continuation of recovery proceedings for the remaining years based on exhibit P6, subject to any challenges by the appellant before relevant authorities.