2016 (4) TMI 1310 - HC - VAT and Sales Tax

Benefit of the Amnesty Scheme - denial of benefit on the ground that payment of tax and interest was made by them prior to the date of the notification whereas according to the respondents the notification requires payment of tax only during the period of Amnesty Scheme - Held that - it appears to be an admitted position that except for the fact that the petitioners had already paid the tax and interest prior to the coming into force of the Scheme the respondents do not deny that the petitioners have otherwise satisfied all the requirements of the Scheme. On a reading of the Preamble and the Memorandum of the Amnesty Scheme it is clear that the benefit of the Scheme is to be given in respect of transactions commencing from 1st April 2006 - The contention of the respondents that the Scheme is prospective in effect and therefore the petitioners are not entitled to the benefit thereof therefore is clearly based upon a misconception of the provisions of the Scheme which clearly provide for granting benefit thereof with effect from 1st April 2006 and hence the scheme by its very nature is retrospective in effect viz. applicable to past transactions. It is an admitted position that in the facts of the present case the petitioners seek the benefit of the Scheme in relation to the years 2010-11 2011-12 and 2012-13 which are well within the ambit of the Scheme namely between 1st April 2006 and 14th October 2014. If the interpretation put forth by the respondents were to be accepted the same would result in a situation where dealers who have paid their taxes prior to the coming into force of the Scheme would be denied the benefit thereof whereas those dealers who have not paid the taxes would be granted the benefit of the Scheme which would be clearly violative of the constitutional provisions as envisaged under Article 14 of the Constitution of India and would amount to putting a premium on non-payment of taxes whereby dealers who have not paid taxes steal a march over those dealers who have paid their taxes in time. Petition allowed - respondents are hereby directed to forthwith grant the benefit of the Amnesty Scheme dated 14th October 2014 to the petitioners - decided in favor of petitioner.

Issues Involved:
1. Eligibility for the benefit of the Amnesty Scheme dated 14th October, 2014.
2. Interpretation of paragraph 7 of the Amnesty Scheme.
3. Retrospective application of the Amnesty Scheme.
4. Constitutional validity concerning Article 14 of the Constitution of India.

Detailed Analysis:

Issue 1: Eligibility for the Benefit of the Amnesty Scheme
The petitioners sought a direction for the respondents to grant the benefit of the Amnesty Scheme dated 14th October, 2014, by allowing their application dated 13th January, 2015. The petitioners, engaged in building construction, had paid tax and interest prior to the Scheme's introduction. The respondents refused the benefit on the ground that payment was made before the Scheme's notification. The court found that the petitioners satisfied all conditions for eligibility under the Scheme, except for the timing of the tax payment.

Issue 2: Interpretation of Paragraph 7 of the Amnesty Scheme
The respondents argued that paragraph 7 of the Scheme required tax payments to be made during the Scheme's operation period to qualify for the benefit. The court disagreed, stating that paragraph 7 only required that taxes be paid before the Scheme's expiry, without precluding those who had paid earlier. The court emphasized that the Scheme's intent was to grant benefits to all eligible dealers, regardless of when the tax was paid.

Issue 3: Retrospective Application of the Amnesty Scheme
The court examined the Scheme's Preamble and Memorandum, concluding that the Scheme was intended to apply retrospectively from 1st April, 2006. Therefore, the petitioners' transactions for the years 2010-11, 2011-12, and 2012-13 fell within the Scheme's ambit. The court rejected the respondents' argument that the Scheme was prospective, clarifying that it was designed to address past transactions.

Issue 4: Constitutional Validity Concerning Article 14
The court noted that denying the benefit to those who paid taxes earlier would result in an incongruous situation, violating Article 14 of the Constitution of India. Such an interpretation would unfairly disadvantage compliant taxpayers while benefiting those who delayed payments. The court emphasized that the Scheme should be interpreted to avoid such constitutional violations.

Conclusion:
The court directed the respondents to grant the benefit of the Amnesty Scheme to the petitioners within three months from the receipt of the order. The petitioners were also required to withdraw their pending appeals against the final assessment orders. The court's decision underscored the need for a fair and consistent application of the Scheme, aligning with its intended purpose and constitutional principles.

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