2015 (1) TMI 723 - HC - VAT and Sales Tax

Benefit of the Samadhan Scheme under Samadhan Act - Representation raised on computation done under Scheme - Subsequent denial of benefit inspite of fact that benefit approved earlier - Held that - Scheme of the Samadhan Act has provided necessary checks and balances and it is not as if as and when applications are filed under Section 7, they are automatically accepted. The first stage by which the designated authority has an opportunity to throw out an application is while examining the same under Section 6 of the Act. In the instant case, the petitioner s applications were examined and the authority was satisfied that the petitioner is entitled to the benefit of the Scheme and therefore orders were passed on 22.2.2011 demanding payment from the petitioner under Section 6(2) of the Act. The petitioner was granted seven days time. The petitioner disputed the computation by submitting representations. The first respondent neither resiled from his decision nor took any decision to state that the petitioner was not entitled to the benefit of the Samadhan Act by subsequent proceedings related to the computation of the amount demanded in the demand dated 22.2.2011 and the same was put to rest after the petitioner effected payments on 28.4.2012. Therefore, by a mere change of officer, now the clock cannot be set back and the petitioner s applications cannot be rejected, when the same were already entertained, the amounts demanded and the only dispute which was with regard to the quantum. Therefore, the impugned proceedings are vitiated on the ground that the procedure contemplated under the Act does not provide for passing such an order at such stage. Accordingly, the writ petitions are allowed and the impugned proceedings are quashed. - Decided in favour of assessee.

Summary

Issues Involved:
1. Rejection of applications under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2010.
2. Compliance with the conditions of the Samadhan Scheme.
3. Computation and payment of the amount demanded under Section 6(2) of the Act.
4. Entitlement to the benefit of the Samadhan Scheme.
5. Issuance of certificate under Section 8 of the Act.

Issue-wise Detailed Analysis:

1. Rejection of applications under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2010:
The petitioner challenged the order dated 21.1.2013 by the first respondent, rejecting their applications under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2010 (Samadhan Act). The applications were initially processed, and an order was passed on 22.2.2011 demanding payment under Section 6(2) of the Act.

2. Compliance with the conditions of the Samadhan Scheme:
The petitioner, a registered dealer, complied with the conditions of the Samadhan Scheme by correctly calculating the amount and reporting the taxable turnover. They submitted representations requesting the details of the workings to submit their reply. The Court previously directed the provision of these details, leading to further representations by the petitioner.

3. Computation and payment of the amount demanded under Section 6(2) of the Act:
The designated authority verified the correctness of the particulars furnished in the application and determined the amount payable. The petitioner was called upon to pay the differential amount, which they disputed and subsequently paid sums of Rs. 12,381 and Rs. 54,014. The Court noted that the designated authority must verify the correctness of the particulars and determine the amount payable at the rates specified in Section 7.

4. Entitlement to the benefit of the Samadhan Scheme:
The Court referred to the case of Cheran Cements Limited, which clarified the scope and operation of the Samadhan Act. The Act provides for settlement of arrears of tax, penalty, or interest, and the designated authority must verify the correctness of the particulars furnished by the applicant. The onus lies on the dealer/applicant to compute the rate payable correctly. The Court observed that the petitioner's applications were initially accepted, and the amounts demanded were paid, indicating entitlement to the benefit of the Scheme.

5. Issuance of certificate under Section 8 of the Act:
The Court emphasized that the Scheme of the Samadhan Act has necessary checks and balances, and applications are not automatically accepted. The designated authority has the opportunity to reject applications while examining them under Section 6. In this case, the petitioner's applications were examined, and the authority was satisfied that the petitioner was entitled to the benefit of the Scheme. The impugned proceedings were quashed, and the Court directed the first respondent to issue the necessary certificate under Section 8, settling the case of the petitioner.

Conclusion:
The writ petitions were allowed, and the impugned proceedings were quashed. The first respondent was directed to issue the necessary certificate under Section 8, settling the case of the petitioner, as the procedure contemplated under the Act did not provide for passing such an order at the subsequent stage after the initial acceptance and payment of the demanded amounts.