2018 (3) TMI 1368 - HC - VAT and Sales Tax

Waiver of arrears on interest - Karnataka Tax on Entry of Goods Act, 1979 - Karasamadhana Scheme, 2017 - Respondent No.3 rejected the application on the ground that the application submitted by the petitioner was not accompanied by 10% of the arrears of tax - Held that - It is apparent that the petitioner has deposited 30% of the arrears of interest before the Appellate Authority and the same is not disputed by the revenue - Rejection of the application of the assessee on the ground that no arrears of interest was demanded by the Authorities is untenable. Hence, the Respondent No.3-Authority ought to have considered the demand notice along with the assessment order - entitlement of the petitioner for the scheme cannot be denied on this count. Petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to rejection of application under Karasamadhana Scheme, 2017 for waiver of interest arrears under Karnataka Tax on Entry of Goods Act, 1979.

Analysis:
The judgment deals with writ petitions challenging the rejection of applications under the Karasamadhana Scheme, 2017 for waiver of interest arrears under the Karnataka Tax on Entry of Goods Act, 1979. The scheme announced by the Government of Karnataka provided for a waiver of interest arrears from 1.4.2005 to 31.03.2016 to the extent of 90%, subject to certain conditions. The petitioner claimed compliance with the scheme requirements except for submitting the application through the website, as the system did not accept 30% of the amount deposited before the Appellate Authority. The Respondent No.3 rejected the application citing non-submission of 10% of arrears of tax and manual submission of the application. The Court referred to a previous judgment stating that the deposit made before the Appellate Authority can be considered a 'colourless deposit' until issues are determined finally, allowing adjustments under the scheme. The petitioner had indeed deposited 30% of arrears of interest before the Appellate Authority, which the revenue did not dispute.

The revenue contended that in addition to the deposit made before the Appellate Authority, the assessee needed to pay 10% arrears of interest along with the application for the scheme. However, the Court found this approach unfounded, categorizing the deposit as 'colourless' and unsustainable objections by the revenue. The manual filing of the application was also challenged by the revenue, citing the website's design to accept 10% of arrears of interest along with the application. The Court deemed the revenue's hyper-technical approach unjustifiable, especially as adjustments were impossible through the website due to the deposit made before the Appellate Authority. The rejection of the petitioner's application based on the absence of a demand notice for arrears of interest was deemed untenable, as the assessment order clearly included the interest component.

Consequently, the Court allowed the writ petitions, setting aside the impugned order and directing the Respondent No.3-Authority to accept the petitioner's applications for the scheme benefits, subject to the satisfaction of all taxes paid by the petitioner. All pending applications were consigned to file upon the disposal of the main writ petitions.