2018 (8) TMI 1377 - HC - VAT and Sales Tax

Recovery of Outstanding Dues - case of petitioner is that having been given the certificate under the Scheme and having accepted the payments, the department cannot start recoveries - time limitation. Held that - It is undisputedly true that the petitioner applied for the benefit of the scheme for both the units. The application as well as the accompanying documents make this aspect sufficiently clear - It was perhaps the mistake on the part of the competent authority to include the petitioner s case for benefit under the scheme only in relation to Vapi Unit. Had the petitioner come within time and made the grievance about this distinction, we would have certainly examined the issue further. However, the petitioner willingly accepted such verdict of the competent authority and made payment only of the principal outstanding dues to Vapi Unit. In consequence, the petitioner would be correct in insisting that the interest and penalty relatable to the assessments of Vapi Unit become enforceable by virtue of operation of the scheme. It would not be possible to put back the clock. The scheme was for a limited period. The application had to be made within prescribed time. If the petitioner, at the relevant time, had approached the authority or the Court for being given benefit under the scheme also for Valsad Unit and had shown willingness to make further payments of principal tax dues in relation to such unit, things would have been different. Petition dismissed.

Summary

Issues: Challenge to VAT department notices for recovery of outstanding dues under State Tax benefits scheme for sick industrial units.

Analysis:
1. Background of the Case: The petitioner, a company with two industrial units facing financial difficulties, challenged VAT department notices for outstanding dues. The Government of Gujarat had introduced a scheme for relief to sick industrial units, which the petitioner applied for within the specified time. The scheme allowed for waiver of interest and penalty subject to eligibility criteria.

2. Certificate Issuance: The competent authority accepted the petitioner's request for amnesty under the scheme only for one unit, issuing a nodal certificate for principal tax dues of that unit. The petitioner made the required payment as per the certificate, which covered only one unit, not both.

3. Petitioner's Argument: The petitioner contended that since the application for the scheme included both units, and they made the payment as per the certificate issued, the department cannot initiate recovery for the other unit. However, the department argued that each unit was separately registered and assessed, and the certificate covered only one unit.

4. Court's Analysis: The Court noted that while the application included both units, the certificates and calculations were specific to one unit only. The petitioner had accepted the authority's decision and made the payment accordingly. Therefore, the Court held that the interest and penalty for the other unit were still enforceable.

5. Conclusion: The Court dismissed the petition, emphasizing that the petitioner had the opportunity to challenge the distinction made by the competent authority but chose not to. As the scheme had a time limit and the petitioner accepted the authority's decision, the Court found no grounds to waive the dues for the other unit.

In summary, the Court upheld the VAT department's right to recover outstanding dues for the unit not covered by the State Tax benefits scheme, as the petitioner had voluntarily accepted the authority's decision and made the payment as per the certificate issued.