2024 (6) TMI 678 - HC - VAT and Sales Tax

Benefit of the Amnesty Scheme, 2020, for settlement of tax arrears for the assessment year 2015-16, as also for the assessment years 1998-99 to 2004-05 - HELD THAT - Inasmuch as the Amnesty Scheme, 2020 envisages a settlement of even those dues that are pending for the assessment years 1998-99 to 2004-05, the appellant must get the benefit of the method of computation of Amnesty amount for the purposes of settlement as envisaged under the Amnesty Scheme, 2020. As the Scheme contains provisions which are beneficial to an assessee, the pendency of the Review Petition, together with the fact that interim orders were passed by this Court and the Supreme Court staying recovery proceedings against the appellant, should be seen as the backdrop against which the payments of various amounts were effected by the appellant during the pendency of the litigation referred. Thus, the said payments have necessarily to be seen as provisional and subject to the final outcome of the litigation. These appeals are disposed off by setting aside the impugned judgments of the learned Single Judges, quashing the impugned orders and demand notices in the Writ Petitions and declaring that the liability of the appellant towards turnover tax interest and penalty for the assessment years 1998-99 to 2004-05 and 2015-16 shall be seen as finally settled in terms of the Amnesty Scheme, 2020 through the payment of Rs. 3,19,32,523/-. Petition disposed off.

Issues Involved:
1. Inclusion of excise duty in total turnover for turnover tax under KGST Act.
2. Adjustment of payments towards tax and interest under Amnesty Schemes.
3. Finality of assessments and applicability of Amnesty Schemes for various assessment years.

Summary:

1. Inclusion of Excise Duty in Total Turnover:
The appellant, a distillery, disputed the inclusion of excise duty in the total turnover for turnover tax purposes under the KGST Act for the years 1998-99 to 2004-05. This issue was settled by the Supreme Court in "State of Kerala v. Maharashtra Distilleries Ltd." (2005) 141 STC 358, which held that excise duty paid forms part of the total turnover for turnover tax.

2. Adjustment of Payments Under Amnesty Schemes:
The appellant challenged the adjustment of payments made towards tax and interest under the Amnesty Scheme introduced by the Kerala Finance Act, 2009. The Assessing Authority appropriated payments towards interest first, as per Section 55C of the KGST Act. The appellant contended that this adjustment was incorrect and sought a revision under the Amnesty Scheme, 2020, which provided for a complete waiver of penalty and interest if 50% of the principal tax amount was paid by 31.03.2021 or 40% within 30 days of intimation.

3. Finality of Assessments and Applicability of Amnesty Schemes:
The learned Single Judge found that the appellant had settled tax liabilities for 1998-99 to 2004-05 under the Amnesty Scheme, 2009, except for 1999-00. The appellant argued that the assessments were not final due to ongoing litigation and interim orders staying recovery. The High Court allowed the Review Petition, reinstating W.P.(C). No. 12901 of 2009, and considered the appellant's claim under the Amnesty Scheme, 2020. The Court found that the appellant had paid Rs. 3,19,32,523/- against a liability of Rs. 2,45,43,736/- under the Amnesty Scheme, 2020, and treated this payment as full settlement for the years 1998-99 to 2004-05 and 2015-16. The Court also ordered a refund of Rs. 7,98,253/- paid during the pendency of W.P.(C). No. 1291 of 2021.

Conclusion:
The High Court set aside the impugned judgments, quashed the orders and demand notices, and declared the appellant's liability settled under the Amnesty Scheme, 2020, through the payment of Rs. 3,19,32,523/-. The appellant was entitled to a refund of Rs. 7,98,253/-.

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