2024 (8) TMI 147 - HC - VAT and Sales Tax

Challenge to revenue recovery notices issued for recovery of amounts allegedly due from the appellant under the Kerala Value Added Tax Act (KVAT Act) and Central Sales Tax Act (CST Act) for various financial years - case of the appellant in the Writ Petition was that in respect of the tax dues under the CST Act and KVAT Act for various assessment years, he had opted for settlement in accordance with the Amnesty Scheme 2020 - HELD THAT - It was open to the respondents to consider an adjustment of the refund amount due to the appellant towards the amounts due from him by way of settlement under the Amnesty Scheme. The reasons furnished by the respondents for not acceding to the request of the appellant are not legally sustainable. The ends of justice would be met by adjusting the Amnesty amount of Rs.1,60,465/- from the Rs.5 lakhs that is due to the appellant by way of refund, and utilising the remaining amount for settlement of the dues outstanding from the appellant in the assessment years other than those that were opted for settlement under the 2020 Amnesty Scheme. This Writ Appeal is allowed by setting aside the impugned judgment of the learned Single Judge, and by directing the respondents to deduct the amount of Rs.1,60,465/- from the amount of Rs.5 lakhs that is due to the appellant by way of refund and treat the dues for the assessment years opted for under the Amnesty Scheme 2020 as finally settled under the said Scheme - appeal disposed off.

Summary

Issues:
Challenge to revenue recovery notices under the KVAT Act and CST Act based on the Amnesty Scheme 2020.

Analysis:
The appellant challenged revenue recovery notices issued under the Kerala Value Added Tax Act (KVAT Act) and Central Sales Tax Act (CST Act) for various financial years. The appellant opted for settlement under the Amnesty Scheme 2020 for tax dues under the CST Act and KVAT Act for specific assessment years. The appellant requested to adjust the Amnesty amount from a refund due to him, supported by a court judgment allowing such adjustments. However, the Department did not act on the request, leading to the issuance of revenue recovery notices.

The learned Single Judge considered the case and found that once an authority determined the payment amount under the Amnesty Scheme, no other payment options could be considered. Consequently, the Writ petition was dismissed by the Single Judge.

Upon appeal, the High Court directed the Government Pleader to confirm if the refund amount due to the appellant was adjusted by the Department. The respondents confirmed receiving the adjustment request before the payment deadline but did not act without a specific court direction based on a previous judgment. The High Court found the reasons for not accepting the appellant's request legally unsustainable. In light of a Division Bench judgment, the High Court allowed the appeal, directing the deduction of the Amnesty amount from the appellant's refund and settling the dues for the opted assessment years under the Amnesty Scheme 2020. The remaining amount from the refund could be used to offset outstanding dues from other assessment years or for future settlement under any new Amnesty Scheme introduced by the State Government.

In conclusion, the Writ Appeal was allowed, overturning the Single Judge's decision. The High Court directed the respondents to adjust the Amnesty amount from the appellant's refund, settling the dues for the opted assessment years, and utilizing the remaining refund amount for other outstanding dues or future settlements under applicable Amnesty Schemes.