2014 (4) TMI 40 - HC - VAT and Sales Tax

Sales tax Amnesty Scheme - Whether the authority was justified in rejecting the application w.r.t. Circular - Liquidation of liability - Entitlement for Scheme application was rejected referring to Circular No.13/08 pointing out that the value of the assets was more than the settlement liability - Held that - Circular was issued with reference to proposal in the Bill disappeared, when the Bill got transformed into the Act - the stipulation on which circular was based, has Section 23B of the Act does not contain any such adverse stipulation/circumstance, which bars the way of the petitioner in availing the benefit of Amnesty Scheme - The Court does not require any further thought to hold that Ext.P5 Circular has become redundant and it is not liable to be acted upon by any of the authorities of the respondent State - It is declared accordingly. After introduction of the Amnesty Scheme in the year 2008, it was not extended for the next year - But by virtue of the provisions of the Finance Act 2013, it was decided to be extended - Though the time originally stipulated got expired on 31.12.2013, it now stands extended till 31.03.2014 -The Court finds that the petitioner is entitled to have the benefit of Amnesty Scheme and the application filed in this regard is liable to be reconsidered - Ext.P4 order set aside - The first respondent directed to reconsider Ext.P3 application and inform the petitioner as to the amount to be satisfied under the Scheme - The proceedings as above shall be finalised within two weeks and petitioner to satisfy the due amount in terms of the Scheme on or before the last date for effecting the deposit Decided in favour of assessee

Summary

Issues:
Rejection of application for availing the benefit of Amnesty Scheme by the petitioner.

Analysis:
The petitioner was aggrieved by the rejection of their application (Ext.P3) to benefit from the Amnesty Scheme declared by the Government to settle tax arrears. The petitioner's assessment for the year 2000-01 initially incurring a substantial liability was later modified by appellate authorities. Despite a reduction in penal liability to 50%, the petitioner's revised assessment under Ext.P1 was challenged and subsequently modified under Ext.P2. The petitioner then applied for the Amnesty Scheme through Ext.P3, which was rejected citing that the value of assets exceeded the settlement liability, as per Ext.P4 order referring to Ext.P5 Circular (Circular No.13/08).

The petitioner's counsel argued that the rejection of the Amnesty Scheme application was unjustified as the Government's policy allowed for such settlements. The enactment of Section 23B without the proviso mentioned during the proposal stage indicated that the Circular (Ext.P5) was no longer applicable to deny the petitioner the benefits of the Scheme. The rejection based on the Circular was deemed improper.

The Government Pleader contended that the rejection was also due to the finalization of proceedings after 31.03.2013 and the proposal to challenge the Deputy Commissioner's order. However, the Court found these reasons unconvincing. The Circular referred to in Ext.P4 was no longer valid as it pertained to the Kerala Finance Bill, 2008, which was not reflected in the enacted Section 23B of the Act. Therefore, the Circular could not be used to deny the petitioner the Amnesty Scheme benefits.

Regarding the proposal mentioned in Ext.P4, no evidence was presented to show that any appeal had been filed or interim orders obtained. The liability in question was for assessment years preceding 31.03.2013, and the Amnesty Scheme had specific timeframes for application, which had been extended until 31.03.2014. Consequently, the Court ruled in favor of the petitioner, directing the first respondent to reconsider the Ext.P3 application and inform the petitioner of the amount due under the Scheme within two weeks for timely settlement.

In conclusion, the writ petition was allowed, and no costs were imposed.