2015 (3) TMI 212 - HC - VAT and Sales Tax

Denial of the benefit under the Amnesty Scheme - Held that - It is not brought to the notice of this Court from the part of the respondents as to how Ext.P14 came to be finalized. It is also not seen whether the notice was issued by registered post, whether the proceedings were finalized with regard to the revocation of permission granted under the Amnesty proposal after giving an opportunity of hearing and whether the concerned order stated as passed on 13.6.2012 was forwarded to the petitioner by registered post. The counter affidavit is also silent as to the manner in which the service was effected and whether any further proceedings were pursued by the petitioner after service of such order. - This is a fit case where a further opportunity can be given to the petitioner to highlight the factual and legal aspects by setting him at liberty to submit a detail objection in response to Ext.P14. This shall be done at the earliest at any rate within 'two weeks' from the date of receipt of a copy of this judgment, upon which the same shall be considered and appropriate orders shall be passed in accordance with law, also in the light of the verdict passed by this Court in previous order and after giving an opportunity of hearing in this regard. This exercise shall be completed at the earliest at any rate within 'three months' from the date of filing the objection as above. Further coercive steps shall be kept in abeyance till such time. - Petition disposed of.

Summary

Issues:
1. Appropriation of amounts towards principal and interest.
2. Denial of benefit under the Amnesty Scheme.
3. Challenge to the manner of appropriation under the KGST Act.

Issue 1: Appropriation of amounts towards principal and interest:
The petitioner contested the respondents' practice of crediting amounts deposited by the petitioner against the interest portion rather than the principal amount. The petitioner argued that despite making deposits in compliance with court orders, the amounts were not appropriately credited towards the principal. This issue arose from the petitioner's liability for sales tax arrears for the years 2000-2001 and 2001-2002. The petitioner sought re-computation of the liability to ensure proper adjustment of payments made. The sequence of events detailed how the petitioner's deposits were credited, leading to dissatisfaction with the appropriation method.

Issue 2: Denial of benefit under the Amnesty Scheme:
The petitioner also raised concerns about being denied the benefit of the Amnesty Scheme declared by the Government. Despite making payments and seeking to avail the benefits of the Scheme, the petitioner faced challenges in having the liability liquidated accordingly. The respondents argued that the petitioner did not fully avail the opportunity for discharging the liability under the Amnesty Scheme. The petitioner contended that the benefit of the Scheme was virtually defeated due to arbitrary appropriation practices, primarily guided by Section 55C of the KGST Act. The petitioner highlighted the intent behind the Amnesty Scheme as a revenue-generating and policy-driven initiative by the Government.

Issue 3: Challenge to the manner of appropriation under the KGST Act:
The petitioner challenged the manner of appropriation under the KGST Act, emphasizing the distinct position of the Amnesty Scheme in the appropriation process. The petitioner argued that the Amnesty Scheme, as a policy-driven initiative, should be treated differently from the standard appropriation methods outlined in the Act. The petitioner relied on legal precedents and highlighted the importance of following the Scheme's provisions strictly. The court recognized the need for further clarification on the appropriation process and granted the petitioner an opportunity to submit detailed objections to Ext.P14, ensuring a fair hearing and consideration of all legal and factual aspects.

In conclusion, the High Court of Kerala addressed the issues raised by the petitioner regarding the appropriation of amounts, denial of benefits under the Amnesty Scheme, and challenges to the manner of appropriation under the KGST Act. The court allowed the petitioner to submit detailed objections and ensured a fair review of the case within a specified timeframe. The judgment aimed to provide clarity on the appropriation process and uphold the principles of justice and legal compliance in resolving the petitioner's grievances.