2018 (11) TMI 4 - HC - VAT and Sales Tax

Penal interest for the belated payment of arrears - Eligibility for the settlement under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008 - Samadhan Scheme - Second proviso to Section 24(3) of the Tamil Nadu General Sales Tax Act. Held that - As per the Second proviso to Section 24(3) of the Tamil Nadu General Sales Tax Act, if an appeal/revision is preferred, then the interest payable is postponed till disposal of appeal/revision and after such disposal, it shall be calculated on the amount that becomes due - if a person wants to enroll himself/herself under Samadhan Scheme, then no appeal or revision should be pending. Therefore, the petitioner has moved the Tribunal to withdraw their appeals and after withdrawing the same, the petitioner has approached the first respondent for Samadhan Scheme. However, their plea was negatived, stating that no demand of penal interest is pending against the petitioner in view of the order passed in the revision petition, which, in the opinion of this Court, is not correct. In the case on hand, admittedly, original assessment was made much prior to the cut off date, ie., 01.04.2002, which is not disputed. Therefore, the arrears of tax, penalty or interest in respect of which the petitioner wanted to file an application, related to the assessment made much prior to 01.04.2002 - Therefore, in the opinion of this Court, the subsequent developments cannot deprive the petitioner, the benefits under the Samadhan Scheme. The first respondent is directed to receive the applications of the petitioner for Samadhan Scheme and examine the same, on its own merits and pass appropriate orders, within a period of six weeks from the date of receipt of a copy of this order - Petition allowed.

Summary

Issues Involved:
Petitioner's eligibility for settlement under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008.

Detailed Analysis:

Issue 1: Eligibility for Settlement under Samadhan Scheme
The petitioner sought settlement under the Samadhan Scheme for arrears of tax, penalty, or interest. The revisional authority postponed the demand of penal interest until the disposal of the petitioner's appeals before the Tribunal. However, the application under the Samadhan Scheme was rejected, citing no pending demand of interest. The petitioner contended that the demand was only postponed, not deleted entirely. The court noted that the legislation aimed for expeditious settlement of arrears and that the rejection based on the absence of demand was incorrect.

Issue 2: Interpretation of Section 4 of the Act
Section 4 of the Act stipulates that an applicant must not have any pending appeal or revision to be eligible for the Samadhan Scheme. The petitioner withdrew appeals before the Tribunal to apply for the scheme. The respondents argued that since the demand and levy of interest accrued after the crucial date, the petitioner was ineligible. The court disagreed, stating that the fresh order post-remand would substitute the original order, making the petitioner eligible for the scheme due to the original assessment predating the cutoff date.

Precedents and Decision
The court cited previous decisions where similarly situated parties were granted benefits under the Samadhan Scheme. Based on the facts and legal interpretation, the court set aside the impugned orders and directed the first respondent to reconsider the petitioner's application for the Samadhan Scheme within six weeks.

In conclusion, the court allowed all the writ petitions, emphasizing the legislative intent of expeditious settlement and ensuring the petitioner's eligibility for the Samadhan Scheme based on the original assessment predating the cutoff date.