2014 (6) TMI 951 - HC - VAT and Sales Tax

Revocation of Amnesty under Sales Tax Act upheld due to payment default. Strict construction applied.

The court upheld the revocation of the petitioner's granted amnesty under the Kerala General Sales Tax Act, 1963 for the years 2002-03 to 2004-05 due to ... Eligibility of revocation of amnesty, granted for the years 2002-03 to 2004-05 - Revocation was not notified as provided under sub-section (6) of section 23 of the KGST Act, 1963 - Default to maintain sufficient amounts to honour the cheques issued - Two cheques were presented having been honoured and the amounts collected thereby having been appropriated towards the interest dues of the petitioner under section 55C of the Act. Appropriation under section 55C being a statutory mandate; is not a question to be addressed in a notice under sub-section (b) of section 23B - Held that:- the default of the assessee to remit amounts on or before the last date stipulated, dis-entitles the assessee, without anything more from settling its arrears under the scheme. Neither a notice nor a revocation order is contemplated on default made by the assessee to pay the amounts stipulated before the last date notified. There is absolutely no infirmity, in the assessing officer having declined the petitioner's continuance under the Amnesty Scheme which is a consequence of the petitioners default. The petitioner cannot claim any further eligibility under the Amnesty Scheme especially since the period is over, and there can definitely be no adjustment under one year and revocation in the others. Therefore the petitioner's claims are not valid under the provisions of Section 23B and the appropriation under section 55C cannot in any manner be assailed, since that is a statutory compulsion, not open for debate or adjudication. A payment beyond time was found to be liable to adjustment or entitled for refund as the law provides and appropriation under section 55C is what the law provides, herein followed by Hemalatha Gargya v. Commissioner of Income-tax (AP) [2002 (11) TMI 6 - SUPREME Court]. - Decided against the petitioner Issues:Revocation of amnesty under Kerala General Sales Tax Act, 1963 for the years 2002-03 to 2004-05 due to default in payment.Analysis:The petitioner, a dealer in live chicken, challenged the revocation of amnesty granted for the years 2002-03 to 2004-05 under the Kerala General Sales Tax Act, 1963. The petitioner contended that the revocation was not properly notified as required by law. The petitioner had applied for amnesty for the specified years and was granted relief under the scheme. However, despite issuing cheques for payment, most were dishonored except for two. The petitioner argued that the assessing authority should have prioritized clearing the cheques for the year with the highest dues. The court found this argument legally unsustainable as the petitioner was obligated to ensure sufficient funds in the account to cover all dues as per the scheme.The petitioner claimed that there were adequate funds in the account to satisfy the amnesty scheme for the year 2002-03 but not for the other two years. However, the court noted that the scheme allowed for settling arrears due prior to March 31, 2005, and not for individual assessment years. The default in maintaining sufficient funds to honor the cheques led to the revocation of the amnesty. The court emphasized that no notice or revocation order was required for such default by the assessee.Regarding the revocation process, the court highlighted that the revocation order under section 23B did not necessitate a formal notice in the context of honoring cheques. The court emphasized that the Amnesty Scheme should be strictly construed as it is a premium on default, and any revocation due to default does not require a hearing. The court concluded that the assessing officer was justified in declining the petitioner's continuance under the scheme due to default, and the petitioner could not claim further eligibility under the scheme.In considering relevant legal precedents, the court distinguished the petitioner's case from previous decisions and emphasized strict adherence to statutory provisions and timelines. The court cited cases where compliance with scheme conditions was mandatory without room for equitable considerations. The court dismissed the writ petition, upholding the revocation of the amnesty due to the petitioner's default in payment obligations.In conclusion, the court found no merit in the petitioner's claims under section 23B and upheld the statutory appropriation under section 55C as a legal requirement. The court's decision was based on the petitioner's failure to comply with payment obligations under the Amnesty Scheme, leading to the revocation of the granted relief.