2021 (4) TMI 1035 - HC - VAT and Sales Tax

Court allows petitioner to adjust excess tax against liability under Amnesty Scheme 2020 citing legal precedents.

The Court held that adjusting the excess tax paid by the petitioner against their liability under the Amnesty Scheme 2020 is permissible, citing legal ... Adjustment of amount which is due and payable to the petitioner as assessee towards their liability under the amount payable as per the Amnesty Scheme - HELD THAT:- The issue involved in the instant writ petition regarding adjustment of amount which is due and payable to the petitioner as assessee towards their liability under the amount payable as per the Amnesty Scheme is no more res integra. In the matter of M/S. STEEL EXCHANGE INDIA LTD VERSUS THE ASST. COMMISSIONER, STATE OF KERALA [2020 (7) TMI 756 - KERALA HIGH COURT] it has been held that The department has not preferred any appeal against the said order so as to cast any doubt on the entitlement of the petitioner for the refund amount. In that scenario, when amounts are liable to be paid by the petitioner to the department for the purposes of getting the benefit of the Amnesty Scheme, an adjustment of the refund amounts due to the petitioner towards whatever amount is found payable by the petitioner, would not in any manner offend the terms of the Scheme because it is simply an adjustment towards the payment to be made under the Scheme and the amount was appropriated. In this view of the matter, non adjustment of the amount due and payable to the petitioner being assessee for the assessment years 2006-07, 2007-08, 2013-14 and 2016-17 towards their liability under the Amnesty Scheme 2020 cannot be justified - petition allowed. Issues:1. Adjustment of excess tax paid by the petitioner towards their liability under the Amnesty Scheme 2020.Analysis:The petitioner, an assessee under the Kerala Value Added Tax Act and Central Sales Tax Act, challenged assessment orders for various years before the Tribunal. The Tribunal quashed the assessment orders for certain years, leading the petitioner to claim a refund of excess tax paid amounting to Rs. 36,66,960. The petitioner also applied for the benefit of the Amnesty Scheme 2020 for certain years, where they were directed to pay specific amounts. The petitioner argued that the excess tax paid should have been adjusted against the amounts payable under the Amnesty Scheme. The petitioner cited precedents like Steel Exchange India Ltd. and Gandhi Sons cases to support their claim.The Government Pleader opposed the petition, arguing that the amount payable under the Amnesty Scheme is separate from any refund due to the petitioner. The Court considered the submissions and referred to the Steel Exchange India Ltd. case where it was held that adjusting refund amounts towards amounts payable under the Amnesty Scheme does not violate the Scheme's terms. The Court emphasized that if an assessee is entitled to a refund and also has a liability under the Amnesty Scheme, adjusting the refund towards the liability is permissible.Furthermore, the Court referred to the Gandhi Sons case, which highlighted the procedure for adjusting amounts due to and from the State. It was stated that the assessing authority should adjust the amount due to the assessee and recover only the balance, if any. In light of these judgments, the Court concluded that the non-adjustment of the amount due to the petitioner towards their liability under the Amnesty Scheme was unjustified. The Court directed the respondents to consider the petitioner's representation for adjustment within two months, following the principles established in the mentioned cases.Therefore, the Court's judgment focused on the issue of adjusting the excess tax paid by the petitioner against their liability under the Amnesty Scheme 2020, emphasizing the legal precedent and the proper procedure for such adjustments as established in previous cases.