2023 (7) TMI 472 - HC - VAT and Sales Tax

Court Quashes Communication & Bank Attachment, Directs Benefits Under Amnesty Scheme

The court allowed the petition, quashing the communication and bank attachment order. The respondent was directed to grant the petitioner benefits under ... Amnesty Scheme - Substantial amount paid prior to announcement of the amnesty scheme and even prior to assessment order passed by the Assessing Officer (change to Vera Samadhan Yojana - 2019) - HELD THAT:- It would emerge from the record that at the time of spot inspection and assessment at the place of the petitioner, the petitioner deposited an amount of Rs. 48,75,000/- on 01.07.2015 towards the amount of tax, however while passing assessment order, the concerned Assessing Officer had not taken into consideration the said amount and thereby held that the petitioner is liable to pay total amount of Rs. 77,77,575/- (including tax of Rs. 38,03,216/- + penalty and interest). Thus prima facie from the record, it is clear that the concerned Assessing Officer has not taken into consideration the amount of tax of Rs. 48,75,000/- paid by the petitioner. The petitioner, therefore, filed first appeal before the appellate authority. In the memo of appeal, the petitioner has specifically taken contention in Paragraph No. 9 that while passing an order of assessment on 29.06.2015, the concerned officer has not taken into consideration the amount of tax of Rs. 48,75,000/- paid by the petitioner and, therefore, he has wrongly calculated the amount of interest and penalty, which is not permissible - It is further reflected from the record that separate application for stay was also filed by the petitioner before the appellate authority and the appellate authority has considered the amount of Rs. 48,75,000/- paid by way of tax by the petitioner to the concerned respondent authority and, therefore, the appellant authority has granted stay on 25.05.2017 in favour of the petitioner against the recovery. It is also pertinent to note that against the aforesaid order passed by this Court, the State preferred SLP in STATE OF GUJARAT AND ANR. VERSUS SAFAL DEVELOPERS AND ANR. [2016 (10) TMI 1383 - SC ORDER] before the Hon’ble Supreme Court and the Hon’ble Supreme Court has dismissed the SLP preferred by the State and thereby the Hon’ble Supreme Court has not interfered with the order passed by this Court in the aforesaid case. The respondents have committed an error while rejecting the application submitted by the petitioner under the amnesty scheme as the petitioner had already paid an amount of Rs. 48,75,000/- even prior to the order of assessment was passed by the concerned Assessing Officer and prior to announcement of the scheme - the petitioner is entitled to get the benefit of the scheme and remission of penalty and interest. The impugned communication dated 11.05.2022 at Annexure-A as well as the attachment order dated 20.06.2022 at Annexure-K are hereby quashed and set aside. The respondent no. 3 herein is hereby directed to grant benefit of the amnesty scheme to the petitioner - Petition allowed. Issues Involved:1. Entitlement to remission of interest and penalty under the CST Act.2. Eligibility for benefit under the Vera Samadhan Yojana amnesty scheme.3. Legality of the bank attachment order.4. Restoration of the first appeal and stay order.Summary:1. Entitlement to Remission of Interest and Penalty:The petitioner, engaged in the manufacture and sale of Ceramic Tiles, challenged the assessment order for the year 2012-13, which demanded tax with interest and penalty without crediting the tax amount already paid by the petitioner. The petitioner had paid Rs. 48,75,000/- but the assessing officer did not consider this payment in the assessment order.2. Eligibility for Benefit under the Vera Samadhan Yojana Amnesty Scheme:The petitioner applied under the Vera Samadhan Yojana - 2019 amnesty scheme, pointing out that the tax liability was already paid. However, the application was rejected by the respondent, who did not consider the pre-paid tax amount. The court noted that the petitioner was eligible for the scheme as the tax was paid before the assessment order and the scheme's announcement. The court referred to the precedent set in Safal Developers, where it was held that pre-paid taxes should be considered for amnesty benefits.3. Legality of the Bank Attachment Order:The petitioner's bank account was attached by the respondent for recovery of alleged outstanding dues, again without considering the pre-paid tax amount. The court found this action to be erroneous since the petitioner had already paid the tax amount, making the attachment order illegal.4. Restoration of the First Appeal and Stay Order:The petitioner had filed a first appeal against the assessment order, and the appellate authority had granted a stay considering the pre-paid tax amount. The court observed that the petitioner had withdrawn the appeal to apply under the amnesty scheme, which was wrongly rejected by the respondent.Judgment:The court allowed the petition, quashing the impugned communication dated 11.05.2022 and the bank attachment order dated 20.06.2022. The respondent was directed to grant the benefit of the amnesty scheme to the petitioner, acknowledging the pre-paid tax amount and providing remission of penalty and interest. The rule was made absolute.