2024 (5) TMI 1430 - HC - VAT and Sales Tax

Petitioner denied Rural Development Cess waiver despite exemption eligibility due to already collecting amount from FCI

The AP HC dismissed a writ petition challenging Rural Development Cess (RDC) demand for Assessment Year 2002-03. The petitioner sought waiver of RDC under ... Failure to extend benefit of waiver of demand of Rural Development Cess for the Assessment Year 2002-03 pursuant ot G.O. Ms. No. 950 & 951 dated 10.09.2003, G.O. Ms. No. 682 & 683 dated 03.09.2004, G.O. Ms. No. 25 dated 09.01.1996 and G.O. Ms. No. 290 dated 07.09.2005 - demand of Rural Development Cess (RDC) and the payment of APGST amount in installments - HELD THAT:- Admittedly two components are involved in this case i.e., tax component of Rs. 66,269/- under AP GST Act for the year 2002-03 and RDC of Rs. 3,00,514/- for the year 2002-03. So far as tax of Rs. 66,269/- is concerned, the petitioner admits its liability to pay the said amount but on the ground of some financial difficulties the petitioner prays to grant six equal monthly installments for payment of the said amount. As rightly contended by the Government Pleader, this Court cannot consider the said request and order the payment of tax under installments. The petitioner can approach the concerned authority and make a representation in that regard if so advised. Rural Development Cess (RDC) - HELD THAT:- The petitioner is not disputing the quantum of the cess but only questions its validity on the ground that in view of several G.Os narrated supra, the petitioner shall be exempted from payment of the cess. The respondent opposes the claim of the petitioner on the main contention that in the normal circumstances the petitioner is entitled to the exemption, but however, since the petitioner has already collected the cess amount from the FCI for the relevant period, the petitioner is not entitled to claim exemption and if such exemption is granted, it will amount to facilitating the petitioner to get undue enrichment. There are force in the said contention of learned Government Pleader. If the petitioner has already collected the cess amount from the FCI, it has to remit the same to the Government as otherwise granting exemption will amount to undue enrichment on the part of the petitioner. It should be noted that the petitioner did not file any rejoinder challenging the counter averments that the petitioner has already collected the cess amount from the FCI. As such, the said contention shall be accepted as a true fact. The writ petition is dismissed. Issues Involved:The judgment involves a writ petition challenging the non-extension of waiver of Rural Development Cess benefit for the Assessment Year 2002-03 and the demand notice issued by the D.C.T.O., Markapur. The issues include the legality of demanding Rural Development Cess and the payment of APGST amount in installments.Petitioner's Case:The petitioner, engaged in rice milling, challenges the demand of Rural Development Cess (RDC) beyond the MSP of paddy, citing various Government Orders (G.Os) restricting RDC levy. Despite G.Os waiving RDC and sales tax on paddy purchase value, the D.C.T.O. issued a demand notice for APGST and RDC. The petitioner seeks installment payment for APGST due to financial crisis.Respondent's Case:The respondent, while acknowledging the G.Os, argues that the petitioner collected tax/cess from customers but failed to remit to the State, leading to the demand notice. The respondent contends that G.Os do not cover non-remittance situations, as it results in unjust enrichment. The respondent justifies the legality of the demand notice and opposes exemption for the petitioner.Court's Decision:The Court notes the tax liability under APGST Act and the disputed RDC amount. It rejects installment payment for APGST, advising the petitioner to approach the relevant authority. Regarding RDC, the Court upholds the respondent's argument that exemption would lead to undue enrichment since the petitioner already collected the cess amount. As the petitioner did not challenge this fact, the Court dismisses the writ petition, denying relief to the petitioner.This judgment highlights the importance of compliance with tax remittance obligations and the limitations of seeking exemptions based on collected amounts.