2024 (10) TMI 1 - HC - VAT / Sales Tax

Company wins amnesty scheme benefits after COVID-19 delays justified deposit acceptance ordered

Gujarat HC allowed petition seeking benefit of Amnesty Scheme. Petitioner company deposited Rs. 6,04,393/- by March 18, 2020, fulfilling scheme ... Remission of interest and penalty since tax amount has already been paid by the Petitioner no. 1-Company - benefit of the Amnesty Scheme - HELD THAT:- It is not in dispute that the petitioner filed a Purshis to avail the benefit of the Amnesty Scheme and made a prayer to remand the matter back to the first appellate authority so as to enable the petitioner to furnish C-Forms/F-Forms which were available with the petitioner. The Tribunal accordingly passed order on 10th January, 2020 which was communicated to the petitioner on 29th January, 2020 and thereafter the petitioner furnished C-Forms/F-Forms before the first Appellate Authority who passed the order on 28th February, 2020. It also appears from the record that the petitioner received the order from the first appellate authority on 16th March, 2020 and thereafter COVID-19 pandemic has started. The benefit of COVID-19 pandemic situation is required to be extended to the petitioner, more particularly in view of the order passed by the Hon’ble Supreme Court in Miscellaneous Application No. 21 of 2022 in Suo Motu Writ Petition No.3 of 2020, by which the period from 15th March, 2020 till 28th February, 2022 was to be treated as a relaxation period for granting benefit of limitation. The petitioner has already deposited sum of Rs. 06,04,393/- which is not disputed by the respondent to be payable under the Amnesty Scheme by 18th March, 2020. Thus, the petitioner has availed the benefit of the Amnesty Scheme, however the same is not given effect to by the respondent authorities on failure of the petitioner to communicate with the department because of the aforesaid two major factors viz. COVID-19 pandemic as well as death of the Consultant in the month of August, 2020. The impugned communication dated 29th March, 2022 and consequential action taken by the respondents are hereby quashed and set aside and the respondents are directed to pass necessary order granting benefit of the Amnesty Scheme to the petitioner accepting amount of Rs. 06,04,393/- towards full and final settlement of the dispute for the year under consideration - Petition allowed. Issues Involved:1. Entitlement to remission of interest and penalty under the CST Act.2. Eligibility for the benefit of the Amnesty Scheme.3. Legality of the bank attachment order.Issue-wise Detailed Analysis:1. Entitlement to Remission of Interest and Penalty under the CST Act:The petitioner company, engaged in manufacturing active pharmaceutical ingredients, was assessed for the period 2011-12 under the VAT Act and CST Act. Due to the inability to supply C-Forms/F-Forms, the branch transfers were treated as inter-state sales, resulting in a demand of Rs. 01,18,98,248/-. Upon appeal, the demand was revised to Rs. 20,13,777/-. The petitioner sought remission of interest and penalty, arguing that the principal tax amount was already paid. The court noted that the petitioner had deposited the required amounts by 18th March 2020, but due to the COVID-19 pandemic and the death of their consultant, further actions were delayed. Thus, the court concluded that the petitioner was entitled to remission of interest and penalty under the CST Act.2. Eligibility for the Benefit of the Amnesty Scheme:The petitioner applied for the Vera Samadhan Yojna, 2019 (Amnesty Scheme), which provided for waiver of interest and penalty upon full payment of the principal tax amount. The petitioner filed the necessary forms and withdrew their appeal to benefit from the scheme. Despite fulfilling these conditions, the respondent authorities rejected the application, citing procedural delays and non-compliance with specific scheme requirements. The court, however, extended the benefit of the COVID-19 pandemic situation and the Hon'ble Supreme Court's order, which treated the period from 15th March 2020 to 28th February 2022 as a relaxation period for granting the benefit of limitation. Hence, the court directed the respondent authorities to grant the benefit of the Amnesty Scheme to the petitioner.3. Legality of the Bank Attachment Order:The respondent authorities issued a bank attachment order to recover the outstanding dues based on the earlier assessment order dated 27th September 2016. The petitioner challenged this order, arguing that it was issued without jurisdiction and was illegal, especially since the revised demand had already been paid. The court quashed the impugned communication dated 29th March 2022 and the consequential bank attachment order, directing the respondents to pass the necessary order granting the benefit of the Amnesty Scheme and accepting the amount of Rs. 06,04,393/- towards the full and final settlement of the dispute for the year under consideration.Conclusion:The court allowed the petition, quashing the impugned communication and the bank attachment order. It directed the respondent authorities to grant the benefit of the Amnesty Scheme to the petitioner, considering the payment made and the exceptional circumstances due to the COVID-19 pandemic and the death of the petitioner's consultant. The rule was made absolute to the extent specified, with no order as to cost.