Settlement Officer must calculate waiver benefits on full disputed amount before deducting pre-deposits under Jharkhand Act 2022

M/s Tata Motors Limited Versus The State of Jharkhand, Additional Commissioner of State Tax (Appeal), Jamshedpur, Joint Commissioner of Commercial Taxes (Administration) -cum-Additional Commissioner, State Tax, Sakchi, Deputy Commissioner of Commercial Taxes, Jamshedpur, Commercial Taxes Officer, Jamshedpur.

M/s Tata Motors Limited Versus The State of Jharkhand, Additional Commissioner of State Tax (Appeal), Jamshedpur, Joint Commissioner of Commercial Taxes ... 1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

• Whether the method adopted by the authorities under the 'Jharkhand Karadhan Adhiniyamon Ki Bakaya Rashi Ka Samadhan Act, 2022' (Amnesty Scheme) in computing the settlement amount by first adjusting the pre-deposit against the disputed tax before applying the waiver was correct.
• Whether the petitioner is entitled to a refund of the excess amount paid under protest due to the alleged incorrect application of the Amnesty Scheme.
• Whether the petitioner is entitled to interest on the excess amount paid.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Method of Computing Settlement Amount

• Relevant legal framework and precedents: The Amnesty Scheme provides a waiver of 60% for disputed tax and 50% for amounts related to declaration forms/certificates. The terms 'admitted tax' and 'disputed amount' are defined under the Scheme.
• Court's interpretation and reasoning: The Court found that the authorities erred in their methodology by first deducting the pre-deposit from the disputed tax before applying the waiver. This approach was deemed contrary to the intent of the Scheme, which aims to provide relief to taxpayers.
• Key evidence and findings: The petitioner had paid Rs. 2.20 crores as a pre-deposit under protest. The authorities calculated the waiver after deducting this amount from the disputed tax, resulting in a higher settlement amount payable by the petitioner.
• Application of law to facts: The Court concluded that the correct application of the Scheme should involve applying the waiver to the full disputed amount before considering any pre-deposit.
• Treatment of competing arguments: The petitioner argued that the waiver should apply first, while the respondents contended that the pre-deposit should be deducted first. The Court sided with the petitioner, citing similar interpretations in other cases.
• Conclusions: The methodology used by the authorities was incorrect, and the petitioner was entitled to a recalculation of the settlement amount.

Issue 2: Entitlement to Refund

• Relevant legal framework and precedents: The Amnesty Scheme and its interpretation in similar cases, such as the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
• Court's interpretation and reasoning: The Court held that the petitioner was entitled to a refund of the excess amount paid due to the incorrect application of the Scheme.
• Key evidence and findings: The petitioner provided a revised computation during the appellate proceedings, claiming a lesser refund amount than initially sought.
• Application of law to facts: The Court determined that the petitioner should receive a refund based on the revised computation submitted during the appeals process.
• Treatment of competing arguments: The petitioner's revised computation was accepted over the respondents' method of calculation.
• Conclusions: The petitioner is entitled to a refund of Rs. 1,18,02,056/-.

Issue 3: Entitlement to Interest

• Relevant legal framework and precedents: The Court referenced the general principles of refund and interest in tax matters, emphasizing the need for fairness and adherence to the Scheme's intent.
• Court's interpretation and reasoning: The Court found it appropriate to award interest on the refunded amount to compensate for the time value of money.
• Key evidence and findings: The petitioner had deposited the excess amount on 28.04.2023 and sought interest from this date until the refund.
• Application of law to facts: The Court directed the respondents to pay interest at 6% per annum on the refunded amount from the date of deposit.
• Treatment of competing arguments: The Court did not find any compelling arguments from the respondents to deny interest.
• Conclusions: The petitioner is entitled to interest on the refund amount.

3. SIGNIFICANT HOLDINGS

• The Court established that under the Amnesty Scheme, the waiver should be applied to the full disputed amount before deducting any pre-deposit. This ensures that taxpayers who have made partial payments are not disadvantaged compared to those who have not paid.
• The Court emphasized the need for a liberal interpretation of beneficial schemes like the Amnesty Scheme, aligning with the intent to provide relief to taxpayers.
• The final determination was that the petitioner is entitled to a refund of Rs. 1,18,02,056/- with interest at 6% per annum from the date of deposit until the refund is made.
• The Court's order set aside the appellate authority's decision and directed the respondents to complete the refund process within eight weeks.