TaxTMI 
TaxTMI 
2007 (12) TMI 440
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....which the petitioner was directed to show cause as to why the application dated June 14, 2007, for settlement of dispute in respect of the assessment for the period mentioned hereinbefore would not be refused, has also been challenged. The petitioner is a dealer registered under the West Bengal Value Added Tax Act, 2003 (in short, "the VAT Act, 2003") and previously, he was registered under the West Bengal Sales Tax Act, 1994 (in short, "the 1994 Act"). It has been submitted that the petitioner's books of account for the four quarters ended on March 31, 2004, had been seized by the bureau of investigation and as per their direction, the petitioner had to pay Rs. 80,000 as tax. Subsequently, upon assessment for the period as aforesaid, tax payable by the petitioner including surcharge and additional surcharge was assessed at Rs. 93,038.54. The applicant was also directed to make payment of Rs. 2,000 as purchase tax. Total amount due from the petitioner on assessment stood at Rs. 95,038.54. Taking into consideration the payment of Rs. 80,000 prior to assessment, additional tax liability was determined at Rs. 15,039. The applicant thereafter filed an appeal pe....
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....itioner, submitted that the additional tax for the period four quarters ending on March 31, 2004, was determined at Rs. 15,039 after giving due credit of Rs. 80,000 paid by the petitioner. Since the petitioner was not liable to pay any tax, entire amount of Rs. 95,039 was disputed by the petitioner while filing the appeal petition before the ACCT/NC. Subsequently, it came to the notice of the petitioner that he could avail of the benefit of the SOD Act, 1999, as in terms of the provision of section 4 of the SOD Act, 1999, the petitioner was eligible for making such application. As the relevant appeal for the period in question was lying pending on August 31, 2006, while filing the application for settlement of dispute under the SOD Act, 1999, the arrear tax in dispute was shown at Rs. 15,039. Since the definition of "arrear tax, penalty or interest in dispute" as given under section 2 of the SOD Act, 1999, means tax by whatever name called payable by an assessee upon assessment under the relevant Act which, as the case may be, is in dispute in any appeal or revision pending before the appellate authority or the revisional authority on the August 31, 2006, under the releva....
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....or settlement shall be furnished to the designated authority along with the application made under section 5". So if the dealer disputed the total amount of Rs. 95,038.54 he was supposed to make payment of Rs. 43,718 along with the application. Total payment, thus, would have been Rs. 1,23,718 whereas the actual liability of the applicant was Rs. 95,038.54. This is perhaps against the objective of the SOD Act, 1999, unless the amount paid in excess, i.e., Rs. 37,282 (Rs. 80,000 which the dealer paid prior to assessment less Rs. 43,718 which the dealer was supposed to make while submitting the application under section 5 of the SOD Act, 1999, being 46 per cent of Rs. 95,038.54) was refunded to the applicant. But as per proviso as contained in section 8 of the SOD Act, 1999, if a certificate of settlement is issued under sub-section (1) of section 8 in respect of the appeal pending for any period, the revision pending for such period shall also be deemed to have been withdrawn by the applicant upon issue of such certificate of settlement from the date of making of the application by the applicant under sub-section (1) of section 5 of the SOD Act, 1999. This, therefore, will deba....
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....ere a dealer has not deposited any amount of arrear tax in dispute, he is being allowed to settle the dispute only by paying a total of 33 per cent of arrear tax and if interest is disputed, five per cent of tax or interest, whichever is less. There is no reasonable basis as it appears for such classification or differentiation within the same class of taxpayers." The differential treatment is not violative of article 14 of the Constitution of India if there is a reasonable basis for such differentiation. The Tribunal further observed that (page 582) "In the instant case, we find no reasonable basis in making classification in the same class of taxpayers. A group, though are paying full amount of arrear tax, and another group pay nothing before making application under section 5 of the Act, 1999, yet benefit goes to the latter group depriving the former. Thus, there is no equality and uniformity within the same class by promulgation of the Ordinance. The (Amendment) Ordinance, 1999, thus, has caused discrimination with a deliberate intention for causing discrimination. The retrospective effect given by the (Amendment) Ordinance, 1999, therefore, is liable to be struck do....
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....he difference between tax admitted to be payable and paid by the assessee and the tax payable according to the assessment order. Amount paid is not always relevant for the purpose of ascertaining arrear tax in dispute. An assessee may pay higher amount of tax under protest or under misconception or by mistake or by way of abundant caution to avoid payment of interest and penalty but he may contend that amount of tax legally payable is less than the amount of tax actually paid. In such case the arrear tax in dispute will be the difference between the assessed amount of tax and the amount of tax admitted to be payable by the assessee. An illustration will make the position clear. "A", an assessee, admits in his return that Rs. 1 lakh is payable as tax and contends that no tax is payable on certain transaction. He finds that if his contention is not accepted, he will have to pay another Rs. 20,000 as tax. At the time of submission of his return he deposits Rs. 1 lakh as admitted tax and Rs. 20,000 under protest or with the contention that he is not legally bound to pay the said amount of Rs. 20,000. The assessing authority does not accept assessee's contention and assess....