TaxTMI 
TaxTMI 
2024 (10) TMI 1176
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.... 2022 (Settlement Act) in which invoking provisions of Section 50 of the Maharashtra Value Added Tax Act, 2002 (MVAT Act), refund amount for financial year 2016-2017 is sought to be adjusted against the outstanding demand for the financial years 2013-2014, 2015-2016 and 2017-2018 and consequently seeks to review settlement orders passed under Section 13 (1) of the Settlement Act. Brief facts:- 3. The Petitioner is engaged in the business of manufacturing and sale of machineries and is registered under the MVAT Act. The Petitioner is regularly filing its MVAT returns which are subjected to scrutiny and assessment orders are passed by the Respondents exercising its powers under the MVAT Act which are also carried in appeal by the Petitioner. PROCEEDINGS FOR THE FINANCIAL YEAR 2013-14, 2016-17 & 2017-18:- 4. For the financial year 2013-2014, on 1st October 2021, an appeal order came to be passed by the Appellate Authority under the MVAT Act and pursuant thereto tax amount of Rs. 1,01,51,134/- was payable by the Petitioner. 5. On 12th May 2022, an assessment order for the financial year 2017-2018 was passed by the Respondents under the MVAT Act and a demand of Rs. 30,40,....
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....TTLEMENT ACT:- 11. On 21st March 2023, Respondent No. 2 issued show cause notice under Section 13 (3) of the Settlement Act for the financial years 2013-2014, 2015-2016 and 2017-2018 whereby a rectification was sought of its settlement orders dated 1st August 2022 and 3rd October 2022 for those financial years on the ground that after the settlement orders were passed it was noticed by Respondent No. 2 that the Petitioner was entitle to a refund for the financial year 2016-2017 amounting to Rs. 2,72,08,381/- by virtue of appeal order dated 13th May 2022 for that year. The said show cause notice further stated that the said refund for financial year 2016-2017 was available for adjustment towards pending dues under the MVAT Act and therefore in the application for settlement, Petitioner should have adjusted refund against demand for the years 2013-2014, 2015-2016 and 2017-2018 for arriving at outstanding amount for settlement. In the said show cause notices provisions of Section 50 of the MVAT Act were invoked. 12. On 24th April 2023, Petitioner filed its reply to the aforesaid show cause notice issued under Section 13 (3) of the Settlement Act and made detailed submissions int....
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....the refund for the financial year 2016-2017 against the demand for the financial years 2013-2014, 2015-2016 and 2017-2018. SUBMISSIONS OF THE PETITIONER:- 16. Mr. Banhatti, learned counsel for the Petitioner submits that the impugned orders are wholly without jurisdiction inasmuch as calculation of arrears made in the impugned orders dated 17th July 2023 is contrary to the provisions of the Settlement Act. There is no provision in the Settlement Act for calculating arrears of a particular year by adjustment of refund of the other years. Mr. Banhatti further submits that looking at the scheme of the Settlement Act and the orders passed accepting the settlement application, Petitioners have not challenged and/or withdrawn appeals for those years and they have lost a vital remedy which were proposed to be settled under the Settlement Act. It is his submissions that the Settlement Act is a self-contained code. He further submits that on the date when the settlement orders were passed, there was no order under Section 50 of the MVAT Act for adjustment of refund nor the said order is passed thereafter and therefore exercise done by the Respondents to recalculate the arrears/outstan....
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....d the relevant provisions of the MVAT Act. 22. The Statement of objects and reasons for enactment of the Settlement Act is reproduced herein : "STATEMENT OF OBJECTS AND REASONS 1. With a view to give effect to the proposals contained in the Budget Speech for the year 2022-2023, the Government considers it expedient for settlement of arrears under the various Acts administered by the Goods and Services Tax Department. 2. The Goods and Services Tax Act has come into force with effect from the 1st July 2017. Prior to the implementation of Goods and Services Tax in the State, various Tax Laws were in force. Some of the Tax Laws have been repealed and subsumed in the Goods and Services Tax. A large number of cases involving outstanding dues and litigations are pending. In order to unlock the amount involved in the outstanding dues and reduce the old pending litigations, the Government considers it expedient to provide for a scheme for settlement of arrears of tax, interest, penalty or late fee under the Relevant Act, for the specified period ending on or before the 30th June 2017. 3. In view of the Covid-19 pandemic, small industries, traders and other d....
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....e for settlement. (d) Section 6 (1) starts with non obstante clause, overriding the Relevant Act (which in the instant case is MVAT) and it provides determination of arrears of tax, interest, penalty or late fee for settlement. Section 6 (1) (a) provides that any payment made in respect of a statutory order shall first be adjusted towards the amount of undisputed tax and then disputed tax and, thereafter, towards the interest and the balance amount remaining unjusted shall then be adjusted towards the penalty and the late fee. Section 6 (1) (b) provides that after adjustment of the amount specified in clause (a), the amount remaining outstanding as on the cutoff date shall be considered for the settlement under the said Act. (e) Section 8 provides that the "requisite amount" determined under Section 6 shall be payable towards the settlement of arrears as specified in Annexures (A) and (B). The said annexures deals with one time payment option or installment option and the percentage of the amount of undisputed tax, disputed tax, interest, penalty and late fee to be paid towards the settlement. (f) Section 11 provides for conditions for settlement. The condition being that ....
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.... excess of the amount due from him. The refund may be either by deduction of such excess from the amount of tax, penalty, amount forfeited and interest due, if any, in respect of any other period or in any other case, by cash payment: Provided that, the Commissioner shall first apply such excess towards the recovery of any amount due in respect of which a notice under sub-section (4) of section 32 has been issued, or, as the case may be, any amount which is due as per any return or revised return but not paid and shall then refund the balance, if any. (2) If a registered dealer has filed any returns, fresh returns or revised returns in respect of any period contained in any year and any amount is refundable to the said dealer according to the return, fresh return or revised return, then subject to rules, the dealer may adjust such refund against the amount due as per any return, fresh return or revised return for any period contained in the said year, filed under this Act or the Central Sales Tax Act, 1956 (74 of 1956) or the Maharashtra Tax on the Entry of Goods into Local Areas Act, 2002. RULE 60 OF THE MVAT RULES 60. Grant of Refund:- (1) A....
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....tatute cannot be exercised for dealing with the matters covered or falling under another statute. In Evergreen Apartment, Co-operative Housing Society Ltd. Vs. Special Secretary (Appeals), Revenue Department AIR 1992 Guj 118, the Gujarat High Court has held that an officer of the revenue department occupying different capacity under different statue would not empower him to exercise powers under one enactment while proceeding under another enactment. 27. Applying the above, order under Section 50 of the MVAT Act for adjustment of refund is to be passed under the said MVAT Act by the authority specified under the said MVAT Act. In the case before us, there is no order under Section 50 of the MVAT Act for adjustment of refund of the Financial Year 2016-17 against dues of Financial years 2013-14, 2015-16 and 2017-18. The authorities under the Settlement Act may also be the authorities under the MVAT Act but while exercising powers under the Settlement Act, they cannot invoke provisions of Section 50 of the MVAT and that too in review proceedings under the Settlement Act. Therefore, on this count itself, impugned orders dated 17th July 2023 are required to be quashed. 28. It is i....
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.... the purpose of settlement under the Settlement Act then nothing prevented them to provide so under the Settlement Act. Having not provided, the authorities under the Settlement Act cannot confer upon themselves the powers given under Section 50 of the MVAT Act for determining the amount payable under the Settlement Act. Section 6 (1) (a) provides for adjustment to be made of payment made by the Petitioners for the year to which statutory order is concerned and not refund of another year. Also, Section 6 of the Settlement Act overrides anything contained in the Relevant Act for the purpose of adjustment and determination of arrears to be considered for the settlement under the said Act. Therefore, even on this count, action of Respondents in invoking provisions of Section 50 of the MVAT Act for arriving at the settlement amount is contrary to the Settlement Act. 30. It is a settled position in taxation laws that each year is a separate year for the purpose of the assessment. This is also codified in Section 12 of the Settlement Act which provides for separate application to be made for each financial year. As per the Settlement Act, the amount payable as per Annexure-A is certai....
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....ct is required to be initiated. In the instant case, we have not been shown any order passed under Section 50 of the MVAT Act till today for adjusting the refund for the year 2016-2017 against the outstanding demand for the years 2013-2014, 2015-2016 and 2017-2018. The Respondent No. 2 has now, vide order dated 13^th October 2023 after the review order was passed, is proposing to adjust the refund for the financial year 2016-2017. Therefore, admittedly there were no proceedings pending under Section 50 of the MVAT Act or any order passed under the said MVAT Act adjusting the refund for the financial year 2016-2017 against outstanding demand for the years 2013-2014, 2015-2016 and 2017-2018 either on the date of application made by the Petitioner under the Settlement Act or on the date when the order of settlement under Section 13 of the said Act was passed or on the date when the review order dated 17th July 2023 is passed. 33. In our view and on a reading of Section 50 of the MVAT Act, it provides that there has to be an order granting refund either by cash payment or by deduction of such refund against the demand for any other period and such order is required to be passed by t....
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....ntion of the Petitioner that there was no error apparent from the record which can be rectified under Section 13 (3) of the Settlement Act. Having failed to do so, Respondents cannot now make one more attempt by resorting to provisions of Section 15 of the Settlement Act and passing the orders which are impugned before us. Unless proceedings initiated under one section are concluded by passing an order one way or the other, on the same ground initiation of proceedings under another provision would be bad-in-law. 35. Section 15 of the Settlement Act provides that any order passed under the Settlement Act may be reviewed within 12 months from the date of service of order after noticing error in such order insofar as it is prejudicial to the interest of revenue. Therefore, first pre-condition for invoking provisions of Section 15 of the Settlement Act is that there has to be an 'error' and that 'error' should be in the order passed under the Settlement Act. The phrase 'error' mans a mistake, something incorrectly done through ignorance or inadvertence. In our view, as observed above, there was no error in the calculation of the outstanding arrears for the years 2013-2014, 2015-2016....
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....first proviso to Section 50(1) of the said Act, which would empower the Commissioner under the MVAT Act to adjust the refund. In our view, the said notice is required to be issued even if the refund arises out of the appeal order. Although as observed by us in the instant case, there is no order under Section 50 of the MVAT Act itself. 38. The contention of the Respondents that in the settlement application, Respondents have not disclosed the refund for the year 2016-2017 is misconceived. On a perusal of the application for settlement there is no such column or row which obliges an applicant to disclose the refund for some other year. The Form only requires the details of the outstanding amount for the year for which the application is made to be disclosed and admittedly there is no dispute that the said information has been correctly disclosed. If there is no provision in the application Form to disclose refund of the year other than the year for which the application is made, in our view, there cannot be any allegation of mis-declaration or suppression. It is also important to note that the Respondents have not revoked the settlement order under Section 17 of the Settlement Ac....