Benefit of Amnesty Scheme cannot be denied merely because of short payment of tax by Rs. 2000: HC

Gujarat High Court in the matter of SKY INDUSTRIES LTD. Versus STATE OF GUJARAT has held that merely because the petitioner inadvertently paid Rs.2000/- less towards the principal outstanding amount of tax, it cannot be denied the benefit of the Amnesty Scheme “Vera Samadhan Yojna, 2019”.

The petitioner is engaged in the business of manufacturing and selling of knitted / woven / braided elastics and it is duly registered under the VAT and CST Acts. The petitioner is, now, also registered under the Central / Gujarat Goods and Services Tax Act, 2017 (‘GST’ for brief).

It was pointed out from the record that the petitioner came to be assessed under the VAT and CST Act for the year 2006-2007 and was issued a demand notice to pay tax along with interest and penalty.

At this stage, it was submitted that the Government of Gujarat introduced ‘Vera Samadhan Yojna, 2019’ (referred to as, ‘Amnesty Scheme’ hereinafter) vide Resolution dated 11.09.2019. However, the said resolution was superseded by the resolution dated 06.12.2019, later on.

It was submitted that the benefit of the Amnesty Scheme was to be made available even in cases, where, the appeals filed by the dealers were pending, provided that they withdrew such appeals and made the full payment of the principal amount of tax. Further, as per the said scheme, once the principal amount of tax was fully paid, the amount towards interest and penalty was to be waived off.

Accordingly, the petitioner made an application for getting the benefit of the Amnesty Scheme within the stipulated time and while so doing, the petitioner also withdrew the appeals filed by it before the concerned appellate authority.

Learned Advocate, Mr. Sheth, submitted that, as per the application submitted by the petitioner, it was required to pay total tax of Rs.5,37,686/- towards VAT, whereas, towards CST tax, it was required to pay Rs.5,39,787/-

It was submitted that Clause-7(3) of the Amnesty Scheme provides that after the submission of application by the petitioner, within the period of 15 days, but, not later than 28.02.2020, the concerned officer of the Respondents was required to intimate the petitioner online, about the amount to be paid under the Amnesty Scheme.

Once again, learned Advocate, Mr. Sheth, referred to the documents produced on the record and pointed out that after the verification of the documents submitted by the petitioner was done, the concerned Officer of the Respondents provided the details to the petitioner, wherein also, the concerned Officer has referred to the very same amount, which is referred by the petitioner in this application. Accordingly, the petitioner paid the entire amount, as per the calculation given by the officer of the Respondents, and the same was duly accepted by the Respondents.

Now, a grievance is raised by the petitioner that that after the amount of Rs.5,37,686/- is paid by the petitioner, the petitioner is orally informed that it has paid Rs.2,000/- less and therefore, by way of the impugned communication dated 06.10.2022, the petitioner was informed that the application made by it under Amnesty Scheme has been disposed of, on the ground that the petitioner failed to make the payment of full principal amount of tax. Hence, the present petition.

Order of Gujarat High Court:

7.4 Thus, from the observations made by the Division Bench of this Court, as referred to herein above, it can be said that the object of the amnesty scheme is to bring about expeditious and effective resolution of old disputes and recoveries of old outstanding dues of the Government and reduction of administrative costs. Since such scheme is applicable to all pending cases, the officers acting under the relevant statutes are expected to respect the object of the scheme and to ensure that the assessees get the benefit under the scheme.

7.5 In view of the above discussion, we are of the considered view that merely because the petitioner inadvertently paid Rs.2000/- less towards principal outstanding amount of tax, it cannot be denied the benefit of the Amnesty Scheme. This petition, therefore, deserves to be allowed.

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