Appeal Restoration shall be allowed when Taxpayer is Unsuccessful in Availing Benefit under Amnesty Scheme: Supreme Court [Read Judgement]

In a civil appeal case, the Supreme Court has noted that there is no specific prohibition against pursuing the restoration of the appeal when the taxpayer is unsuccessful in benefiting from the Amnesty Scheme. This is because the appeal is a legally mandated recourse, and the appellant had initially pursued this statutory remedy but withdrew it solely as a prerequisite for availing remedy under the Amnesty Scheme.

The bench comprising Justice B.V. Nagarathna and Justice Ujjal Buyan emphasised that both the appellate authority and the High Court should have allowed the appellant to request the restoration of his appeal before the appellate authority on consideration of the case on its merits.

The brief facts is that the appellant, P.M. Paul is a dealer registered under the provisions of the Kerala Value Added Tax Act, 2003 (KVAT Act). The Sales Tax Officer, Chavakkad cancelled the KVAT registration of the appellant on the assumption that the appellant had permanently closed his business as no transaction had taken place and his registration of dealership had not been renewed.

The appellant assailed the order of the Sales Tax Officer, Chavakkad before the Joint Commissioner (Appeals). The appellant had also challenged the assessment order imposing tax liability of Rs.8,32,753/- before the Joint Commissioner of Appeals by filing KVATA 174/2019.

When the matter was pending before the said appellate authority, the appellant availed of the Amnesty scheme introduced by the Government of Kerala. In order to avail of the said benefit under the Amnesty scheme, the appellant withdrew his appeal KVATA 174/2019 pending before the appellate authority. However, the appellant was not successful in availing the benefit of the Amnesty scheme.

Being unsuccessful to avail benefit under amnesty scheme, the appellant sought restoration of appeals against the order of the Sales Tax Officer pending before the Joint Commissioner of Appeals.

Nevertheless, the appellate authority rejected the restoration application, citing the absence of valid reasons for seeking the appeal's reinstatement. Dissatisfied with this decision, the appellant then filed a Writ Petition with the Kerala High Court.

The Single bench of the High Court dismissed the Writ petition on the ground that the appellant could not seek restoration of the appeal on being unsuccessful in availing the benefit under the Amnesty scheme. The appellant filed an Intra court appeal.

Further, the Division Bench of the Kerala High Court dismissed the Intra Court Appeal stating that the appellant had no reason to seek restoration of his appeal on initially withdrawing the same.

The Supreme Court stated that “One of the conditions for seeking the benefit under the Amnesty scheme is that there should be no pending proceeding and in order to comply with that condition, the appellant had withdrawn his appeal then pending before the appellate authority. But there is no bar as such for seeking restoration of the appeal if the assessee is unsuccessful in availing the benefit under the Amnesty Scheme, since the appeal being a statutory remedy the appellant had availed of such a statutory remedy and withdrawn the same only as a pre-condition for availing the benefit under the Amnesty Scheme. Since the appellant did not avail such a benefit he was entitled to be heard in the appeal on merits.”

The Supreme Court set aside the orders of the High Court as well as the appellate authority on grounds that neither the appeal has been restored nor has he been heard on merits and further remedies have also been foreclosed. Thus, the appeal before the KVATA No.174/2019 which was pending before the Joint Commissioner of Appeals was restored on the file of the said authority.

The apex court has listed the case on 04.10.2023 at 11.00 A.M for the final hearing and disposal. Additionally, it was instructed that the appellant has the liberty to request temporary relief from the appellate authority. If such a request is made, it should be quickly evaluated and handled in accordance with the law.

To Read the full text of the Order CLICK HERE

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