The Gujarat High Court held that benefits under the amnesty scheme cannot be denied because of payment of an amount less than the principal outstanding.
Sky Industries, 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’).
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. It was submitted that the Government of Gujarat introduced ‘Vera Samadhan Yojna, 2019’ (‘Amnesty Scheme’) vide Resolution dated 11.09.2019. However, the said resolution was superseded by the resolution dated 06.12.2019, later.
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.
It was submitted that Clause-7(3) of the Amnesty Scheme provides that after the submission of the 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.
The petitioner mainly submitted that the petitioner made the payment, as per the calculation given/verified by the officer of the Respondents under the Amnesty Scheme, which is not in dispute. Further contended that the notice of demand was issued in the year 2011, wherein, the total amount of tax payable by the petitioner was shown to be Rs.5,39,787/-, whereas, the petitioner, in the application under Amnesty Scheme, mentioned the amount of Rs.5,37,686/-, i.e. the petitioner mentioned Rs.2000/- less, and therefore, the petitioner is not entitled to get the benefit of Amnesty Scheme, which is unjust and improper.
As per Clause 7(3) of the Amnesty Scheme, the concerned Officer of the Respondents was required to verify and intimate the petitioner about the amount of tax to be paid under the Amnesty Scheme and the petitioner paid the tax accordingly, and therefore, there is no error committed by the petitioner
On the other hand, AGP, Ms. Dhruve, appearing for the Respondents, referred to the averments made in the affidavit-in-reply filed on behalf of Respondent No.2 and strongly opposed the present petition.
It was submitted that, as per the demand notice issued in the year 2011, the petitioner was required to make the payment of Rs.5,39,787/-, however, the petitioner made the payment of Rs.5,37,686/-, i.e. the petitioner paid Rs.2000/- less towards tax under the Amnesty Scheme, and therefore, the Respondents are justified in issuing the impugned communication dated 06.10.2022.
A two-judge bench comprising Justice Vipul M Pancholi and Justice Devan M Desai viewed 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 applies 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.”
It was evident 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. This petition, therefore, deserves to be allowed.
While allowing the appeal, the CESTAT quashed and set aside the impugned communication. The respondents are directed to grant the benefit of the Amnesty Scheme to the petitioner.
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