Benefit Under Amnesty Scheme Cannot Be Denied Merely Because The Petitioner Inadvertently Paid Rs. 2000/- Less Towards Principal Outstanding Amount Of Tax: Gujarat HC

In a recent decision, the Gujarat High Court has ruled that benefits under the "Vera Samadhan Yojna, 2019" Amnesty Scheme cannot be denied solely based on the petitioner inadvertently paying Rs. 2,000/- less towards the principal outstanding tax amount.

The court's decision came in response to a petition filed by Sky Industries, a registered business engaged in the manufacturing and selling of knitted, woven, and braided elastics.

Sky Industries had been assessed under the VAT and CST Act for the fiscal year 2006-2007 and received a demand notice for payment of tax, interest, and penalty. Seeking respite, the company applied for the benefit of the Amnesty Scheme introduced by the Government of Gujarat through a resolution dated 11.09.2019. Although the resolution was later superseded by a new one on 06.12.2019, Sky Industries remained eligible for the scheme.

According to the Amnesty Scheme, dealers with pending appeals could avail themselves of its benefits if they withdrew their appeals and made full payment of the principal tax amount. Upon complete payment of the principal tax, any interest and penalty amounts were to be waived off.

Sky Industries, adhering to the requirements, submitted an application within the stipulated time frame and withdrew their appeals. The application stated that the company owed Rs. 5,37,686/- towards VAT and Rs. 54,177/- towards CST tax. The concerned officer verified the submitted documents and informed the petitioner of the amount to be paid under the scheme, which matched the amount mentioned in the application. Accordingly, Sky Industries paid the entire sum as instructed, which was duly accepted by the authorities.

However, the petitioner later received an oral communication claiming that the payment fell short by Rs. 2,000/-. Subsequently, through an official communication dated 06.10.2022, the petitioner was informed that their Amnesty Scheme application had been rejected due to the alleged non-payment of the full principal tax amount. Dissatisfied with this decision, Sky Industries approached the High Court by filing a petition.

During the court proceedings, Advocate Sheth argued that the petitioner had paid the amount as calculated and verified by the authorities under the Amnesty Scheme. He emphasized that there was no error on the part of the petitioner.

On the other hand, the Assistant Government Pleader (AGP), Shruti Dhruve, representing the respondents, contended that the petitioner had paid Rs. 2,000/- less than the total principal amount outstanding and therefore was rightfully denied the benefits of the Amnesty Scheme.

The division bench comprising Justice Vipul M Pancholi and DM Desai referred to the observations made in the case of Sunflowers Developers Vs. State Of Gujarat’, 2019 SCC Online Guj 6611 and reiterated that the objective of the amnesty scheme is to facilitate the prompt and effective resolution of old disputes, recover outstanding dues, and reduce administrative costs. Furthermore, as the scheme is applicable to all pending cases, the officers acting under the relevant statutes are expected to uphold the scheme's objective and ensure that the assessees receive the benefits under it.

Based on the discussion, the bench held, “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,”

Consequently, the petition was allowed, and the court set aside and quashed the impugned communication. The respondents were directed to grant the benefit of the Amnesty Scheme to the petitioner as requested.

Case Title: Sky Industries Ltd. Vs. State Of Gujarat Special Civil Application - No. 246 Of 2023

Case Citation: 2023 Livelaw (Guj) 102

Appearance:

Uchit N Sheth(7336) For The Petitioner(S) No. 1

Ms Shruti Dhruve, Government Pleader For The Respondent(S) No. 1,2

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