Kerala High Court Allows Adjustment Refund Amount Towards Amount payable under Amnesty Scheme
The Kerala High Court has held that it is open to the department to consider an adjustment of the refund amount due to the appellant towards the amounts due from him by way of settlement under the Amnesty Scheme.
The bench of Justice A.K. Jayasankaran Nambiar and Justice Syam Kumar V.M. has quashed the order passed by the Single Bench in which it was held that the Amnesty Scheme was essentially a Code in itself, and once an order was passed by the authority determining the amount to be paid by an assessee under the Scheme, the said authority became functus officio to consider any other option of payment of the Amnesty amount.
The appellant/assessee had filed the Writ Petition challenging a series of revenue recovery notices issued for recovery of amounts allegedly due from the appellant under the Kerala Value Added Tax Act and Central Sales Tax Act for various financial years. The case of the appellant in the Writ Petition was that in respect of the tax dues under the CST Act and KVAT Act for various assessment years, he had opted for settlement in accordance with the Amnesty Scheme 2020.
The application preferred by the appellant for settlement of the tax dues in relation to the assessment years 2011-12, 2013-14, 2014-15, and 2016-17 under the CST Act and 2007-08, 2011-12, 2012-13, and 2013-14 under the KVAT Act was preferred on 28.11.2020. The application was considered for the benefit of the Amnesty Scheme, and the appellant was intimated by a communication that he had to pay an amount of Rs. 1,28,373 towards full and final settlement of the tax dues for the years if the payment was made in a single instalment. Alternatively, he could pay the amount in four instalments by paying the first installment before the cut-off date of 30 days from the date of intimation. In the latter event, the total amount payable would be Rs. 1,60,465. The last date for making the payment in terms of the Amnesty Scheme was 14.03.2021.
The appellant, instead of making the payment, wrote to the Department that as there was an amount of Rs. 5 lakhs that was due to him by way of refund pursuant to a modified order passed by the authorities on 30.07.2019, the amnesty amount could be adjusted from the refund amount due to him.
The respondent Department did not accede to the request of the appellant, and finding that no payment had been effected by the cut-off date, the respondents treated the appellant as not having opted for the Amnesty Scheme and proceeded to issue the revenue recovery notices that were challenged in the Writ petition.
The Single Judge, who considered the Writ Petition, found that the Amnesty Scheme was essentially a Code in itself, and once an order was passed by the authority determining the amount to be paid by an assessee under the Scheme, the authority became functus officio to consider any other option of payment of the Amnesty amount. The Writ petition preferred by the appellant was, therefore, dismissed by the learned single judge.
The court held that the ends of justice would be met by adjusting the Amnesty amount of Rs. 1,60,465/- from the Rs. 5 lakhs that are due to the appellant by way of refund and utilizing the remaining amount for settlement of the dues outstanding from the appellant in the assessment years other than those that were opted for settlement under the 2020 Amnesty Scheme.
The court allowed the Writ Appeal by setting aside the judgment of the Single Judge and by directing the department to deduct the amount of Rs. 1,60,465 from the amount of Rs. 5 lakhs that is due to the appellant by way of refund and treat the dues for the assessment years opted for under the Amnesty Scheme 2020 as finally settled under the Scheme.
Counsel For Petitioner: Sergi Joseph Thomas
Counsel For Respondent: V.K.Shamsudheen
Case Title: S. Vijayan Versus Commissioner Of State Goods And Service Taxes
Case No.: WA NO. 477 OF 2024