No Bar In Assessee Seeking Restoration Of Appeal After Being Unsuccessful In Availing Amnesty Scheme: Supreme Court

The Supreme Court has ruled that since appeal is a statutory remedy, the assessee cannot be barred from seeking restoration of the appeal which was withdrawn by him as a pre-condition for availing the benefit under an Amnesty scheme, if the assessee is subsequently unsuccessful in availing the benefit of the scheme.

The top court remarked that the appellate authority as well as the Kerala High Court ought to have allowed the assessee to seek restoration of his appeal before the appellate authority so that the same could have been heard on merits. The court thus set aside the order of the High Court where it had upheld the appellant authority’s decision rejecting assessee’s application for restoration of appeal against the assessment order passed against him.

Noting that the appellate authority was originally seized of the appeal which was in the nature of a statutory appeal, and that if the assessee was unsuccessful in appeal he had further remedies in law, the bench of Justices B.V. Nagarathna and Ujjal Bhuyan said:

“In view of the application filed by the appellant being rejected, neither the appeal has been restored nor has he been heard on merits and further remedies have also been foreclosed. On that short ground alone, the orders of the High Court as well as the appellate authority on the application filed by the appellant herein are set aside. The appeal before the KVATA No.174/2019 which was pending before the Joint Commissioner of Appeals is restored on the file of the said authority.”

The assessee was registered under the provisions of the Kerala Value Added Tax Act, 2003 (KVAT Act). Later, the Sales Tax Officer cancelled the assessee’s KVAT registration. The assessee challenged the cancellation of his registration as well as the assessment order passed against him imposing tax liability, before the Joint Commissioner (Appeals). During the pendency of the matter before the appellate authority, the assessee availed the Amnesty scheme introduced by the Government of Kerala. In order to avail the said benefit, the assessee withdrew his appeal pending before the appellate authority against the assessment order passed by the Sales Tax Officer. However, the assessee could not pay the amount in order to avail the benefit of the said scheme and thus, was unsuccessful. Accordingly, the assessee moved an application seeking restoration of his appeal before the appellate authority, which was rejected. The appeal filed against the order of the appellate authority was dismissed by the Single Judge of Kerala High Court. The same was upheld by the Division Bench in appeal. Against this, the assessee filed an appeal before the Supreme Court.

The Supreme Court observed that one of the conditions for seeking the benefit under the Amnesty scheme is that there should be no pending proceeding; noting that in order to comply with the said condition, the assessee had withdrawn his appeal pending before the appellate authority.

However, the court remarked, “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. Therefore he sought permission for restoration of the appeal by filing such an application. We find that the appellate authority as well as the High Court ought to have permitted the appellant herein to seek restoration of his appeal before the appellate authority so that the same could have been heard on merits.”

Thus, setting aside the orders of the High Court and the appellate authority, the court restored the appeal pending before the Joint Commissioner of Appeals, directing the parties to appear before the said appellate authority.

“Since both parties are represented by their respective counsel they are directed to appear before the said appellate authority on 04.10.2023 at 11.00 A.M. On that date or on any other date(s), the appeal filed by the appellant shall be heard on merits and disposed of in accordance with law,” the court directed.

Case Title: P. M. PAUL vs THE STATE TAX OFFICER & ORS.

Citation : 2023 LiveLaw (SC) 774

Counsel for the Petitioner: Mr. Abhilash M.R., Adv. Mr. Alim Anvar, Adv. Mr. Rajkumar, Adv. Mrs. Anu K Joy, Adv. Mr. Mohammed Sadique T.a., AOR

Counsel for the Respondents: Mr. C. K. Sasi, AOR Ms. Meena K Poulose, Adv.

Kerala Value Added Tax Act, 2003; Amnesty Scheme - The Supreme Court has ruled that since appeal is a statutory remedy, the assessee cannot be barred from seeking restoration of the appeal which was withdrawn by him as a pre-condition for availing the benefit under an Amnesty scheme, if the assessee is subsequently unsuccessful in availing the benefit of the scheme.

The top court remarked that the appellate authority as well as the Kerala High Court ought to have allowed the assessee to seek restoration of his appeal before the appellate authority so that the same could have been heard on merits. The court thus set aside the order of the High Court where it had upheld the appellant authority’s decision rejecting assessee’s application for restoration of appeal against the assessment order passed against him.

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