2020 (12) TMI 363 - HC - VAT and Sales Tax

Permission requested by the petitioner for settling arrears under the Amnesty Scheme - rejection on the ground that it had not opted for settlement of the arrears for the assessment year 2012-13 - it is the contention of the petitioner that inasmuch as on the date of submission of the application for Amnesty the liability for the assessment year 2012-13 under the KVAT Act did not exist on account of the order of the First Appellate Authority in its favour - HELD THAT - The Amnesty Scheme is one that contains various provisions which have to be reckoned together for the purposes of understanding the true scope and ambit of the Scheme. On a holistic reading of the said provisions it would appear that the Scheme envisages an option to be exercised by the assessee concerned for settlement of outstanding liabilities under the various enactments covered under the scheme. The benefit under the scheme is conditional in that if an assessee opts for settlement of arrears under any particular enactment he/she has to opt for settlement of arrears in respect of all the assessment years where such arrears are outstanding. In the instant case while it may be a fact that for the assessment year 2012-13 on the date of submission of the option by the petitioner asssessee he had a favourable order from the First Appellate Authority the right of appeal that is granted to the Department under the Statute cannot be rendered ineffective through an unilateral action on the part of the assessee to opt for settlement. The provisions of the Act have to be read holistically so as to not render illusory the rights conferred under the Statute. When so read it must be found that notwithstanding the submission of option by the assessee in the instant case the appeal preferred by the Department within the time granted under the Statute cannot be ignored while reckoning the assessment years in which amounts are seen as outstanding from an assessee for the purposes of settlement. Inasmuch as there was an appeal filed by the department within the statutory period permitted for doing so in respect of the assessment year 2012-13 under the KVAT Act it is for the petitioner to include the demand confirmed against him by the assessment order for the said year also while opting for the benefit of the Amnesty Scheme in respect of arrears outstanding under the KVAT Act. Petition is disposed off by directing that if the petitioner includes the liability in respect of the assessment year 2012-13 also in the application submitted for the benefit of Amnesty the respondents shall consider the same.

Summary

Issues:
- Interpretation of provisions of Amnesty Scheme for settlement of arrears under various enactments
- Consideration of outstanding liabilities for settlement under the Scheme
- Impact of pending appeals on the eligibility for settlement under the Amnesty Scheme

Analysis:
The petitioner, a partnership firm, approached the court aggrieved by the 1st respondent's refusal to grant permission for settling arrears under the Amnesty Scheme. The petitioner contended that as of the application date, the liability for the assessment year 2012-13 did not exist due to a favorable order from the First Appellate Authority. The respondents argued that all arrears must be settled together under the Scheme, including cases with pending appeals. They justified the denial based on the appeal filed by the Department against the First Appellate Authority's decision for the assessment year in question.

The court analyzed the provisions of the Amnesty Scheme holistically and found that the Scheme requires settling all outstanding liabilities under covered enactments. It emphasized that if an assessee opts for settlement under a particular enactment, all outstanding arrears for relevant assessment years must be included. The court noted that the Department's right to appeal should not be undermined by unilateral actions of the assessee. Therefore, despite the petitioner's favorable order, the appeal filed by the Department within the statutory period must be considered while opting for the Amnesty Scheme.

Consequently, the court directed the petitioner to include the liability for the assessment year 2012-13 in the application for the Amnesty Scheme. It ordered the respondents to consider this inclusion in accordance with the Scheme's provisions. The judgment underscores the importance of considering all outstanding liabilities and pending appeals when seeking settlement under the Amnesty Scheme, ensuring a fair and comprehensive approach to resolving arrears under various enactments.