IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 26 of 2011 FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE VIJAY MANOHAR SAHAI and HONOURABLE MR.JUSTICE N.V.ANJARIA ================================================================
1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
================================================================ DODSAL PVT LTD Appellant(s) Versus COMMISSIONER OF COMMERCIAL TAX Opponent(s) ================================================================ Appearance:
MR HARDIK P MODH, ADVOCATE for the Appellant(s) No. 1 MS. MAITHILI MEHTA, AGP for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE VIJAY MANOHAR SAHAI and
HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 26/06/2012 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE N.V.ANJARIA) The present appeal is preferred by the assessee invoking the provisions of section 78 of the Value Added Tax Act, 2003, and is directed against order dated 22.07.2009 in appeal no. 445 of 2007.
2. In the facts of the case following substantial question ariseS for consideration and determination of this Court.
“Whether the Tribunal committed an error in not extending the benefit of the ‘Sales Tax Samadhan Yojana’ by holding that conditions for getting the benefit was not fulfilled by the appellant-assessee and whether those conditions and whether the appellant in the facts and circumstances of the case can be said to have complied with the conditions substantively to get the benefit under the Yojana?”
3. The issue involved is whether the appellant is entitled to benefit of “Sales Tax Samadhan Yojana, 2006”. The facts are as follows.
3.1 The appellant is engaged in the business of performing the works contract for construction of road, laying pipelines and power plant. The appellant has got itself registered in the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as ‘the act’ for sake of brevity) as also under the Central Sales Tax Act. The Assistant Commissioner of Commercial Tax passed provisional assessment order on 31.03.2005 for the Assessment Year 2002-2003. The assessment was done under section 41 (B) of the Gujarat Sales Tax Act, 1969, since repealed. Total amount of rs. 5,25,387/- was demanded. Out of that total amount, Rs. 1,52,992/- was tax payable, whereas Rs. 57,163/- was the amount of interest and Rs. 3,15,232/- was penalty amount.
3.2 The appellant challenged the said provisional assessment order before the Deputy Commissioner of Commercial Tax. While the said appeal was pending, the competent authority namely the Deputy Commissioner of Commercial Tax (Corporate) took up a regular assessment for 2002-2003 under section 41(3) of the erstwhile Gujarat Sales Tax Act. By order dated 28.2.2006, total tax Rs. 15,41,791/- was assessed. Penalty amount of Rs. 15,53,725/- and interest of Rs. 5,27,743/- under section 45(6) and section 47 (4)(c) of the said Act, were also imposed. In the said regular assessment, the provisional assessment made as above stood included. The appellant had deposited the amount of Rs. 2,85,260/- towards the tax at the time of filing of the return. Therefore, pursuant to the above regular assessment order dated 28.02.2006, the balance of Rs. 33,38,009/- was demanded by issuing a notice of demand.
3.3 In the meantime, the new Gujarat Value Added Tax, 2003 received the Presidential assent on 17.01.2005. The provisions of the said act were brought in force w.e.f. 1.4.2006, as notified by the Govt. of Gujarat. The Gujarat Sales Tax Act, 1969 stood repealed having been replaced by above new Act.
3.4 In order to deal with the problem of piled up cases under the erstwhile Sales Tax Act, the State Government vide notification dated 27.02.2006 introduced a scheme called “Sales Tax Samadhan Yojana, 2006”. The said scheme inter-alia provided for waiver of interest and penalty in the cases where the assessee deposits the tax amount before 31/03/2006.
3.5 The appellant filed an application seeking benefit under the said settlement scheme. Since it had deposited the tax of Rs. 2,85,260/- at the time of filing return, the balance amount Rs. 12,56,531/- was deposited on 29.03.2006. The appellant’s application to claim the benefit under the scheme came to be rejected by the Assistant Commissioner of Commercial Tax on 16.11.2006 without giving opportunity of hearing, on the ground that the benefits of the scheme was available to those assesses whose outstanding amount was due before 31.1.2006 and whose assessment was made after 1.3.2006. According to the Assistant Commissioner, as the appellant’s assessment was done on 28.02.2006, the benefit of the scheme was not available. The Appellate Authority dismissed assessee’s appeal by order dated 24.7.2007 citing similar reasons and holding that the date 31.01.06 was a cut off date for settling the case under the Samadhan Yojana. The appellant failed in its second appeal before the Tribunal.
3.6 It may be noted that after order of the Tribunal, the appellant preferred a rectification application by submitting that the finding of the Tribunal in respect of non submission of evidence about payment of tax was erroneous. It was pointed out that the tax amount of Rs. 12,56,531/- was paid on 29.03.2006. The Tribunal vide order dated 1002.2009 disposed of the application by correcting the date of payment as 29.03.2006.
4. This Court heard learned advocate Mr. Hardik P. Modh for the appellant and learned Assistant Government Pleader Maithili Mehta for the respondent authority. The appeal is herewith admitted. With consent learned advocates appearing for both the sides, it is taken up for final disposal today itself.
5. Having considered the different clauses of Tax settlement Scheme and the relevant facts and dates of the case, it is not in dispute that the provisional assessment order was passed on 31.03.2005. The appellant preferred appeal. The regular assessement was pending. Regular assessment order was passed on 28.02.2006 and the tax was assessed at Rs. 15,41,791/- and penalty of Rs. 15,53,725/- was imposed and interest was charged. The assessee had at the time of filing returns, deposited Rs. 2,85,260/- towards tax payable and in the assessment order dated 28.02.2006, the balance amount Rs. 33,38,009/- was demanded. The appellant deposited the balance amount of tax of Rs. 12,56,531/- (i.e. Rs. 15,41,791 – Rs. 2,85,260/- paid earlier). The said balance amount was deposited on 29.03.2006 within 30 days from the date of passing of order. As noted above, the scheme provided that waiver of interest and penalty could be provided to the assessee, who deposits the tax on or before 31.03.2006. The appellant withdrew their appeal on 12.04.2006.
5.1 What has weighed with the Tribunal in confirming the order of the lower tax authorities and for holding that assessee is not entitled to get the benefit under the scheme, is that firstly the appeal was withdrawn on 12.04.2006 i.e.
after 31.03.2006, whereas the scheme provided that appeals pending ought to have been withdrawn before 31.03.2006. The second ground is that the amount of tax was required to be paid within 30 days, but the appellant paid the tax only on 29.03.2003 and therefore, the tax amount was not paid within 30 days from the date of assessment i.e 28.02.2006.
5.2 The condition in the scheme for withdrawal of appeal before 31.03.2006 was procedural condition. Secondly, the ground that the tax was not paid within 30 days from the regular date of assessment and therefore the assessee is not entitled to get the benefit under the scheme, also does not stand in good stead and cannot be accepted. Indisputably, the provisional assessment order was passed on 31.03.2005, which was challenged by the assessee by way of appeal and during the pendency of the appeal, the regular assessment order was passed. The part of the amount of tax was deposited by the assessee at the time of filing of returns itself. As and when the regular assessment order is passed i.e on 28.02.2006, the balance of tax was paid within 30 days on 29.03.2006. In the said set of circumstances, the assessee could not have been denied the benefit on the ground that the cut off date was 31.03.2006 and that the tax was not paid before the said date. The scheme does not set such time limit, but the condition mentioned is that the assessee will have to pay the balance mount of tax within 30 days from the date of assessment, if such tax assessed, comes to higher than the amount paid at the time of filing of return. In that view, the assessee can be said to have complied with the conditions. The conditions having been substantially complied with in the facts of the case, the assesse could not have been denied the benefit of Samadhan Yojana. Having regard to the object of the scheme, a technical or pedantic approach is not justified.
6. The substantial question of law is answered in affirmative by holding that the Tribunal committed an error in denying the benefit of the scheme to the assessee. The appeal is allowed accordingly.
(V.M.SAHAI, J.) cmjoshi (N.V.ANJARIA, J.)