Ext.P5 notice, by which the 2nd respondent proposed to revoke the benefit of Amnesty Scheme granted to the petitioner, is under challenge in this writ petition.
2. The petitioner is a partnership firm engaged in the trade of spices and hill produce. During the year 2004, penalty proceedings under Section 45A of the KGST Act were initiated against the petitioner in respect of the assessment years 1999-2000 to 2001-2002. The petitioner objected to the proposal for imposition of penalty and challenged the order before this Court by filing Sale Tax Appeal Nos.12 and 13 of 2008. These appeals were disposed of by Ext.P3 judgment dated 14.10.2009, by which the quantum of penalty was reduced to equal the amount of tax on the suppressed turn over subject to the condition that the petitioner had paid tax and interest on such suppressed turn over. In the alternate, it was held that if the petitioner has settled the liability under the Amnesty Scheme, then the matter should be treated as concluded. Pursuant to Ext.P3, the petitioner opted for settlement of the arrears. The grievance of the petitioner is that the 2nd respondent, by Ext.P5, proposed to revoke the benefit of the Amnesty Scheme granted to the petitioner in Ext.P4. It is with this background, the petitioner has come up before this Court.
3. In the counter affidavit filed by the respondents, they pleaded ignorance regarding Ext.P3 judgment. They would contend that without disclosing a direction of this Court and without remitting the tax, the petitioner filed Amnesty application with ulterior intention for getting illegal gain. According to them, if the disposal of the above case by this Court had been disclosed in the application, they could have made proper enquiries with regard to the direction of this Court. Therefore, according to them, since the amnesty order was obtained by fraud and misrepresentation, the petitioner is not entitled to get any relief as prayed for.
4. Arguments have been heard.
5. The stand taken by the respondent State that they were unaware of Ext.P3, will not stand the test of reason. The allegation of the 2nd respondent in Ext.P5 notice is that the petitioner has not disclosed the details of Ext.P3 judgment in the Amnesty application, which is produced and marked as Ext.R1(a). It is true that in the application for settlement of arrears, all the details should be furnished regarding any appeal/revision/court cases as on the date of application. Evidently, and admittedly too, on the date of application, there was no pending case relating to the years - 1999, 2000 & 2001, and the case that was pending, was already disposed of by this Court vide Ext.P3 judgment. So, there was no requirement of mentioning any case in the application. Therefore, the allegation in Ext.P5 notice that the petitioner has concealed Ext.P3 judgment of this Court while submitting amnesty application, is without any basis. In Ext.P3 judgment, this Court only held that the reduction of the quantum of penalty to equal the amount of tax on the suppressed turn over would be available only if the petitioner had paid full tax and interest on such suppressed turn over. It was also held that the matter should be treated as concluded if the petitioner has settled the entire liability under the Amnesty Scheme. It was also clarified that the amounts paid under the Amnesty Scheme need not be modified based on Ext.P3 judgment.
6. It is also relevant to note that as per Clause 23B of the Amnesty Scheme, which was introduced by Kerala Finance Act, 2008, the benefit granted under the scheme can be revoked only if the dealer commits any default in payment of instalments granted by appropriate authority. In the instant case, the petitioner had remitted the instalments strictly in compliance with the condition prescribed by the 2nd respondent in Ext.P4 intimation.
Therefore, the 2nd respondent cannot invoke Sub Section 5 of Section 23B of the KGST Act to revoke the benefit of the Amnesty Scheme granted vide Ext.P4. Though it was vehemently argued by the learned Government Pleader that the Government has power to revoke the benefit granted under the Amnesty Scheme for other reasons also in the light of the express provision in Clause 23B of the Amnesty Scheme, the only conclusion that can be drawn is that the State had intended to exclude all other conditions for revoking the benefit of this Scheme.
7. It was further submitted by the learned Government Pleader, on instructions, that there was mistake in calculating interest as well as in making adjustment of payment towards the tax amount instead of interest. That is not a reason for revoking the benefit under the Amnesty Scheme. A comparison of Ext.R1(a), which is an application submitted by the petitioner under the Amnesty Scheme, as well as Ext.P4 intimation would reveal that remittances made by the petitioner were on the basis of the recalculations made by the respondents. If the respondents have a case that mistakes have crept in the calculations and more amounts are due from the petitioner, it may lead to a fresh demand so that the petitioner will get an opportunity to defend himself. The allegation that Ext.P4 intimation was on account of fraud perpetuated by the petitioner, cannot be accepted; and therefore, the impugned order shall not be allowed to stand.
In the result, the writ petition is allowed. Ext.P5 is quashed.
This judgment will not stand in the way of respondents in initiating further action in respect of any arrears due from the petitioner to the respondents.
Sd/-
A.V. RAMAKRISHNA PILLAI, JUDGE bka/-