K. M. MOOSA Vs. INSPECTING ASSISTANT COMMISSIONER

JUDGEMENT

(1.) Writ Appeal is filed against judgment of the learned Single Judge upholding Revenue Recovery proceedings initiated against the appellant vide Ext.P6 for recovery of arrears of sales tax and other dues for the assessment years 1998-99, 1999-2000, 2005-2006, 2006-2007 and 2007-2008. The dispute is only in regard to the demand for the years 1998-99 and 1999-2000. Counsel contended that pursuant to application filed under Section 23B, the Assessing Officer vide Exts.P5 and P5A communicated the reduced amount payable by the appellant under the amnesty scheme provided under Section 23B of the Act for both the years. However, appellant's case is that Exts.P5 and P5A are not in accordance with the guidelines issued by the Commissioner of Commercial Tax vide Circular No.13/2008 produced as Ext.P3. The learned Single Judge, however, upheld the revenue recovery proceedings by holding that appellant forfeited the benefit of amnesty granted under Exts.P5 and P5A on account of it's failure to remit the amount with the time stipulated under Section 23B(4) of the KGST Act. It is against this judgment of the learned Single Judge the appellant has filed this appeal. We have heard counsel for the appellant and Government Pleader appearing for the respondents.

(2.) After hearing both sides and after going through the Circular and the statutory provisions, we do not find any justification to interfere with the finding of the learned Single Judge that appellant forfeited the benefit under amnesty scheme because of the default committed in payment of the reduced amount based on Exts.P5 and P5A demands within the time stipulated under Section 23B(4) of the Act. Even though counsel for the appellant contended that there is no provision in section 23B for automatic revocation of orders issued granting amnesty benefit on account of default, Government Pleader pointed out that sub-clause (5) of Section 23B provides for cancellation of benefit only on account of default in payment of instalments which according to the Government Pleader does not cover 25% payable under sub-clause (4) of Section 23B within 15 days from date of receipt of proceedings. In fact, the Circular also does not dilute the statutory provision in regard to payment of 25% within 15 days from receipt of intimation from the Assessing Officer. Even though there is no specific provision for automatic revocation of amnesty benefit, we feel non-payment of 25% will render the order ineffective and non- operational. In other words, if 25% is not paid within 15 days, then the benefit granted under amnesty scheme will get automatically cancelled and cancellation by express order arises only in cases where the assessee has paid 25% but committed default in payment of any of the remaining three instalments. So much so, in principle, we uphold the finding of the learned Single Judge on forfeiture of benefit by the appellant. However, we notice that there is mistake in Exts.P5 and P5A in as much as the Assessing Officer has not followed the Circular issued by the Commissioner which prescribes even the form under which intimation has to be communicated. Further, the officer is bound to intimate the month for starting the payment of instalments and Circular has prescribed 10th of every month as the last date for payment of the monthly instalment. In view of the inadequacies in the proceedings issued by the Assessing Officer and since no proceedings was issued revoking the orders, we feel the benefit granted to the appellant vide Exts.P5 and P5A could be extended to the appellant on conditions. Considering the penal interest payable under Section 23 (3), we restore the benefit granted to the appellant vide Exts.P5 and P5A on condition of payment of Rs.60,000/- (Rupees sixty thousand) towards further interest for the belated payment for 1998-99 and Rs.40,000/- (Rupees forty thousand) towards further interest payable for the belated payment for 1999-2000. In other words, besides the amount determined as payable by the Assessing Officer under Exts.P5 and P5A, if appellant pays Rs.60,000/- for 1998-99 and Rs.40,000/- for 1999-2000 before 31.1.2010, then the appellant will be entitled to the amnesty benefit granted by the officer. However, if appellant commits default, recovery under Ext.P6 can be continued. We make it clear that the judgment covers only arrears for 1998-99 and 1999-2000 and for the remaining years, recovery could be continued based on Ext.P6 subject to challenge if any made by the appellant before any authority.