ALWAYE SUGAR AGENCY Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The issue involved in this case is whether the payments effected by the petitioner towards the arrears of tax liability, after the declaration of the proposed 'Amnesty Scheme' w.e.f 1.4.2010 in the 'Budget Speech' 2010, with specific request to have it set off against the principal tax and surcharge, could have been unilaterally appropriated by the departmental authorities against 'interest', placing reliance on Section 55C of the KGST Act, contending that, as on the date of payment, the Scheme had not actually come into force. The petitioner firm was in arrears of sales tax with regard to the year 1997-98 and the first respondent initiated recovery steps for realization of the dues, coming to a total of Rs. 3,82,015/- including interest. In the meanwhile, the proposal for settlement of tax dues was announced in the Kerala Budget Speech 2010, letting it known to all concerned that, similar benefit as announced in the 2008 Scheme, would be implemented w.e.f. 1.4.2010 till 30.6.2010, enabling the defaulters to clear the liability by availing the benefit of the Scheme. True copy of the relevant portion of the Budget Speech as above is produced as Ext. P1.

(2.) Immediately on coming to know about the declaration made by the Finance Minister in the Budget Speech, the petitioner volunteered to avail the benefit of the said Scheme, which in fact, was to be applied for and obtained after notification of the Scheme w.e.f. 01.04.2010. A specific request was made before the second respondent, as borne by Ext. P2 dated 20.3.2010 (with reference to the contents of paragraph '205' of the Budget Speech, whereby the Scheme was announced), requesting to keep the revenue recovery proceedings in abeyance till proper application is filed under the Scheme and orders are passed by the assessing authority thereon. In token of willingness of the petitioner to pay the arrears-under the Amnesty Scheme, a sum of Rs. 75,000/- was also caused to be paid, which was requested to be adjusted against the sales tax and surcharge dues.

(3.) In the meanwhile, the Scheme was declared and the petitioner filed necessary application for availing the benefit under the Scheme and this was sanctioned as per Ext. P3 dated 28.5.2010, whereby the petitioner was required to satisfy a total sum of Rs. 1,54,291/- to settle the liability once and for all. On receipt of Ext. P3, the petitioner submitted a letter dated 1.8.2010, referring to the payment of Rs. 75,000/- already made by the petitioner along with Ext. P2 and to have it set off/given credit to while fixing the liability under the Scheme. This was replied by the first respondent vide Ext. P4 dated 02.06.2010, stating that, as on the date of remittance of Rs. 75,000/- on 20.03.2010, the Amnesty Scheme was not brought into force and that the application form for availing the benefit under the Scheme, having been filed by the petitioner only on 09.05.2010 the request could not be entertained and that the amount paid was adjusted towards "interest" under Section 55Cof the KGST Act, which course is subjected to challenge in this Writ Petition.