Gujarat High Court
M/S Shree Bansi Metal And Alloys Pvt. Ltd vs State Of Gujarat on 24 April, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 16467 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
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Approved for Reporting Yes No
No
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=M/S SHREE BANSI METAL AND ALLOYS PVT. LTD.
Versus
STATE OF GUJARAT & ANR.
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Appearance:
HIREN J TRIVEDI(8808) for the Petitioner(s) No. 1
GOVERNMENT PLEADER for the Respondent(s) No. 1,2
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 24/04/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr.Hiren J. Trivedi for the petitioner and learned Assistant Government Pleader Ms.Shrunjal Shah for the respondents.
2. Rule returnable forthwith. Learned Assistant Government Pleader Ms.Shrunjal Shah waives Page 1 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025 NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined service of notice of rule for and on behalf of the respondents.
3. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the communication/order dated 23rd February, 2022 rejecting the application filed by the petitioner No.1-Company under Vera Samadhan Yojna, 2019 (hereinafter referred to as 'the Amnesty Scheme') on the ground that the petitioner No.1-Company has not paid the full amount against the outstanding amount intimated to the petitioner No.1-Company. 4.1. It is the case of the petitioner that the search operation carried out by the respondent culminated into the seizure of the invoices related to certain purchases but the petitioner No.1-Company voluntarily declared amount of Rs.4,81,779/- as Input Tax Credit Page 2 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025 NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined (for short 'the ITC') from purchases made from dealers whose registration had been cancelled and applied for Amnesty Scheme in September, 2019.
4.2. The petitioner No.1-Company was assessed in March, 2021 under the provisions of the Gujarat Value Added Tax Act, 2003 (for short 'the VAT Act') for the period of 2015-16 and the total tax amount was determined with a balance of Rs.4,84,195/- payable by the petitioner No.1-Company. The petitioner, however, had already declared and paid Rs.4,81,779/- under the Amnesty Schemes by installments as per the provisions of the Scheme by January 19, 2021 with the extended time from time to time.
4.3. It is the case of the petitioner that a communication stating that the application of Page 3 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025 NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined the Amnesty Scheme has been rejected for non- payment of the small shortfall of Rs.1,175/-. received by the petitioner. The petitioner- Company was not aware about such issue and then the Bank Account of the petitioner- Company was attached and recovery of Rs.4,98,082/- was made from it. The petitioner filed an Appeal against the order which was rejected on April 28, 2024 on the ground that no Appeal could be filed for rejection of the Scheme. The petitioner has therefore preferred this petition.
5.1. Learned advocate Mr.Hiren Trivedi for the petitioner submitted that the petitioner was never intimated about the shortfall of payment of interest by any intimation and petitioner had already paid the entire amount as per the intimation issued by the respondent-Authority under the Amnesty Scheme on 19th February, Page 4 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025 NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined 2020 by way of installments. It was further submitted that however, the petitioner could not pay the interest for late payment of the installments. It was submitted that the petitioner was not aware about such rejection of the Amnesty Scheme till the Bank Account of the petitioner was attached and the outstanding amount as per the Assessment Order was recovered from the Bank Account of the petitioner.
5.2. It was therefore submitted that the petitioner should be granted the benefit of the Amnesty Scheme as there is no fault on part of the petitioner to pay the outstanding dues and only fault of the petitioner is that 6th and 7th installments were paid belatedly, which has resulted into interest amount to be paid by the petitioner of Rs.1,175/-. Page 5 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025
NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined 5.3. It was submitted that the impugned communication dated 23rd February, 2022 is contrary to the Circulars issued by the respondents for extending the time limits for making payment under the Amnesty Scheme. Reliance was placed on the Circular dated 05.07.2021 which has extended the time limit for payment under the Amnesty Scheme up to 31st August, 2021, whereas, the petitioner- Company has already made the entire payment on 19.01.2021 and therefore, it was submitted that the benefit under the Scheme could not have been rejected.
5.4. It was further pointed out from the Schedule of payments that the petitioner was late in payment of installments of October, 2020 and November, 2020 but as per the Circular dated 05.07.2021, entire payment was made before 31.08.2021 and therefore, the Page 6 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025 NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined petitioner at the best can be liable to pay the interest for late payment of the installments of October, 2020 and November, 2020 but there is no failure on the part of the petitioner to make the payment of the entire amount of the tax of Rs.4,81,779/- beyond the time limit extended by the respondent-Authority.
5.5. It was therefore prayed that the respondent-Authority may be directed to grant the benefit of the Amnesty Scheme and the amount, which is already recovered over and above resulting into double payment by the petitioner is required to be refunded. A calculation of the refund to be given by the respondent-Authority is worked out as under :
Details of Refund to be paid (INR) (Rounded off to nearest Rupee) Page 7 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025 NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined Particulars (A) Total amount recovered from Bank 4,89,092/-
Account on 28.03.2023 (B) Interest to be Paid due to 1,175/-
delayed payment of installments © Shortfall of tax as per assessment 2,416/-
order passed (D) Interest on 2,416/- @ 18% from 01.04.2016 to 28.03.2023 (7 3044/- years) (2416*18%*7) (E) Penalty (2,416*150%) 3,624/- 9,084/- (F) Total (C) +(D)+(E) (G) Total Amount to be refunded (A)-
4,78,833/-
(B)-(F) 6.1. On the other hand, learned Assistant Government Pleader Ms.Shrunjal Shah for the respondents submitted that it is not in dispute that the petitioner has paid the installments of October and November, 2020 late and therefore, as per the Amnesty Scheme, the petitioner No.1-Company was liable to pay interest at the rate of 1.5% per month for such delay. It was further pointed out that the loss of payment of interest in clause 8 in Page 8 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025 NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined the Amnesty Scheme stipulates that if the amount payable as per the Scheme is not paid, then no benefit under the Scheme shall be granted to the applicant.
6.2. Learned Assistant Government Pleader Ms.Shrunjal Shah therefore submitted that considering the provisions of the Amnesty Scheme, the order dated 23rd February, 2022 rejecting the application under the Scheme is just and proper and no interference is called for since the full amount was not paid by the petitioner as per the intimation dated 19th February, 2020 issued by the respondent- Authority which required the petitioner to pay Rs.4,81,779/- in twelve monthly installments. 6.3. Learned Assistant Government Pleader Ms.Shrunjal Shah also invited the attention of the Court to the Condition No.3 of the said Page 9 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025 NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined intimation which stipulates that if monthly installment is not paid before the end of the respective month, same shall be paid with 1.5% penal interest before 20th of the subsequent month. It was therefore submitted that admittedly the petitioner did not comply with such mandatory condition No.3 of the intimation and therefore, the respondent- Authority was justified in rejecting the application filed by the petitioner under the Amnesty Scheme.
6.4. It was also pointed out from the Circular dated 26th May, 2022 whereby, the Government has granted further time to the assessees for payment of the outstanding interest, if any, under the Amnesty Scheme. It was submitted that though the application of the petitioner was rejected prior to such Circular, petitioner could have made application on Page 10 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025 NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined payment of the outstanding interest under the said Circular to grant the benefit of the Scheme. It was submitted that the petitioner however, has not made such application and therefore, no interference is called for in the impugned order dated 23rd February, 2022.
7. Considering the submissions made by the learned advocates for the respective parties, it would be germane to refer to the Amnesty Scheme, 2019 which is a benevolent Scheme for recovery of the old outstanding dues in pending Appeals to reduce the cost of litigation of the Government. As per the provisions of the Clause 8 of the Amnesty Scheme, the petitioner was required to give the benefit of the Scheme on payment of the first installment being 10% of the total outstanding dues to be paid before 15th March, 2020 and remaining 90% to be paid from April, Page 11 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025 NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined 2020 in eleven equal installments. Clause 8(4) of the Scheme provides that if the monthly installment is not paid within time, then such installment can be paid with 1.5% interest per month before the 20th Day of the next month.
8. On the basis of the material made available on record, the petitioner has paid the monthly installments as under :
tax as per application after 1 installment 181779 433601.1 Installm amount Original revised ent to balance paid date paid be paid 15-03- Rs.81,779/-
1st 31-07-2020 48177.9 214779 166601 excess
2020 Dt.12-03-2020
30-04- Rs.1,33,000/-
2nd 31-07-2020 39418.28 127183 excess
2020 Dt.16-06-2020
31-05-
3rd 39418.28 87765 excess
2020 31-08-2020
30-06-
4th 30-09-2020 39418.28 48346 excess
2020
31-07-
5th 31-10-2020 39418.28 excess
2020 8928
31-08- Short
6th 30-11-2020 39418.28 -30490.31
2020 paid
30-09- Short
7th 31-12-2020 39418.28 -39418.28
2020 paid
31-10- Rs.2,67,000/-
8th 31-01-2021 39418.28 267000 157673.13
2020 Dt.19-01-2021
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NEUTRAL CITATION
C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025
undefined
30-11-
9th 28-02-2021 39418.28 118254.85
2020
10t 31-12-
31-03-2021 39418.28 78836.56
h 2020
11t 31-01-
30-04-2021 39418.28 39418.28
h 2021
12t 28-02-
31-05-2021 39418.28 0.00
h 2021
Total 481779 481779
6th installment to be short
30-11-2020 30490.31
installment paid date payment
installment actual
19-01-2021 766.85 interest
paid date
late payment
51
days
7th installment to be short
31-12-2020 39418.28
installment paid date payment
Installment
19-01-2021 408.22 interest
actual paid date
late payment days 21 Total
1175.07
interest
9. From the above details, it is discernible that the petitioner has not paid the 6th and 7th Monthly installments within the due date and therefore, the petitioner did not pay the interest amount of Rs.1,175.07/- as per the Amnesty Scheme.Page 13 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025
NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined
10. The respondent-Authority therefore, on the ground that the petitioner did not pay the 6th and 7th monthly installments with interest, literally interpreted the provisions of Clause 8(4) of the Amnesty Scheme and rejected the Application of the petitioner on the ground that full amount is not paid.
11. We are of the opinion that such literal interpretation of benevolent Scheme could not have been made by the respondent-Authority without giving any intimation to the petitioner for outstanding amount of interest, if any, to be paid. The impugned order dated 23rd February, 2022 could not have been passed rejecting the application filed by the petitioner under the Amnesty Scheme.
12. It is also pertinent to note that the petitioner has paid the entire amount on 19th Page 14 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025 NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined January, 2021 whereas, the last date of payment of the last installment was extended up to 31st August, 2021. It was therefore, incumbent upon the respondent-Authority to intimate the petitioner to pay the shortfall of interest of Rs.1,175.07/- before rejecting application filed by the petitioner under the Amnesty Scheme.
13. In view of the above facts, the petition succeeds and accordingly, allowed. The impugned order dated 23rd February, 2022 is hereby quashed and set aside and the respondents are directed to give the benefit of the Amnesty Scheme to the petitioner and refund the amount of Rs.4,78,833/- which was recovered subsequently from the attached Bank Account of the petitioner after adjustment of the interest amount of Rs.1,175.07/- along with interest at the rate of 9% per annum from Page 15 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025 NEUTRAL CITATION C/SCA/16467/2024 JUDGMENT DATED: 24/04/2025 undefined the date of such recovery till the date of payment of such refund amount to the petitioner. Such exercise shall be completed within a period of twelve weeks from the date of receipt of the copy of this order. Rule is made absolute to the aforesaid extent. No orders as to cost.
(BHARGAV D. KARIA, J) (D.N.RAY,J) PALAK Page 16 of 16 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri May 02 2025 Downloaded on : Sat May 03 11:51:18 IST 2025