Varmora Granito Pvt. Ltd vs State Of Gujarat
2023 Latest Caselaw 5229 Guj

     C/SCA/4650/2023                                  JUDGMENT DATED: 06/07/2023




     IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
         R/SPECIAL CIVIL APPLICATION NO.                  4650 of 2023

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE VIPUL M. PANCHOLI   :    Sd/-
and
HONOURABLE MR. JUSTICE DEVAN M. DESAI      :    Sd/-
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1 Whether Reporters of Local Papers may be       NO
    allowed to see the judgment ?
2 To be referred to the Reporter or not ?        NO
3 Whether their Lordships wish to see the
    fair copy of the judgment ?                  NO
4 Whether this case involves a substantial
    question of law as to the interpretation     NO
    of the Constitution of India or any
    order made thereunder ?
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                VARMORA GRANITO PVT. LTD.
                          Versus
                     STATE OF GUJARAT
=======================================================
Appearance:
UCHIT N SHETH(7336) for the Petitioner(s) No. 1
MR PRANAV TRIVEDI AGP for the Respondent(s) No. 1,2,3
=======================================================
  CORAM:HONOURABLE MR. JUSTICE VIPUL M. PANCHOLI
        and
        HONOURABLE MR. JUSTICE DEVAN M. DESAI

                               Date : 06/07/2023
                                   ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE VIPUL M. PANCHOLI)

1. Looking to the issue involved in the present petition, learned advocates appearing for the parties have jointly requested to take up this matter for final disposal at admission stage.

2. Rule. Learned AGP Mr Pranav Trivedi waives service of notice of rule for respondents.

C/SCA/4650/2023 JUDGMENT DATED: 06/07/2023

3. This petition is filed under Article 226 of the Constitution of India, in which, the petitioner has prayed for following reliefs, "A. This Hon'ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order quashing and setting aside impugned communication dated 11.5.2022 (annexed at Annexure A) rejecting application filed by the Petitioner and it may please be held that the Petitioner is entitled to remission of interest and penalty since tax amount has already been paid by the Petitioner;

B. This Hon'ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the Respondents to forthwith grant benefit of amnesty scheme to the Petitioner and grant waiver of interest and penalty under the CST Act; C. This Hon'ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order quashing the bank attachment order (annexed at Annexure K) as being wholly without jurisdiction and illegal; D. Without prejudice to the above and in the alternative, this Hon'ble Court may be pleased to issue a writ of mandamus or writ

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in the nature of mandamus or any other appropriate writ or order directing the first appellate authority to restore the first appeal of the Petitioner for the year 2012-13 under the CST Act and also revive the stay order which already granted earlier.

E. Pending notice, admission and final hearing of this petition, this Hon'ble Court may be pleased to stay the operation, execution and implementation of the impugned bank attachment order (annexed at Annexure K), the Petitioner may be permitted to operate the bank account;

        F.      xxx     xxx    xxx.
        G.      xxx     xxx    xxx."

4. Heard learned advocate, Mr. Uchit N. Sheth for the petitioner and learned AGP Mr. Pranav Trivedi for the respondents.

5. The brief facts leading to the filing of the present petition are as under, 5.1 It is the case of the petitioner that the petitioner is engaged in the business of manufacture and sale of Ceramic Tiles and the petitioner was duly registered under the Central Sales Tax Act, 1956 (hereinafter referred to as "the Act"). It is stated that the assessment order was passed under the Act for the year 2012-13, wherein tax was demanded with interest and penalty without

C/SCA/4650/2023 JUDGMENT DATED: 06/07/2023

giving credit of tax paid by the petitioner for an amount of Rs.48,75,000/-.

5.2 It is further stated that the petitioner filed first appeal before the appellate authority challenging the order of assessment. In the said appeal, the petitioner had specifically taken ground that while passing an order of assessment, the Assessing Officer has not considered the payment of tax of Rs.48,75,000/-. The petitioner has also annexed the copy of challan.

5.3 The petitioner has further stated that the first appellate authority had granted interim stay against the recovery on the basis of the challan in respect of which, the credit was not given in the assessment order. 5.4 It is the case of the petitioner that the Government of Gujarat has announced Vera Samadhan Yojana 2019 by Resolution dated 11.09.2019. However, thereafter the said resolution was superseded by new Resolution dated 06.12.2019 and the scheme was named as "Vera Samadhan Yojana - 2019" (hereinafter referred to as "the amnesty scheme"). 5.5 It is the case of the petitioner that the petitioner applied as per the provision contained in the amnesty scheme and in the application, the petitioner has specifically pointed out that as per the assessment order,

C/SCA/4650/2023 JUDGMENT DATED: 06/07/2023

the petitioner was required to pay tax for an amount of Rs.38,03,216/-, against which, the petitioner had already deposited tax amount of Rs.48,75,000/-.

5.6 Thereafter, the intimation letter was issued by the competent authority under the amnesty scheme, wherein the concerned officer of the respondent has stated that the petitioner is liable to pay tax for an amount of Rs.38,03,216/-.

5.7 As the petitioner had already paid an amount of Rs.48,75,000/- prior to announcement of the amnesty scheme and even prior to assessment order passed by the Assessing Officer, the amount as asked for by the officer of the respondent under the amnesty scheme was not paid and, therefore, the respondent disposed of the application submitted by the petitioner vide order dated 11.05.2022.

5.8 It is further stated that thereafter, the bank account of the petitioner came to be attached by an order dated 20.06.2022 for recovery of the alleged outstanding dues under the Act again without giving credit of tax amount already paid by the petitioner.

           The          petitioner,                  therefore,                    made
           representation,             however,        no        response            was
           given       and,     therefore,           the     petitioner              has
           preferred present petition.






      C/SCA/4650/2023                                          JUDGMENT DATED: 06/07/2023




6.      Learned         advocate,       Mr.      Sheth       appearing           for       the

petitioner has referred to the documents, which are placed on record. It is submitted that as per the amnesty scheme, an amount of tax paid by the concerned applicant beneficiary prior to filing of the application under the scheme is required to be taken into consideration as per the amnesty scheme. It is further stated that if the amount of tax is paid, remission with interest and penalty will be granted. It is submitted that the petitioner paid an amount of Rs.48,75,000/- even prior to the order of assessment was passed by the concerned officer, however while passing an order of assessment, the said amount of tax paid by the petitioner was not taken into consideration by the said authority. Learned advocate has referred to the assessment order, copy of which is placed on record at Page Nos.14-17 of the compilation. At this stage, it is submitted that the petitioner challenged the said order by filing first appeal before the appellate authority and along with the said appeal, stay application was also preferred and as the petitioner had already paid tax amount of Rs.48,75,000/-, an order of pre-deposit was not passed by the appellate authority and the stay was granted in favour of the petitioner. Learned advocate has also referred to Paragraph No.9 of the memo of appeal, copy of which is placed on record at Page No.22 of the compilation. After referring to the same, it is submitted that

C/SCA/4650/2023 JUDGMENT DATED: 06/07/2023

specific ground was taken by the petitioner in the memo of appeal that the concerned officer while passing order of assessment on 29.06.2015 has not taken into consideration the amount of tax of Rs.48,75,000/- paid by the petitioner.

7. Learned advocate would further submit that thereafter the scheme was announced by the Government of Gujarat. Learned advocate has referred to the said scheme, copy of which is placed on record at Page No.28 of the compilation. It is submitted that as per the said scheme, the petitioner was required to withdraw the appeal, which was pending before the first appellate authority and, therefore, the petitioner withdrew the said appeal and submitted an application under the amnesty scheme. In the application itself, the petitioner has pointed out that the petitioner had paid an amount of Rs.48,75,000/- against the demand of tax of Rs.38,03,216/- as per the order of assessment. The petitioner has, therefore, not paid the amount as stated by the respondent under the amnesty scheme as per the intimation letter. Learned advocate submits that the respondents have wrongly rejected the application of the petitioner though the petitioner was entitled to get benefit of the amnesty scheme.

8. At this stage, learned advocate has placed reliance upon the decision taken by this Court in case of Safal Developers & Anr. Vs. State of Gujarat & Anr. while passing an order dated

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22.04.2016 and 27.04.2016 in Special Civil Application No.1338/2016. Learned advocate has more particularly placed reliance upon the observations made by this Court in Paragraph Nos.10 and 13 of the said order. Learned advocate, therefore, urged that the impugned communication be quashed and set aside and thereby the respondent authority be directed to grant benefit of the scheme to the petitioner and the order of attachment be quashed and set aside.

9. On the other hand, learned AGP Mr. Trivedi has referred to the averments made in the affidavit in reply filed on behalf of the respondent no.3. It is submitted that the petitioner is not entitled to get remission as per the amnesty scheme for the reason that initially the petitioner had paid an amount of Rs.48,75,000/- on 01.07.2015 at the time of spot inspection and assessment and, thereafter, the order of assessment has been passed in the year 2017 and, therefore, the said amount was not considered by the concerned competent authority at the time of passing Assessment Order. It is also pointed out that the office of the Deputy Commissioner, State Tax Circle 22 had completed the assessment on 31.03.2017 and as per the said assessment, total claim amounting to Rs.77,77,575/- (including tax amount of Rs.38,03,216/- + interest amount of Rs.30,23,556/- + penalty amount of Rs.9,50,823/-). It is further submitted that at the time of filing of the appeal

C/SCA/4650/2023 JUDGMENT DATED: 06/07/2023

before the Joint Commissioner, State Tax, Rajkot, the said amount of Rs.48,75,000/- was not considered and, therefore, the respondent no.3 being subordinate to higher authority would not be in a position to consider the same by granting any remission to the petitioner. Learned AGP, therefore, submitted that no illegality is committed by the concerned respondent while rejecting the application submitted by the petitioner under the amnesty scheme. Learned AGP , therefore, urged that the present petition be dismissed.

10. We have considered the submissions canvassed by learned advocates appearing for the parties. We have also gone through the material placed on record. It would emerge from the record that at the time of spot inspection and assessment at the place of the petitioner, the petitioner deposited an amount of Rs.48,75,000/- on 01.07.2015 towards the amount of tax, however while passing assessment order, the concerned Assessing Officer had not taken into consideration the said amount and thereby held that the petitioner is liable to pay total amount of Rs.77,77,575/- (including tax of Rs.38,03,216/- + penalty and interest). Thus prima facie from the record, it is clear that the concerned Assessing Officer has not taken into consideration the amount of tax of Rs.48,75,000/- paid by the petitioner. The petitioner, therefore, filed first appeal before the appellate authority.

C/SCA/4650/2023 JUDGMENT DATED: 06/07/2023

In the memo of appeal, the petitioner has specifically taken contention in Paragraph No.9 that while passing an order of assessment on 29.06.2015, the concerned officer has not taken into consideration the amount of tax of Rs.48,75,000/- paid by the petitioner and, therefore, he has wrongly calculated the amount of interest and penalty, which is not permissible. It is further reflected from the record that separate application for stay was also filed by the petitioner before the appellate authority and the appellate authority has considered the amount of Rs.48,75,000/- paid by way of tax by the petitioner to the concerned respondent authority and, therefore, the appellant authority has granted stay on 25.05.2017 in favour of the petitioner against the recovery.

11. It further transpires from the record that in the year 2019, the scheme was announced by the Government of Gujarat and as the petitioner was eligible to get the benefit of the amnesty scheme, an application was submitted, in which, it was specifically pointed out by the petitioner that against the tax liability of Rs.38,03,216/-, the petitioner had paid tax of Rs.48,75,000/-, inspite of that, the application submitted by the petitioner was rejected by the concerned respondent authority.

12. Now only contention taken by learned AGP appearing for the respondents on the basis of the affidavit

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in reply is that as the concerned deponent is subordinate to the higher authority, which had passed the order of assessment, he would not be in a position to consider the payment of Rs.48,75,000/- paid by the petitioner even prior to the order of assessment was passed and, therefore, remission under the scheme was not granted to the petitioner.

13. At this stage, we would like to refer to the order passed by this Court in case of Safal Developers (supra), wherein this Court has observed in Paragraph Nos.10 and 13 as under, "10. On behalf of the respondents, it has been contended that in view of paragraph 7 of the Scheme, the petitioners are not entitled to the benefit of the Scheme as the amount of tax and interest has been paid prior to the Scheme having been brought into effect. As noticed earlier, paragraph 7 of the Scheme provides that the dealers shall be entitled to the benefit of the Scheme only after the payment of the taxes payable under the Scheme during the period of the Scheme. In the opinion of this court, the contention that in cases where the tax and interest have been paid prior to the coming into force of the Scheme, the Scheme would not be applicable, does not appear to be a true construction of the provisions of paragraph 7. Paragraph

C/SCA/4650/2023 JUDGMENT DATED: 06/07/2023

7 only provides that the dealer, to be entitled to the benefit of the Scheme, shall have to have paid the taxes thereunder during the operation of the Scheme. The same does not in any manner preclude those dealers who have already paid the tax prior to the coming into force of the Scheme.

13. Examining the case from another angle, if the interpretation put forth by the respondents were to be accepted, the same would result in a situation where dealers who have paid their taxes prior to the coming into force of the Scheme, would be denied the benefit thereof, whereas those dealers who have not paid the taxes would be granted the benefit of the Scheme, which would be clearly violative of the constitutional provisions as envisaged under Article 14 of the Constitution of India and would amount to putting a premium on non-payment of taxes whereby dealers who have not paid taxes steal a march over those dealers who have paid their taxes in time."

14. It is also pertinent to note that against the aforesaid order passed by this Court, the State preferred SLP No.19269/2016 before the Hon'ble Supreme Court and the Hon'ble Supreme Court has dismissed the SLP preferred by the State and

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thereby the Hon'ble Supreme Court has not interfered with the order passed by this Court in the aforesaid case.

15. Keeping in view the aforesaid observations made by this Court, if the facts of the present case as discussed hereinabove, are examined, we are of the view that the respondents have committed an error while rejecting the application submitted by the petitioner under the amnesty scheme as the petitioner had already paid an amount of Rs.48,75,000/- even prior to the order of assessment was passed by the concerned Assessing Officer and prior to announcement of the scheme. Therefore, the petitioner is entitled to get the benefit of the scheme and remission of penalty and interest.

16. Accordingly, the present petition stands allowed.

The impugned communication dated 11.05.2022 at Annexure-A as well as the attachment order dated 20.06.2022 at Annexure-K are hereby quashed and set aside. The respondent no.3 herein is hereby directed to grant benefit of the amnesty scheme to the petitioner. Rule is made absolute.

Sd/-

(VIPUL M. PANCHOLI, J.)

Sd/-

(D. M. DESAI, J.) Gautam