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
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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
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(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
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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,
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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/-.
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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
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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)
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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
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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
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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
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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,
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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
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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30-11-
9th 28-02-2021 39418.28 118254.85
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
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.
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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
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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
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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
