Jharkhand High Court
Floor vs The State Of Jharkhand on 12 February, 2025
Author: Deepak Roshan
Bench: Deepak Roshan
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(T) No. 2204 of 2024
M/s. Tata Cummins Private Limited, (A Company deemed to be incorporated
under the Companies Act, 2013), having its Registered and Corporate Office at 7th
Floor, Tower A, Cummins India Office Campus, Survey No. 21, Balewadi, Pune
411045, Maharashtra having its Office at Cummins Road, Telco Township, P.O.
and P.S. Telco, Jamshedpur, District East Singhbhum, through its Signatory-cum-
Junior Manager-Legal namely, Vyom Ashik Ajmera, aged about 29 years, son of
Shri Ashik Kishore Ajmera, resident of 2/1-D Lala Lajpat Rai Sarani, P.O. & P.S.
Bhawanipur, District, Kolkata, State of West Bengal, PIN-700020.
... Petitioner
Versus
1. The State of Jharkhand, through the Secretary, Commercial Taxes Department,
having its office at Jharkhand Mantralaya (Project Building), P.O. Dhurwa, P.S.
Jagannathpur, District Ranchi, PIN 834 002 (Jharkhand).
2. Additional Commissioner of State Tax (Appeal), Jamshedpur Division,
Jamshedpur, having its office at Sakchi, P.O. and P.S. Sakchi, District Singhbhum
East.
3. Joint Commissioner of Commercial Taxes (Administration)-cum-Additional
Commissioner, State Tax, having its Office at atSakchi, P.O. and P.S. Sakchi,
District Singhbhum East.
4. Deputy Commissioner of Commercial Taxes, Jamshedpur Circle, Jamshedpur,
having its office at Sakchi, P.O. and P.S. Sakchi, District Singhbhum East.
... Respondents
CORAM: HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE DEEPAK ROSHAN
For the Appellant : Mr. Sumeet Kumar Gadodia, Advocate
Mrs. Shilpi Sandil Gadodia, Advocate
Ms. Shruti Shekhar, Advocate
Ms. Sanya Kumari, Advocate
For the Respondents : Mr. Ashok Kumar Yadav, Sr SC-I
Mr. Aditya Kumar, AC to Sr. SC-I
C.A.V. On 23.01.2025 Delivered on.12 /02/2025
Per Deepak Roshan J.
JUDGMENT
1. The present writ application has been filed praying therein for
the following reliefs:-
(i) For issuance of an appropriate writ/order/direction, including Writ of
Certiorari for quashing/setting aside the order contained in Memo No. 576
dated 25.10.2023 [Annexure-12] passed by Respondent No.2- Additional
Commissioner of State Tax (Appeal), Jamshedpur Division, Jamshedpur in
Appeal Case No. JR/JKSYA-07/2023-24 for the period 2003-04, wherein the
Appeal filed by the Petitioner in terms of 'Jharkhand
KaradhanAdhiniyamon Ki Bakaya Rashi Ka Samadhan Act, 2022'
[hereinafter referred to as 'Settlement Scheme of 2022' for short], has
been dismissed.
(ii) For issuance of further appropriate writ/order/direction, including Writ of
Certiorari, for quashing/setting aside the order of settlement issued under
Jharkhand KaradhanAdhiniyamon Ki Bakaya Rashi Ka Samadhan Act,
2022 contained in Form JKSY-V dated 09.05.2023 (Annexure-9) passed by
Respondent No. 4 pertaining to the period 2003-04 to the extent the amount
of pre-deposit of Rs. 76,00,000/- being the amount of disputed tax paid by
Petitioner has not been allowed to be adjusted against the final settlement
amount while issuing settlement order, due to which, Petitioner was
compelled to deposit excess payment of Rs. 45,60,000/-.
(iii) For issuance of further appropriate writ/order/ direction, including Writ of
Mandamus, directing the Respondents to refund an amount of Rs.
45,60,000/- being the excess amount realized by Respondents in terms of
Settlement Scheme of 2022 by adopting the mechanism of deducting the
amount of pre-deposit made by Petitioner against the disputed tax and,
thereafter, conferring the benefit of waiver of tax to the Petitioner in a most
illegal and arbitrary manner.
(iv) For issuance of further appropriate writ/order/direction directing the
Respondents to make payment of interest @ 18% per annum on the amount
of Rs. 45,60,000/- from the date of deposit i.e. 08.05.2023, till the date of
refund of the said amount.
(v) For issuance of any other appropriate writ(s)/ order(s)/direction(s), as Your
Lordships may deem fit and proper in the facts and circumstances of the
case.
2. The brief facts of the case as evident from the records is that the
petitioner is a Joint Venture Company formed by and between Tata
Motors Limited and Cummins Inc USA having its date of commercial
production as on 01.01.1996, and, is engaged primarily in
manufacturing/assembling of high speed diesel engines for automotive
applications including diesel engines for industrial, power generation
and CNG applications.
3. The present writ petition relates to dispute of financial year
2003-04 under Bihar Finance Act, 1981. For the period in dispute, an
assessment order was passed by assessing officer, wherein claim of the
petitioner regarding exemption from payment of additional tax and
surcharge was rejected and, consequentially, as against admitted
liability of Rs. 5,17,39,669/-, total tax liability of Rs. 12,89,71,279/-
was determined.
Against the said order, the petitioner preferred a writ
petition before this Court being W.P.(T) No. 3749 of 2016 and it is an
admitted fact that during stage of adjudication proceedings, an amount
of Rs. 76,00,000/- was deposited by the petitioner to the state
exchequer as pre-deposit.
4. In the meanwhile, the State of Jharkhand formulated an
Amnesty Scheme namely, "Jharkhand Karadhan Adhiniyamon Ki
Bakaya Rashi Ka Samadhan Act, 2022" [hereinafter referred to as
'Amnesty Scheme'] and even Rules for giving effect to the said
scheme was formulated namely, 'Jharkhand Karadhan Adhiniyamon Ki
Bakaya Rashi Ka Samadhan Rules, 2023' [hereinafter referred to as
'Rules of 2023'].
5. The petitioner being desirous of availing benefit under the
Scheme filed online application in prescribed format in terms of Rule-
3(1) of Rules of 2023 but while filing online application form suo-motu
computation of the benefit under Amnesty Scheme was determined in
the following manner:-
Sl. No.
Particulars Amount (Rs.)
1. Amount of Admitted Tax 5,17,39,669.00
2. Amount of Assessed Tax 12,89,71,279.00
3. Remaining balance to be paid 7,72,31,610.00
4. Pre-Deposit 76,00,000.00
5. Remaining balance for settlement 6,96,31,610.00
6. Final Settlement amount 2,79,06,859.70
6. However, as per the petitioner, determination of tax liability
should have been as under:-
Sl. Amount (Rs.)
No. Particulars
1. Amount of Admitted Tax 5,17,39,669.00
2. Amount of Assessed Tax 12,89,71,279.00
3. Remaining balance to be paid 7,72,31,610.00
4. Settlement amount (40% & 50%) 3,09,46,859.70
5. Pre-Deposit 76,00,000.00
6. Final Settlement amount 2,33,46,859.70
7. Due to the aforesaid difference in determination of amount
payable under Amnesty Scheme, an excess amount of Rs. 45,60,000/-
[Rs. 2,79,06,859.70 - Rs. 2,33,46,859.70] was determined as payable
by the petitioner which the petitioner paid under protest.
Under the Amnesty Scheme, vide Section 8 thereof, provisions
were incorporated for filing Appeal before Additional Commissioner of
State Tax (Appeal), Jamshedpur Division, Jamshedpur and,
accordingly, petitioner preferred its Appeal against the order of
settlement dated 09.05.2023 to the extent an excess tax amount of Rs.
45,60,000/-was realized from petitioner under Settlement Scheme.
8. However, appellate authority vide its order contained in Memo
No. 576 dated 25.10.2023 confirmed the order of settlement and held
that amount of pre-deposit made by petitioner was to be first deducted
from disputed amount and only thereafter, benefit under the Scheme
was to be extended to petitioner.
9. Mr. Sumeet Gadodia, learned counsel appearing for petitioner
submitted that under Amnesty Scheme, provisions were incorporated
for giving waiver of disputed tax to the extent of 60% of the disputed
amount and the term 'admitted tax' and 'disputed amount' is defined
under Amnesty Scheme itself vide Section 2(i) and 2(viii).
10. It was further submitted that Section 3 of the Amnesty Scheme
clearly provided, inter alia, that the amount of waiver was to be
calculated being the difference between the tax component of assessed
tax and the amount of tax already paid. It was further submitted that
amount of tax already paid is the amount of admitted tax paid by an
assessee and would not include any amount pertaining to disputed tax
which has been paid either as pre-deposit or as condition of stay, etc.
11. It has been submitted that almost identical provisions of Central
Amnesty Scheme i.e. Sabka Vishwas (Legacy Dispute Resolution)
Scheme, 2019 came up for interpretation by this Court, wherein exactly
similar dispute was adjudicated and it was held that intent of the
Scheme was to give waiver of disputed tax amount and, merely,
because some amount towards pre-deposit/deposit is made by an
assessee, the same cannot be first deducted from disputed tax amount
for determining the measure for extending benefit of waiver.
12. Per contra, Mr. Ashok Yadav, Sr. S. C. 1representing the
Respondent-State while referring to the paragraphs of Counter
Affidavit submitted that it is an admitted fact that petitioner deposited
pre-deposit amount of Rs. 76,00,000/- against disputed demand
pursuant to an interim order passed by Appellate Authority, but it has
been submitted that once said amount has been deposited, same would
stand appropriated against disputed amount and disputed amount to that
extent would stand reduced.
13. It was further submitted that under the Scheme, definition of
"disputed amount" would mean the amount disputed by an assessee
minus the amount already paid by it at any interim stage of the
proceedings, may be either as pre-deposit/deposit/ suo-motu deposit etc.
and, thus, while passing the settlement order, the settlement officer has
rightly issued certificate after first adjusting the amount of pre-deposit
from disputed amount and, thereafter, extending the benefit of waiver
under the Scheme.
14. We have carefully considered the submissions of the parties at
bar and perused the provisions of 'Jharkhand Karadhan Adhiniyamon
Ki Bakaya Rashi Ka Samadhan Act, 2022' and the corresponding
Rules. For the sake of ready reference, certain relevant provisions of
the aforesaid Amnesty Scheme is quoted herein under:-
2 DEFINITIONS-
(i) "Admitted tax"- means the amount of tax admitted as being payable as per the returns filed
by the person under the relevant Act;
(ii) "Assessed tax"- means tax, interest and penalty determined as being payable under an order
of assessment or reassessment under the relevant Act;
(vii) "Dispute" means an Appeal, Revision, Review, Reference, Writ Petition, or Special Leave
Petition, arising out of any order passed under the relevant Act and pending before, as
the case may be, the following:-
(i) The Additional/Joint Commissioner of Commercial Taxes/State Tax (Appeal);
(ii) The Additional/Joint Commissioner of Commercial Taxes/State tax
(Administration);
(iii) The Commissioner of Commercial Taxes;
(iv) The Commercial Taxes Tribunal;
(v) The Central Sales Tax Tribunal
(vi) The High Court;
(vii) The Supreme Court of India;
Explanation:- For the purposes of this clause a dispute includes:
(i) Any levy of tax, interest and penalty by an authority prescribed and/or
authorized under the relevant Acts, which has not been paid into
Government Treasury, or
(ii) A proceeding for recovery of any tax, interest, or penalty pending for
recovery under the Bihar and Orissa Public Demand Recovery Act, 1914;
(viii) "Disputed Amount" , in relation to a dispute, means any tax or interest or penalty which has
been determined as being payable by the person pursuant to an order of assessment,
reassessment, scrutiny or any other order made or passed under the Relevant Acts and
which is not admitted and for such demand a litigation has been filed before any
Appellate Authority or Forum but shall not include any demand in pursuant to an order
of assessment, reassessment, scrutiny or any other order made or passed under the
Relevant Acts where the Government has filed any case against such demand before any
Appellate Authority or higher Courts.
15. From bare perusal of the Settlement Scheme it would reveal
that under Settlement Scheme, term 'admitted tax' is defined to mean
an amount of tax admitted as being payable as per the return filed by an
assessee, and, the term 'disputed amount' means the amount of tax,
interest or penalty which is determined as payable by an
assesseepursuant to an order of assessment/re-assessment/scrutiny or
any other order and which is not admitted, and, for such demand, a
litigation has been filed by an assessee.
16. Thus, under the Scheme, amount of 'admitted tax' clearly
represents an amount which is admitted by assessee, whereas 'disputed
amount' means amount of tax, interest or penalty which is in dispute
pursuant to a litigation filed by an Assessee.
17. Under Section 3 of Settlement Scheme, waiver is provided vide
Section 3(4) providing for 60% waiver in the following manner:-
'3. Determination of Settlement amount.- Subject to other provisions of this Act, old arrears
of tax or tax in a dispute pending under the relevant Act may, on an application made in this
behalf by a person, be settled upon payment of the settlement amount as specified in column 3
and 4 of the Table below:
No. Type of Cases Settlement amount
1 2 3 (Tax) 4 (Interest)
1 Arrear of admitted 100% amount of admitted 10% of unpaid
tax, interest and tax amount of interest
penalty and penalty (90%
waiver).
2 Arrear amount of 40% of the difference 10% of the unpaid
assessed tax between the tax amount of interest
uptoFinancial year component of assessed tax and penalty in that
2017-18. and the amount of tax statutory order
already paid (60% waiver) (90% waiver)
3 Arrear amount related 50% of the unpaid amount 10% of the unpaid
to statutory of tax calculated after the amount of interest
declarations deduction of (50% waiver) and penalty as per
/Forms/certificates (a) The amount of tax statutory order
upto Financial Year involved in the value of (90% waiver)
2017-18 acceptable Forms/
Certificates/Declarations
submitted by the applicant
before the prescribed
authority under this Act,
and
(b) The amount already
paid towards the total
arrear of tax.
4 Any arrear in dispute 40% of tax in dispute 10% of the unpaid
other than mentioned provided the same has not amount of interest
in Sl. No. 1, 2 and 3 been declared/considered and penalty as per
in any order/ statutory order
assessment/reassessment (90% waiver)
(60% waiver)
Provided that, where the amount of tax involved in the value of acceptable forms/
certificates/ declarations, along with the amount already paid, becomes more than the
arrear amount, no refund shall be made as a result of the Settlement.
Provided further that, no application for settlement shall be entertained by the authority,
in which the State Government/Department has moved to higher court.
Explanation-I Where settlement application is made only against interest and penalty
order, it shall be considered provided the relevant tax component in the statutory order
has been paid;
Explanation-II For the purpose of settlement of dispute, each statutory order/Demand
Note issued by the department/ authority shall be construed as one dispute and person
has to apply separately for settlement for each such dispute.'
18. The Scheme clearly provides that assessee is liable to pay 40%
of the amount of tax in dispute provided the same has not been
declared/considered in any order/assessment/re-assessment. In the
present case, it is not in dispute that the petitioner admitted an amount
of Rs. 5,17,39,669/- being the admitted amount of tax payable by it as
per its return. However, pursuant to an adjudication order, an amount of
Rs. 12,89,71,279/- was determined against the petitioner.
19. Thus, balance between disputed tax and admitted tax was the
amount in dispute i.e. in the present case Rs. 7,72,31,610/-. Under the
Scheme, petitioner was only liable to deposit 40% of the disputed
amount and there was 60% waiver but while computing the tax
liability, Settlement Officer first deducted the amount of pre-deposit
from the amount in dispute and, thereafter, extended the benefit of
waiver under the scheme which is clearly travelling beyond the
contours of the scheme itself.
20. The methodology adopted by the assessing officer can be
summarized in the following chart:-
Sl. No.
Particulars Amount (Rs.)
1. Amount of Admitted Tax 5,17,39,669.00
2. Amount of Assessed Tax 12,89,71,279.00
3. Remaining balance to be paid 7,72,31,610.00
4. Pre-Deposit 76,00,000.00
5. Remaining balance for settlement 6,96,31,610.00
6. Final Settlement amount 2,79,06,859.70
21. In our considered opinion, this calculation made by the
respondent is erroneous for the following reason:-
If an assessee is having a liability of Rs.1 crore and he does not
pay any amount, he will get benefit of 60% waiver as per the scheme
and he will have to pay Rs. 40 lakhs.
But if an assessee who is having a tax liability of Rs. 1 Crore,
pays as pre-deposit pending appeal Rs. 30 lakhs, his balance tax
liability is Rs. 70 lakhs; benefit which is to accrue to him cannot be
computed at 60% of Rs. 70 lakhs i.e., Rs.42 lakhs.
If this is done, then he would be worse off by paying Rs.30
lakhs ( as he would get a lesser benefit of only Rs. 42 lakhs under the
scheme) than an assessee who does not pay any amount pursuant to
demand and gets waiver of 60% of Rs.1 Crore i.e. Rs. 60 Lakhs.
This could never have been the intention of the scheme.
Similar view has been taken in Vassu Enterprises & analogous
cases v. Union of India &Ors.1 while interpreting the Central Amnesty
(2023) 11 GSTR 21
Scheme i.e. Sabka Vishwas (Legacy Dispute Resolution) Scheme,
2019, it was held:-
'28. Even from a plain reading of Section 124(2), it would be evident that the amount
of deposit made during enquiry, investigation or audit is required to be deducted after
extending relief under section 124(1) of the Scheme and at the time of issuing
statement indicating the amount payable by a declarant.
Even otherwise, the intent of legislature cannot be in such a way that an assesse who
pays some amount either suo motu prior to demand or after demand put in worse
condition than an assesse who does not pay any amount after demand and avail the
benefit of the scheme because admittedly; if the contention of the revenue is accepted
then if an assesse is having liability of 1 crore rupees and he does not pay any amount
then he will get benefit of 40% as per the scheme and he will have to pay 60 lacs.
However, if an assesse who is having a demand of 1 crore and during course of
investigation or otherwise he pays an amount of 30 lacs then if 40% will be deducted
from 70 lacs than he would be in worse position than anassesse who does not pay any
amount pursuant to demand. This can never be the intent of the scheme.'
22. So, in our opinion, determination of tax liability under the
Scheme was to be undertaken in the following manner and not as done
by the assessing officer :-
Part-1
Sl. Amount (Rs.)
No. Particulars
1. Amount of Admitted Tax 5,17,39,669.00
2. Amount of Assessed Tax 12,89,71,279.00
3. Remaining balance to be paid 7,72,31,610.00
4. Settlement amount (40% & 50%) 3,09,46,859.70
5. Pre-Deposit 76,00,000.00
6. Final Settlement amount 2,33,46,859.70
23. Thus, we are of the considered opinion that the petitioner is
right in contending that due to incorrect application of the Settlement
Scheme, petitioner is denied its actual benefit resulting into a loss of
Rs. 45,60,000/- ( Rs. 2,79,06,859.70-Rs.2,33,46,859.70) to petitioner.
24. Admittedly, the Settlement Scheme is a beneficial scheme and
the Hon'ble Apex Court in its judgment rendered in the case of
Government of Kerala and Another v. Mother Superior Adoration
Convent reported in (2021) 5 SCC 602, has held that even in tax
statutes, exemption provisions should be liberally considered in
accordance with the object sought to be achieved. In a beneficial
legislation, literal formulistic interpretation should be eschewed to give
full effect to the provisions of the beneficial legislation.
25. In view of the facts stated hereinabove, impugned order passed
by the appellate authority contained in Memo No. 576 dated
25.10.2023 in Appeal Case No. JR/JKSYA-07/2023-24 for the period
2003-04 is set aside and, further, order of settlement to the extent,
amount of pre-deposit of 76,00,000/- has been directed to be adjusted
from the amount in dispute before extending the benefit of settlement is
set aside.
26. Consequentially, a writ of mandamus is issued upon
respondents to refund an amount of Rs. 45,60,000/- to the petitioner
realized in excess by them under the Scheme of 2022. The petitioner
would further be entitled for payment of interest on the aforesaid
amount of Rs. 45,60,000/- from the date of deposit i.e. 08.05.2023 till
the date of refund of the said amount @ 6% per annum. The aforesaid
exercise shall be completed by the respondent-authorities within a
period of eight weeks from today.
27. As a result, the instant writ application stands allowed. Pending,
I.As., if any, stand disposed of. However, there shall be no order as to
costs.
(M.S. Ramachandra Rao, C.J.)
(Deepak Roshan, J.)
Amardeep/-
AFR
