Kerala High Court
M/S India Food Exports vs Asst. Commissioner on 8 October, 2012
Author: Antony Dominic
Bench: Antony Dominic
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE ANTONY DOMINIC
MONDAY, THE 8TH DAY OF OCTOBER 2012/16TH ASWINA 1934
WP(C).No. 14261 of 2009 (C)
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PETITIONER(S):
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M/S INDIA FOOD EXPORTS,
P.B. NO. 100, KOLLAM, REPRESENTED BY
S. SATHISH NAIR, MANAGING PARTNER
BY ADVS.SRI.ARIKKAT VIJAYAN MENON
SRI.HARISANKAR V. MENON
SMT.MEERA V.MENON
RESPONDENT(S):
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1. ASST. COMMISSIONER, DEPARTMENT OF
COMMERCIAL TAXES, SPECIAL CIRCLE,KOLLAM.
2. STATE OF KERALA, REP. BY SECRETARY
TO GOVERNMENT, TAXES DEPARTMENT
GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.
3. COMMISSIONER OF COMMERCIAL-
TAXES, THIRUVANANTHAPURAM.
BY ADV. GOVERNMENT PLEADER SRI.T.K.SHAIJ RAJ
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08-10-2012,
ALONG WITH WPC. 17057/2009, WPC. 18511/2009, THE COURT ON THE SAME
DAY DELIVERED THE FOLLOWING:
WP(C).14261/09
APPENDIX
EXHIBITS
P1- COPY OF ORDER ISSUED BY THE SECRETARY TO GOVERNMENT, TAXES
DEPARTMENT, GOVERNMENT OF KERALA, TVM
P2- COPY OF CIRCULAR NO.35/08 ISSUED BY THE 3RD RESPONDENT
P2(a)- COPY OF CIRCULAR NO.37/08 ISSUED BY THE 3RD RESPONDENT
P3- COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT
P4- COPY OF LETTER SUBMITTED BY THE PETITIONER BEFORE THE 1ST
RESPONDENT
P5- COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT
P6- COPY OF LETTER ISSUED BY THE PETITIONER
/true copy/ PA To Judge
ANTONY DOMINIC, J
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W.P.(C)s.14261, 17057 & 18511/2009
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Dated this the 8th day of October, 2012
JUDGMENT
Issues raised in these writ petitions are common. Therefore, these cases were heard together and are disposed of by this common judgment, treating W.P.(C). 14261/09 as the leading case.
2. Petitioner in W.P.(C).14261/09 is engaged in processing of raw cashew nuts. There was huge demand against the petitioner for higher rate of tax pertaining to the year 2002-03, which was raised on the basis that F Forms submitted by them were bogus. It appears that based on the representations made by the Trade Unions and others, in the budget speech for 2007-08, an Amnesty Scheme was announced, the relevant portion of which reads as under:-
"I offer to waive the penalty and all amounts in excess of 4% and interest thereon on all transactions upto 31.3.06 provided the dealers pay the amount in full before 30.6.07. If the dealers accept the offer necessary orders will be issued subject to concurrence of the Central W.P.(C)s.14261,18511 &17057/09 2 Government. The sacrifice of revenue involved is Rs.25 Crore."
3. Based on the budget speech and to give effect to the above proposal, Government issued G.O.(MS)No.136/008/TD dated 7.7.2008 in which it was stated thus:-
"In the circumstances, with a view to give effect to the proposals contained in para 174 of the Budge speech 2007-08, Government order that penalty, interest and all amount in excess of 4% of tax thereon on all inter-state transactions made by cashew dealers in Kerala upto 31.3.2006 stand waived."
4. On the basis of Ext.P1, petitioner submitted their application for the benefit of the Scheme and finally paid Rs.12,39,924/- being 4% tax payable under the Scheme. Subsequently, they were issued Ext.P3 notice calling upon them to remit Rs.1,85,989/- towards interest. Since the notice did not disclose the basis of the demand, by Ext.P4, petitioner sought the details thereof. There upon, they were issued Ext.P5 notice stating that interest as per Section 55 (C) of the KGST Act was payable on the 4% tax and that from out of the amount remitted by the petitioner, the W.P.(C)s.14261,18511 &17057/09 3 interest due is already appropriated. On that basis, petitioner was called upon to remit Rs.1,91,569/- due towards interest. Petitioner says that there upon, they remitted the amount under protest as per Ext.P6 and thereafter, has filed this writ petition, seeking to quash Exts.P3 and P5 and to direct the respondents to refund the amount deposited by them.
5. The contention raised by the petitioner is that in order to give effect to the budget proposal, when Ext.P1 Government Order was issued, anything in excess of 4% tax, such as penalty and interest, was offered to be waived. Therefore, once they remitted 4% tax payable under Ext.P1, their liability stands discharged. It is stated that in such circumstances, the claim that interest is payable in addition to 4% tax is unsustainable.
6. Counter affidavits have been filed by the 1st respondent and respondents 2 and 3. In the counter affidavit filed on behalf of the 1st respondent, the stand taken is that what is W.P.(C)s.14261,18511 &17057/09 4 waived is only the amount in excess of 4% tax and interest thereon. In other words, according to the respondents the interest is payable on 4% tax payable under Ext.P1 Amnesty Scheme.
7. Having considered the rival submissions made by the learned counsel on both sides, I am of the view that this controversy will have to be resolved in the light of Ext.P1 Government Order, in as much as that is the order by which the Amnesty Scheme was announced by the Government. Therefore, the rights and obligations of the parties will have to be decided by referring to that document. I have already extracted the order to the extent it is relevant. That part of the order says that with a view to give effect to the budget proposal Government ordered that "penalty, interest and all amount in excess of 4% of tax thereon on all interstate transactions made by cashew dealers in Kerala upto 31.3.2006 stand waived". This therefore, means that what is payable by all Cashew dealers in Kerala was only 4% of the tax and the order does not say that interest on 4% tax was W.P.(C)s.14261,18511 &17057/09 5 also payable by the dealers. In fact, if reference is made to be budget proposal as contained in paragraph 174 of the speech which also has been extracted in the earlier portion of this judgment, it can be seen that it provided for waiver of "penalty and all amounts in excess of 4% and interest thereon." On comparison of the budget proposal as contained in para 174 and what the Government ordered by Ext.P1, it is evident that the provision for interest contained in the budget proposal is conspicuously absent when the Government issued Ext.P1 order. Therefore dealers like the petitioner who have applied in response to Ext.P1 are liable only to pay 4% tax without any interest thereon. If that be so, so long as Ext.P1 remained in force, petitioner could not have been saddled with the liability for interest. In such circumstances, Exts.P3 and P5 are unsustainable.
Writ petition is therefore disposed of quashing Exts.P3 and P5 and directing that Rs.1,91,569/- remitted by the petitioner be refunded to them or adjusted towards their future liability.
W.P.(C)s.14261,18511 &17057/09 6 17057 & 18511/2009 Issue raised in these writ petitions is fully covered by the judgment in W.P.(C).14261/09. Therefore, notices demanding remittance of interest are set aside and any payment made by the petitioners herein will also be refunded to them or adjusted towards their future liability.
Writ petitions are disposed of as above.
Sd/- ANTONY DOMINIC, JUDGE /-
mrcs /true copy/ PA To Judge