M/S Tata Motors Limited Through Pankaj Kumar Patwari vs. The State Of Jharkhand Through The Secretary Commercial Taxes Deptt

The present writ application has been filed praying therein for the following reliefs:-

Brief facts of the case as evident from the records is that petitioner is engaged in manufacturing and selling of heavy and medium commercial vehicles and its spare and accessories and is also

The present writ petition relates to dispute of financial year 2004-05 under Bihar Finance Act, 1981. For the period in dispute, an assessment order dated 01.07.2008 was passed by assessing officer, wherein as against the admitted tax liability of Rs. 64,29,12,831/- assessment of tax was made for an amount of Rs. 1,41,78,52,927/- an amount of Rs. 4,12,264/- was paid as admitted tax pursuant to assessment and, thus, disputed tax remained as Rs. 77,45,27,832/-. Against the said order, petitioner after exhausting the remedy of appeal and revision filed writ petition before this Hon’ble Court vide W.P.(T) No. 1624 of 2014 and W.P.(T) No. 4154 of 2015. It is an admitted fact that as against the disputed tax liability of Rs. 77,45,27,832/-, petitioner deposited on various dates an amount of Rs. 6,00,02,005/- which was primarily deposited by it either towards pre-deposit and/or amounts towards condition of stay passed by various forms.

In the meanwhile, 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 also formulated namely, ‘Jharkhand Karadhan Adhiniyamon Ki Bakaya Rashi Ka Samadhan Rules, 2023’ [hereinafter referred to as ‘Rules of 2023’].

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 it is the case of the petitioner that while filing online application formsuo-motu computation of the benefit under Amnesty Scheme was determined, wherein the amount of pre-deposit of Rs. 6,00,02,005/- was first adjusted against the disputed amount and upon remaining balance, waiver of 60% and 50% of tax respectively was extended to petitioner. The same was illustrated as under:- Amount admitted in Return 64,29,12,831/-

It is the case of petitioner that under the Settlement Scheme, 60% waiver of disputed tax under Section 3 was applicable, where disputed tax related to amount other than certificate/declaration forms and in respect of declaration forms/certificates waiver of tax to the extent of 50% was admissible. According to petitioner, waiver pertaining to disputed tax should have been applied first before adjusting pre-deposit/deposit amounts and had the said methodology been adopted by respondents, total settlement amount would have been Rs. 31,03,76,775/- against which petitioner had already made a deposit of Rs. 6,00,02,005/- and, hence, balance to be paid by petitioner would have been ‘25,03,74,770’/-.

However, since respondents first adjusted the amount of pre- deposit from the amount of disputed tax and, thereafter, applied waiver under the scheme, an amount of Rs. 28,63,75,973/- was determined to be paid by petitioner while computing settlement amount on 18.04.2023 which the petitioner was compelled to pay under protest on 29.04.2023. As per petitioner due to aforesaid incorrect application of scheme, petitioner was compelled to pay an extra amount of Rs. 3,60,01,023/-.

Thereafter, settlement order for Rs. 28,63,75,973/- was passed on 03.05.2023 against which in terms of Amnesty Scheme, vide Section 8 thereof, petitioner preferred an appeal before Additional Commissioner of State Tax (Appeal), Jamshedpur Division, Jamshedpur. However, appellate authority vide its order contained in

However, from the records and statements made in the writ petition and revised computation given vide Annexure-15, it would transpire that petitioner during the appellate proceedings had given a revised computation taking into consideration the amount of tax pertaining to declaration forms and, as per the said revised computation as against an original refund of Rs. 3,60,01,203/- claimed by petitioner refund of Rs. 3,31,72,992/- was only claimed. In fact, from Annexure- 15, it would be evident that petitioner before appellate authority had made prayer for refund as per alternative computation.

Mr. Sumeet Kumar 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% and 50% 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).

It was further submitted that Section 3 of Amnesty Scheme clearly provided, inter alia, that 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 submitted that the term 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.

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 Hon’ble Court, wherein exactly similar dispute was adjudicated by this Hon’ble Court 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

Per contra, Mr. Ashok Yadav counsel for Respondent-State while referring to the paragraphs of the Counter Affidavit submitted that it is an admitted fact that petitioner deposited an amount of Rs. 6,00,02,005/- pursuant to demand notice under protest, but, the moot question for adjudication would be as to whether the amount deposited by petitioner under protest would remain a disputed amount of tax or a tax realized against the demand raised by revised orders passed pursuant to remand order passed by appellate authority.

It has been submitted that although amounts were deposited under protest but once remand assessment orders were passed and the amounts paid under protest were adjusted against disputed demand, then the said amounts paid under protest would stand appropriated against the disputed amount and disputed amount to that extent would stand reduced.

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, rightly the settlement officer issued certificate after first adjusting the amount of pre-deposit from disputed amount and, thereafter, extending the benefit of waiver under the Scheme.

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-

A perusal of Settlement Scheme would reveal that under Settlement Scheme, term ‘admitted tax’ is defined to mean an amount of tax admitted as being payable as per 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 assessee pursuant 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.

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.

Under Section 3 of Settlement Scheme, waiver is provided to the extent of 60% disputed being other taxes and waiver of 50% was

In the present case, disputed tax of the petitioner also pertained to non-furnishing of declaration forms and, thus, waiver of tax to the extent of 60% and 50% respectively were applicable to petitioner. It is not in dispute that disputed amount was Rs. 28,63,75,973/- /- and amount of Rs. 6,00,02,005/- was deposited as pre-deposit and/or condition of stay.

In our considered opinion, this calculation made by the respondent is erroneous for the following reason:-

In our opinion, difference between disputed tax and admitted tax was the amount in dispute and under the scheme, petitioner was entitled for waiver of 60% and 50% respectively, 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.

The methodology adopted by the assessing officer can be summarized in the following chart:- Amount admitted in Return 64,29,12,831/- Amount of Tax assessed 1,41,78,52,927/- Balance to be paid (after adjustment of Rs. 4,12,264/- paid in respect of assessed tax). 77,45,27,832/- Less amount of pre-deposit 6,00,02,005/- Remaining Balance 71,45,25,827/- Waiver granted [60% of Rs. 76,88,71,410 after first deduction of Rs. 6,00,02,005 & 50% of Rs. 56,56,422/-, i.e.

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 :-

Thus, we are of the opinion that petitioner is right in contending that due to incorrect application of Settlement Scheme, petitioner is denied its actual benefit which resulted into a loss of Rs. 3,60,01,203/- (Rs.28,63,75973 – Rs. 25,03,74,770). However, before the appellate authority, petitioner had filed its revised computation taking into consideration the component of the declaration form and has claimed only as per revised computation being an amount of Rs. 3,31,72,992/-. Hence, we are of the opinion that petitioner cannot take a different stand than what it has taken in the appellate proceedings and it can only be entitled for refund as per the revised computation submitted before the appellate authority of an amount of Rs. 3,31,72,992/- and not the original refund amount claimed as Rs. 3,60,01,203/-.

Admittedly, Settlement Scheme is a beneficial scheme and Hon’ble Supreme 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 formalistic interpretation should be eschewed to give full effect to the provisions of the beneficial legislation.

In view of the facts stated hereinabove, impugned order passed by the appellate authority contained in Memo No. 415 dated 24.07.2023 in Appeal Case No. JR/JKSYA-04/2023-24 for the period 2004-05 is set aside and, further, order of settlement to the extent, amount of pre-deposit of 6,00,02,005/- was directed to be adjusted from the amount in dispute before extending the benefit of settlement is set aside.

Consequentially, a writ of mandamus is issued upon respondents to refund an amount of Rs. 3,31,72,992/- to petitioner realized in excess by them under the Scheme of 2022. Petitioner would further be entitled for payment of interest on the aforesaid amount of Rs. 3,31,72,992/- from the date of deposit i.e. 28.04.2023 till the date of refund of the said amount @ 6% p.a. The aforesaid exercise shall be completed by the respondent-authorities within a period of eight weeks from today.

Pending, I.As., if any, stand disposed of. There shall be no order as to costs. (M.S. Ramachandra Rao, C.J.)