Polsons Distillery vs. The Asst.Commissioner (Assessment)

Facts

The appellant, Polsons Distillery, manufactured Indian Made Foreign Liquor and paid turnover tax on conceded sales. A dispute arose regarding the inclusion of excise duty in the total turnover for tax levy for assessment years 1998-99 to 2004-05. The Supreme Court settled this issue in 2005, holding excise duty as part of total turnover. Assessments were completed, and demands were raised. Appeals were filed, and recovery proceedings were stayed subject to a 50% deposit of disputed tax. An Amnesty Scheme in 2009 allowed settlement of dues with relaxed interest/penalty. The appellant applied, but the Assessing Authority appropriated previous payments towards interest, demanding a further amount for settlement. Later, the Amnesty Scheme, 2020, was introduced, which the appellant sought to utilize for outstanding dues, including those from 2015-16. The High Court considered a Writ Appeal against a Single Judge's order upholding the 2020 Amnesty Scheme demand, a Review Petition related to an earlier writ, and the original Writ Petition concerning the 2009 Amnesty Scheme.

Held

The Court held that the appellant is entitled to the benefit of the Amnesty Scheme, 2020, for settling tax dues for assessment years 1998-99 to 2004-05 and 2015-16. The Court reasoned that the 2020 Scheme envisages settlement of dues from the earlier period, making it beneficial for the assessee. Payments made by the appellant during the pendency of litigation were deemed provisional and subject to the final outcome. The Court computed the total liability under the Amnesty Scheme, 2020, as Rs.2,45,43,736/-. It found that the appellant had already paid Rs.3,19,32,523/-, resulting in an excess payment of Rs.73,88,787/-. However, the appellant's counsel waived the claim for refund of this excess amount in the spirit of settlement. The Court also clarified that the appellant is entitled to a refund of Rs.7,98,253/- paid pursuant to an interim order in W.P.(C).No.1291 of 2021. The assessment orders under the 2009 Scheme were considered provisional due to ongoing litigation. The Court's ratio is that beneficial amnesty schemes should be applied liberally, and payments made during protracted litigation should be treated as provisional towards the final settlement under the most beneficial scheme available.

Key Issues

1. Whether the appellant is entitled to the benefit of the Amnesty Scheme, 2020, for settling tax dues for assessment years 1998-99 to 2004-05 and 2015-16, considering the pendency of earlier litigation and the existence of the Amnesty Scheme, 2009? Petitioner's contention: The appellant argued that the Amnesty Scheme, 2020, is beneficial and should apply to their outstanding dues, including those from the period covered by the 2009 Scheme. They contended that payments made during the litigation should be treated as provisional and subject to the final computation under the 2020 Scheme. They also argued that the assessment orders under the 2009 Scheme were provisional given the ongoing litigation. Respondent's contention: The State argued that Ext.P11 series of assessment orders, not impugned in the earlier writ petition, virtually bound the appellant and prevented them from assailing demands made under the 2020 Amnesty Scheme. They maintained that the amounts due under the earlier Amnesty Scheme of 2009 were correctly computed.