Visudira Impex Private Limited vs. The Assistant Commissioner-Iii

Facts

The petitioner, Visudira Impex Private Limited, faced an assessment order under Section 25(1) of the Kerala Value Added Tax (KVAT) Act for the assessment year 2013-14. While an appeal was pending before the Appellate Authority, a government amnesty scheme was introduced in 2020, requiring withdrawal of all pending appeals for eligibility. The petitioner applied for the amnesty scheme and awaited tax liability calculation. The Appellate Authority, upon noticing the petitioner's amnesty application on the KVATIS portal, unilaterally dismissed the pending appeal for default, deeming the application for the amnesty scheme as an implicit withdrawal of the appeal. The petitioner contends they neither withdrew the appeal nor received the benefit of the amnesty scheme.

Held

The Court held that the reasoning of the Appellate Authority was perverse. The condition for the amnesty scheme was the withdrawal of the appeal. If the appeal was not withdrawn, the application for the amnesty scheme should have been rejected, not the other way around. Applying for the amnesty scheme cannot, by any stretch of imagination, render a pending appeal deemed to be withdrawn or dismissed. Withdrawal of an appeal is an action that must be initiated by the appellant. The Court also noted that the petitioner claimed not to have even received approval for the amnesty scheme benefit. Consequently, the dismissal of the appeal for default was set aside. The Appellate Authority was directed to reinstate the appeal and pass fresh orders after hearing the petitioner.

Key Issues

1. Whether the Appellate Authority erred in dismissing the petitioner's appeal for default based on the petitioner's application for an amnesty scheme, when the scheme's condition was to withdraw pending appeals, and no such withdrawal was formally made by the petitioner? (Section 25(1) KVAT Act, Amnesty Scheme conditions) Petitioner's Arguments: The petitioner argued that applying for the amnesty scheme does not automatically equate to withdrawing a pending appeal. Withdrawal is a deliberate action by the appellant. Furthermore, the petitioner claimed they had not even received the benefit of the amnesty scheme. The dismissal for default was therefore unjustified and perverse. Revenue's Arguments: The judgment does not record specific arguments made by the revenue or state. However, the Appellate Authority's action implies an argument that opting for the amnesty scheme, which mandates appeal withdrawal, should be treated as a deemed withdrawal of the appeal.