Birla Jute Industries LTD. (A Public Limited Company) vs. The State Of M.P.

Held

The Court held that the 18% per annum interest, directed by the High Court's order dated 17.03.1992, was not eligible for settlement under the M.P. Bakaya Rashi Saral Samadhan Yojna, 2002. The reasoning was that this interest was levied by the High Court as a condition for interim protection, contingent upon the dismissal of the petitioner's writ petition, and was not an amount arising directly under the M.P. Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976, or the Scheme itself. Therefore, this specific amount of interest could not be reduced or liquidated under the Samadhan Yojana. The Court also noted that a similar writ petition (W.P No. 5150-2002) concerning the assessment year 1994-95 had already been dismissed on 07.07.2003, with a finding that the 18% interest rate was final and the benefit of the Scheme could not be extended due to the case being a remand for fresh assessment under Clause 5(2) of the Scheme. The Court found no reason to interfere with the cancellation orders. The operative direction was the dismissal of the writ petitions.

Facts

The petitioners, Birla Jute Industries Ltd. and GEI Engineering Ltd., challenged orders cancelling their settlements under the M.P. Bakaya Rashi Saral Samadhan Yojna, 2002. The settlements were for arrears of interest related to entry tax under the M.P. Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976. The High Court had previously directed the petitioners to pay taxes along with 18% interest per annum if their writ petition challenging the entry tax was dismissed. The petitioners' writ petition was dismissed, and subsequently, the Commercial Tax Officer issued demand notices for tax and interest. The petitioners applied for settlement under the Samadhan Scheme, which was initially accepted but later cancelled. The cancellation was based on the grounds that the 18% interest was levied by a High Court order and not under the Act or Scheme, and that the case involved a remand for fresh assessment, making it ineligible under Clause 5(2) of the Scheme.

Key Issues

1. Whether the interest at the rate of 18% per annum, directed by this Court's order dated 17.03.1992, is eligible for settlement under the M.P. Bakaya Rashi Saral Samadhan Yojna, 2002, considering it was levied by a High Court order and not directly under the M.P. Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976? Petitioner's contention: The petitioner argued that all types of taxes, including interest, are covered under the Scheme, and there is no exclusion clause. They also contended that once a certificate is issued under the Scheme, it cannot be revoked except for arithmetical errors, citing Rule 8 of the Rules of 2002. They relied on Supreme Court judgments in National Bal Bhawan, Prem Chandra Agarwal, Kalabharti Advertising, State of Kerala, and Patel Narshi Thakershi. Revenue's contention: The State argued that the 18% interest was levied by a High Court order as a condition for interim protection and was not an amount arising directly under the Entry Tax Act or the Samadhan Scheme. Therefore, it could not be liquidated under the Scheme. Furthermore, the State contended that the case involved a remand for fresh assessment, which disqualifies it from the Samadhan Scheme as per Clause 5(2).