IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 11TH FEBRUARY 2011 / 22ND MAGHA 1932 WP(C).No. 2680 of 2011(H) -------------------------------------- PETITIONER(S): ----------------------- M/S.ACCEL TRANSMATIC LTD., (FORMERLY TRANSMATIC SYSTEMS LTD.), REGD. OFFICE, 17/27, JAGATHY, THIRUVANANTHAPURAM-695 014, REPRESENTED BY COMPANY SECRETARY SHRI.S.T. PRABHU. BY ADV. SRI.T.M.SREEDHARAN, SRI.V.P.NARAYANAN. RESPONDENT(S): -------------------------- 1. THE ASSISTANT COMMISSIONER (ASSESSMENT) COMMERCIAL TAXES, SPECIAL CIRCLE, THIRUVANANTHAPURAM-695 014. 2. THE COMMISSIONER OF COMMERCIAL TAXES, OFFICE OF THE COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM-695 014. 3. THE INTELLIGENCE OFFICER (IB), COMMERCIAL TAXES, THIRUVANANTHAPURAM-695 014. 4. STATE OF KERALA, REPRESENTED BY CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM-695 001. R1 TO R4 BY GOVT. PLEADER MR.C.K. GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11/02/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs C.K.ABDUL REHIM, J. *********************** W.P(C) No.2680 of 2011-H ***************************** Dated this the 11th day of February, 2011 JUDGMENT Ext.P2 order issued by the 1st respondent, declining the request made by the petitioner to permit settlement of the arrears under the Amnesty Scheme, is challenged in this Writ Petition. The petitioner was imposed with penalty under Section 45 A pf the KGST Act with respect to the years 2000-01 to 2004- 05. It is stated that the order imposing penalty was subsequently modified by the appellate authority and the petitioner was seeking settlement of the amounts due as per the modified order. It is evident that on submitting the application seeking benefit under the Amnesty Scheme, the petitioner had deposited 10% of the amount of penalty outstanding payment. But the 1st respondent had rejected the application stating the reason that the assessment for the year 2000-01 to 2003-04 is to be re-opened and assessment for 2004-05 is pending finalisation. 2. According to the petitioner, the reasons mentioned in Ext.P2 is not sustainable. It is contended that, going by the scheme as contemplated under Section 23 B of the KGST Act, the W.P(C) No.2680 of 2011-H 2 arrears which could be settled, is the arrears of tax and penalty or interest due. The scheme did not contemplate settlement of any future demands. On the other hand, what is contemplated is only the settlement of outstanding arrears. According to the petitioner, the assessment with respect to the years 2000-01 to 2003-04 was set aside in appeal and there was no outstanding arrears at the time when the application was made. Contention of the petitioner is that those assessments were revised suo motu by the Commissioner of Commercial Taxes in exercise of powers under Section 37 of the KGST Act and it was remitted for passing modified orders. Therefore without finalising such assessments, the benefit under the Amnesty Scheme for Settlement of the penalty, could not be denied. 2. In the counter affidavit filed on behalf of the 1st respondent it is conceded that, the petitioner had submitted an application under the Amnesty scheme on 24.11.2010. The 1st respondent is relying on a circular issued by the Commissioner of Commercial Taxes (No.40/2008 dated 06.10.2008), wherein it is mentioned that while settling the amount of penalty under the Amnesty Scheme, the authority should finalise the assessment if any pending, in relation to the years for which the penalty was W.P(C) No.2680 of 2011-H 3 imposed. It is stated that the Amnesty Scheme is envisaged for settlement of the entire arrears with respect to a particular year and in such case settling of penalty alone, leaving aside the assessment incomplete, could not be allowed. Hence it is contended that the settlement of the amount of penalty alone will cause prejudice to the State exchequer and it will go against the mandate of the above said circular. 3. While considering the rival contentions, I take note of the fact that on the date on which the petitioner submitted application for allowing the benefit of the Amnesty Scheme, there was no demand on the basis of any assessment. Now the objection raised is that on the basis of the circular issued by the Commissioner, in exercise of powers under Section 37, the assessment need be completed for allowing the benefits. But for the said reason, the respondent was not justified in denying settlement of the arrears due as on the date of application, since the provisions under Section 23 B does not insist any such impediment. 4. Going by the scheme of the statute under Section 23 B, it is evident that the petitioner is entitled for settlement of the arrears by availing the benefit under the scheme. Therefore I W.P(C) No.2680 of 2011-H 4 am of the view that the rejection of the application under Ext.P2 could not be sustained as legal. However, it is made clear that if the assessment is finalised and any further liability arises before passing fresh orders under the Amnesty Scheme, the outstanding liability under the assessment also can be reckoned for the purpose of allowing the benefit under the Amnesty Scheme. 5. Under the above said circumstances, the Writ Petition is disposed of quashing Ext.P2. The 1st respondent is directed to pass fresh orders allowing settlement under the Amnesty Scheme with respect to the existing arrears. Orders in this regard shall be issued as early as possible, at any rate within a period of two weeks from the date of receipt of a copy of this judgment. The amount already remitted by the petitioner shall be reckoned for the purpose of considering the application for settlement under the Amnesty Scheme. (C.K.ABDUL REHIM, JUDGE) rtr/