The court established that payment of tax and interest prior to assessment qualifies a taxpayer for the waiver of penalties under the Amnesty Scheme, regardless of subsequent procedural misinterpretations by tax authorities.

JUDGMENT :

BHARGAV D. KARIA, J.

1. Heard learned advocate Mr. Uchit Sheth, learned Assistant Government Pleader Mr. Raj Tanna and Ms. Shrunjal Shah for the respondent-State.

2. By these petitions under Article 226 of the Constitution of India, the petitioner has challenged the order rejecting the benefit of Amnesty Scheme under the Vera Samadhan Yojna, 2019 [for short ‘the Amnesty Scheme’] and further prayed for directions to the respondents to grant waiver of the penalty under the Amnesty Scheme on the basis of payment of tax and interest prior to passing of the assessment order. The petitioner has further prayed for refund of the amount paid by the petitioner towards penalty pursuant to the directions by the respondents along with statutory interest on such refund. The petitioner has also prayed for quashing and setting aside the attachment order on the bank accounts of the petitioner. The petitioner, in the alternative, has prayed for restoration of the second appeal filed by the petitioner on merits if it is held that the petitioner is not entitled to the benefit of the Amnesty Scheme as the petitioner has challenged the order of penalty in the second appeal before the Gujarat Value Added Tax Tribunal (Tribunal)which was withdrawn to avail the benefit of the Amnesty Scheme.

3. Rule returnable forthwith. Learned Assistant Government Pleader Mr. Raj Tanna waives service of notice of rule for the respondents.

4. Having regard to the controversy in the narrow compass, with the consent of the learned advocates for the parties, the matters were taken up for hearing.

5. The brief facts are as under:

5.1 The petitioner, a proprietorship concern, is engaged in the business of resale of waste paper and was duly registered under the provisions of the Gujarat Value Added Tax Act,2003 [for short ‘VAT Act’]. The petitioner was regularly filing returns and paying tax under the VAT Act. Search proceedings were conducted by the Enforcement Division of the VAT department on 07.02.2017 and the petitioner was made to pay tax with interest without passing any assessment order on the ground of possible disallowance of input tax credit.

5.2 The assessment notices were issued to the petitioner for the Assessment Years 2013-14, 2014-15 and 2015-16.

5.3 In the assessment proceedings, the Assessing Authority confirmed the demand of tax with interest and penalty on the basis of disallowance of input tax credit on the ground of retrospective cancellation of registration certificate of some selling dealers from whom the petitioner had purchased the goods by assessment order dated 10.05.2017 for all the three assessment years. The petitioner, however, had already paid the tax and interest before passing of the assessment order.

5.4 The petitioner filed First Appeal challenging the assessment order. The First Appellate Authority by order dated 02.08.2019 partly allowed the appeals confirming the assessed tax and interest and reducing the amount of penalty imposed from 150% to 50%.

5.5 The petitioner filed Second Appeal for challenging the before the Tribunal challenging the imposition of tax, interest and penalty. The Tribunal admitted Second Appeal on 22.10.2019 and stay was granted till final disposal of the appeal. During the pendency of the Second Appeal before the Tribunal, the Government of Gujarat announced Amnesty Scheme on 06.12.2019 and thereafter the Resolution No. GST-10209-19-1006 was issued and the scheme was named as “Vera Samadhan Yojna, 2019”. The Amnesty Scheme provided that upon deposit of tax, a liability of interest, penalty was to be waived. The petitioner therefore, withdrew the appeal pending before the Tribu