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2002 Supreme(MP) 793
HIGH COURT OF MADHYA PRADESH
Arun Mishra, J.
Gei Engineering Ltd
Versus
Additional Commissioner, Commercial Tax
W.P. 2249 of 2002 Of
Decided On : Aug 07,2002
Akshay Dharmadhikari, H.S.Shrivastava, R.S.Jha, Sanjay K.Agrawal, Sumit Nema,
The main legal point established in the judgment is that the deferred tax liability, which is payable on a future date, cannot be considered 'due' for payment as on a specified earlier date, as per the definition of 'amount of arrear' in the Rules.
Headnote:
Madhya Pradesh Bakaya Rashi Saral Samadhan Yojna - Applicability - Madhya Pradesh Vanijyik Kar Adhiniyam, 1994, Central Sales Tax Act, 1956 - Summary of Acts and Sections: The court discussed the applicability of the Madhya Pradesh Bakaya Rashi Saral Samadhan Yojna, 2002 for liquidating the arrears of tax under the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 and the Central Sales Tax Act, 1956. The court analyzed the relevant factual matrix and the provisions of the Scheme and Rules framed thereunder to determine whether the deferred tax liability can be considered 'due' to extend the benefit of the Scheme.
Fact of the Case:
The petitioners sought to avail the benefit of the Madhya Pradesh Bakaya Rashi Saral Samadhan Yojna, 2002 for liquidating the arrears of tax under the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 and the Central Sales Tax Act, 1956. However, their applications were rejected on the ground that the amount of arrears were not due for payment as payment of amount has been 'deferred' to a date after March 31, 2001, despite the assessment order being passed and notice of demand for making payment after March 31, 2001 being issued. The petitioners challenged the rejection, arguing that the deferred tax liability should be considered 'amount of arrear' and 'due' for payment as on April 1, 2001.
Finding of the Court:
The court found that the deferred tax liability, which was payable on a future date, cannot be considered 'due' for payment as on April 1, 2001, as per the definition of 'amount of arrear' in the Rules. The court held that the demand notice for a date after April 1, 2001 does not make the amount recoverable before April 1, 2001, and therefore, the Scheme is not applicable to the deferred tax liability.
Issues: The central question for consideration was the interpretation of the expression 'due' in the context of the Scheme and the Rules, and whether the deferred tax liability can be considered 'due' for payment as on April 1, 2001.
Ratio Decidendi: The court interpreted the provisions of the Scheme and the Rules to determine the applicability of the Madhya Pradesh Bakaya Rashi Saral Samadhan Yojna, 2002. It held that the deferred tax liability, which was payable on a future date, cannot be considered 'due' for payment as on April 1, 2001, as per the definition of 'amount of arrear' in the Rules.
Final Decision: The court dismissed the writ petitions, upholding the rejection of the petitioners' applications for availing the benefit of the Scheme. The court held that the deferred tax liability is not 'due' for payment as on April 1, 2001, and therefore, the Scheme is not applicable to such liabilities.
( 1. ) IN these writ petitions a common question arises about the applicability of the Madhya Pradesh Bakaya Rashi Saral Samadhan Yojna, 2002 for liquidating the arrears of tax under the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 and the Central Sales Tax Act, 1956. Petitioners have availed the benefit of the Madhya Pradesh Deferment of Payment of Tax Rules, 1994 issued as per Notification No. A-3-24-94-ST-V (108) dated October 6, 1994. Under the deferment scheme tax is payable on a future date. The amount of deferred liability to a date after April 1, 2001 has been treated as not "due" under the M. P. Bakaya Rashi Saral Samadhan Yojna, 2002 (hereinafter referred to as the "scheme") and Rules framed there under. The question which has been agitated precisely whether the amount of liability of tax which has been determined, but has been "deferred" to a future date, can be said to be a tax "due" to extend benefit of the "scheme".
( 2. ) THE relevant factual matrix of each writ petitions indicates that each of the petitioners has been assessed to tax covered under one or other Acts mentioned in Scheme and the petitioners industries are availing the benefit of deferment scheme as per notification dated October 6, 1994. The State Government has issued the eligibility certificate and the petitioners have been given the benefit of deferment of amount due under the provisions of the State Act/the Central Act of the maximum of 300 per cent of total capital investment for the periods as per their entitlement in deferment Rules commencing from date of commencement of the production. It is also relevant to note that under the deferment scheme on the tax liability so deferred interest is not payable whereas with respect to tax liability which has not been deferred interest is payable at present at the rate of 24 per cent per annum.
( 3. ) THE State Government issued a Notification No. A-7-15-2001- A ST-V (98) dated January 5, 2002 for the purpose of liquidating the amount of arrears which include tax, penalty and interest under the Madhya Pradesh General Sales Tax Act, Madhya Pradesh Vanijyik Kar Adhiniyam, Central Sales Tax Act and Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam. It is meant for liquidating the amount of arrears which were "outstanding" and "due" for payment on April 1, 2001. The Scheme is known as "madhya Pradesh Bakaya Rashi Saral Samadhan Yojna, 2002". The application under this Scheme could be submitted up to January 31, 2002. Clause 2 of the Scheme provides that the amount of tax, penalty/interest which was outstanding for payment on April 1, 2001, the facility granted under this Scheme shall be available for that amount of arrears, which is related to any year ending up to March 31, 1997. Cases of arrears were also classified and the calculation of amount to be paid for Samadhan shall be made according to the Schedule. A case in which arrear is up to Rs. 50,000, 25 per cent of the amount of arrear has to be paid towards Samadhan and the case in which the amount exceeds sum of Rs. 50,000, 40 per cent of the amount of arrears has to be paid. Explanation is that if any amount exceeding 25/40 per cent, as the case may be, has been deposited between April 1, 2001 and date of coming into force of this Scheme the amount deposited in excess shall not be refunded.
( 4. ) FOR implementation of the "m. P. Bakaya Rashi Saral Samadhan Yojna, 2002" the State Government has framed Rules called "m. P. Bakaya Rashi Saral Samadhan Niyam, 2002" published in the Gazette on February 5, 2002. "scheme" has been defined in Rule 2 (1) (a) to mean Madhya Pradesh Bakaya Rashi Saral Samadhan Yojna, 2002". "defaulter" means the person desirous of availing of benefit under the Scheme against whom the amount of arrears are pending. Rule 2 (l) (h) defines "amount of arrear" to mean amount of tax and penalty/interest imposed and due under the Madhya Pradesh General Sales Tax Act, Vanijyik Kar Adhiniyam, Central Sales Tax A
