The court established that the Amnesty Scheme under Section 31A cannot be negated by ongoing appeals, reinforcing its role in quick tax resolution.

JUDGMENT

Vinod Chandran, J.

The short question to be considered in the appeals is as to whether the application filed under the Amnesty Scheme introduced by Section 31A of the Kerala Value Added Tax Act, 2003 ['KVAT Act' for brevity] can be rejected on the ground that there is an appeal intended by the State from the order of the first appellate authority.

2. The learned Single Judge found that the intention in introducing an Amnesty Scheme was to bring an expeditious end to the pending litigation while the State is also assured of recovery of tax dues. Reading the scheme as such it was found that there is no provision by which the application can be rejected on the mere contemplation of an appeal before the statutory authorities. The rejection was based on a Circular of the Tax Department, which was held to travel beyond the statutory provisions under the guise of a clarification.

3. We have heard Sri.C.E.Unnikrishnan, learned Special Government Pleader (Taxes) for the State and Sri.Harisankar V. Menon, Sri.Tomson T.Emmanuel and Sri.Santhosh P.Abraham for the respondents.

4. The learned Special Government Pleader argues that there is no anomaly in the provision and that the Circular was introduced only to explain the provision as such. There is no provision in the Scheme introduced to withdraw an appeal filed by the State. It is for the assessee to opt for filing an application under the Scheme and the State is reserved with the power to accept it or reject it. There being no lacuna or ambiguity in the provisions, there was no reason for the learned Single Judge to interfere with the Circular, since the rejection can be sustained even on a plain reading of the provision.

5. The learned Counsel for the respondents points out that the provision under Section 31A only provides for determination of the amounts of tax and other amounts due from the dealer, on an application being filed by the assessee under . It is also pointed out that the rejection has been made on the contemplation of filing an appeal by the State which is not a permissible exercise under . The assessee-respondent in W.A.No.573 of 2020 specifically points out that if the rejection is sustained, then necessarily he will have a better benefit for reason of a subsequent Amnesty Scheme introduced by the State in the next consecutive year. The assessee having remitted the entire amounts of tax under the Amnesty Scheme, he would be entitled to refund of 60% of the tax.

6. Section 31A is a non-obstante provision, by which an option is provided to any assessee having arrears of tax or any other amounts to pay the principal amount of tax in arrears, upon which the assessee would stand absolved from the interest due and also any penalty imposed. The proviso also mandates that for such settlement to be arrived at, the assessee shall also be liable to pay applicable tax relating to a penalty which is not utilized or not liable to be utilized for a best judgment assessment. Sub-section (2) requires that in every case where revenue recovery is initiated to collect arrears due; when a settlement is arrived at under sub-section (1), the revenue recovery proceedings shall stand withdrawn for reason of the settlement binding the Revenue authorities. Sub-section (3) mandates that the assessee shall withdraw all pending appeals before the statutory authorities, Tribunal or the Courts. Sub-section (4) insists for all pending arrears of tax and penalties to be settled together under sub-section (1). Sub-section (5) provides for the submission of an option before 30.09.2019 and by a proviso extends the period by 30 days from the date of demand in the event of a demand generated after 30.09.2019. The proviso also mandates any such settlement to be finalized by deposit of amounts before 31.03.2020. Sub-section (6) contemplates the arrears for the purpose of settlement to be determined as on the date of submission of option. By sub-section (7) it is provided that on receipt of the op