Taxpayer is not obliged to pay erroneous sum for availing VSY Scheme benefit in absence of outstanding dues towards principal amount of entry tax payable

In a Mandamus Writ Petition under Article 226 of the constitution of India, seeking a direction to the State of Gujarat to grant the benefits of the Vera Samadhan Yojana-2019 to the Planet Automotive Pvt. Ltd., the Gujarat High Court allowed the Petition and directed the respondents to extent the benefit of the Vera Samadhan Yojana-2019 to the petitioner. 

A Division Judge Bench of Justice Biren Vaishnav and Justice Bhargav D. Karia observed that “Merely because, the intimation generated online has erroneously stated the amount which was not correct, the petitioner was not liable to make the payment of such amount to avail the benefit of the Scheme when it emerges from the record that there were no outstanding dues towards the principal amount of entry tax payable by the petitioner and such amount was paid by the petitioner before the due date.”

Advocate Uchit N Sheth appeared for the Petitioner whereas Advocate Shrunal Shah appeared for the Respondent. 

The brief facts of the case were that the petitioner is a Private Limited Company and distributor of Hyundai Car. The petitioner paid the total tax of Rs. 32,20,901/- under the Entry Tax Act. After filing the return, it was noticed that there was an error in tax computation which has resulted in short payment of tax. Meanwhile, the State of Gujarat announced an amnesty Scheme named “Vera Samadhan Yojana-2019” for the settlement of disputes under different tax laws including the Entry Tax Act. Under this scheme, the petitioner was entitled to the credit of tax already paid prior to the Scheme. The Petitioner availed the benefit and filed an application for the total tax liability of Rs. 1,80,75,735/- and the petitioner paid the amount of Rs. 32,20,901/- towards tax. 

The petitioner has also submitted the challans showing the payment of tax. Upon filing the application under the said Scheme, the petitioner received an online intimation regarding the amount payable by the petitioner to avail the benefit of the Scheme. The petitioner noticed that there was an error in the intimation requiring the petitioner to pay the amount in excess of what is actually to be paid by the petitioner. The petitioner therefore approached the Jurisdictional Officer and pointed out an error in the letter. The Officer manually corrected the amount and reduced it to Rs. 1,48,54,834/- from Rs. 1,80,75,735/-. The petitioner, therefore, paid the said amount in instalments. During the pendency of the amnesty scheme, the petitioner was also assessed to tax and the liability under the Entry Tax Act and VAT Act was determined after giving the credit of tax already paid by the petitioner in the assessment order.

The petitioner applied for the amnesty scheme was also recorded in the assessment order. Considering the assessment order as a base, the petitioner paid a further amount of Rs. 1,31,641/- as determined by the assessment order after the set off of the amount already paid by the petitioner under the amnesty scheme. Thus, according to the petitioner, the petitioner has paid the dues as determined by the assessment order passed on 31.12.2020 for the period from 01.04.2017 to 30.06.2017.

However, the respondent, by impugned letter dated 20.07.2022, rejected the application of the petitioner under the ‘Vera Samadhan Yojana-2019’ on the ground that the petitioner did not pay full payment against the outstanding amount intimated to the petitioner vide intimation letter generated online.

After considering the submission, the Bench noted that it is not in dispute that the petitioner has paid the entire amount of the outstanding dues as per the corrected intimation and assessment order prior to the date prescribed under the Vera Samadhan Yojna-2019.

The Bench stated that merely because, the intimation generated online has erroneously stated the amount which was not correct, the petitioner was not liable to make the payment of such amount to avail the benefit of the Scheme when it emerges from the record that there were no outstanding dues towards the principal amount of entry tax payable by the petitioner and such amount was paid by the petitioner before the due date.

Finding the petitioner entitled to the benefits of the Vera Samadhan Yojana-2019, the Bench quashed and set aside the impugned order and directed to give the benefit of Vera Samadhan Yojana-2019 to the petitioner.

Cause Title: Planet Automotive Pvt. Ltd. and Anr. Vs. State of Gujarat and Ors. [R/Special Civil application No. 19475 of 2022 / 2023-Enterslice-3-HC-Guj-Misc]

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Planet-Automotive-Pvt.-Ltd.-Versus-State-Of-Gujarat