Taxpayers With Pending Appeals Eligible For 50% Relief Under 2020 Samadhan Scheme: Madhya Pradesh High Court

Justices Vivek Rusia and Binod Kumar Dwivedi observed that the assessee's case is pending before the appellate authority, and the department wrongly considered the case of the assessee under Category 1 of Section 4(1) of the Ordinance, which deals with the amount related to the statutory certificate/declaration.

Assessee/Petitioner is engaged in the manufacturing of machinery types of equipment. The petitioner's assessment for the financial year 01.04.2012 to 31.03.2013 under the Central Sales Tax Act was completed, and an additional demand of Rs.20,88,443/- was issued against the petitioner. The aforesaid demand was calculated due to the non-submission of C-Forms.

The assessee preferred an appeal before the Deputy Commissioner, Commercial Tax, by depositing the additional demand of Rs.5,24,000/-. The appellate authority granted the tax relief of Rs.5,04,362/-, therefore, as per the order of the First Appellate Authority, the demand was reduced to Rs.10,60,081/-.

The assessee challenged the order of the First Appellate Authority before the Madhya Pradesh Commercial Tax Appellate Board by depositing 20% of the balance amount of Rs.2,12,021.

During the pendency of this appeal, the State Government came up with the ordinance in the name of The Madhya Pradesh Karadhan Adhiniyamon Ki Puranee Bakaya Rashi Ka Samadhan Adhyadesh, 2020 (“the Ordinance”).

According to the assessee, Clause 'f' of Section 2(1) defines the 'disputed amount'. According to this any demand against which the litigation has been filed before the appellate authority. Therefore, for the purpose of settlement under this Ordinance, the disputed amount will be the amount pending in the litigation before the MPCTAB.

The assessee applied in a prescribed form to get the benefit of the Ordinance. The assessee deposited the amount of Rs.3,17,622/- which is a 50% amount of the demand of tax. Respondent No.3 rejected the claim of the assessee in order to pay an extra amount which is equal to the 100% of the remaining balance amount of the arrears of tax.

According to the assessee, the disputed amount means any demand against which the litigation has been filed before any appellate authority or forum and the case of the assessee falls into this category because his appeal is pending before the appellate authority. Therefore, the valuation made in the appeal shall be the disputed amount for the purpose of settlement under the Ordinance.

According to the department, the case of the assessee falls into the first category which deals with the amount related to statutory certificate and declaration.

As per the order of the First Appellate Authority the demand has been reduced to 15,84,081/- because in the appeal the assessee submitted Section 29 Form-C valued Rs.46,76,808/- which has been accepted by the appellate authority and reduced Rs.15,84,081/- which is a disputed amount in the appeal, therefore, the case of the assessee falls under Section 4(1) & (3) of the Ordinance, noted the bench.

The bench held that “had the petitioner submitted an application for settlement under the Ordinance during the pendency of the proceeding before the Assessment Officer, then certainly this case would have fallen under category 1, but now that stage has crossed. The petitioner's case is pending before the appellate authority as per the definition of 2(f) the settlement amount is liable to be calculated on the basis of the disputed amount.”

In view of the above, the bench allowed the petition.

Case Title: M/s Hindustan Equipment Pvt. Ltd. v. State of M.P.

Case Number: WRIT PETITION No. 12770 of 2021

Counsel for Petitioner/ Assessee: Harshvardhan Sharma

Counsel for Respondent/ Department: Bhuwan Gautam

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