Facts of the Case

  1. The petitioner, A.J. Annakutty, was the proprietress of Anjali Broilers, described in the proceedings as defunct.
  2. The petitioner had arrears arising under the Kerala Value Added Tax Act.
  3. The petitioner applied for the benefit of the Amnesty Scheme-2020 by filing the declaration contemplated under the Scheme.
  4. The declaration was filed within the cut-off date prescribed by the Amnesty Scheme-2020.
  5. The petitioner’s declaration under the Scheme was initially accepted through Ext.P16.
  6. Subsequently, Ext.P17 communication was issued by the Assessing Authority to the Law Officer, with a copy to the petitioner.
  7. Through Ext.P17, it was stated that the petitioner’s declaration under the Amnesty Scheme-2020 could not be processed because Ext.P3 appeal relating to assessment year 2005-06, filed at the instance of the Revenue, was pending before the Appellate Tribunal.
  8. The petitioner challenged Ext.P17 before the Kerala High Court.
  9. The petitioner contended that the communication was contrary to the express provisions of the Amnesty Scheme-2020.
  10. The petitioner therefore sought judicial intervention for setting aside Ext.P17 and processing of the amnesty declaration in accordance with law.

Issues Involved

The principal issues before the High Court were:

  1. Whether pendency of an appeal filed by the Revenue before the Appellate Tribunal rendered the petitioner ineligible for the benefit of the Amnesty Scheme-2020.
  2. Whether Ext.P17 communication refusing to process the petitioner’s amnesty declaration because of the pending Revenue appeal was contrary to Section 10(11) of the Kerala Finance Act, 2020.
  3. Whether the petitioner’s declaration could be processed by reckoning the demand contained in the original assessment order despite pendency of the Revenue’s appeal.
  4. Whether the legal position declared by the Division Bench of the Kerala High Court in W.A. No. 573 of 2020 and connected cases applied to the petitioner’s claim.
  5. Whether Ext.P17 communication was liable to be quashed and the competent authority directed to process the amnesty application/declaration in accordance with law.

Petitioner’s Arguments

The petitioner contended as follows:

  1. The declaration under the Amnesty Scheme-2020 had been validly filed within the prescribed cut-off date.
  2. The declaration had initially been accepted through Ext.P16.
  3. Subsequently, Ext.P17 communication stated that the declaration could not be processed because an appeal concerning assessment year 2005-06, filed at the instance of the Revenue, was pending before the Appellate Tribunal.
  4. The pendency of a Revenue appeal could not constitute a valid ground for denying or refusing to process the petitioner’s amnesty declaration.
  5. Ext.P17 was contrary to the provisions of the Amnesty Scheme-2020.
  6. The impugned communication was therefore liable to be set aside.

Respondents’ Arguments

The learned Senior Government Pleader appearing for the respondents fairly submitted that:

  1. Ext.P17 might not be in accordance with the provisions of the Amnesty Scheme-2020.
  2. Ext.P17 might also not be consistent with the declaration of law made by the Division Bench of the Kerala High Court in W.A. No. 573 of 2020 and connected cases.
  3. The matter could therefore be directed to be considered in accordance with the provisions of the Scheme.

This concession was material because the State itself acknowledged that the impugned communication might not conform to the governing statutory Scheme and the binding Division Bench ruling.

Court Order / Findings

The Kerala High Court recorded the following material findings:

1. Section 10(11) Expressly Covers Pending Revenue Appeals

The Court examined Section 10(11) of the Kerala Finance Act, 2020, which contains the Amnesty Scheme-2020.

The provision expressly contemplates that cases involved in appeals filed by an officer empowered by the Government under Sections 60 and 62 of the former Act and pending final orders can also be opted for settlement under the Scheme by reckoning the demand in the original assessment order.

2. Pending State Appeal Does Not Prevent Processing of Amnesty Application

The Court held that a reading of Section 10(11) makes it clear that even where an appeal filed by the State is pending adjudication before an appellate authority, including the Appellate Tribunal, the assessee’s application can be processed.

3. Demand in Original Assessment Order Is Relevant

The Court clarified that such processing can take place on the basis of the demand raised in the order of assessment.

4. Division Bench Ruling Applied

The Court considered and relied upon the judgment of the Division Bench in W.A. No. 573 of 2020 and connected cases.

5. Ext.P17 Was Unsustainable

After considering:

  • the submissions of the petitioner;
  • the fair submission of the Senior Government Pleader;
  • the provisions of the Amnesty Scheme-2020;
  • Section 10(11) of the Kerala Finance Act, 2020; and
  • the Division Bench judgment in W.A. No. 573 of 2020 and connected cases,

the High Court allowed the writ petition.

6. Impugned Communication Quashed

Ext.P17 communication was quashed.

7. Direction to Process Amnesty Declaration

The competent authority among the respondents was directed to process the application/declaration filed by the petitioner under the Amnesty Scheme-2020 in accordance with law.

Important Clarification

The judgment establishes an important distinction between:

  • an appeal filed by the assessee; and
  • an appeal filed by the State/Revenue.

Section 10(11) of the Kerala Finance Act, 2020 expressly contemplates settlement of cases involved in appeals filed by an officer empowered by the Government under Sections 60 and 62 of the former Act and pending final orders.

Therefore, the mere pendency of a Revenue appeal before an appellate authority, including the Appellate Tribunal, cannot by itself be treated as a statutory disqualification against processing an otherwise eligible declaration under the Amnesty Scheme-2020.

The Court further clarified through its interpretation that the application can be processed on the basis of the demand raised in the original assessment order.

Sections / Legal Provisions Involved

·         Section 10(11) of the Kerala Finance Act, 2020 : This was the principal statutory provision directly examined and applied by the High Court. The provision permits cases involved in appeals filed by an officer empowered by the Government under Sections 60 and 62 of the former Act and pending final orders to be opted for settlement under the Scheme, reckoning the demand in the original assessment order.

·         Sections 60 and 62 of the Former Act : These provisions are expressly referred to in Section 10(11) as provisions governing appeals filed by an officer empowered by the Government.

·         Kerala Value Added Tax Act : The petitioner’s arrears arose under the Kerala Value Added Tax Act and the claim related to settlement under the Amnesty Scheme-2020.

·         Amnesty Scheme-2020 : The Scheme formed the substantive framework governing the petitioner’s declaration and claim for settlement.

·         Article 226 of the Constitution of India : The petitioner invoked the writ jurisdiction of the High Court to challenge the impugned communication and seek lawful processing of the amnesty declaration.

Link to download the order -

https://www.mytaxexpert.co.in/uploads/1783401305_1183compressed.pdf

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