Surjeet Auto Agency vs Assistant Commissioner of Commercial Tax and Others

Shri Mukesh Agrawal, counsel for the petitioner. Shri Samdarshi Tiwari, Government Advocate, for the State.

The petitioner has sought the following reliefs:

(1) It is, therefore, most respectfully prayed that the honourable court may kindly declare the recovery proceedings initiated by the Commercial Tax Department for the period 2003-04, 2006-07, as illegal, void and bad in law;

(2) May kindly be pleased to quash the notices issued u/s 146 of the M.P. Land Revenue Code, 1959 for the period 2003-04, 2004-05 and 2006-07 by respondent No. initiating recovery proceedings;

(3) to issue any other writ or direction as may be deemed fit.

The case of the petitioner is that as per section 24B of the M.P. Value Added Tax Act, 2002, the petitioner has moved an application before the competent authority for settlement of its case for the years from 2003 to 2006-07. The aforesaid application for settlement was filed in the month of May 2011 before the authority but the assessing officer before completion of the settlement proceedings is proceeding against the petitioner for recovery of the dues. It is submitted that until and unless matter is settled by the authority, the assessing authority may be directed not to take any action against the petitioner for recovery of the dues.

Shri Samdarshi Tiwari, learned Government advocate, submitted that the respondents have already submitted an undertaking before this court on July 7, 2011 that the respondents shall not take any action for cancellation of the registration of the petitioner during the pendency of the aforesaid application. Now reply has been filed. It is also submitted by Shri Tiwari that the aforesaid settlement may take about six months as various assessment orders are under consideration of the settlement authority.

It is submitted that a period of six months from today, be provided to the authority for settlement of the matters. It is also brought to our notice that sections 24B and 24C of the VAT, 2002, have been incorporated in the statutory rule on August 10, 2010 itself which is a new procedure prescribed under the Act. As per procedure prescribed in section 24C of the Act, sometime is required to the authority to decide the dispute between the parties. For ready reference, we quote sections 24B and 24C of the VAT Act which read as under:

24B. Application for settlement of cases.--(1) Notwithstanding anything to the contrary contained in this Act, if any amount of tax, interest and penalty under the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959) (Repealed Act), the Madhya Pradesh Commercial Tax Act, 1994 (No. 5 of 1995) (Repealed Act), the Madhya Pradesh Vat Act, 2002 (No. 20 of 2002), the Central Sales Tax Act, 1956 (No. 74 of 1956) and the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 (No. 52 of 1976),--

(i) is disputed by a dealer and the dispute is pending before the High Court for adjudication;

(ii) hardship is being caused to a dealer due to any order passed under any of the provisions of the Acts.

the dealer may apply for the settlement of the amount of tax, interest and penalty to the settlement authority.

(2) An application for settlement of the amount shall be submitted in the form and the manner as may be prescribed.

(3) The dealer shall pay,--

(i) the undisputed amount of tax in full and twenty five per cent of the disputed amount of tax, in case of application under clause (i) of sub-section (1);

(ii) the full amount of tax, in case of application under clause (ii) of sub-section (1),

before submission of the application.

24C. Procedure on receipt of an application.--(1) The settlement authority shall pass an appropriate order, including waiver of the whole or part of the interest and penalty levied and included in the amount payable by the dealer, on every application for settlement after affording an opportunity of hearing to the dealer.

(2) The settlement authority shall consider the application and the submissions, if any made before them by the dealer and thereafter decide the amount to be deposited by the applicant.

(3) The dealer shall submit an application for withdrawal of the case pending before the High Court and a copy thereof shall be submitted to the settlement authority before the issue of order of settlement.

(4) If the amount required to be deposited under sub section (2), has already been deposited by the dealer, the settlement authority shall pass an order of settlement. If the amount deposited is less than the amount decided by the settlement authority. The balance amount shall be deposited by the dealer within the time as may be decided by the settlement authority. On receipt of proof of payment of the balance amount, the settlement authority shall pass an order of settlement.

(5) The settlement authority shall pass a settlement order on every application indicating the balance amount of interest and penalty waived on settlement.

(6) The settlement authority may remand the case wherever it thinks fit.

(7) An order of settlement shall not form the basis for any claim by the applicant in cases other than the case in which such settlement order has been passed.

(8) No penal action against the applicant under any Act administered by the Department shall be initiated after an order of settlement has been passed under this section. The dealer also shall not be entitled to refund of any amount (any other benefit under any Act affords).

The petitioner has already approached to the settlement authority u/s 24B and as per the procedure prescribed u/s 24C, the authority has to decide the matter in accordance with law. Section 24(8) provided that after settlement of the dispute no penal action shall be initiated against the assessee under any Act--administered by the Department after an order of settlement has been passed under this section. Meaning thereby that a protection is provided to the assessee who had moved an application before the settlement authority to settle the cases u/s 24B of the Act. In view of the aforesaid, we find it appropriate to dispose of this matter with following directions:

(i) That, the settlement authority shall expedite the matter and make an endeavour to decide/settle all the matters expeditiously as far as possible within a period of six months from the date of this order but not later than June 30, 2012.

(ii) Till the matters are settled by the authority, no coercive action shall be taken against the petitioner in respect of dues for the assessment years 2003-04 to 2006-07 as stated in paragraph 2 of the return. However any amount which is not disputed by the petitioner shall be deposited by the petitioner as per provisions as contained under sections 24B and 24C within period of 30 days from today.

(iii) The settlement authority shall communicate its final order to the petitioner for its compliance by the petitioner in accordance with law. No order as to costs.