Agasti Sahakari Sakhar Karkhana Ltd. v. State of Maharashtra & Ors.

wp-13990-2024.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWRIT PETITION NO.13990 OF 2024Agasti Sahakari Sakhar Karkhana Ltd.,Akole, At Post Agastinagar,Taluka Akole, District Ahmednagar Through Managing Director,Sudhir Chintaman KapadnisAge: 59 years, Occu.: Service,R/o At Post Agastinagar,Taluka Akole, District Ahmednagar.. PetitionerVersus1.State of MaharashtraDepartment of Goods and ServiceTax, Mantralaya, Mumbai.2.The Commissioner,Goods and Service Tax,Mumbai.3.The Joint Commissioner ofSales Tax (Adm.)Nashik Division, Nashik... Respondents…Ms. Anagha Kulkarni, Advocate for the petitioner.Mr. R. S. Wani, AGP for respondent Nos.1 to 3/State.... CORAM : SMT. VIBHA KANKANWADI & HITEN S. VENEGAVKAR, JJ. RESERVED ON : 19 DECEMBER 2025 PRONOUNCED ON : 12 FEBRUARY 2026[1] wp-13990-2024.odtORDER (Per Smt. Vibha Kankanwadi, J.) :-.Present petition has been filed for challenging the order dated21.09.2022 passed by Additional Commissioner of State Tax, NashikZone, Nashik and order dated 08.07.2020 passed by respondent No.3thereby confirming the order dated 22.09.2019 passed by DesignatedAuthority AHM-VAT-E-002 Deputy Commissioner of State Tax,Ahmednagar in respect of benefit of waiver in respect of dues for theperiod 1992-93, 1993-94, 1994-95, 1995-96, 1996-97 and 1999-2000.2.Heard learned Advocate Ms Anagha Kulkarni for the petitioner andlearned AGP Mr. R. S. Wani for respondent Nos.1 to 3/State.3.Learned Advocate for the petitioner submitted that the petitioner isa Cooperative Sugarcane Factory registered under MaharashtraCooperative Societies Act, 1960. The petitioner is holding a valid licenseunder the provisions of Maharashtra Sugarcane Purchases Tax Act, 1961.The petitioner has to purchase sugarcane for the purpose ofmanufacturing sugar and by products from its members as well as fromnon members. This activity of purchase is taxed under the provisions ofMaharashtra Purchase Tax On Sugarcane Act, 1962 and, therefore, thepetitioner has to file returns. The petitioner is assessed by therespondents for levy of cane purchase tax. It is further submitted that the[2] wp-13990-2024.odtrespondent/Government of Maharashtra had undertaken to settle thedisputed dues/arrears of tax interest and penalty or late fee under theordinance “Maharashtra Settlement of Arrears of Tax, Interest, Penalty orLate Fee Act, 2019” (hereinafter referred to as the “Settlement Act”). Thepetitioner had preferred applications before the Designated Authority,Ahmednagar under Section 7(1) in form No.1 for the aforesaid years forsettlement of dues. The Designated Authority then passed orders underSection 12(1) of the Settlement Act on 22.09.2019. It has been observedby the competent authority that the application filed by the petitionerunder Section 7(1) form No.1 is found correct and complete. Theapplicant has made the payment of requisite amount as determinedunder Section 10 read with Section 4 of Settlement Act. The applicant isheld eligible for the waiver. The corresponding post assessment interestor as the case may be, for the post assessment penalty also stand waived.Thus, the Designated Authority had allowed the applications of thepetitioner, yet the authority gave direction to the Recovery Officer to takenecessary entries to give effect to the waiver and the paymentsconsidered in the order. The Designated Authority while implementingthe said order created misunderstanding. Though the waiver was madeavailable to the petitioner, due to the said misunderstanding andmisconception of factor, for reason known to the authority avoided, failed[3] wp-13990-2024.odtand neglected and due to the said order, though the petitioner wasgranted benefit, is unable to get the relief of the same. Under the saidcircumstance, the petitioner challenged the order of implementation byfiling Appeal under Section 13(1)(b) of the Settlement Act beforerespondent No.3. Respondent No.3 was in fact not expected and had nojurisdiction or power to examine the unchallenged issue and therebyconceded the issue of eligibility of the petitioner for the waiver of theamount. By exceeding his jurisdiction, respondent No.3 has dealt withthe unchallenged issue regarding eligibility of petitioner for the waiverand perversely held that the petitioner is not entitled for the waiver whilepassing the impugned order dated 08.07.2020. When the petitionerfound that respondent No.3 has passed erroneous order, he approachedAdditional Commissioner of Sales Tax, (Adm.) Nashik Zone, Nashik andby a common order dated 21.09.2022, the said authority has dismissedthe applications/review applications filed by the petitioner under Section17 of the Settlement Act on the ground that Section 13 of the said Actcan be used only by the Commissioner, upon noticing any error so far asit is prejudicial to the interest of the revenue. 4.Learned Advocate for the petitioner has taken us through thedocuments, especially, the orders and pointed out that in the column ofAmount of waiver sought First Phase, the figure has been shown as zero,[4] wp-13990-2024.odthowever, the bottom part of the order i.e. clause Nos.5 to 7 upheld theissue that the petitioner has paid the requisite amount under First Phase.The Deputy Commissioner of State Tax then held the applicant eligiblefor waiver of the amount as given in column No.(g) or (h) of the table,but in fact the column was not designated with (g) or (h) and then it washeld that the corresponding post-assessment interest or as the case maybe post-assessment penalty also held to be waived. In the Appeal, thepetitioner submitted that the order that has been passed by the DeputyCommissioner of State Tax, Ahmednagar is vague and against theprinciples of natural justice. Though certain things have been admitted,yet in the waiver column, the amount that was shown was zero. In fact,the Deputy Commissioner in the order ought to have held that theapplicant is eligible for the waiver of the amount, which has been entirelypaid for the First Phase. Stereotype orders have been passed. Theratification in the last column showing amount zero ought to have beenthen corrected in the appeal, however, the appeal came to be rejected andthen respondent/Additional Commissioner of State Tax, Nashik Zone,Nashik has misinterpreted Section 17 of the Settlement Act, 2019. Whenreview is permissible, it cannot be restricted to one party. The onlycorrection sought in the order ought to have been accepted and,therefore, the writ petition deserves to be allowed. [5] wp-13990-2024.odt5.Learned AGP is relying on the affidavit-in-reply by Ms. NehaSandip Deshmukh, the Joint Commissioner, State GST, Ahmednagar. Ithas been stated that the order that was passed on 22.09.2022 was by theDesignated Authority under the Settlement Act in respect of in all sixyears returns. Before passing the order, the Designated Authority hadissued defect memos for short payment of taxes. It was not replied by thepetitioner, nor they have paid the said amount under the defect memos.The settlement orders were passed after adjusting the tax paid as‘requisite amount’ against the undisputed tax quantum and no waiverwas given against pending interest due to their payment of tax (lesspayment of tax) as per defect memo. The Designated Authority hasallowed the applications as per the trade circular 9T of 2019 issued byCommissioner of Sales Tax, Maharashtra State, Mumbai dated08.03.2019, which is based on the Maharashtra Settlement of Arrears ofTax, Interest and Penalty Act, 2019. After adjusting the requisite paymenttowards the undisputed tax, balance dues are available for recovery. Nowaiver/proportionate benefit was given to the petitioner in thesettlement orders. The Designated Authority, in the said order itself, gavedirection to the recovery officer under the relevant Act to take necessaryentries to give the effect of waiver and payments considered in the order.Under such circumstance, even if, in the waiver column figure zero is[6] wp-13990-2024.odtshown, the recovery is ordered in respect of the amount after theadjustment of the amount that was paid by the petitioner. The dues thosewere paid by the petitioner were undisputed tax amount, which is to bepaid 100% i.e. full payment. The grounds in the Appeal preferred by thepetitioner under section 13 of the Settlement Act are different than thosehave been mentioned in the writ petition. Therefore, the petitioner ismisleading the Court. Even under Section 17 of the Settlement Act, theconcerned authority has limited power to review the order only if theorder to be reviewed is prejudicial to the interest of the revenue and,therefore, all the orders are legal requiring no interference. 6.The first and the foremost fact to be noted is that the SettlementAct, 2019 came into existence to provide for settlement of arrears of tax,interest, penalty or late fee, which were levied, payable or imposedrespectively under the various Acts administered by the Goods andServices Tax Department and for the matters connected therewith orincidental thereto. We can therefore say that it was the Amnesty Schemein a way that the said Scheme was introduced. It appears that on08.03.2019, the Commissioner of State Tax, (GST), Maharashtra State,Mumbai had issued Trade Circular giving the procedure or guidelines asto how the provisions of Settlement Act, 2019 were to be implemented.It has been stated that the Ordinance provides for the settlement arrears[7] wp-13990-2024.odtof tax, interest, penalty or late fee in Two phase. First phase was to lastfor three months and the Second phase was for one month. The Firstphase provides slightly higher waiver in respect of disputed tax, interestand penalty as compared to the waiver available in the Second phase. Inorder to understand the amount for which waiver was claimed by thepetitioner, we will have to understand the definitions given in respect ofdisputed tax or undisputed tax. As per Section 2(g) of the SettlementAct, 2019 ‘disputed tax’ means other than un-disputed tax as defined inclause (q). Clause 2(q) of the Settlement Act, 2019 defines undisputedtax, which reads thus :-“2. Definitions.--(q) “un-disputed tax” means,--(i) the taxes collected separately under the Relevant Act ; or(ii) the deductions allowed by the authorities in the statutoryorder for the taxes collected separately under the RelevantAct ; or(iii) the taxes shown payable in the return or the revisedreturn under the Relevant Act ; or(iv) an amount claimed by the dealer as deductions orallowed by the designated authority as per rule 57 of theValue Added Tax Rules or similar rules made under otherRelevant Act ; or(v) an amount forfeited under the statutory order or excesstax collection shown in the return, revised return or, Auditreport, as the case may be, submitted under the Relevant Act ;or[8] wp-13990-2024.odt(vi) any amount of tax determined and recommended to bepayable by the auditor, in the audit report submitted as persection 61 of the Value Added Tax Act, and accepted by theassessee either wholly or partly ; or(vii) the tax deducted at source (TDS) by the employer underthe Relevant Act ; or(viii) the tax collection made under section 31A of the ValueAdded Tax Act ;”7.Here, the petitioner has not provided the copy of the application inForm No.1 filed by it under Section 7 of the Settlement Act, 2019.However, we can gather it from the orders those were passed on22.09.2019 in respect of each year, column No.3 was specifically inrespect of amount of tax, interest, penalty or late fee outstanding as onthe 1st April 2019 and in column Un-disputed Tax as per the applicant,the figure is zero, but then in the column as per the order it isRs.14,95,306/- in respect of the period for which settlement was soughti.e. 1992-93 and the disputed tax that was shown is Rs.27,56,705/-. Theamount that was paid and accepted to be paid by the petitioner isRs.14,95,306/-. It is so reflected in the Column No.4 also. Same is thecase for the subsequent years with change in figures. Being aggrieved bythose orders, then the petitioner filed the Appeal under Section 13 of theSettlement Act, 2019. The grounds under appeal and the facts submittedby the applicants have been considered in Annexure ‘A’ and ‘B’ by the said[9] wp-13990-2024.odtauthority. The only thing that has been put by the Appellate Authorityi.e. respondent No.3 is regarding the change in tabular form than it wasreflected in the orders under challenge before him. It has been thenspecifically stated that tax payable as per returns for the year 1992-93 i.e.Rs.27,56,705/- have remained unpaid and likewise for other years also ithas been so stated and, therefore, the authorities say that the waivercould not have been for the entire amount. Further, as per Section 10 ofthe Settlement Act, 2019, in respect of First Phase, for undisputed tax,amount to be paid is 100% of the amount in column B i.e. undisputed taxand the amount to be waived is nil. Only in respect of disputed tax, 50%is to be paid and for remaining 50% it would be waived. There is noaverment in the present petition on behalf of the petitioner that what hasbeen paid by them is disputed amount and, therefore, they were entitledfor the waiver as per Section 10 of the Settlement Act, 2019. A detailedand speaking order has been passed by respondent No.3 by giving all thecalculations and supported by the legal provision.8.Petitioner has thereafter knocked the doors of AdditionalCommissioner of State Tax, Nashik Zone, Nashik under Section 17 of theSettlement Act, 2019, which runs thus :-“17.Review – After an order is passed by the designatedauthority, the Commissioner may, on his own motion, at any[10] wp-13990-2024.odttime within twelve months from the date of service of order,call for the record of such order and after noticing an error insuch order, in so far as it is prejudicail to the interest ofrevenue, may serve on the assessee a notice and pass an orderto the best of his judgment, where necessary.”9.The first and the foremost fact to be noted is that as per thedefinition of the Act, the “Designated Authority” has been defined underSection 2(f) means the authority appointed under Section 3. Section 3states that the Commissioner of State Tax, especially, the Commissionerfor the purposes of this Act and sub-section (3) of Section 3 empowersthe Commissioner to delegate his powers to the designated authorities bynotification to be published in Official Gazette under sub-section (2) andsuch authorities shall within their jurisdiction, exercise the powers underSection 10 of the Value Added Tax Act or, as the case may be, under sub-section (2) of Section 4 and Section 5 of the Goods and Services Tax Act.The petitioner does not dispute that the Deputy Commissioner of StateTax, Ahmednagar is the Designated Authority. Section 17 gives power ofreview to the Commissioner to review the order passed by the DesignatedAuthority on his own motion within twelve months from the date ofservice of order. Here, the Deputy Commissioner of State Tax,Ahmednagar had passed the orders on 22.09.2019, whereas the reviewapplications were filed by the petitioner before the AdditionalCommissioner of State Tax, Nashik Zone, Nashik on on 04.03.2021.[11] wp-13990-2024.odtTherefore, it was beyond the period of twelve months from the date ofthe order passed by the Designated Authority as contemplated underSection 17 of the Settlement Act, 2019. The petitioner cannot interpretthat after it has exhausted the remedy of Appeal under Section 13 andthen filing the application under Section 17 would have given jurisdictionto the Additional Commissioner of State Tax, Nashik Zone, Nashik. Wecannot interpret the provisions of the Act in a different way, which werenot contemplated by the legislature. The interpretation requires that theunambiguous words should be given the same meaning as they appear inthe statute. Therefore, rejection of those applications under Section 17 ofthe Settlement Act, 2019 are perfectly legal. 10.We do not find any substance in the submissions on behalf of thepetitioner that the purpose for the review was only to get correction inthe orders, as certain facts were admitted. It has been impressed againand again by the petitioner that when the Designated Authority hadaccepted the amount paid by the petitioner, then it automatically oughtto have been reflected as the amount of waiver in the First Phase. Whenas per Section 10 of the Settlement Act, 2019 the determination ofrequisite amount and extent of waiver has been prescribed, then theappeal can be preferred only if the calculation has gone wrong. TheAnnexures ‘A’ and ‘B’ to the Settlement Act, 2019 are clear enough in this[12] wp-13990-2024.odtregard. Therefore, taking into consideration these aspects, we do not findany merit in the writ petition. The respondent authorities were justifiedin dismissing the review. No case is made out for exercise of powersunder Article 226 of the Constitution of India.11.Hence, the writ petition stands dismissed. [ HITEN S. VENEGAVKAR ] [ SMT. VIBHA KANKANWADI ] JUDGE JUDGEscm[13]