Law: Sales Tax Act, 1990

Section: 34A

NOTES: Amnesty scheme Amnesty notification being beneficial subordinate legislation must be viewed liberally in favour of the taxpayer in order to achieve the solitary fiscal objective of quick recovery of stuck up tax revenue. Illegally adjusted input tax---Default surcharge and penalties---Amnesty Scheme---Purpose and scope---Purpose of an amnesty scheme is to incentivize payment and collection of stuck-up revenue---Taxpayer who had made voluntary payment before the cut-off date under the amnesty scheme can avail the amnesty scheme. Plain reading of SRO No. 606(I)/2012 dated 01.06.2012 (“amnesty notification”) shows that if the default surcharge and penalties payable by a registered person are outstanding on account of illegally adjusted input tax, the registered person may avail exemption against default surcharge and penalties provided the whole of the principal amount of illegally adjusted input tax is deposited by 25th June, 2012 and any case or complaint filed by the registered person against the department is withdrawn by the said date. The contention of the (tax) department that the amount of sales tax must be outstanding against the person on 01-06-2012 for the amnesty notification to apply, is not convincing. The spirit and object of the amnesty notification is to incentivize quick recovery of stuck up tax revenue, hence the notification offers that if only the principal amount of illegally adjusted sales tax is deposited by 25th June, 2012 the default surcharge and penalties stand exempted. The importance is of the cut-off date i.e. 25th June, 2012. There appears to be no bar in the notification and no possible disadvantage caused to the department, if the principal amount of sales tax is deposited prior to the date of the amnesty notification. In fact it is advantageous for the department as the stuck up tax revenue has been voluntarily deposited by the taxpayer, which is in line with the scheme of the amnesty being offered by the department. The other condition is the withdrawal of any case or complaint filed by the registered person against the department in this regard. Admittedly, the respondent (tax payer) deposited the principal amount of…

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