100% Payment Mandatory On Undisputed Tax Under Maharashtra Settlement Scheme, No Waiver Permissible: Bombay High Court

100% Payment Mandatory On Undisputed Tax Under Maharashtra Settlement Scheme, No Waiver Permissible: Bombay High Court

Introduction

The Bombay High Court (Aurangabad Bench) has held that under the First Phase of the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2019, no waiver is available on undisputed tax. A Division Bench of Justice Vibha Kankanwadi and Justice Hiten S. Venegavkar ruled that 100% of undisputed tax must be paid and the waiver amount in such cases is nil.

Factual Background

The petitioner, Agasti Sahakari Sakhar Karkhana Ltd., a cooperative sugar factory, sought settlement of tax dues for multiple assessment years including 1992–93 to 1996–97 and 1999–2000 under the First Phase of the 2019 Settlement Act. The Designated Authority, by orders dated September 22, 2019, recorded that the petitioner had paid the requisite amount. The amounts paid were adjusted toward undisputed tax, and the waiver column in the tabulated order reflected zero. The petitioner later challenged the appellate order dated July 8, 2020, as well as the review order dated September 21, 2022, contending that once the requisite amount was accepted, a corresponding waiver should have been reflected.

Procedural Background

The matter reached the High Court through a writ petition under Article 226 of the Constitution challenging the appellate and review orders. The petitioner argued that the authorities had misapplied the scheme and denied the benefit of waiver despite compliance.

Issues

1. Whether waiver under the Maharashtra Settlement of Arrears of Tax Act, 2019 is available on undisputed tax.

2. Whether the Designated Authority erred in reflecting zero waiver where only undisputed tax was paid.

3. Whether the review petition was maintainable beyond the statutory twelve-month period.

Contentions

The petitioner contended that acceptance of the “requisite amount” under the scheme implied entitlement to waiver benefits and that the authorities had wrongly denied such benefit. It argued that the scheme had been misinterpreted and that the orders were liable to be set aside.

The State maintained that under the statutory scheme, waiver is available only in respect of disputed tax and not undisputed tax, and that the review application was filed beyond the permissible period.

Reasoning and Analysis

The Bench held that the statutory language was clear and unambiguous. It observed that for undisputed tax, the amount payable is 100% of the amount specified, and the waiver component is nil. The Court noted that there was no averment by the petitioner that the amounts paid constituted disputed tax so as to attract waiver under Section 10 of the Act.

Referring to Section 17 of the Settlement Act, the Court clarified that the Commissioner’s power of review is limited to cases where the order is prejudicial to the interests of revenue and must be exercised within twelve months from service of the order. Since the review application was filed beyond the prescribed period from the order dated September 22, 2019, its rejection was justified.

The Court emphasised that statutory provisions must be interpreted as they stand and cannot be expanded by judicial construction beyond legislative intent. Finding no illegality in the impugned orders, it declined to exercise writ jurisdiction.

Decision

Holding that waiver is not available on undisputed tax under the First Phase of the Maharashtra Settlement Act, 2019, and that the review was time-barred, the Bombay High Court dismissed the writ petition.

In this case the petitioner was represented by Ms. Anagha Kulkarni, Advocate. Meanwhile the respondent was represented by AGP R. S. Wani.