No bar on seeking restoration of tax appeal on failure to avail Kerala VAT Amnesty Scheme benefit: Supreme Court

The Supreme Court recently held that there is no bar on seeking the restoration of an appeal against the imposition of a tax liability after an assessee is unsuccessful in availing the benefit of the Value Added Tax Amnesty Scheme, 2020 (VAT Amnesty Scheme) introduced by the Kerala government for assessees in the State. [PM Paul versus The State Tax Officer & Ors].The bench of Justice BV Nagarathna and Justice Ujjal Bhuyan made the observation while granting relief to a Kerala-based businessman who was not successful in availing the VAT Amnesty Scheme benefit."There is no bar as such for seeking restoration of the appeal if the assessee is unsuccessful in availing the benefit under the Amnesty Scheme, since the appeal being a statutory remedy the appellant had availed of such a statutory remedy and withdrawn the same only as a pre-condition for availing the benefit under the Amnesty Scheme," the Court held. .The Court concluded that he was entitled to have his tax appeal restored, heard and decided on merits.The Court passed the ruling on finding that his earlier tax appeal had been withdrawn only because he needed to ensure no legal proceedings were pending in order to apply for the benefit of the amnesty scheme. .In the case before the Court, the Sales Tax Officer had cancelled the Kerala Value Added Tax (KVAT) Act registration of the businessman on the assumption that he had permanently closed his business. The Sales Tax Officer passed the order on finding that the assessee's registration of dealership had not been renewed and no transaction had taken place in respect of this business. The assessee challenged the order before the Joint Commissioner (Appeals) in 2018. He later also challenged the imposition of a tax liability of ₹ 8,32,753. However, during the pendency of the matter before the appellate authority, the assessee decided to apply for the benefit under Kerala VAT Amnesty Scheme. In order to apply for this scheme, the assessee also withdrew his tax appeal. However, the assessee was not successful in availing the benefit of the scheme. Hence, he sought restoration of the earlier tax appeal before the Joint Commissioner of Appeals at Chavakkad. The request was denied by the appellate authority. He was also unsuccessful in getting any relief from the Kerala High Court, which held that the assessee could not seek the restoration of the tax appeal on being unsuccessful in availing the benefit under the Amnesty scheme. A single-judge ruling to this effect was also upheld by a Kerala High Court division bench. The Supreme Court allowed an appeal against the Kerala High Court's judgment in the matter. .The top court restored the appeal which was pending before the Joint Commissioner of Appeals and directed the parties to appear before the appellate authority on October 4. The Supreme Court added that the restored tax appeal should be heard on merits and disposed of in accordance with law. .Advocates Abhilash MR, Alim Anvar, Rajkumar, Anu K Joy and Advocate-On-Record Mohammed Sadique TA represented the assessee.Advocate-On-Record CK Sasi and advocate Meena K Poulose represented the respondent-authorities..[Read Judgment]