Waiver Under Maharashtra Settlement Of Arrears Of Tax Act Available Only On Disputed Tax: Bombay High Court

The Bombay High Court at Aurangabad has recently held that under the First Phase of the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2019, one hundred percent of undisputed tax must be paid and no waiver is available on such amount, dismissing a writ petition filed by a sugar manufacturing co-operative.

A Division Bench of Justice Vibha Kankanwadi and Justice Hiten S. Venegavkar held, “for undisputed tax, amount to be paid is 100% of the amount in column B i.e. undisputed tax and the amount to be waived is nil.”

The Court also outlined the narrow scope of review under the Act. Referring to Section 17, the Bench observed that the Commissioner can review an order only on his own motion, within twelve months of service of the order, and only if it is prejudicial to the interest of revenue.

Since the review was filed beyond twelve months from the order dated September 22, 2019, the Court held that its rejection was justified.

The petitioner, Agasti Sahakari Sakhar Karkhana Ltd., a cooperative sugar factory, had sought settlement of tax dues for the assessment years 1992-93, 1993-94, 1994-95, 1995-96, 1996-97 and 1999-2000 under the First Phase of the scheme. The Designated Authority passed orders on September 22, 2019 recording that the petitioner had paid the “requisite amount.”

The amounts paid were adjusted towards undisputed tax. The waiver column in the tabular part of the order reflected zero. The petitioner challenged the appellate order dated July 8, 2020, and the review order dated September 21, 2022.

Before the High Court, the petitioner argued that once the requisite amount was accepted, the corresponding waiver ought to have been reflected in the order. It contended that the authorities had misapplied the scheme and wrongly denied the benefit of waiver.

Rejecting the contention, the Bench observed, “There is no averment in the present petition on behalf of the petitioner that what has been paid by them is disputed amount and, therefore, they were entitled for the waiver as per Section 10 of the Settlement Act, 2019.”

The Court emphasised, “We cannot interpret the provisions of the Act in a different way, which were not contemplated by the legislature. The interpretation requires that the unambiguous words should be given the same meaning as they appear in the statute.”

Concluding that “No case is made out for exercise of powers under Article 226 of the Constitution of India,” the court dismissed the petition.

For Petitioner: Advocate Anagha Kulkarni,

For Respondent: AGP R. S. Wani,