1. Introduction :
The Government of
Maharashtra, with a view to reduce the arrears of tax, interest and penalty, has
announced a scheme called ‘Amnesty Scheme-2004’. The scheme is announced by
the Maharashtra Government Resolution No. AMD-1003/15/Adm-3, dated the 1st June
2004. The Commissioner of Sales Tax has issued Trade Circular No. 10-T of 2004
dated 22nd June 2004, which explains the details of the scheme. In this article,
important aspects of it are discussed in brief.
of amnesty :
The scheme grants amnesty in
respect of tax, interest and penalty payable under
various sales-tax laws administered by Sales Tax Department, Maharashtra State.
There is no disclosure scheme. The amnesty is applicable to any amount of tax,
interest or penalty payable as on 1-7-2004, whether assessed or un-assessed
under the various sales-tax laws.
The scheme is applicable for any
amount payable under the following Acts :
(i) The Bombay Sales Tax
(ii) The Central Sales Tax
(iii) The Maharashtra Tax on
Entry of Motor Vehicles into Local Areas Act, 1987;
(iv) The Maharashtra Tax on
Luxuries Act, 1987;
(v) The Maharashtra Purchase
Tax on Sugarcane Act, 1962;
(vi) The Bombay Sales of
Motor Spirit Taxation Act, 1958;
(vii) The Maharashtra Sales
Tax on the Transfer of Property in goods involved in the execution of Works
Contract (Re-enacted) Act, 1989, popularly known as Works Contract Act;
(viii) The Maharashtra Sales
Tax on the Transfer of Right to use any goods for any Purpose Act, 1985,
popularly known as Lease Act;
(ix) The Maharashtra Tax on
Entry of Goods into Local Areas Act, 2002.
The scheme is not applicable to
any amount payable under The Maharashtra State Tax on Professions, Trades,
Callings and Employments Act, 1975.
of the scheme :
The duration of the scheme is of
four months consisting of two phases as under :
(i) First phase :
From 1-7-2004 to 31-8-2004.
(ii) Second phase :
From 1-9-2004 to 31-10-2004.
The division of the scheme in
two phases is for the purposes of determination of amount payable under the
scheme. When application is made in the first phase, then the dealer has to pay
lesser amount than in the second phase. So, dealers applying and making the
payment in the first phase get more benefit. However, when the payment is made
in two phases, then the benefit of the scheme is available as per the second
The benefit of the scheme is
available to the following persons :
(i) Registered dealers.
(ii) Unregistered dealers,
whether registered before the scheme or yet to be registered. However, the
dealer who is not registered till the date, will have to apply for
registration as a prerequisite for amnesty. This condition for registration
along with amnesty application is not specified in the original GR, but the
Commissioner has specified this by issue of Trade Circular No. 11-T of 2004.
(iii) Deferral units covered
under the Package Scheme of Incentives.
(iv) Exempted units under the
Package Scheme of Incentives, to the extent they are required to pay tax.
Amnesty benefits are available
in respect of the following amount payable as on 1-7-2004 under the specified
(i) waiver of disputed tax.
(ii) waiver of interest and
penalty for assessed as well as un-assessed periods.
(iii) waiver of
post-assessment interest or penalty, whether levied or not levied.
U/s.36(3)(a) of the Bombay Sales Tax Act, 1959, no interest was payable on
late payment of any tax up to 21-4-1987, but penalty was payable under that
Section. From 21-4-1987, instead of penalty, interest is payable on late
payment of tax, whether as per return or any order. As per note (1) in
Annexure-I of GR, it is provided that any amount of post-assessment penalty
payable up to 21-4-1987 will be exempt fully upon dealer making an application
(iv) waiver of penalty other
than post-assessment payable in respect of which notice is issued separately
for levy of it, in respect of any assessment order, etc. passed before 31st
May 2004. This is applicable mainly under the CST Act, 1956. Due to the
Supreme Court ruling in the case of India Carbon, no interest was payable
under the CST Act, 1956. With a view to compensate for levy of interest, the
Bombay Sales Tax Act, 1959 was amended to levy penalty for late payment of tax
as well as differential assessment dues on the line of provisions of interest
payable u/s.36(3) of the Act. As a result of which in many cases, the
sales-tax Department has initiated penalty proceedings to levy penalty under
the CST Act, 1956 in such cases. Finance Act, 2001 has amended S. 9 of the CST
Act, 1956 to provide for levy of interest under the Act from retrospective
effect. After this amendment, the provisions for levy of such penalty under
the BST Act, 1959 is deleted. So, where any such penalty is proposed to be
levied in any assessment order or in appeal, any action to levy it is
deferred, then it is provided for exemption when dealer makes
application for amnesty.
(v) waiver of penalty payable
u/s.36(4A) for un-assessed periods. Where a dealer gets the benefit of
interest u/s.36(3)(a) under the amnesty scheme, then the said penalty
u/s.36(4A) will not be levied in future at the time of assessment.
(vi) In case of exempted unit,
no benefits of Amnesty Scheme are available. However, if a part of the year is
under exemption, and balance part of the year is not under exemption, then the
dealer can avail the benefit of the scheme in respect of the part of the year
not covered under exemption. At the same time, such Unit is allowed to get
benefits of the scheme, in respect of the period covered by exemption, for any
additional demand raised due to non-fulfilment of the conditions, like
manufacture of scrap sales, as also for any demand raised due to proportionate
levy of payable tax, etc. where the sales are not exempted in terms of the
The Commissioner has also
clarified that the C.Q.B. calculations of an exempted unit will not be
affected, even if the exempted unit avails of the amnesty benefit as above.
(vii) In case of deferral
units, benefit of amnesty is available in respect of any demand of other tax
(which is not deferred as per the Package Scheme) and interest, penalty and
post-assessment interest consequential thereto. However, such a Unit will have
to make payment as per the net present value as per table prescribed in Rule
31D of the B.S.T. Rules, 1959 in respect of the amounts deferred. Even though
payments are made on NPV basis, the amount of tax to be deferred shall be
debited as per the deferral scheme. When a part of the year is under deferral
and balance part of the year is not under deferral, then amount payable under
the scheme will have to be calculated separately for both the parts of the
relevant year. It may be noted that for a unit under deferral (whether for a
part of the year or for the full year), availment of amnesty is subject to the
unit making NPV payment of the amount deferred in respect of the period under
(viii) No amnesty benefit is
available in respect of any amount of un-disputed tax payable. Further, no
amnesty in tax is available for un-assessed period.
amount of the tax :
The term ‘undisputed amount of
tax’ is given special definition in the scheme, which is as under :
(i) taxes collected
(ii) deduction allowed by the
departmental authorities in statutory order for the taxes collected
(iii) taxes shown payable in
the return; or
(iv) amount claimed by the
dealer as deduction under Rule 46A(b) (ii) of the B.S.T. Rules, 1959; and for
the purposes of Acts other than the B.S.T. Act, the amount of tax claimed by
the assessee as a statutory deduction from sale price is also to be treated as
(v) amount forfeited in the
(vi) Additional tax/surcharge,
turnover tax in respect of (a), (b), (c) or (d) whether collected separately
or not; and whether shown payable or not in the return and whether or not the
period is assessed. Even if an appeal is filed against such levy of additional
tax or surcharge or turnover tax, then also the same will be treated as
amount of tax :
As per the scheme, the term ‘disputed
amount of tax’ means ‘any amount of tax other than ‘undisputed amount of
tax’. Under the scheme, benefit is available only in respect of disputed
amount of tax for assessed period only. This term is given artificial meaning
under the scheme. Accordingly, any amount of tax payable, which is not
undisputed as defined in the scheme, would be the disputed amount of tax.
Under the BST Act, 1959, extra
tax becomes payable due to various reasons. It is not necessary to create any
dispute by filing an appeal against the assessment order or any application for
rectification of mistake, etc. For the purpose of the scheme, one has to
calculate undisputed tax as specified in the scheme. The balance tax payable
will be the disputed tax eligible for amnesty. As per the scheme, in the
following cases balance tax payable will be treated as disputed amount of
(i) Disallowance of set-off
for any reason. This is clarified in the Trade Circular issued by the
Commissioner of Sales Tax at Para No. 24(v).
(ii) Amount of purchase tax
payable to the extent not shown in return.
(iii) Disallowance of claim of
exemption or concessional rate of tax for want of production of forms like
Form 14, BC, Form C, etc.
(iv) Disallowance of resale
(v) Disallowance of claim of
(vi) Dispute relating to the
rate of tax payable.
(vii) Levy of tax on
suppressed or concealed turnover of sales or purchases. Even order passed in
Enforcement proceedings is eligible for amnesty as disputed tax.
in respect of which amnesty is applicable :
Under the scheme, the following
amount of dues payable as on 1-7-2004 are eligible for benefit of amnesty
(i) Dues as per any statutory
orders passed on or before 31st May 2004.
(ii) Interest payable on late
payment of return dues for un-assessed period, whether or not
returns have been filed, which have become due on or before 31st May 2004.
Under the BST Act, 1959, a
registered dealer is required to file monthly or quarterly returns depending
upon its tax liability. The due date for filing of monthly or quarterly return
is 25th of the next month immediately following the month or quarter, as the
case may be. So, a dealer required to file monthly returns could avail benefit
of amnesty for the period up to April 2004. In any other case, the benefit of
amnesty can be availed for the period up to 31-3-2004.
rectification, reassessment, revision orders passed on or after 1st June 2004
to 31st October 2004.
(iv) In case of appeal orders
passed after 31st May 2004 and before the end of the scheme :
(a) if demand in appeal is
reduced, the benefits are available as per the original statutory order
against which appeal order is passed.
(b) in case the demand in
appeal is increased, then benefits are available : (i) in respect of
additional demand raised in appeal; excluding relief granted in appeal; and
(ii) also in respect of original statutory order against which the appeal
order has been passed.
In other words, for the purpose
of amnesty scheme, in case of any order passed in appeal, during the period of
amnesty scheme, any relief granted in appeal is to be ignored, but any
additional demand raised in such order will be considered.
payable under the scheme :
The benefit of amnesty is
available only upon payment of amount as specified in the scheme, which is the
aggregate of the following in respect of the relevant assessment year :
(a) undisputed amount of tax
in full and
(b) prescribed percentage of
amount of disputed tax and also prescribed percentage of interest, penalty and
post-assessment interest/post-assessment penalty levied or not, applicable to
particular phase of the scheme as per Annexure-I.
of the payments made prior to 1st July 2004 :
With a view to determine any
outstanding dues as on 1-7-2004, in respect of a composite order which is the
subject matter of the scheme, any payment made prior to 1-7-2004, is to be
appropriated, as specified in the scheme, in the following order :
(a) Undisputed amount of tax
as per the scheme.
(b) Disputed amount of tax as
per the scheme.
(c) Interest and penalties.
of refund :
Where any dealer is entitled to
any refund, as per refund order issued by the Department, then it is provided in
the scheme for adjustment of such refund towards any payment to be made during
the period of the scheme. This adjustment of refund is to be made in respect of
any refund due to the dealer under any of the Acts covered under the scheme
towards the dues payable under any other Acts. If any refund arises out of any
order passed, whether before or after 1st July 2004, the same will be first
adjusted against arrears in the same manners as provided in para 10 and the
balance amount of arrears if any, will alone be considered eligible for amnesty.
withdrawal of appeal, etc. :
In order to avail amnesty
benefit, it is necessary to withdraw any appeal, or reference or writ petition
filed by the applicant. Unconditional withdrawal of pending appeal or reference
or writ petition is a necessary condition precedent for availing concession
under the Amnesty Scheme, in respect of the period of assessment for which
amnesty is sought. If an appeal or reference or writ petition is filed
subsequently, then amnesty benefit granted in respect of that period will be
However, when in respect of any
order, the Department raises any audit objections, and an appeal is preferred
against that order, then the appeal will not be allowed to be withdrawn. The
appellate authorities are instructed to dispose of such appeals expeditiously.
of Amnesty in case of partial payments :
Benefit of the amnesty for any
assessment period is subject to full payment of amount payable, as per the
scheme, in respect of that assessment period, during the amnesty period. Any
short payment will result in denial of benefits for the relevant year. The
dealer is not entitled for any benefits under the Amnesty Scheme in case of
partial payments made during the period of the scheme.
for availing the benefits under the scheme :
In order to avail the benefit of
the scheme, the dealer is required to comply with the following procedure :
(i) Payments to be made during
the period of the scheme.
(ii) Application to be made in
prescribed form in Trade Circular to the assessing authority of the dealer.
Separate application is to be made for each period of assessment as well as
for each Act. When the dealer is not aware of his assessing officer, then he
will have to file an application to the P.A. to the Deputy Commissioner of
Sales Tax (Adm.) of concerned Division. In case of unregistered dealer, the
same is to be made to the P.A. of the Deputy Commissioner of Sales Tax (Adm.)
of the concerned Division.
In the case of dealers who
want to get the benefit of amnesty scheme under Entry Tax on Motor Vehicles
Act, the application is to be made to The Deputy Commissioner of Sales Tax
(iii) The dealer is required
to submit photocopies of chalans in support of all payments made during the
amnesty scheme as well as prior to it.
(iv) The dealer is required to
submit acknowledged photocopy of application for unconditional withdrawal of
appeal or reference or writ petition made by the dealer to the concerned
authority, along with the amnesty application form.
(v) In the cases of benefits
to be availed for un-assessed periods, dealer should submit photocopies of the
returns or revised returns filed during the period of amnesty.
(vi) In case of dealers who
were never registered during the relevant period
under this Amnesty Scheme, are required to file the proof of
the application for registration under the relevant Act, along with the
application form for amnesty and to file the returns for unregistered as well
as registered periods.
(vii) Upon receipt of the
application for amnesty, the assessing officer will scrutinise it. If there
are any defects, then the officer will communicate the same to the dealer
within 15 days of receipt of the application and request him to make good such
(viii) If the assessing
officer finds that the application is correct and complete in all respects,
then he will pass the amnesty order within 15 days of receipt of the amnesty
in respect of dispute :
If any dealer is not satisfied
with the merits of the amnesty order passed in his case, he may approach the
immediately superior administrative officer. However, the decision of the
Commissioner of Sales Tax is final and no appeal lies against such order.
of benefit of Amnesty :
When the sales tax department
finds that the amnesty given to any dealer is not as per the scheme, then the
immediate higher administrative authority would pass the corrective orders
withdrawing the benefit of amnesty. It may be noted that such corrective orders
cannot be disputed at any legal forum and it will be binding on the dealer.
refunds under amnesty scheme :
Under no circumstances a dealer
is entitled for refund of amounts paid prior to the date of commencement of the
for amnesty :
The dealer is allowed to opt for
amnesty for all or any period of assessment under any applicable Act. However,
no option is available for partial benefit of amnesty for the particular period
of assessment. The dealer has to avail amnesty for all demands by way of any
tax, interest or penalty, pending for the particular period of assessment.
of payment or benefit :
Under the scheme, the dealer is
required to make payment of tax, interest and penalty as per Annexure-I
depending upon the date of payment and application made in the first phase or
the second phase. Annexure-I of the GR is given herewith for the benefit of the
21. Conclusion :
In this article, an effort is
made to explain the amnesty scheme on the basis of the Government Resolution
issued in this respect and also on the basis of the Trade Circular issued by the
Commissioner of Sales Tax in this respect. Before making any application, it is
necessary to refer the Government Resolution and the Trade Circular issued by