Kerala High Court Ruling on Amnesty Schemes and Pending Appeals

Introduction

The ruling clarified that submitting an application under an amnesty scheme does not automatically dismiss any pending appeals filed by an assessee.

Case Background

The petitioner, Sakthi Agencies, had filed an appeal before the Appellate Authority concerning an assessment order under Section 25(1) of the Kerala Value Added Tax Act (KVAT Act) for the assessment year 2015-16. While this appeal was pending, the Government introduced an amnesty scheme in 2020, which included a condition requiring the withdrawal of all pending appeals to be eligible for amnesty benefits.

Desiring to benefit from the amnesty scheme, the petitioner submitted an application and awaited the tax liability calculation. According to procedures, this application had to be submitted through the designated tax amnesty portal. Despite filing the application, the petitioner received no response from the department.

However, after noting the amnesty application via the KVATIS portal, the Appellate Authority dismissed the petitioner's appeal, incorrectly asserting that the appeal was “deemed withdrawn” due to the amnesty application, which established a default in processing the appeal.

Court's Findings

The High Court critically reviewed the Appellate Authority's decision. Notably, it observed:

Dismissal for Default: The authority dismissed the appeal merely because the petitioner opted for the amnesty scheme without any withdrawal of the appeal.
Perverse Reasoning: The judgment pointed out that the Appellate Authority's logic was fundamentally flawed. The Court noted that if the condition for applying for the amnesty required appeal withdrawal, then the failure to withdraw the appeal should only affect the amnesty application itself, not the appeal, which remained pending.
Lack of Benefit Approval: It was also highlighted that the petitioner had not received approval for amnesty benefits, raising further concerns regarding the dismissal of the appeal.

Conclusion

Considering the points outlined, the High Court set aside the dismissal order issued on March 29, 2021 (Ext.P4). The Court mandated that the Appellate Authority reinstate the appeal regarding the assessment year 2015-16 and issue a fresh order after properly hearing the petitioner.