Rr Hotel v. The Commissioner

Madras HC28 Apr 2025WP(MD)/7998/2025

Case brief

AI extract

What is this about?

New Samathana Scheme 2023; Tamilnadu Taxes (Settlement of Arrears) Act, 2023; settlement of arrears of taxes; assessment years 2015-16, 2016-17, 2017-18; belated final assessment after scheme expiry; delay not attributable to assessee; Union of India v. Onkar S. Kanwar [2000 (7) SCC 591]; Kar Vivad Samadhan Scheme (Removal of Difficulties) Order; writ of mandamus; Article 226; Commercial Tax Department; RR Hotel, Cumbum, Theni District; Madras High Court Madurai Bench; disposed with direction to consider representation.

What did the court decide?

Direction (mandamus effect) to the first respondent to consider the petitioner's case under the New Samathana Scheme 2023 for assessment periods 2015-16 to 2017-18 and pass appropriate orders on merits and in accordance with law; no order as to costs. ¶¶41

Rr Hotel Vs The Commissioner — Writ and Judicial Review | Madras HC (2025)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the petitioner is entitled to avail the New Samathana Scheme 2023 for assessment periods 2015-16, 2016-17 and 2017-18 (after deducting the deposited amount), notwithstanding that the final assessment order was passed only in 2023, after expiry of the scheme window, the delay not being attributable to the petitioner.

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Court's answer

The ratio laid down by the Hon'ble Supreme Court in Union of India v. Onkar S. Kanwar is applicable to the case on hand.

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Ratio / Principle

Applying that ratio, the petitioner herein is entitled to the New Samathana Scheme 2023 for assessment periods 2015-16, 2016-17 and 2017-18.

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Key takeaways

The first respondent is directed to consider the petitioner's case in the light of the New Samathana Scheme 2023 for assessment periods 2015-16, 2016-17 & 2017-18 and pass appropriate orders on merits and in accordance with law.ratio¶¶40

Detailed headnote1 paragraphs

Writ petition under Article 226 by a hotel (Cumbum, Theni District) seeking a mandamus to be permitted to avail the New Samathana Scheme 2023, framed under the Tamilnadu Taxes (Settlement of Arrears) Act, 2023 (window 16.10.2023 to 15.02.2024), for assessment periods 2015-16, 2016-17 and 2017-18, after deducting amounts already deposited. The petitioner had availed the scheme for 2012-13 to 2014-15 but missed the window for the later years because the pre-assessment notice was issued only in 2018 and the final assessment order was passed only in 2023, the delay not being attributable to the petitioner; representations dated 21.02.2024 and 21.02.2025 went unconsidered. Relying on the ratio in Union of India v. Onkar S. Kanwar, [2000 (7) SCC 591], the Madurai Bench of the Madras High Court (Vivek Kumar Singh, J.) held the petitioner entitled to the scheme for 2015-16 to 2017-18, directed the first respondent to consider the case and pass appropriate orders on merits and in accordance with law, and disposed of the writ petition with no order as to costs.

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W.P.(MD)No.7998 of 2025

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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DATED: 28.04.2025

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CORAM:

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THE HONOURABLE MR.JUSTICE VIVEK KUMAR SINGH

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W.P.(MD)No.7998 of 2025

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RR Hotel, 14/21, Viswanathan Street, Cumbum, Theni District. Rep. By its Proprietor, T. Ravi. ... Petitioner

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Vs.

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The Commissioner, Commercial Tax Department, Chepauk, Chennai.

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The Joint Commissioner (ST), Commercial Tax Department, Madurai Division, Madurai.

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The State Tax Officer, Uthamapalayam Assessment Circle, Uthamapalayam, Theni District.

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The Additional Commissioner (Non-GST), Commercial Tax Department, Chepauk, Chennai. ... Respondents

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(R4 is impleaded vide order of this Court dated 28.04.2025 in WMP(MD)No.8322 of 2025.)

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https://www.mhc.tn.gov.in/judis

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W.P.(MD)No.7998 of 2025

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PRAYER:

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PRAYER: Writ Petition filed under Article 226 of the Constitution of India seeking issuance of Writ of Mandamus, directing the respondents to permit the petitioner to avail the New Samathana Scheme 2023 for assessment period of 2015-16, 2016-17 and 2017-18 after deducting the deposited amount on the basis of representation given by the petitioner dated 21.2.2025 within time stipulated.

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For Petitioner : Mr. C. Jeganathan for Mr.Sri Charan Rengarajan, Senior Counsel For Respondents : Mr.J.K.Jayaselan Government Advocate

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ORDER

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This writ petition has been filed seeking a direction to the respondents to permit the petitioner to avail New Samathana Scheme 2023 for assessment periods 2015-16, 2016-17 and 2017-18 after deducting the deposited amount, on the basis of representation given by the petitioner dated 21.2.2025 within time stipulated

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2 . The petitioner is running a hotel in the name and style of 'RR Hotel' at Cumbum. The state government has introduced a new samathana scheme with effect from 16.10.2023 to 15.02.2024 for

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W.P.(MD)No.7998 of 2025

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settlement of arrears of taxes as per Tamilnadu Taxes (Settlement of Arrears) Act, 2023. for the assessment period upto 2017-18. The petitioner had availed the said scheme for the assessment years 2012-13 to 2014-15. However, the petitioner was not permitted to avail the said scheme from 2015 onwards. The pre assessment notice was issued in the year 2018 and the final assessment order was passed only in the year 2023, after a period of five years and hence, the petitioner was unable to avail the said scheme. The delay is not on the part of the petitioner. Hence, the petitioner made requests to the third respondent to extend the said scheme on 21.02.2024 and 21.02.2025. Since the said representations have not been considered, this writ petition came to be filed.

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3. The learned counsel appearing for the petitioner relied upon a judgment of the Hon'ble Supreme Court in the case of Union of India and Others vs. Onkar S.Kanwar and Others reported in [2000 (7)

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Supreme Court cases 591] , wherein it is held as follows:-

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“We have heard the parties. In our view, a reading of the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order shows that where a declaration had been made in respect of a tax arrear and where in respect of the same matter a show cause notice had also been issued to any other person, then the settlement in favour of the declarant has to be deemed to be full

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and final in respect of other persons on whom show cause notices had been issued. It is settled law that when an Appeal is pending there is no finality to the proceedings. The proceedings are then deemed to be continuing. Undoubtedly, at one place the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order seems does state that the show cause notice should be pending adjudication. However, the same order also talks of the show cause notice being in respect of same matter on which the show cause notice has been issued to the main declarant. Then the Order provides that a settlement in favour of the declarant will be deemed to be full and final in respect of other persons also. This Order has to be read as a whole. If read as a whole, it is clear that a settlement by the main declarant is to operate as full and final settlement in respect of all other persons on whom show cause notice was issued in respect of the same matter. Thus read as a whole the words "pending adjudication" cannot be read to exclude cases where the proceedings are still pending in Appeal. Even otherwise the order has to be read along with the Kar Vivad Samadhan Scheme. Under the Kar Vivad Samadhan Scheme a party can file a declaration so long as the proceedings are pending. Thus, even though the show cause notice may have been adjudicated upon and an Appeal is pending a party could still take the benefit of the Kar Vivad Samadhan Scheme and file a declaration. The object of the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order is to give benefit of a settlement by the main party (i.e. the Company in this case) to all other co-noticees. This being the object a classification, restricting the benefit only to cases where the show cause notice is pending adjudication, would be unreasonable. If read in this manner the Order would be discriminatory. An interpretation which leads to discrimination mustbe avoided. An interpretation, as suggested by Mr. Ganesh, would also be against the object of the Kar Vivad Samadhan Scheme (Removal of Difficulties) Order. It is therefore not possible to accept the submissions of Mr. Ganesh. In our view the reasoning given by the High Court of Kerala is correct and needs to be upheld.”

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4 . Thus, the aforesaid ratio laid down by the Hon'ble Supreme

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Court in the case of Onkar S.Kanwar stated supra, is applicable to the

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case on hand and hence, the petitioner herein is also entitled to the New Samathana Scheme 2023 for assessment period of 2015-16, 2016-17 and 2017-18.

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5. Considering the facts and circumstances of this case, the first respondent is directed to consider the case of the petitioner, in the light of the New Samathana Scheme 2023 for the assessment periods of 2015-16, 2016-17 & 2017-18 and pass appropriate orders on merits and in accordance with law.

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6. With the above direction, the writ petition is disposed of. There

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shall be no order as to costs.

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28.04.2025 Index : Yes / No (2/2) NCC : Yes / No

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