Legal Opinion on GST

LEGAL OPINION

The following opinion is provided to Tvl. Sahyadri Industries Ltd., is a company

incorporated under the provisions of Companies Act, 1956 and, office at, Plot No. KK2 (N)
& KK2 (S),Sipcot Industrial Growth Centre, Kovai Main Road, Perundurai on applicability
of Samadhan Act, 2023 introduced by the State Government of Tamil Nadu. The contents
of this opinion are strictly confidential and intended for the use only by the querist
named herein. In case you are not the intended querist, kindly notify the undersigned
immediately.

The contents of the said opinion are as under:

Chapter Particulars Page Nos.

Chapter I Factual Background

Chapter II Queries

Chapter III Discussion and Analysis of the Legal Position

Chapter IV Conclusion and Summary

Chapter V Disclaimer

Date: 30.12.2023
Place: Mumbai

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Chapter I Factual Background

1.1 Mr. Tvl. Sahyadri Industries Ltd., (hereinafter referred to as the “querist”) is a
company incorporated under the provisions of Companies Act, 1956.

1.2 The querist is, inter alia, engaged in the manufacture of asbestos cement
corrugated sheets and other products and is carrying out its business.

1.3 The relevant facts reproduced below:-

(a) An investigation was conducted by the VAT department on the querist.

On basis of the said investigation, the querist was issued re-
assessment/revision notice dated 27.02.2014 for the period 2010-11 to
2012-13. The querist filed a detailed reply, inter alia, refuting all the
allegations levelled therein;
(b) Without appreciating and considering the submissions of the querist,
vide order dated 28.05.2015, the Ld. Assistant Commissioner rejected
the contentions of the querist and confirmed the reversal of ITC along
with penalty under section 27 (4) of the act;
(c) Being aggrieved with the above order, the querist filed a writ petition
bearing no. 21963of 2015 before this Hon’ble Madras High Court, inter
alia, seeking quashing of the above order dated 28.05.2015;
(d) Vide order dated 22.07.2015, the Hon’ble Court disposed the petition
granting liberty to the querist to file appeal before the appellate
authority;
(e) Pursuant to the above order, as directed by this Hon’ble Court, the
querist filed an appeal before the Ld. Appellate Deputy Commissioner,
Erode. The Personal hearing was held on 31.12.2015. The querist
appeared through their authorized representative and reiterated the
grounds of appeal;

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(f) Vide order dated 31.12.2015, the Ld. Appellate Deputy Commissioner
inter alia, set aside the re-assessment order to the extent it disallowed
ITC where there is mismatch in the returns filed by the selling dealer
vis-à-vis purchasing dealer and remanded back the matter to the
assessing officer for fresh adjudication;
(g) The department (i.e. Respondent in the above matter) being aggrieved
and dissatisfied with the above order, the Respondent filed an appeals
CTSA No. 91,92 and 93 of 2016 before the Appellate Tribunal i.e. Tamil
Nadu Sales Tax Appellate Tribunal (AB) Coimbatore. The querist is filed
reply to the department appeal;
(h) The Appellate Tribunal, vide impugned order dated 16.11.2021,
remanded the matter back on the ground which was never a part of
the audit or re-assessment notice or re-assessment order or order of
the first appellate authority or even the appeal of the Respondent
before the Appellate Tribunal;
(i) Hence, being aggrieved and dissatisfied with the above order, to the
extent it is against and prejudicial to the querist, the querist has
preferred the Revision Petitions vide Tax Case Nos. 19, 20 and 21 of
2022 before the Hon’ble Madras High Court under section 60 of the
Tamil Nadu Value Added Tax, 2006;
(j) Vide Common Order dated 18.04.2023, the Hon’ble Madras High Court
has erred in tagging the revision petitions of the querist along with the
other writ petition/ writ appeals mentioned in the Impugned Order and
passed a Common impugned Order in the case of the querist
dismissing the tax revision petitions of the querist;
(k) Being aggrieved and dissatisfied with the High Court order, the querist
filed a Special Leave Petition before the Hon’ble Supreme Court
bearing SLP (C) No. 11902-11904/2023 before this Hon’ble Court to
challenge the Order dated 18.04.2023 on the grounds that the

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Appellate Tribunal could not have made a new case at the appellate
stage. The querist submitted that the Hon’ble High Court of Madras
has erred in tagging the tax revision petitions of the querist along with
the other writ petitions/ writ appeals mentioned in the order dated
18.04.2023 and passing a common impugned order in the case of the
querist dismissing the tax revision petitions of the querist;
(l) Vide order dated 09.06.2023, the Hon'ble Supreme Court disposed of
the Special Leave Petition granting liberty to querist to file an
appropriate application before the Hon'ble Madras High Court;
(m) Pursuant to the directions of the Hon’ble Apex Court, the querist filed
Civil Miscellaneous Petition No. 17434, 17439 & 17439 of 2023 before
the Hon’ble High Court of Madras seeking to Re-open T.C. No. 19, 20, 21
of 2022 for fresh adjudication on its own facts & merits independently
from the other batch petitions;
(n) However, without consideration of the facts & merits of the case, the
Hon’ble high court of Madras dismissed the revision petition filed by
the querist vide order dated 25.08.2023. The querist aggrieved by the
said order filed a Special Leave Petition before the Hon’ble Supreme
Court. The same is pending adjudication;
(o) In the mean time we have been informed us that the Tamil Nadu State
Government has passed Tamil Nadu Taxes (Settlement of Arrears) Act,
2023. Vide Notification No. 360 dated 13.10.2023 the Samadhan Scheme
came into force 16.10.2023.

1.4 In view of the above, the querist seeks to know the applicability of the scheme in
case, where the litigation is pending before the Hon’ble Supreme Court and if yes,
whether it will be beneficial for the querist to go into the scheme. Accordingly,
the querist has sent us a brief note seeking our opinion on the said issue.

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1.5 In this regard, we had the benefit of discussing the matter with Shri Jagadeesh
and Shri Arvind Garg on behalf of the querist company.

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Chapter II Queries

2.0 In light of the above factual matrix, the querist seeks to know:

(a) Whether the Tamil Nadu Taxes (Settlement of Arrears) Act, 2023 is applicable
in case, where the litigation is pending before the Hon’ble Supreme Court?

(b) If answer to query (a) is in affirmative then, what is the amount payable
under the scheme and the relief available?

(c) If answer to query (a) is in affirmative then, whether the said scheme will be
beneficial for the querist or not?
(d)

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Chapter III Discussion and Analysis of the Legal Position

3.1 We have perused the note for opinion. For all practical purposes, the same shall
be treated as part and parcel of the present opinion.

3.2 We have also perused the documents shown to us.

3.3 In the instant case, before adverting to the query posed before us, it would be
imperative to briefly examine the factual position.
Factual Background

1.6 4.1 The querist is, inter alia, engaged in the in the manufacture of asbestos
cement corrugated sheets and other products and is carrying out its business. We
have been informed that the VAT department conducted an investigation on the
records of the querist and issued re-assessment/revision notice dated 27.02.2014
for the period 2011-12 to 2012-13. The querist also filed a detailed reply refuting all
the allegations levied therein.

4.2 The department without appreciating the submissions of the querist passed an
order dated 28.05.2015 and rejected the contention of the querist. Also confirmed
the reversal of ITC along with interest and penalty u/s 27(4) of the act. The querist
filed a Writ Petition before the Hon’ble Madras High Court challenging the above
order.

4.3 The Hon’ble Madras High Court vide its order dated 22.07.2015 and granted liberty
to the querist to file an appeal before the Appellate Authority. The querist in
pursuance of the High Court order filed an appeal before the Ld. Appellate Deputy
Commissioner, Erode. Personal hearing was held on 31.12.2015. Vide order dated
31.12.2015, Ld. Appellate Deputy Commissioner set aside the reassessment order
to the extent it disallowed ITC and remanded back the matter to the assessing
officer for fresh adjudication.

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4.4 The department (i.e. Respondent in the above matter) being aggrieved and
dissatisfied with the above order, the Respondent filed an appeals CTSA No. 91,92
and 93 of 2016 before the Appellate Tribunal i.e. Tamil Nadu Sales Tax Appellate
Tribunal (AB) Coimbatore. The querist filed its reply. Vide order dated 16.11.2021
the matter was remanded back on the ground which was never part of the audit
or re-assessment notice or re-assessment order or order of the first appellate
authority or even the appeal of the Respondent before the Appellate Tribunal.

4.5 The querist been aggrieved with the above order, to the extent it is against and
prejudicial to the querist, the querist has preferred the Revision Petitions vide Tax
Case Nos. 19, 20 and 21 of 2022 before the Hon’ble Madras High Court. The
Hon’ble Madras High Court tagged various Writ Petition/Writ Appeals with the
querist case. The Hon’ble Madras High Court passed the rejected the querist Writ
Petition by passing a common order.

4.6 The querist filed an SLP before the Hon’ble Supreme Court challenging the order
of the Hon’ble Madras High Court. Vide order dated 09.06.2023, the Apex Court
dismissed the SLP and granted liberty to querist to file an appropriate application
before the Hon’ble Madras High Court.

4.7 The querist pursuant to the order of the Ape Court filed a Civil Miscellaneous
Petition No. 17434, 17439 & 17439 of 2023 before the Hon’ble High Court of
Madras seeking to Re-open T.C. No. 19, 20, 21 of 2022 for fresh adjudication on its
own facts & merits independently from the other batch petitions. The same was
rejected by the Hon’ble Madras High Court vide order dated 25.08.2023 without
considering the submissions of the querist. The querist has filed another SLP
before the Hon’ble Supreme Court challenging the order dated 25.08.2023. The
same is pending adjudication.

4.8 Now the querist has informed us that the Tamil Nadu State Government has
passed Tamil Nadu Taxes (Settlement of Arrears) Act, 2023. Vide Notification No.
360 dated 13.10.2023 the Samadhan Scheme came into force from 16.10.2023.
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4.9 Now the moot question that arises for our consideration is whether the said
scheme will be applicable in the facts of the present case and if yes then whether
the same will be beneficial for the querist or not.

Samadhan Scheme 2023

5.1 Before, we dwell into answering the query of the querist it is imperative to
understand the important provisions of the Tamil Nadu Taxes (Settlement of
Arrears) Act, 2023.

5.2 The Chief Minister of Tamil Nadu Shri M.K. Stalin in the recently-concluded
assembly session, announced the ‘Tamil Nadu issued Tamil Nadu Taxes
(Settlement of Arrears) Act, 2023’ i.e. the Samadhan Scheme for the settlement
of arrears of tax, penalty or interest pertaining to various taxes administered
under commercial taxes. The said act received the assent of the Governor on
12.10.2023. The state government has commercial tax dues of Rs. 25,000/- crore
owed to it, with a lot of these cases pending.

5.3 Tamil Nadu Chief minister in its speech in the assembly further emphasized that
this Samadhan Scheme 2023 makes the first-ever waiver program by any Tamil
Nadu Government aimed at supporting small traders. The complete waiver of
dues below Rs. 50,000/- is expected to benefit over 95,000 small traders,
providing them with much needed relief.

5.4 The State Government of Tamil Nadu issued a Notification No. 360 dated
13.10.2023. Vide the said notification the Samadhan Scheme came into force from
16.10.2023. Accordingly, the Tamil Nadu Taxes-Settlement of Arrears Act 2023 has
now been enacted. Tax arrears relating to a total of 11 State Acts are covered
under the scheme. Some of the Acts include the repealed Tamil Nadu General
Sales Tax Act, 1959, the repealed Tamil Nadu Sales Tax (Surcharge) Tax, 1971, the
repealed Tamil Nadu Tax on Luxuries Act, 1981, among others. The Key Acts

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among them are The Tamil Nadu Value Added Tax Act 2006 and The Central Sales
Tax Act 1956.

5.5 The preamble of the act is reproduced below:

Be it enacted by the Legislative Assembly of the State of Tamil Nadu in the
Seventy-fourth Year of the Republic of India as follows:—
(1) This Act may be called the Tamil Nadu Taxes (Settlement of Arrears) Act,
2023
(2) It extends to the whole of the State of Tamil Nadu.
(3) It shall come into force on such date as the State Government may, by
notification, appoint.

5.6 Section 2(1) of the Act provides for the definition clause. Some of the relevant
definitions are reproduced below:
(a) “admitted tax” means tax payable as per the returns, books of accounts
or tax assessed by the assessing authority under the relevant Act but does
not include disputed tax;
(b) “applicant” means a dealer or any person who is liable to pay tax under
the relevant Act;
(c) “arrears of tax, penalty or interest” means-
(i) tax including sales tax, additional sales tax, surcharge, additional
surcharge, value added tax, central sales tax, luxury tax, advertisement tax,
entertainments tax, entry tax or betting tax, payable by an applicant upon
assessment under the relevant Act;
(ii) penalty payable by an applicant under the relevant Act; or
(iii) interest payable by an applicant under the relevant Act,
as the case may be, pertaining to the assessment years upto 2017-2018, for
which assessment has been made on or before the 31st day of March 2021
under the relevant Act, and pending collection on the date of filing of
application under this Act;
(f)“designated authority” means an authority appointed under section 3;
(g)“disputed tax” means the whole or part of tax determined by the
assessing authority under the relevant Act against which appeal, revision or
review is pending before any authority, tribunal or court, as on the date of
commencement of this Act;
(h) “Government” means the State Government;
(i) “relevant Act” means,- Tamil Nadu Act 1 of 1959.

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(i) the repealed Tamil Nadu General Sales Tax Act, 1959; or
(ii) the repealed Tamil Nadu Sales Tax (Surcharge) Act, 1971; or
(iii) the repealed Tamil Nadu Additional Sales Tax Act, 1970; or
(iv) the repealed Tamil Nadu Tax on Luxuries Act, 1981; or
(v) the repealed Tamil Nadu Tax on Entry of Goods into Local Areas Act, 2001;
or
(vi) the repealed Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas
Act, 1990; or
(vii) the repealed Tamil Nadu Entertainments Tax Act, 1939; or
(viii) the repealed Tamil Nadu Advertisements Tax Act, 1983; or
(ix) the repealed Tamil Nadu Betting Tax Act, 1935; or
(x) the Tamil Nadu Value Added Tax Act, 2006; or
(xi) the Central Sales Tax Act, 1956, as the case may be.
(2) Unless there is anything repugnant to the subject or context, all words
and expressions used in this Act, but not defined, shall have the same
meaning as assigned to them in the relevant Act.

5.7 Section 3 of the Act provides for the Designated Authority. The same is
reproduced below:-
Subject to the other provisions of this Act, an applicant is eligible to make an
application for settlement of arrears of tax, penalty or interest pertaining to
the assessment years upto 2017-2018 for which assessment has been made
under the relevant Act, on or before the 31st day of March 2021, against
which an appeal, revision or review is not pending before any authority or
tribunal under the relevant Act or any court on the date of filing of
application: Provided that in cases where any appeal, revision or review, is
pending before any authority or tribunal under the relevant Act or any court
on the date of commencement of this Act, application for settlement of
arrears shall be made along with a copy of leave to withdraw granted by the
authority or tribunal or court, as the case may be: Provided further that in
cases where any appeal filed by the Government is pending before any
authority, tribunal under the relevant Act or court on the date of
commencement of this Act, application for settlement of arrears shall be
made as per the tax claimed by the Government, treating such claims as
disputed tax together with the corresponding penalty or interest.

5.8 Section 4 of The Eligibility for settlement provision is reproduced below:-.

4. Subject to the other provisions of this Act, an applicant is eligible to make
an application for settlement of arrears of tax, penalty or interest pertaining
to the assessment years upto 2017-2018 for which assessment has been made
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under the relevant Act, on or before the 31st day of March 2021, against
which an appeal, revision or review is not pending before any authority or
tribunal under the relevant Act or any court on the date of filing of
application:

Provided that in cases where any appeal, revision or review, is pending

before any authority or tribunal under the relevant Act or any court on the
date of commencement of this Act, application for settlement of arrears
shall be made along with a copy of leave to withdraw granted by the
authority or tribunal or court, as the case may be:
Provided further that in cases where any appeal filed by the Government is
pending before any authority, tribunal under the relevant Act or court on the
date of commencement of this Act, application for settlement of arrears
shall be made as per the tax claimed by the Government, treating such claims
as disputed tax together with the corresponding penalty or interest.

5.9 On perusal of the above it is clear that the said act is eligible in cases where the
assessment year for the tax should be up to 2017-18, and the assessment order
should have been passed on or before March 31, 2021. Assessment orders passed
after March 31, 2021 are not eligible under the scheme.

5.10 Section 5 of the act provides for the manner in which the application for each
assessment year is to be filed before the designated authority.

5.11 Section 6 of the act provides for the determination of amount to be payable by
the applicant for settlement of any matter under the act. Section 7 of the act
provides for the rate applicable in determining amount payable and Section 8 of
the act provides for the extent upto which an assessee will be exempt from
payment of any disputed tax. The same is reproduced below:

7. (1) The amount payable by the applicant and to be waived shall be

determined as follows: -
(a) where the total arrears of tax, penalty or interest is above rupees fifty
thousand and upto rupees ten lakh for an assessment year on the date of
application for settlement under this Act, the applicant shall have an option
to pay under any one of the following methods that is most beneficial to him:
-
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(i) pay twenty per cent on the total arrears of tax, penalty or interest
and on such payment, the remaining arrears of tax, penalty or
interest payable shall be waived; or
(ii) (1) on the admitted tax, pay sixty-six per cent along with ten
per cent of the penalty and ten per cent of the interest and on
such payment, the remaining admitted tax, penalty and
interest payable shall be waived;
(2) on the disputed tax, pay thirty-three per cent along with
ten per cent of the penalty and ten per cent of the interest
and on such payment, the remaining disputed tax, penalty
and interest payable shall be waived;
(3) where it relates to arrears of penalty or interest or both
and where there is no arrear of tax, pay ten per cent of the
interest and ten per cent of the penalty and on such payment,
the remaining interest or penalty or both payable shall be
waived;
(b) where the total arrears of tax, penalty or interest is above rupees ten
lakh and upto rupees one crore for an assessment year on the date of
application for settlement under this Act, the applicant shall,
(i) on the admitted tax, pay sixty-six per cent along with ten per cent
of the penalty and ten per cent of the interest and on such payment,
the remaining admitted tax, penalty and interest payable shall be
waived;
(ii) on the disputed tax, pay thirty-three per cent along with ten per
cent of the penalty and ten per cent of the interest and on such
payment, the remaining disputed tax, penalty and interest payable
shall be waived; 118 TAMIL NADU GOVERNMENT GAZETTE
EXTRAORDINARY
(iii) where it relates to arrears of penalty or interest or both and
where there is no arrear of tax, pay ten per cent. of the penalty and
ten per cent. of the interest and on such payment, the remaining
penalty or interest or both payable shall be waived;
(c) where the total arrears of tax, penalty or interest is above rupees one
crore and upto rupees ten crore for an assessment year on the date of
application for settlement under this Act, the applicant shall, -
(i) on the admitted tax, pay seventy-five per cent. along with fifteen
per cent. of the penalty and twenty per cent. of the interest and on
such payment, the remaining admitted tax, penalty and interest
payable shall be waived;
(ii) on the disputed tax, pay fifty per cent. along with fifteen per cent.
of the penalty and twenty per cent. of the interest and on such
payment, the remaining disputed tax, penalty and interest payable
shall be waived;

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(iii) where it relates to arrears of penalty or interest or both and

where there is no arrear of tax, pay fifteen per cent. of the penalty
and twenty per cent. of the interest and on such payment, the
remaining penalty or interest or both payable shall be waived.
(d) where the total arrears of tax, penalty or interest is more than rupees ten
crore for an assessment year on the date of application for settlement under
this Act, the applicant shall,-
(i) on the admitted tax, pay ninety per cent. along with fifteen per
cent. of the penalty and thirty per cent. of the interest and on such
payment, the remaining admitted tax, penalty and interest payable
shall be waived;
(ii) on the disputed tax, pay sixty per cent. along with fifteen per
cent. of the penalty and thirty per cent. of the interest and on such
payment, the remaining disputed tax, penalty and interest payable
shall be waived;
(iii) where it relates to arrears of penalty or interest or both and
where there is no arrear of tax, pay fifteen per cent. of the penalty
and thirty per cent. of the interest and on such payment, the
remaining penalty or interest or both payable shall be waived.
(2) Notwithstanding anything contained in the relevant Act, interest accrued
at the time of payment of tax, penalty or interest, as the case may be, under
this Act, shall also stand waived.
8. Notwithstanding anything contained in the relevant Act or this Act, where
on the date of commencement of this Act, the total arrears of tax, penalty or
interest, is rupees fifty thousand or less for an assessment year, the entire
amount shall stand waived on that date and the assessee shall stand
discharged from his liability to make payment of such arrears of tax, penalty
or interest.

5.11 On perusal of the above provides for the amount payable under the scheme and
the relief available. There are five categories under the scheme. If the arrears
(including tax, interest and penalty) are up to ₹50,000, then the amount is
completely waived off, and no declaration needs to be filed. If the arrears are
more than ₹50,000 and up to ₹10 lakh, the dealers have two options. They can
pay 20% of the amount and 80% would be waived off. Under the second option,
the arrears in the assessment order can be split into two: the admitted tax (what
the dealer accepts) and what is not accepted (disputed tax). On the admitted tax,
66% has to be paid and on the disputed tax 33% has to be paid, as per the scheme.
Also, 10% of the penalty amount and 10% of the interest mentioned in the
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assessment order needs to be paid. The third category is where the arrears are
more than ₹10 lakh and up to ₹1 crore. Here, the option is to pay 66% of the
admitted tax and 33% of the disputed tax. Also 10% each of the penalty and
interest amount as per the assessment order needs to be paid. The fourth
category, is where the arrears are above ₹1 crore and up to ₹10 crore. Here, 75% of
the admitted tax has to be paid and 50% of the disputed tax has to be paid. In
addition 15% of the penalty amount and 20% of the interest has to be paid. In the
last category, if the arrears amount is more than ₹10 crore, 90% of the admitted
tax has to be paid and 60% of the disputed tax has to be paid. In addition, 15% of
the penalty and 30% of the interest has to be paid.

5.12 Section 9 of the Act provides for the restrictions on payment of arrears of tax,
penalty or interest payable under the act. Section 10 of the act provides for the
manner in which the designated authority will issue certificate of settlement.
Section 11 of the Act provides for appeal against any order of the designated
authority. Section 12 of the Act provides for the revision of the order of the
Commissioner on its own motion. Section 13 of the act provides for the various
bar on re-opening of the settled cases. Section 14 of the act provides for the
revocation of certificate of settlement.

5.13 Further, the said scheme is open from October 16, 2023 to February 15, 2024.
Eligible dealers and commercial establishments can file their declaration online at
Tamil Nadu Commercial Taxes Department website, https://ctd.tn.gov.in/home.
After verifying the declaration, an official from the department will issue a
settlement certificate. Another key aspect is that the portal has a ‘raise query’
option where a taxpayer can raise doubts about the scheme an get them clarified
before filing the declaration. If the declaration is verified and if the taxpayer has
paid the amount, the balance tax liability, penalty and interest need to be paid,
and the liability gets completely discharged.

Samadhan Scheme – Applicable or not?

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6.1 Section 4 of the Act provides for eligibility of the scheme. On perusal of the above
section it is clear that the case of any assessee will be eligible under the scheme
provided following conditions are satisfied. (1) the assessment year for the
pending case should be upto 2017-18; and (2) assessment order should have been
made i.e. passed on or before 31.03.2021. Therefore, in other words assessment
orders passed after 31.03.2021 will not be eligible under the scheme.

6.2 In the instant case, the assessment year of the querist case pending before the
Hon’ble Supreme Court is 2010-11 to 2012-13. Therefore, the condition no. 1 of
section 4 of the scheme is satisfied.

6.3 The second condition is that whether the ‘assessment order made’ on or before
31.03.2021. Now let us understand the meaning of the term ‘assessment order
made’. The said term are not defined under the Samadhan Scheme. Therefore, the
same has to be looked from common parlance. In simple term assessment order
made means the act of judging or deciding the amount, value, quality or
importance of something, or the judgment or decision that is made. Therefore,
assessment order made means any wherein any matter has been decided by the
authority and the amount of tax payable is ascertained by the authority.

6.4 In the instant case, as explained supra the querist has filed a SLP before the
Hon’ble Supreme Court challenging the order dated 25.08.2023. Vide the said
order the Hon’ble Madras High Court held that by means of civil miscellaneous
petitions, the tax cases cannot be reviewed. Thus, in view of the above it can be
contended that since the applications filed by the querist has been dismissed by
the Hon’ble Madras High Court. Thus there is no pending assessment. Thus, there
is no assessment being made the court. Therefore, there is no assessment been
made in the pending matters of the querist. Hence, the second condition will not
be applicable. Thus, the querist will not be eligible under the said scheme.

Samadhan Scheme – Beneficial or not?

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7.1 As explained supra the provisions of the scheme will not be applicable to the
pending litigation of the querist. However, let us assume that the provisions of
the scheme is applicable then what will be the amount payable by the querist
under the scheme and whether the said scheme will be beneficial or not.

7.2 Section 6 of the act provides for the determination of amount to be payable by
the applicant for settlement of any matter under the act. Section 7 of the act
provides for the rate applicable in determining amount payable and Section 8 of
the act provides for the extent upto which an assessee will be exempt from
payment of any disputed tax. Therefore, to determine the rate and the payable by
the querist under the said scheme, it is imperative to determine the total liability
payable.

7.3 The total liability payable for year 2010-11 is Rs. 30,34,769/- along with penalty of
Rs. 15,17,385/-. For year 2011-12 is Rs. 26,61,408/- along with penalty of Rs.
26,61,408/-. For year 2012-13 is Rs. 27,09,803/- along with penalty of Rs. 27,09,803/-.
Since the total tax, interest or penalty payable under the said scheme is below
One Crore and the querist has not admitted any liability, the querist case will be
covered by section 7(1) (b) (ii) of the scheme.

7.4 Therefore, in view of the above, the querist will be liable to pay the following
amount for all the period:

Year Disputed Penalty Tax Penalty Payable

Tax Liabilities Liabilities amount As
As per As per per the
Scheme- scheme- scheme.
33% 10%
(Amount in (Amount (Amount in (Amount in (Amount
Rs.) in Rs.) Rs.) Rs.) in Rs.)
2010-11 30,34,769/- 15,17,385/- 10,01,474/- 1,51,739/- 11,53,213/-

2011-12 26,61,408/- 26,61,408/- 8,80,244/- 2,66,140/- 1,46,384/-

2012-13 27,09,803/- 27,09,803/ 8,94,235/- 2,70,980/- 11,65,215/-

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Total 19,95,830/- 6,88,870/- 26,84,700/-

Chapter IV Conclusion and Summary

7.1 To sum up, we proceed to answer the queries raised by the querist, in seriatim:

(a) Whether the Tamil Nadu Taxes (Settlement of Arrears) Act, 2023 is
applicable in case, where the litigation is pending before the Hon’ble
Supreme Court?
Ans: No. Refer to discussion at Para 4.1 to Para 5.13

(b) If answer to query (a) is in affirmative then, what is the amount payable
under the scheme and the relief available?
Ans: NA. However, if assumed that the act is applicable then refer to the
discussion at Para 6.1 to Para 7.4.

(c) If answer to query (a) is in affirmative then, whether the said scheme will
be beneficial for the querist or not?
Ans: NA.

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Important note

7.2 Before parting, it is essential to mention that these are matters involving
interpretation of a new law. There are no precedents on the above issues. The
department, in all likelihood, may not agree with the above view. Hence, the
matter would have to be argued on first principles before a court of law, if need
arises. Accordingly, it is recommended that the above stand taken by the querist
should be informed to the department, as and by way of disclosure. This route is
suggested in order to avoid any allegations of suppression of facts in future.

Advised Accordingly

Bharat Raichandani
Advocate
Partner
UBR Legal, Advocates

Disclaimer

The above opinion is issued ex-parte.

The above conclusions are based on the completeness and accuracy of the facts and assumptions stated above. If these are not
entirely complete or accurate, this should be communicated to me immediately, as their inaccuracy or incompleteness could have a
material impact on the conclusions. No documents, other than mentioned hereinabove, have been provided by the querist in
connection with or for the purpose of the present opinion and hence, the present note is based on the information/facts provided by
the querist.

The conclusions reached and views expressed in the memorandum are matters of opinion. The opinion is based on my understanding
of the law and regulations prevailing as of the date of this memorandum and my past experience with the Revenue Authorities.
However, there can be no assurance that the tax authorities or regulators or Courts may not take a position contrary to my views.

Legislation, its judicial interpretation and the policies of the regulatory authorities are also subject to change from time to time, and
these may have a bearing on the advice that I have given. Accordingly, any change or amendment in the law or relevant regulations
would necessitate a review of my comments and recommendations contained in this memorandum. Unless specifically requested, I
have no responsibility to carry out any review of my comments for changes in laws or regulations occurring after the date of issue of
this memorandum.

Further, this memorandum may not be used or quoted in whole or in part or otherwise referred to in any document or delivered to
any other person or entity other than the Querist, without my prior written consent.

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