VVF (INDIA) LIMITED versus THE STATE OF MAHARASHTRA & ORS

Citation: [2021] 12 S.C.R. 108 · Decided: 03-12-2021 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 12 S.C.R.
VVF (INDIA) LIMITED
v.
THE STATE OF MAHARASHTRA & ORS
(Civil Appeal No 7387 of 2021)
DECEMBER 03, 2021
[DR. DHANANJAYA Y CHANDRACHUD AND
A. S. BOPANNA, JJ]
Maharashtra Value Added Tax Act, 2002: s.26(6A) – Pursuant
to investigation carried out by the Sales Tax Department at the
premises of appellant, demand notice issued to appellant – Appellant
made a protest payment of Rs.3.64 crores comprising an amount of
Rs.2.32 crores towards tax and Rs.1.31 crores towards interest for
assessment year 2013-14 – Another show cause notice issued to
appellant in relation to imposition of penalty – On 15 April 2017,
ss.26(6A), 26(6B) and 26(6C) were introduced into the MVAT Act
by Maharashtra Act XXXI of 2017 mandating a pre-deposit for the
filing of appeals – For AY 2013-14, an order of assessment passed
under the Maharashtra Tax on the Entry of Goods into Local Areas
Act 2002, imposing a tax demand of Rs 10.44 crores, together with
the penalty in an equivalent amount, besides a demand for interest
of Rs 7.09 crores – The total dues under the assessment order were,
thus, in the amount of Rs 27.98 crores – After adjustment of the
amounts paid, under protest, by the appellant, the amount held to
be payable was Rs 24.34 crores – Appellant was informed by Sales
Tax Department that the payments which were made under protest
could not be considered towards pre-deposit for the purpose of
s.26(6A) – Appellant filed writ petition under Art.226 of the
Constitution – High Court dismissed the petition holding that once
an order of assessment has been passed, any amounts which have
been paid albeit under protest, would have to be adjusted against
the total tax liability and the demand to follow – Whether amounts
which have been deposited under protest prior to an order of
assessment can be adjusted against the mandatory pre-deposit
required for filing an appeal under s.26(6A) of the Act of 2002 –
Held: Under the provisions of s.26(6A), the aggregate of the amounts
stipulated in the sub-clauses of the provision has to be deposited
and proof of payment is required to be produced together with the
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[2021] 12 S.C.R. 108
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filing of the appeal – Both clauses (b) and (c) employ the expression
“an amount equal to ten per cent of the amount of tax disputed by
the appellant” – The entirety of the undisputed amount has to be
deposited and 10 per cent of the disputed amount of tax is required
to be deposited by the appellant – In the instant case, the appellant
disputes the entirety of the tax demand – Consequently, on the plain
language of the statute, 10 per cent of the entire disputed tax liability
would have to be deposited in pursuance of s.26(6A) – The amount
which has been deposited by the appellant anterior to the order of
assessment cannot be excluded from consideration, in the absence
of statutory language to that effect – The provisions of a taxing
statute have to be construed as they stand, adopting the plain and
grammatical meaning of the words used. Consequently, the appellant
was liable to pay, in terms of s.26(6A), 10 per cent of the tax disputed
together with the filing of the appeal – There is no reason why the
amount which was paid under protest, should not be taken into
consideration – Rejection of the appeal was not in order and the
appeal would have to be restored to the file of the appellate
authority, subject to due verification that 10 per cent of the amount
of tax disputed has been duly deposited by the appellant –
Interpretation of statutes.
Interpretation of statutes: A taxing statute must be construed
strictly and literally – There is no room for intendment – Maharashtra
Value Added Tax Act, 2002 – s.26(6A).
Allowing the appeal, the Court
HELD: 1. On the plain language of the statute, 10 per cent
of the entire disputed tax liability would have to be deposited in
pursuance of Section 26(6A). The amount which has been
deposited by the appellant anterior to the order of assessment
cannot be excluded from consideration, in the absence of statutory
language to that effect. A taxing statute must be construed strictly
and literally. There is no room for intendment. If the legislature
intended that the protest payment should not be set off as the
deposit amount, then a provision would have to be made to the
effect that 10 per cent of the amount of tax in arrears is required
to be deposited which is not the case. [Para 11][113-G-H;
114-A-B]
VVF (INDIA) LIM

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