2026-VIL-1255-PAT
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VAT High Court Cases

Bihar Settlement of Taxation Disputes Act, 2024 - Admitted tax under Sections 2(b) and 3 of the Bihar Settlement of Taxation Disputes Act, 2024 - Petitioner disclosed output tax in its returns, claimed set-off of Entry Tax and paid the balance by cheque. The assessing authority disallowed a part of the set-off claimed on batteries supplied as free replacement, and raised an additional demand - The prescribed authority treated the amount arising from the disallowance as admitted tax, demanded it in Form-IV and rejected the applications for failure to deposit it - Whether the amount arising from the disallowance of set-off can be treated as admitted tax - HELD - Section 2(b) defines admitted tax as the amount of tax admitted as being payable in the returns filed by the party. Sections 2(d) and 2(f) separately cover tax payable pursuant to an order of assessment as arrear in dispute and disputed amount. The Legislature has thus maintained a distinction between the tax admitted in the return and the amount determined pursuant to an assessment order. The additional demand was not separately admitted in the return. It arose upon the determination in the assessment order, which was pursued in appeal, and it falls under the disputed amount - The Scheme is not one where the entire liability reflected in the assessment order is required to be deposited. Under Explanation 1 to Section 3(1), the settlement amount does not include arrears of admitted tax, which the party shall deposit separately. Under Rule 4 of the Settlement Rules, Form-IV deals only with the disputed amount or the settlement amount and is not the source of liability towards admitted tax - On a strict interpretation of the Explanation, the Petitioner is required to pay the short payment against admitted tax that arose when the assessing authority reduced the adjustment claimed for Entry Tax paid. The correctness of the disallowance of set-off is not examined - The Petitioner shall make payment of the arrears of admitted tax, and the Respondent shall then pass a fresh order of settlement – The writ applications are disposed
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