2011 (12) TMI 198 - HC - VAT and Sales Tax

Pre-deposit u/s 76(4) of the Delhi VAT Act, 2008 as a pre-condition for hearing of the appeal revised return filed for second quarter of the A.Y. 2008-09 treated as null and void return - original return filed was treated as valid/correct return and no addition was made - A.O. imposed tax, interest and penalty on the basis of figures from the revised return Held that - There is no demand on the basis of original return. The revised return has been rejected as void. In these circumstances, appellant should not be asked to make a pre-deposit before the hearing of the appeals. Even after the audit is carried out under the Act, the tax assessed was in minus figure and the figures in the original return remain untouched. The question of law is accordingly answered in favour of the appellant and against the revenue.

Summary

Issues:
1. Validity of the direction for pre-deposit of 15% of tax, interest, and penalty under Section 76(4) of the Delhi Value Added Tax Act, 2008.

Analysis:
The judgment pertains to an appeal challenging an order passed by the Appellate Tribunal, Value Added Tax, Delhi, requiring the appellant to deposit 15% of the total demand of tax, interest, and penalty as a pre-condition for hearing the appeals on merit. The primary issue framed was whether the Tribunal was justified in directing such a pre-deposit under Section 76(4) of the Act.

The appellant, a retail outlet for men and women wear, leather goods, and accessories, had initially declared a total turnover for a specific quarter of the assessment year 2008-09. Subsequently, realizing an error in not including the entire input tax credit, a revised return was filed to enhance the tax credit carried forward. Despite an audit under the Act resulting in a net tax assessment in minus figure, the Assessing Officer imposed tax, interest, and penalty based on the figures from the revised return, rejecting the revised return as void while upholding the original return figures.

The order of the Assessing Officer was affirmed by the Special Commissioner-I, leading to the appellant filing an appeal before the Tribunal, which then passed the impugned order concerning the pre-deposit requirement. However, the High Court found that there was no demand based on the original return figures, as the revised return had been rejected. Given this factual position, the Court held that the appellant should not be obligated to make a pre-deposit before the hearing of the appeals, ruling in favor of the appellant and against the revenue on the substantial question of law framed.

The judgment clarified that if the appellant had utilized the carried forward tax credit in the subsequent year based on the revised return, the Assessing Officer could take appropriate action in accordance with the law. It was further emphasized that the opinion expressed in the judgment was specifically for the disposal of the present appeal and would not bind the Tribunal when the appeals are heard on merits. Ultimately, the appeal was disposed of with no costs awarded.