2011 (9) TMI 585 - HC - VAT and Sales Tax

Whether the Commissioner under the DVAT Act can exercise suo motu power of revision under Section 74A of the DVAT Act in respect of assessments that have been completed under the Delhi Sales Tax Act, 1975 - Time limitation - It is put forth that if Section 74A is read in conjunction with Section 106 of the DVAT Act, it is clear as day that the power of suo motu revision does not rest any more with the first respondent and, therefore, recourse to the same could not have been taken for initiating a suo motu revision - if the time to exercise the revisionary power had not expired before coming into force of the DVAT Act, the said power could be exercised in respect of an order under the DST Act in terms of Section 74A of the DVAT Act read with Section 106 of that Act - Section 106(3) of the DVAT Act clearly lays a postulate that an order passed under Section 46 of the DST Act and the process of assessment leading to it is deemed to have been done in exercise of the power conferred under the DVAT Act - If the order of assessment could not have been revised under the DST Act as on 1.4.2005, the power of revision conferred under the DVAT Act cannot be exercised if the time span has expired - The writ petitions be listed before the appropriate Division Bench

Issues Involved:
1. Whether the Commissioner under the Delhi Value Added Tax Act, 2004 (DVAT Act) can exercise suo motu power of revision under Section 74A of the DVAT Act in respect of assessments completed under the Delhi Sales Tax Act, 1975 (DST Act).

Issue-wise Detailed Analysis:

1. Suo Motu Power of Revision under Section 74A of the DVAT Act for Assessments under the DST Act:
The central issue in this case is whether the Commissioner under the DVAT Act can exercise suo motu power of revision under Section 74A for assessments completed under the DST Act. The petitioners argued that, based on the decisions in *International Metro Civil Contractors v. Commissioner of Sales Tax/VAT and Another* and *LG Electronics (India) Ltd. v. Commissioner of Trade and Taxes, New Delhi*, and the terms of Section 106 of the DVAT Act, such power could not be exercised. The Department contended that an amendment effective from 1.4.2005 kept the suo motu power of revision alive, thus legitimizing the revisional proceedings.

2. Legislative Intent and Retrospective Effect:
The court examined the legislative intent behind the amendment, which retrospectively made Section 74A operational from 1.4.2005. The court noted that the legislature clearly intended to confer the power of suo motu revision on the Commissioner for orders passed under the DST Act.

3. Interpretation of Section 106 of the DVAT Act:
The court scrutinized Section 106, which deals with repeal and savings, and concluded that it does not preclude the exercise of revisional power. Section 106(2) saves the "previous operation" of the DST Act and any "right, title, entitlement, obligation or liability" acquired under it. Section 106(3) deems actions taken under the DST Act as if done under the DVAT Act, thereby supporting the continuation of revisional powers.

4. Impact of the Amendment Act, 2009:
The Amendment Act, 2009, which inserted sub-section (5) into Section 74A, made it effective from 1.4.2005. This amendment clarified the legislative intent to keep the revisional power alive from the commencement of the DVAT Act.

5. Analysis of Previous Judgments:
The court analyzed the judgments in *International Metro Civil Contractors* and *LG Electronics (India) Ltd.*, concluding that they were incorrectly decided. The court held that the power of revision under Section 74A of the DVAT Act applies to orders passed under the DST Act, provided the period of limitation has not expired.

6. Legal Principles on Repeal and Savings:
The court referred to various legal principles and precedents, emphasizing that the repeal of a statute does not extinguish liabilities incurred under it unless explicitly stated. The court highlighted that the liability to tax arises from the charging section and is quantified by assessment, which can be subject to revision within the statutory period.

7. Finality of Assessment Orders:
The court clarified that an assessment order does not attain finality if it is subject to revision within the statutory period. The liability incurred under the DST Act continues to be enforceable under the DVAT Act, as per the savings clause.

8. Applicability of General Clauses Act:
The court noted that the General Clauses Act applies unless the new legislation indicates a contrary intention. In this case, the DVAT Act did not manifest an intention to destroy the old liabilities, thus preserving the revisional powers.

Conclusion:
The court concluded that the Commissioner under the DVAT Act can exercise suo motu power of revision under Section 74A for assessments completed under the DST Act. The amendment making Section 74A retrospective from 1.4.2005 was intended to clarify this power. The court overruled the decisions in *International Metro Civil Contractors* and *LG Electronics (India) Ltd.* to the extent they conflicted with this interpretation. The writ petitions were directed to be listed before the appropriate Division Bench for further proceedings.

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