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2012 (5) TMI 378 - HC - VAT and Sales TaxRejection of refund claim under DVAT by invoking revision powers - period of limitations - Power of revision of cases under DVAT Act after repeal of Delhi Sales Tax Act - section 74A - prospective or retrospective - held that - no revisional proceeding had been initiated under the Delhi Sales Tax Act, 1975 on the date (01.04.2005) on which the DVAT Act was brought into operation. However, since the Full Bench had indicated that proceedings could be initiated under section 74A of the DVAT Act, all that has to be seen is as to whether the said proceedings have been initiated during the period of limitation as stipulated under section 74A of the DVAT Act or not. Section 74A(2)(b) of the DVAT Act and not Section 46 of the Delhi Sales Tax Act, 1975 would apply. In fact, the impugned show cause notice dated 02.02.2010 could not have been issued under Section 46 of the Delhi Sales Tax Act, 1975. However, even if it is assumed that the impugned show cause notice was issued in exercise of the powers of revision under Section 74A of the DVAT Act, the period of limitation would be that which was in vogue when the said notice was issued. The period of limitation that would apply would, therefore, be the one prescribed under Section 74A(2)(b) of the DVAT Act. And, that being the case, as we have mentioned above, the impugned show cause notice dated 02.02.2010 is barred by time. - Decided in favor of assessee.
Issues Involved:
1. Validity of the show cause notice dated 02.02.2010 2. Limitation period for revisional proceedings under Section 74A of the DVAT Act 3. Applicability of Section 46 of the Delhi Sales Tax Act, 1975 post-repeal Detailed Analysis: 1. Validity of the show cause notice dated 02.02.2010: The petitioner challenged the show cause notice dated 02.02.2010 on the ground that it was barred by time. The notice pertained to the assessment year 2003-2004 and sought to revise the assessment order dated 24.02.2005 under Section 16 of the Delhi Sales Tax on Works Contract Act, 1999 read with Section 46 of the Delhi Sales Tax Act, 1975. The court found that the show cause notice was issued beyond the permissible period of four years from the end of the year in which the assessment order was served, making it time-barred. 2. Limitation period for revisional proceedings under Section 74A of the DVAT Act: The assessment order for the year 2003-2004 was passed on 24.02.2005 and served on or before 02.03.2005. According to Section 74A(2)(b) of the DVAT Act, no order under this section shall be passed after the expiry of four years from the end of the year in which the order passed by the subordinate officer has been served on the dealer. Therefore, the revisional order under Section 74A could only be passed up to 31.03.2009. Since the show cause notice was issued on 02.02.2010, it was beyond the four-year period, rendering it invalid. 3. Applicability of Section 46 of the Delhi Sales Tax Act, 1975 post-repeal: The court examined whether the provisions of Section 46 of the Delhi Sales Tax Act, 1975, which allowed for a five-year limitation period for revisional orders, could be applied post-repeal. It was determined that once the DVAT Act came into force on 01.04.2005, the power of revision under Section 46 of the Delhi Sales Tax Act, 1975 was replaced by Section 74A of the DVAT Act. The Full Bench of the court had previously held that proceedings initiated under the Delhi Sales Tax Act, 1975 were saved by the DVAT Act, but any new proceedings under Section 74A had to adhere to the limitation period stipulated in Section 74A itself. Therefore, the five-year limitation period under Section 46 was not applicable after the repeal of the Delhi Sales Tax Act, 1975. Conclusion: The court concluded that the impugned show cause notice dated 02.02.2010 was barred by limitation as it was issued beyond the permissible period under Section 74A(2)(b) of the DVAT Act. Consequently, the show cause notice was quashed, and the writ petition was allowed. The parties were left to bear their own costs.
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