2015 (12) TMI 1087 - HC - VAT and Sales Tax

Delegation of the Commissioner s powers u/s 68 of DVAT - validity of order passed u/s 36A - Held that - An order under Section 36A(8) has to be passed by the Commissioner in writing. Section 66(3) specifically provides that the Commissioner and the Value Added Tax Authorities shall exercise such powers, as may be conferred upon them, and perform such duties, as may be required by or under this Act. In other words, it is only the Commissioner who can pass an order under Section 36A(8) unless and until the power of the Commissioner has been delegated under Section 68 of the said Act to the VATO. - it is evident that an order under Section 36A(8) has to be passed by the Commissioner in writing. Section 66(3) specifically provides that the Commissioner and the Value Added Tax Authorities shall exercise such powers, as may be conferred upon them, and perform such duties, as may be required by or under this Act. In other words, it is only the Commissioner who can pass an order under Section 36A(8) unless and until the power of the Commissioner has been delegated under Section 68 of the said Act to the VATO. - We could have understood if this power of the Commissioner had been delegated by the Commissioner in terms of Section 68 of the said Act to the VATO. But that has, admittedly, not been done. As such, the impugned order dated 07.08.2013 is liable to be quashed as the VATO did not have the jurisdiction to pass such an order. The impugned order is quashed. - Decided in favour of assessee.

Summary

Issues:
Challenge to the jurisdiction of Value Added Tax Officer (VATO) to pass an order under Section 36A(8) of the Delhi Value Added Tax Act, 2004 without specific delegation of powers by the Commissioner.

Analysis:
The petitioner sought a writ of certiorari to quash an order by the VATO for the assessment years 2008-09 and 2009-2010, arguing that only the Commissioner, not the VATO, could pass an order under Section 36A(8) of the Act. The petitioner contended that without delegation of powers under Section 68 of the Act, the VATO lacked jurisdiction to issue the order. On the other hand, the respondents argued that the Commissioner had "authorized" the VATO to pass such orders, justifying the validity of the VATO's order.

The Court examined Section 36A(8) which mandates the Commissioner to pass orders in writing, emphasizing that the Commissioner and VAT Authorities can exercise powers conferred upon them under the Act. The Court highlighted Section 68, which allows the Commissioner to delegate powers to VAT authorities, subject to prescribed restrictions. It was noted that the Commissioner must delegate powers explicitly for the VATO to issue orders under Section 36A(8).

The Court reviewed an order dated 31.10.2005 demonstrating instances of delegated powers under different sections of the Act but found no delegation concerning Section 36A. Despite the respondents' argument that the VATO acted under the "authority" of the Commissioner, the Court held that such authority must be explicitly delegated under Section 68. As no specific delegation existed for Section 36A(8), the Court quashed the impugned order dated 07.08.2013, declaring it void due to the VATO's lack of jurisdiction. The writ petition was allowed, with parties bearing their respective costs.