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2016 (2) TMI 655 - HC - VAT and Sales TaxWhether a single Member of the Appellate Tribunal, Value Added Tax (AT) can legitimately function as the AT in terms of Section 73(1) of the Delhi Value Added Tax Act, 2004 - Held that - the single Member (Judicial) could validly function as the AT between 1st August 2013 and 20th July 2014. Further, even assuming that during the aforementioned period he lacked jurisdiction, the de facto doctrine would apply and the decisions taken by him during the said period shall not be invalidated.
Issues Involved:
1. Jurisdiction of a single Member of the Appellate Tribunal, Value Added Tax (AT) under Section 73(1) of the Delhi Value Added Tax Act, 2004 (DVAT Act). 2. Validity of orders passed by a single Member of the AT. 3. Application of the de facto doctrine to validate decisions taken by a single Member of the AT. Detailed Analysis: 1. Jurisdiction of a single Member of the Appellate Tribunal: The primary issue was whether a single Member of the AT could legitimately function as the AT under Section 73(1) of the DVAT Act. Section 73(1) allows the government to constitute an AT with one or more members. The proviso specifies that if the AT consists of one member, that member must have certain qualifications. The GNCTD had initially constituted a two-member AT, but due to removals, only Mr. D.C. Anand remained. The court examined whether Mr. Anand could continue to function as the AT in the absence of other members. 2. Validity of orders passed by a single Member of the AT: The Assessees argued that any order passed by a single Member of the AT was null and void due to the lack of a quorum. They contended that the absence of a specific provision in the DVAT Act allowing the AT to function with a vacancy invalidated the orders. The court referred to the legislative intent of Section 73(4) of the DVAT Act, which emphasizes the continuity of the AT's functioning despite vacancies. The court also cited the decision in Kwality Restaurant & Ice Cream Co. v. Commissioner, VAT, which supported the view that the AT could continue functioning with the remaining members. 3. Application of the de facto doctrine: The court considered the de facto doctrine, which validates the acts of a person acting under the color of lawful authority, even if their appointment is later found to be defective. The court referenced Gokaraju Rangaraju v. State of AP, which explains that judgments pronounced by a de facto judge have the same efficacy as those by a de jure judge. The court concluded that even if Mr. Anand lacked jurisdiction, the de facto doctrine would apply, and his decisions would remain valid. Conclusion: The court held that Mr. Anand could validly function as the AT between 1st August 2013 and 20th July 2014. Even if he lacked jurisdiction, the de facto doctrine would apply, validating his decisions. Consequently, the writ petitions challenging his jurisdiction were dismissed, and the Assessees were directed to file statutory appeals to challenge the orders on merits. The court also set a date to consider the constitutional validity of Section 5 of the DVAT Act in a separate writ petition. Separate Judgments: - The writ petitions challenging the jurisdiction of a single Member of the AT were dismissed. - The court set a date to hear the constitutional validity of Section 5 of the DVAT Act. - The Sales Tax Appeals were directed to be listed on separate dates for further consideration.
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