2016 (11) TMI 1618 - HC - VAT and Sales Tax

Validity of SCN - Refund of the amount deposited together with interest - Section 32 of the DVAT Act 2004 - HELD THAT - The notices in question even if they were served upon the assessee do not conform the Rule that was issued much later in the year 2012. What is more disturbing to this Court however is that all seven notices produced and relied upon by the Revenue demand zero from the assessee and assessed turnover at zero . It is not only to the utter dismay of the Court but is entirely un-comprehensible and goes completely untenable. The respondents are directed to process the petitioner s application and pass appropriate orders within a week. Any amount deposited by the petitioner shall be refunded after adjusting tax due together with interest payable in accordance with law within a period of two weeks.

Summary

Issues: Refund of deposited amount with interest under DVAT Act, validity of default assessment notices, compliance with statutory timelines, quashing of erroneous orders, direction for processing application and refund.

In the judgment, the petitioner sought a refund of the amount deposited along with interest. The respondent VAT Department had issued notices of default assessment of tax and interest under Section 32 of the Delhi Value Added Tax Act, 2004 (DVAT Act) for two quarters in 2011. However, these notices remained unserved, leading to the rejection of the refund claims. The Court considered the submissions and referred to the ruling in Prime Papers & Packers v. Commissioner of VAT & Anr., emphasizing that notices under Section 59 of the DVAT Act must be issued within the statutory two-month timeframe. The Court found that the notices in question did not conform to this rule as they were issued much later in 2012. Furthermore, the Court expressed concern over the fact that all seven notices demanded "zero" from the assessee and assessed turnover at "zero," deeming it incomprehensible and untenable.

The Court proceeded to quash the so-called orders produced by the Revenue and directed the respondents to process the petitioner's application promptly, issuing appropriate orders within a week. It was further ordered that any amount deposited by the petitioner should be refunded after adjusting the tax due, along with interest payable in accordance with the law, within a period of two weeks. This comprehensive judgment addressed the issues of refund under the DVAT Act, the validity of default assessment notices, compliance with statutory timelines, quashing erroneous orders, and provided clear directions for the processing of the application and refund within specified timelines.