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2019 (2) TMI 1629 - HC - VAT and Sales TaxDemand u/s 37 of DVAT Act - demand amounts were sought for the two period in 2007- 08 in the 3rd quarter and for the month of July, 2007 without any underlying assessment order - HELD THAT - This Court is of the opinion that given the declaration of law in Shaila Enterprises and the phraseology of Section 34(2), the demand in this case is unenforceable, illegal and is consequentially quashed - Petition allowed.
Issues:
1. Validity of demand by Delhi VAT Authorities without underlying assessment order. Analysis: The petitioner challenged the demand made by the Delhi VAT Authorities for two periods in 2007-08 without any underlying assessment order. The Objection Hearing Authority remitted the matter for fresh consideration in 2013, but the assessment was not completed within the mandated one-year period. The impugned demand was issued in 2018 under Section 37. The petitioner relied on a Division Bench ruling in Shaila Enterprises case, which held that the limitation under Section 34 cannot be circumvented for recovery of alleged tax made after the void period. The Supreme Court affirmed this ruling in 2017. 2. Interpretation of Section 34(2) of the DVAT Act. The Court considered the interpretation of Section 34(2) of the DVAT Act in light of the Shaila Enterprises case. The petitioner argued that the demand in this case was unenforceable and illegal due to the limitations set out in Section 34(2). The Court agreed with this argument, stating that the demand was unenforceable, illegal, and consequently quashed it. The judgment in Shaila Enterprises case was deemed to be the declaration of law on this matter, leading to the allowance of the writ petition. In conclusion, the High Court of Delhi held that the demand made by the Delhi VAT Authorities without an underlying assessment order and beyond the statutory limitation period was unenforceable and illegal. The Court relied on the interpretation of Section 34(2) of the DVAT Act as per the Shaila Enterprises case, ultimately allowing the writ petition and quashing the impugned demand.
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