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2016 (4) TMI 367 - HC - VAT and Sales TaxInvokation of powers under Section 60(2)(f) - in continuation of invocation of power under Section 59 of the Act to search the premises for information and documents - Sealing of the premises of petitioner - Avoidance or evasion of tax demand - Sufficient opportunity not afforded to petitioner to explain why the premises should not be sealed - Held that - the respondents are directed to de-sealed forthwith the business premises of the Petitioner in the presence of the authorized representative of the Petitioner. The documents/records seized at the time of the sealing will be returned to the Petitioner. The proceedings drawn up for the de-sealing will be signed by both the VATO concerned and the authorized representative of the Petitioner. - Petition disposed of
Issues involved:
1. Invocation of powers under Section 60 of the Delhi Value Added Tax Act, 2004 for sealing business premises. 2. Compliance with jurisdictional requirements for invoking power under Section 60(2)(f) of the Act. 3. Adequacy of opportunity provided to the Petitioner before sealing the premises. 4. Directive for de-sealing the business premises and return of seized documents. 5. Direction for the Petitioner to produce records before the concerned officer. Issue 1: Invocation of powers under Section 60 of the Delhi Value Added Tax Act, 2004 for sealing business premises: The Assistant Commissioner, Department of Trade and Taxes, sealed the business premises of the Petitioner after a visit by the Enforcement Team. The Petitioner failed to produce documents within the stipulated time, leading to the sealing of the premises. Issue 2: Compliance with jurisdictional requirements for invoking power under Section 60(2)(f) of the Act: Section 60 of the Act requires the Commissioner to have reasonable grounds to believe that a person is attempting to avoid tax. The Court noted that the satisfaction of the Commissioner must be based on materials available on record and not be mechanically exercised. In this case, the notice of sealing did not meet the statutory requirement under Section 60(2)(f) of the Act. Issue 3: Adequacy of opportunity provided to the Petitioner before sealing the premises: The Court found that the decision to seal the premises was taken hastily without affording the Petitioner sufficient opportunity to explain why the premises should not be sealed. The Petitioner was not given a chance to clarify discrepancies between data and books of accounts, leading to an unjust presumption of tax evasion. Issue 4: Directive for de-sealing the business premises and return of seized documents: The Court directed the immediate de-sealing of the Petitioner's business premises and the return of seized documents by a specified date. The de-sealing process was to be conducted in the presence of the Petitioner's authorized representative and the VATO concerned. Issue 5: Direction for the Petitioner to produce records before the concerned officer: The Petitioner was directed to appear before the concerned officer on a specified date to produce the required accounts and books. The Petitioner expressed readiness to comply with the directive and provide the necessary information. In conclusion, the Court found the sealing of the business premises unjustified due to procedural lapses and lack of adequate opportunity for the Petitioner to address the concerns raised. The judgment emphasized the importance of complying with statutory requirements and providing fair opportunities for parties involved in tax-related matters.
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