9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (8) TMI 426 - HC - VAT and Sales TaxRefund input tax credit - adjustment of refund with outstanding demand - there was no outstanding demand that had been determined for the aforementioned period for which the refund was claimed - In terms of Section 38 (4) of the DVAT Act, it was open to the Commissioner, if he sought to make inquiries while processing the refund, to go in for an audit of the business affairs of the Petitioner under Section 58 of the DVAT Act or seek additional information under Section 59 of the DVAT Act. In the present case, none of these steps were taken by the Respondent/Department of Trade & Taxes ( DT&T ). Held that - This Court has in a series of judgments emphasised the mandatory nature of the time limits under Section 38 of the DVAT Act for processing of the refunds. - Due to the careless action of the VATO in the present matter, who issued the issued the adjustment order dated 30th December 2010 unmindful of the law, an interest burden of nearly ₹ 56 lakhs is now placed on the exchequer. A question then arises as to who should be made responsible for this and whether any action on the disciplinary side is not called for? Consequently, the Commissioner, VAT is directed to seek an explanation from the VATO who issued the above adjustment order and to pass appropriate orders on the disciplinary side as he deems fit not later than four weeks from today. A copy of this order be delivered forthwith to the Commissioner, VAT by the Registry through a Special Messenger for compliance with the above direction. decided in favor of petitioner.
Issues Involved:
1. Refund claim under the Delhi Value Added Tax Act, 2004 (DVAT Act) 2. Adjustment Order and its validity 3. Default assessment notices and subsequent objections 4. Legal obligations of the Assessing Officer (AO) and Objection Hearing Authority (OHA) 5. Interest on delayed refund 6. Disciplinary action against the Value Added Tax Officer (VATO) Detailed Analysis: 1. Refund Claim Under the DVAT Act: The Petitioner, a Hindu Undivided Family engaged in trading cement, filed a return for January 2008 claiming a refund of ?1,02,08,179. The refund was due by 27th March 2008. No audit or additional information was sought by the Department of Trade & Taxes (DT&T), and thus interest on the refund began accruing from 27th March 2008. 2. Adjustment Order and Its Validity: An "Adjustment Order" dated 30th December 2010 by the VATO denied the refund, citing adjustment against an outstanding demand, but failed to specify the reasons or details of the demand. The Court found this order nonsensical and lacking crucial information, noting that no outstanding demand existed at that time. 3. Default Assessment Notices and Subsequent Objections: Following the adjustment order, default assessment notices for tax, interest, and penalties were issued for various months in 2007-08. The Petitioner filed objections under Section 74 of the DVAT Act. The OHA on 25th June 2013 directed the AO to provide the Petitioner another opportunity to present relevant documents and to pass a fresh, reasoned order. 4. Legal Obligations of the AO and OHA: Despite the OHA's order, the AO did not pass a fresh order. The Court emphasized that the AO was legally bound to pass an assessment order afresh, even if the Petitioner did not appear as directed. The AO's failure to do so rendered the earlier default assessment notices void. 5. Interest on Delayed Refund: The Court highlighted the mandatory nature of time limits for processing refunds under Section 38 of the DVAT Act. Since no fresh assessment order was passed within the stipulated time, the refund along with interest became due to the Petitioner. The Court cited several precedents reinforcing this interpretation. 6. Disciplinary Action Against the VATO: The Court criticized the VATO for issuing the flawed adjustment order, resulting in an interest burden of nearly ?56 lakhs on the exchequer. The Commissioner, VAT, was directed to seek an explanation from the VATO and take appropriate disciplinary action within four weeks. Conclusion: The Court directed the DT&T to pay the refund amount with interest by 5th September 2016 and imposed costs of ?10,000 on the Respondent, payable to the Sales Tax Bar Association. The Court also stressed the need for regular training and orientation for VAT officers to prevent such issues in the future.
|
