2016 (8) TMI 427 - HC - VAT and Sales Tax

Delhi VAT - imposition of penalty by OHA - business of marketing of petroleum products - merger with Indian Oil Corporation Ltd. - definition of the sale price in terms of the proviso to Section 2(1)(zd) of the DVAT Act. - assessment of tax, interest and penalty - Held that - penalty levied by the VATO under Section 86(10) of the DVAT Act affirmed by the OHA by the order dated 20th June 2013 is affirmed. The AT will now consider the said issue afresh particularly in light of the AT s earlier order dated 1st December 2011 which dealt with a similar issue for the month of November 2006. The AT will pass a fresh order within a period of eight weeks from the date of receipt of a certified copy of this order - appeal disposed off.

Summary

Issues:
Challenge to order upholding penalty under Section 86(10) of DVAT Act based on changed definition of 'sale price'; Failure to consider earlier order dated 1st December 2011 by Appellate Tribunal (AT).

Analysis:
The judgment concerns an appeal by an Assessee, a registered dealer under the DVAT Act, challenging an order passed by the Appellate Tribunal, Value Added Tax, Delhi (AT) upholding the imposition of penalty by the Objection Hearing Authority (OHA) under Section 86(10) of the DVAT Act. The Assessee, engaged in marketing petroleum products, faced a controversy regarding the changed definition of 'sale price' under the DVAT Act. The assessing authority disputed the applicability of the proviso to Section 2(1)(zd) of the DVAT Act from November 30, 2006, onwards, leading to default assessment of tax, interest, and penalty.

The Assessee contended that the AT failed to consider its earlier order from December 1, 2011, where a similar penalty imposition issue had been addressed and set aside. Despite the acknowledgment of this submission in the impugned order, the AT did not discuss the earlier order in detail. The Assessee argued that the AT's previous order had considered the bona fides of the Assessee in claiming deductions based on their understanding of the proviso to Section 2(1)(zd) of the DVAT Act, leading to the penalty being waived.

The High Court found merit in the Assessee's argument that the AT needed to revisit the penalty imposition issue in light of its earlier order from December 1, 2011. Consequently, the Court set aside the portion of the impugned order affirming the penalty and directed the AT to reconsider the issue within eight weeks from the date of the Court's order. The appeal was disposed of accordingly, emphasizing the need for a fresh assessment by the AT considering the earlier order's findings on the penalty issue for November 2006.