2016 (9) TMI 873 - HC - VAT and Sales Tax

Releasing the refund - Delhi Value Added Tax Act, 2004 - petitioner association, association of Tax Legal Practitioners - non-compliance with statutory provisions - individual claim - public interest litigation - Right to Information Act, 2005 - Held that - the cause, which apparently involves public interest, is sought to be espoused by a registered association of legal practitioners dealing with the issue in controversy on behalf of the dealers, it is believed that the interest of justice would be met if the Commissioner of VAT, New Delhi is directed to look into the issue and take the necessary steps for rectification of the lapses, if any, in implementation of the statutory provisions. Direction to the Commissioner of VAT, New Delhi to consider the issues raised in this writ petition by treating the same as a representation. The Petitioner association is at liberty to make a representation before the Commissioner of VAT, New Delhi within two weeks furnishing a list of specific instances where the refund is withheld - petition disposed off - decided in favor of petitioner.

Summary

Issues:
1. Petition seeking release of VAT refunds and interest.
2. Contention on legality of withholding refunds.
3. Compliance with statutory provisions of DVAT Act.
4. Public interest litigation and redressal of grievances.
5. Refunds due for tax period and information annexed.
6. Dismissal of petition based on previous order.
7. Direction to Commissioner of VAT for rectification.
8. Petitioner's representation and necessary steps by Respondent.

Analysis:

The petition filed by the "Taxation Bar Association" sought the release of VAT refunds claimed by registered dealers under the DVAT Act, along with interest and exemplary damages for delays. The High Court considered the previous dismissal of a similar PIL and emphasized that individual refund claims should be pursued by aggrieved parties, not in public interest litigation. However, the Petitioner association argued that the withholding of refunds by the Respondents was illegal and violated established law. They highlighted the mandatory refund timeline under Sections 38, 39, and 42 of the DVAT Act, citing a previous case as precedent. The association also alleged that interest on delayed refunds had not been paid, forcing dealers to seek legal remedies for recovery.

To support their claim that refunds were due for the tax period from 01.04.2011 to 31.03.2015, the association annexed information obtained under the Right to Information Act. The Respondents contended that the petition should be dismissed based on a prior order, but the Court decided that justice required the Commissioner of VAT to address the issues raised. The Court directed the Commissioner to treat the petition as a representation and investigate the alleged refund withholdings. The Petitioner association was given two weeks to provide specific instances of withheld refunds, after which the Commissioner was to issue an appropriate order within eight weeks and inform the association accordingly.

In conclusion, the Court disposed of the writ petition with a directive to the Commissioner of VAT to examine the issues raised and take corrective action as necessary. The Petitioner association was granted the opportunity to present their grievances, leading to a resolution within the specified timeline.