2017 (5) TMI 1064 - HC - VAT and Sales Tax

Refund claim - demand order has been passed in 2017, more than five years after the filing of the return - time limitation - Held that - The Court hereby sets aside the notices of default assessment of tax and interest dated 11th January 2017 and 24th January 2017 under Section 32 of DVAT Act for the second, third and fourth quarters of 2012 respectively - petition allowed - decided in favor of petitioner.

Summary

Issues Involved:
Challenge to the validity of Section 9(2)(g) of the Delhi Value Added Tax, 2004 (DVAT Act) | Denial of refund by the Respondent DVAT Department | Abuse of process of law by the VATO | Quashing of default assessment notices by the Court | Direction for refund amount and interest payment | Compliance and further remedies available to the Petitioner.

Analysis:

1. Challenge to the validity of Section 9(2)(g) of the DVAT Act:
The judgment notes that the challenge to the validity of Section 9(2)(g) of the DVAT Act is already under consideration before the Court in a batch of matters. The Court decides not to add another petition to the existing batch, indicating that the issue is being actively addressed through a consolidated approach.

2. Denial of refund by the Respondent DVAT Department:
The Petitioner's grievance pertains to the denial of refund by the Respondent DVAT Department. Despite previous legal precedents emphasizing that the pendency of a refund claim should not be used as an opportunity to issue a fresh demand, the VATO in this case has issued notices of default assessment of tax and interest, which exceed the refund amount. The Court deems this action as an abuse of the legal process.

3. Abuse of process of law by the VATO:
The Court highlights a similar instance where a demand created long after the filing of a refund claim was quashed in a previous case. By setting aside the notices of default assessment issued by the Respondent DVAT Department, the Court reaffirms its stance against the abuse of the legal process to create unwarranted demands, especially when they significantly exceed the refund amount.

4. Quashing of default assessment notices by the Court:
In line with its previous judgments and to rectify the abuse of process, the Court sets aside the notices of default assessment of tax and interest dated January 11, 2017, and January 24, 2017, under Section 32 of the DVAT Act for specific quarters. This decision aims to correct the unjust actions taken by the Respondent DVAT Department against the Petitioner.

5. Direction for refund amount and interest payment:
The Court directs that the refund amount along with interest be credited directly to the Petitioner's account within two weeks after the passing of the refund order. This directive ensures that the Petitioner receives the rightful refund promptly, addressing the unjust denial and subsequent demands made by the Respondent DVAT Department.

6. Compliance and further remedies available to the Petitioner:
The judgment concludes by disposing of the petition in the terms mentioned, providing a clear timeline for the refund payment and outlining the recourse available to the Petitioner in case of non-compliance by the Respondent DVAT Department. This ensures that the Petitioner's rights are protected and that appropriate legal remedies can be sought if necessary.