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2008 (3) TMI 11 - HC - Service TaxDelhi Sales Tax - DST - illegal withholding of refund - illegal rectification / revisions proceedings. Reassessment proceedings initiated without intimating original order. Overreach the process of constitutional court - department to bear the cost of ₹ 26,18,000/- in favor of petitioner
Issues Involved:
1. Validity of the order dated 19th April 2007 issued by the Commissioner, Value Added Tax. 2. Validity of the order dated 19th April 2007 delegating revisionary powers to the Deputy Commissioner (Special Zone). 3. Validity of the notice dated 18th July 2007 issued by the Deputy Commissioner (Special Zone). Detailed Analysis: Issue 1: Validity of the Order Dated 19th April 2007 Issued by the Commissioner, Value Added Tax The order dated 19th April 2007 transferred the jurisdiction concerning the assessment of the Petitioner from the Assistant Commissioner Zone-I to the Deputy Commissioner, Special Zone for the assessment year 2000-2001 onwards under the Delhi Sales Tax on Works Contract Act, 1999 and the Central Sales Tax Act, 1956. This order was challenged on the grounds that the DVAT Act, which came into force on 1st April 2005, did not confer any power of revision on the Commissioner until 16th November 2005, when Section 74A was inserted. The Court noted that the power of revision conferred under the DST Act was omitted under the DVAT Act and was only reinstated later. The Court concluded that the power to revise the assessment order dated 31st March 2003 could not be exercised after the repeal of the DST Act and the Works Contract Act. Issue 2: Validity of the Order Dated 19th April 2007 Delegating Revisionary Powers to the Deputy Commissioner (Special Zone) The second order dated 19th April 2007 delegated the revisionary powers under Section 46 of the DST Act to the Deputy Commissioner (Special Zone). The Court found that no revisionary proceedings were initiated before the repeal of the DST Act and the Works Contract Act on 31st March 2005. The Court held that the revisionary power was not saved by the DVAT Act and thus, the delegation of such powers after the repeal was invalid. The Court emphasized that the power of revision is an enabling power and not a substantive right, and therefore, it was not saved by Section 106(2) of the DVAT Act. Issue 3: Validity of the Notice Dated 18th July 2007 Issued by the Deputy Commissioner (Special Zone) The notice dated 18th July 2007 sought to exercise the revisionary jurisdiction under the repealed statutes. The Court noted that the DVAT Act did not provide for any revisionary power until the insertion of Section 74A on 16th November 2005. Since no revisionary proceedings were initiated before the repeal of the DST Act and the Works Contract Act, the notice dated 18th July 2007 was deemed invalid. The Court highlighted that the previous operation of the repealed statutes was saved only for transactions past and closed, and the revisionary power did not survive the repeal. Conclusion: The Court quashed both the orders dated 19th April 2007 and the notice dated 18th July 2007, holding that the revisionary powers were not validly exercised or delegated after the repeal of the DST Act and the Works Contract Act. The Court awarded costs of Rs. 26,18,000/- to the Petitioner, to be deposited by the Revenue within four weeks.
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