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2019 (8) TMI 1249 - HC - VAT and Sales TaxJurisdiction - issuance of notice of Default assessment of tax, Interest and penalty - Sections 32 and 33 of the DVAT Act - According to the Petitioner, the said assessments were issued by the VATO (Audit) without having jurisdiction and authority in DVAT-50 as per Section 68 of the DVAT Act read with Rule 65 of the DVAT Rules - whether the objections filed by the Petitioner before the OHA were still pending? HELD THAT - The Petitioner did supply the self-attested copies of Form DVAT-38 by a letter dated 14th May, 2018. The date stamp of 14th May, 2018 of the VATO, Ward-41 on the covering letter written by the Petitioner is annexed as Annexure-P13 to the petition. These documents have not been denied by the Respondents, even in the affidavit dated 21st August, 2019. The whole object behind Section 74 (8) read with Section 74 (9) would stand defeated by requiring a dealer to repeatedly file attested copies of the DVAT-38 long after the deadline within which such objections are required to be decided, have been crossed. The Respondents have been unable to deny by producing any document the fact that the DVAT-38 was initially filed on 22nd July, 2011 i.e. more than 8 years ago and that the DVAT-41 was served on 18th December, 2017. They have also not been able to deny that the self-attested copies of the objections in Form DVAT-38 were submitted on 14th May, 2018. On 14th June 2018, the Petitioner again served notices under DVAT-41. Despite all of the above, the Respondents have chosen not to act on the repeated requests of the Petitioner. The resultant position is that the three months period specified under Section 74 (8) of the DVAT Act not having been complied with, and the Commission not having notified the Petitioner of its decision within 15 days of service upon him of the notice in Form DVAT-41 in terms of Section 74 (8) of the DVAT Act, the consequence spelt out in Section 74 (9) ensues, viz., that the objections filed by the Petitioner before the OHA shall be deemed to have been allowed . The objections of the Petitioner are declared as deemed to have been allowed under Section 74 (8) read with Section 74 (9) of the DVAT Act. Consequently, while setting aside the default notices of tax, interest and penalty, all dated 19th May 2011, issued by the VATO, Ward-41, this Court directs the Respondents to issue refund to the Petitioner in the sum of ₹ 1,34,35,473/- for the aforementioned periods i.e. May to December 2010, January to March 2011, March 2012, July 2012 and November 2012, within a period of four weeks from today by issuing appropriate orders in that regard - refund amount together with interest to be credited to the account of the Petitioner positively on or before 30th September, 2019 failing which the Respondents will additionally pay the Petitioner compensation of ₹ 50,000/-. Petition disposed off.
Issues Involved:
1. Jurisdiction and authority of the Value Added Tax Officer (VATO) in issuing default assessments. 2. Validity of the objections filed by the Petitioner before the Objection Hearing Authority (OHA). 3. Refund claims and the associated interest under the Delhi Value Added Tax Act, 2004 (DVAT Act). 4. Application of Section 9(2)(g) of the DVAT Act. 5. Timeliness and procedural compliance by the Respondents. Detailed Analysis: Jurisdiction and Authority of VATO: The Petitioner contested the jurisdiction and authority of the VATO (Audit) to issue default assessments under Sections 32 and 33 of the DVAT Act. The Petitioner argued that these assessments lacked jurisdiction as per Section 68 of the DVAT Act read with Rule 65 of the DVAT Rules. The Court noted that the VATO (Audit) had denied the Input Tax Credit (ITC) claims based on doubts about the dealers' tax payments, implicitly invoking Section 9(2)(g) of the DVAT Act. Validity of Objections Filed: The Petitioner filed objections under Section 74 of the DVAT Act against the assessments. The Court observed that the objections were filed on 22nd July 2011, with acknowledgment receipts provided. Despite multiple notices and personal service of notices in Form DVAT-41, the OHA failed to communicate a decision within the stipulated time, making the OHA functus officio. Consequently, under Section 74(9) of the DVAT Act, the objections were deemed to have been allowed. Refund Claims and Associated Interest: The Petitioner sought a refund of ?1,34,35,473/- for various periods, along with interest as per Section 42 of the DVAT Act. The Court directed the Respondents to issue the refund within four weeks, along with interest calculated in terms of Section 42. The Court emphasized that the Respondents' failure to act on repeated requests and the mandatory nature of Section 74(8) and (9) necessitated this directive. Application of Section 9(2)(g) of the DVAT Act: The Court highlighted that Section 9(2)(g) was inserted with effect from 1st April 2010 and could not be applied retrospectively. Therefore, the denial of ITC for the period ending 30th April 2009 was erroneous. The Court referenced its judgment in Lotus Impex v. The Commissioner, Department of Trade & Taxes, New Delhi, affirming that Section 9(2)(g) is prospective and does not apply to periods before its insertion. Timeliness and Procedural Compliance: The Court noted the Respondents' procedural lapses, including the failure to trace the objections and the repeated requests for self-attested copies of Form DVAT-38. The Court reiterated the mandatory nature of the time limits specified in Section 74(8) and (9) and criticized the Respondents for not acting within these limits, leading to the objections being deemed allowed. Conclusion: The Court declared the objections filed by the Petitioner as deemed to have been allowed under Section 74(8) read with Section 74(9) of the DVAT Act. It set aside the default notices of tax, interest, and penalty dated 19th May 2011 and directed the Respondents to issue the refund of ?1,34,35,473/- along with the applicable interest. The refund amount, along with interest, was to be credited to the Petitioner's account by 30th September 2019, failing which an additional compensation of ?50,000/- would be payable. The writ petition was disposed of with no costs.
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