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2020 (1) TMI 416 - HC - VAT and Sales TaxValidity of SCN - Allegation that the SCN is illegal only on account of the fact that the reasons for initiation of revision proceedings have not been made part of the notice under Section 74A(2) of the DVAT Act - HELD THAT - Section 74A, which vests power of revision on the Commissioner does not per se require that the reasons for initiation of revisionary proceedings should be communicated with the notice under Section 74A(2). At the same time, there cannot be any doubt that good and sufficient reasons, which are germane to the issue, should be recorded by the Commissioner at the time when he exercises his discretion to initiate revision proceedings under Section 74A of the DVAT Act. So far as the claim for refund made by the petitioner is concerned, we find that the said claim has been made by the petitioner on 28.03.2018 in the requisite form DVAT-21. The said refund in terms of Section 38 of the Act read with Rule 34 of the DVAT Rules, 2005 was liable to be granted within two months of the claim being made. There is no reason for the respondent to withhold the said refund. Mere pendency of the revision proceedings cannot be a justification for withholding the refund since that is not a ground for withholding the same under Section 38 and 39 of the DVAT Act. The respondent is directed to forthwith refund the excess tax deposited by the petitioner. The same be credited to the account of the petitioner positively within the next two weeks, along with the interest as admissible in law. List on 03.02.2020.
Issues:
1. Legality of the notice dated 15.11.2018 under Section 74A(2) of the DVAT Act. 2. Requirement of communicating reasons for initiation of revisionary proceedings. 3. Claim for refund made by the petitioner and its timely processing. Analysis: 1. The judgment addresses the legality of the notice dated 15.11.2018 under Section 74A(2) of the DVAT Act. The petitioner initially contended that the notice was illegal due to the absence of reasons for initiating revision proceedings. However, the court observed that while Section 74A does not explicitly mandate the communication of reasons with the notice, it is essential for the Commissioner to have good and sufficient reasons related to the issue when exercising discretion to initiate revision proceedings. The court emphasized that the assessee has the right to request and receive copies of the reasons recorded by the Commissioner, as awareness of the grounds is crucial for the affected party. 2. Regarding the requirement of communicating reasons, the respondent, through Mr. Satyakam, informed the court that he possesses the original file containing the reasons for initiating revision proceedings. The respondent provided copies of these reasons to the petitioner's counsel and the court for examination. The court directed the petitioner's counsel to review the reasons and present submissions on the next hearing date. This underscores the importance of transparency and the right of the assessee to access information relevant to the revision proceedings initiated under Section 74A of the DVAT Act. 3. The judgment also addresses the claim for refund made by the petitioner on 28.03.2018 in form DVAT-21. The court noted that as per Section 38 of the Act read with Rule 34 of the DVAT Rules, 2005, the refund should have been granted within two months of the claim submission. The court found no valid reason for the respondent to withhold the refund, emphasizing that the mere pendency of revision proceedings does not justify withholding the refund under Sections 38 and 39 of the DVAT Act. Consequently, the court directed the respondent to promptly refund the excess tax deposited by the petitioner, instructing the amount to be credited within two weeks along with applicable interest, as per the law. In conclusion, the judgment delves into the legality of the notice under Section 74A(2) of the DVAT Act, the necessity of recording and providing reasons for revision proceedings, and the timely processing of the petitioner's refund claim in compliance with statutory provisions.
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