2022 (7) TMI 1173 - HC - VAT and Sales Tax

Jurisdiction - Complete waiver of pre-deposit required to be made under the Delhi Value Added Tax Act, 2004 not done by Delhi Value Added Tax, Appellate Tribunal, Delhi - whether the Objection Hearing Authority (OHA) had the power, under Section 74 of the Act, to remand the matter to the Assessing Authority? - if such a power was vested in the OHA, whether the assessment, pursuant to remand, had to be carried out within the limitation period prescribed under Section 34 of the Act? - HELD THAT - In the matter at hand, there is an arguable defence available to the respondent/revenue. The matter needs deliberation and cogitation. The interests of both sides would be served if the appeal is disposed of with the following directions (i) The appellant will deposit 5% of the disputed demand. (ii) The appellant will deposit the aforementioned amount, within four weeks from the date of receipt of a copy of the judgement. (iii) If the directions issued hereinabove, are complied with by the appellant, the Tribunal will hear the matter on merits. The appeal is disposed off.

Summary

Issues:
1. Whether the Objection Hearing Authority had the power to remand the matter to the Assessing Authority under Section 74 of the Act?
2. If the OHA had the power to remand, whether the assessment after remand had to be completed within the limitation period under Section 34 of the Act?

Analysis:
The appellant approached the Delhi High Court, contending that the Delhi Value Added Tax Appellate Tribunal did not completely waive the pre-deposit required under the Delhi Value Added Tax Act, 2004. The appellant was required to deposit 10% of the disputed demand by a specified date. The counsel for the appellant argued that the Tribunal's judgments favored the appellant on the merits of the issue. The key issues revolved around the powers of the Objection Hearing Authority (OHA) under Section 74 of the Act to remand matters to the Assessing Authority and whether the assessment post-remand had to adhere to the limitation period under Section 34 of the Act.

The appellant's counsel cited specific judgments by the Tribunal in support of their contention for complete waiver of the disputed tax demand. Additionally, reference was made to a Division Bench decision of the Court to strengthen the argument for complete waiver. The Court acknowledged that the respondent/revenue had a plausible defense regarding the applicability of the limitation period under Section 34 in cases of remand by OHA. However, considering the Tribunal's favorable view in the appellant's case in previous decisions, the Court refrained from providing a definitive opinion at that stage.

The Court considered the interests of both parties and issued directions for the appellant to deposit 5% of the disputed demand within a specified timeline. Compliance with these directions would enable the Tribunal to proceed with hearing the matter on merits. Both counsels agreed that these directions would safeguard the interests of both sides. The Court disposed of the appeal based on the agreed-upon terms, emphasizing the need for further deliberation on the matter due to the arguable defense presented by the respondent/revenue.

In conclusion, the judgment addressed the issues raised by the appellant regarding the waiver of pre-deposit under the Delhi Value Added Tax Act, emphasizing the need for a balanced approach to protect the interests of both parties while considering the legal complexities involved in the case.