2023 (1) TMI 1101 - HC - VAT and Sales Tax

Disallowance of Input Tax Credit - failure to produce the relevant documents along with tax invoices despite notices - Section 100A(2) of the Delhi Value Added Tax Act, 2004 - HELD THAT - According to the learned counsel for the appellant, provisions of Section 100A(2) of the Delhi Value Added Tax Act, 2004 do not support the stand of the respondent. He submits that although the electronic communications may not be required to be personally signed, in terms of Section 100A(2), the said communications must necessarily be authenticated by the digital signature of the concerned authority - The learned Tribunal did not decide the controversy, but remanded the matter to the learned OHA. This was, essentially, for the reason that one of the contentions advanced on behalf of the appellant was that the learned OHA had not put the issue of limitation to the appellant and therefore, the appellant did not have the opportunity to respond to the same. There are no infirmity with the decision of the Tribunal in remanding the matter to the learned OHA. It would be apposite for the learned OHA, in the first instance, to decide the contentious issues, including the issue whether the notices were required to be digitally signed as contended by the petitioner - appeal dismissed.

Issues:
1. Appeal against order of Appellate Tribunal, VAT
2. Rejection of objections against assessment order and penalty
3. Default assessment of tax and interest
4. Bar of limitation for filing objections
5. Non-receipt of notices and request for opportunity
6. Requirement of signatures on notices
7. Interpretation of Section 100A(2) of Delhi Value Added Tax Act, 2004
8. Remand of matter by Tribunal to Objection Hearing Authority
9. Opportunity for condonation of delay

Analysis:

1. The appellant appealed against the order of the Appellate Tribunal, VAT, seeking a direction for deciding the appeal on merits, including the raised question of law. The appeal was in response to the Tribunal's order rejecting objections against the assessment order and penalty imposed by the Objection Hearing Authority (OHA).

2. The OHA had rejected the appellant's objections on the grounds of limitation, related to tax, interest, and penalty for specific quarters. The appellant contested that the objections were not time-barred as they had not received relevant notices, and submitted a form DVAT-38 to support their claim of non-receipt and requested an opportunity to produce the required documents.

3. The assessing authority issued a notice for default assessment due to the dealer's failure to provide necessary documents despite prior notices. This led to disallowance of input tax credit claimed by the dealer and imposition of tax and penalty. The appellant argued that the notices were not received, including one dated on a Sunday, and emphasized the lack of signatures on the notices.

4. The respondent argued that as per Section 100A(2) of the Delhi Value Added Tax Act, 2004, notices prepared on an automatic data processing system do not require personal signatures if properly served. The appellant, however, contended that electronic communications should be authenticated by the digital signature of the concerned authority, not merely generated electronically.

5. The Tribunal remanded the matter to the OHA due to the appellant's contention that the issue of limitation was not raised during the initial hearing, depriving them of a chance to respond. The High Court upheld the Tribunal's decision, instructing the OHA to address the contentious issues, including the requirement of digital signatures on notices.

6. Additionally, the Tribunal granted the appellant an opportunity to file for condonation of delay, clarifying that such an application would not prejudice the appellant's argument regarding timely filing of objections despite the alleged non-receipt of notices. Ultimately, the appeal was dismissed with the mentioned observations.

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