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2017 (4) TMI 831 - HC - VAT and Sales TaxRevision of order - Section 74A of the DVAT Act - Entitlement to interest u/s 42 of the DVAT Act - delayed grant of refund - Held that - the undated and unsigned notice proposing the exercise of the revisionary jurisdiction was at best vague. It did not satisfy the basic requirement of the law - if the allegations in the show cause notice are not specific and are on the contrary vague, lack details and/or unintelligible that is sufficient to hold that the noticee was not given proper opportunity to meet the allegations indicated in the SCN. Apart from the fact that there was a total non-application of mind to the facts of the case, there is sufficient indication from the notes on files that the invocation of the revisionary powers under Section 74A of the DVAT Act was to delay making the refund which was overdue for over six years. The Court is left no manner of doubt is that this was plainly an abuse of power vested in the Commissioner which calls for disapproval in strongest terms. The Court accordingly sets aside the undated and unsigned notice of the Commissioner, VAT uploaded upholding on the Petitioner s Web ID proposing the invocation of the powers under Section 74A of the DVAT Act to revise the order dated 14th October 2016 of the OHA VAT commissioner directed to ensure that the refund due to the Petitioner in relation to the monthly returns filed in July 2010 together with the interest accrued thereon is disbursed/paid into the account of the Petitioner not later than 8th May 2017. - petition allowed.
Issues Involved:
1. Validity of the undated and unsigned notice for revision under Section 74A of the DVAT Act. 2. Entitlement of the Petitioner to a refund and interest under the DVAT Act. 3. Proper exercise of revisionary power under Section 74A of the DVAT Act. 4. Compliance with procedural requirements for issuing a refund. Issue-wise Detailed Analysis: 1. Validity of the undated and unsigned notice for revision under Section 74A of the DVAT Act: The Petitioner challenged the undated and unsigned notice No. F.CD:105350157/Ward 63 posted on its Web ID, which required the Petitioner to appear before the Commissioner, Trade & Taxes. The Court found that the notice was vague and lacked specific grounds, failing to meet the legal requirement that allegations in a show cause notice must be specific and clear. The Court held that the notice was insufficient to provide the Petitioner with a proper opportunity to meet the allegations, citing the case of Commissioner of Central Excise, Bangalore v. Brindavan Beverages (P) Limited 2007 (213) ELT 487 (SC). 2. Entitlement of the Petitioner to a refund and interest under the DVAT Act: The Petitioner was entitled to a refund of ?4,06,24,323 due to excess input tax credit for the period from July 2010 to March 2012. Despite the order dated 14th October 2016 by the Special Commissioner-II/OHA setting aside the default assessment and upholding the Petitioner's objections, the refund was not issued. The Court noted that under Section 38 of the DVAT Act, the refund should have been issued within one month from the date of filing the return. The delay in granting the refund entitled the Petitioner to interest under Section 42 of the DVAT Act. 3. Proper exercise of revisionary power under Section 74A of the DVAT Act: The Court found that the revisionary power under Section 74A was not exercised properly. The original file lacked reasons justifying the invocation of this power, and there was no endorsement from the Commissioner, VAT, indicating a conscious decision. The Court observed that the undated and unsigned note titled 'Revision of orders of M/s. Garg Roadlines' was not referred to in the notings, and the reasons for finding the OHA's order objectionable were absent. The Court concluded that the exercise of revisionary power was an abuse of authority intended to delay the refund. 4. Compliance with procedural requirements for issuing a refund: The Court highlighted the procedural lapses by the DT&T in processing the refund claim. The refund application, pending since July 2010, was not processed within the stipulated time frame under Section 38 of the DVAT Act. The Court noted that the DT&T failed to issue the refund despite the OHA's order and the absence of any impediments such as a notice of audit under Section 58 or additional information sought under Section 59 of the DVAT Act. The Court ordered the Commissioner, VAT, to ensure the refund along with accrued interest is disbursed by 8th May 2017 and imposed costs of ?20,000 on the DT&T. Conclusion: The Court set aside the undated and unsigned notice and quashed all further proceedings under Section 74A of the DVAT Act. It directed the Commissioner, VAT, to disburse the refund due to the Petitioner along with interest by 8th May 2017 and imposed costs on the DT&T for their procedural lapses. The petition was disposed of in these terms.
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