2017 (11) TMI 441 - HC - VAT and Sales Tax

Refund claim - despite the finality of the Court directions, the respondent/VAT Department is continuing to harass the petitioner with several queries and has, in fact, passed further orders rejecting the refund claims - Held that - taking note of the interpretation of Section 10(5) and interpretation of Rule 6A, Court is of the opinion that direction to the respondent to refund the entire amount is not expedient in the circumstances - so far as the exercise of verification of refund claim for the years 2009-10 are concerned, the assessing officer should conduct it fully and a direction is, therefore, issued to the assessing officer to verify the sales/purchases of the goods towards the credit which was claimed by the petitioner and after taking into account the selling price of the said goods, pass a speaking order - penalty order issued, to be quashed - petition allowed by way of remand.

Summary

Issues involved:
1. Refund claim for default assessments for the assessment years 2010-11 and 2011-12 not paid.
2. Adjustment of refund amount by VAT Department in three instalments.
3. Harassment by VAT Department despite court directions.
4. Interpretation of Section 10(5) and Rule 6A of the Delhi Value Added Tax Act, 2005.
5. Denial of refund for 2010-11 and 2011-12 pending appeal before VAT Tribunal.
6. Issuance of penalty orders without following proper procedure.

Analysis:

Issue 1: The petitioner claimed that despite court directions, the refund claim for default assessments for the years 2010-11 and 2011-12 had not been paid. The VAT Department had adjusted the refund amount in three instalments, leading to harassment despite previous court orders.

Issue 2: The respondent VAT Department contended that Section 10(5) of the Delhi Value Added Tax Act, 2005, regulated the credit claimed by the assessee. The petitioner argued against the retrospective application of this provision to concluded matters and relied on Rule 6A to contest the denial of refund.

Issue 3: The Court found it not expedient to direct the respondent to refund the entire amount due to the interpretation of Section 10(5) and Rule 6A. However, it directed the assessing officer to conduct a verification of the refund claim for the years 2009-10 within three months.

Issue 4: The petitioner also raised concerns about penalty orders issued without following the prescribed procedure. The Court quashed the penalty orders dated 09.02.2015 and 10.02.2015, directing the VAT authorities to pass penalty orders after issuing notices and considering the petitioner's reasons and submissions.

In conclusion, the writ petitions were disposed of with directions for the verification of refund claims and the proper issuance of penalty orders in accordance with the prescribed procedure.