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2019 (7) TMI 1341 - HC - VAT and Sales TaxInterpretation of Statute - Section 74 (7) read with Section 74 (8) and (9) of the Delhi Value Added Tax, 2004 - grant of refund within stipulated time. HELD THAT - This Court is of the view that Section 34 (2) which has to be read in the context of Section 34 (1) of the DVAT Act would not apply in the facts and circumstances of the present case, which is essentially concerned with the failure of the OHA to dispose of the objections filed under Section 74 (1) of the DVAT Act. It must be recalled that what was set aside by this Court by its judgment dated 28th September 2018 was the decision dated 17th May 2018 of the OHA under Section 74 (7) of the DVAT Act which is a specific provision dealing with objections whereas Section 34 (2) of the DVAT Act appears to be a general provision relating to assessments. In the present case there was no occasion for the Commissioner to pass any order of assessment . As rightly pointed out by the learned counsel for the Petitioner the re-assessment order dated 8th January, 2018 passed by the VATO was not disturbed by this Court when it remanded to the OHA the objections of the Petitioner for a fresh consideration. The Court declares that the objections filed by the Petitioner on 13th March, 2018 should, in terms of Section 74 (7) read with Section 74 (8) and 74 (9) of the DVAT Act be deemed to have been allowed by the OHA - petition allowed.
Issues Involved:
1. Interpretation of Section 74 (7), (8), and (9) of the Delhi Value Added Tax, 2004 (DVAT Act). 2. Compliance with statutory timelines for objections and refunds under the DVAT Act. 3. Validity of service of notice under Section 74(8) of the DVAT Act. 4. Applicability of Section 34 (2) of the DVAT Act in the context of objections. Issue-wise Detailed Analysis: 1. Interpretation of Section 74 (7), (8), and (9) of the DVAT Act: The primary issue in this case was the interpretation of Section 74 (7), (8), and (9) of the DVAT Act, which deals with the timelines and procedures for addressing objections to tax assessments. The court emphasized the mandatory nature of these timelines, stating that if the Commissioner fails to decide on objections within the specified period, the objections are deemed to be accepted. The court referred to the statutory provisions and previous judgments to clarify that the three-month period for deciding objections starts anew from the date of the court's order restoring the objections. 2. Compliance with Statutory Timelines for Objections and Refunds: The petitioner filed objections on 13th March 2018, which were not decided within the stipulated three months. Despite multiple hearings and submissions, the objections remained unresolved. The court noted that the petitioner had served a notice under DVAT-41 on the Commissioner on 4th January 2019, and the objections were not decided within the subsequent fifteen days. Consequently, under Section 74(9) of the DVAT Act, the objections should be deemed to have been allowed. 3. Validity of Service of Notice under Section 74(8) of the DVAT Act: The respondent argued that the notice under DVAT-41 was not served "in person" on the Objection Hearing Authority (OHA) but on the Commissioner, which they claimed was non-compliant with Section 74(8) and Rule 56 of the DVAT Rules. The court rejected this argument, noting that the petitioner made several attempts to serve the notice personally on the OHA and ultimately served it on the Commissioner, which was acknowledged. The court found this to be consistent with the general practice in government offices and deemed it valid service. 4. Applicability of Section 34 (2) of the DVAT Act: The respondent contended that the one-year period for the Commissioner to deal with objections under Section 34 (2) of the DVAT Act should apply. The court disagreed, stating that Section 34 (2) pertains to assessments and re-assessments, not to objections under Section 74. The court clarified that the remand by the court was specifically for the OHA to consider objections, and the reassessment order dated 8th January 2018 was not disturbed. Therefore, Section 34 (2) was inapplicable in this context. Conclusion: The court concluded that the objections filed by the petitioner on 13th March 2018 should be deemed to have been allowed under Section 74(9) of the DVAT Act. The court directed the Department of Trade and Taxes (DT&T) to issue consequential orders granting the petitioner’s refund with interest within four weeks, failing which compensation of ?50,000 would be payable. If the petitioner is aggrieved by the orders regarding refund and interest, they may seek appropriate remedies in accordance with the law. The writ petition was allowed accordingly.
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