2023 (4) TMI 867 - HC - VAT and Sales Tax

Levy of additional amount of tax - petitioner failed to prove that certain transactions were covered under Section 3 of the Central Sales Tax Act, 1956 - It is averred in the present petition that the petitioner had the relevant documents to establish the inter State sales, however, it could not produce the same because of non-receipt of any notice. HELD THAT - The concessional rate of duty had been denied to the petitioner on the ground that the C-Forms, relied upon by the petitioner, had been cancelled by the concerned tax authorities in Haryana with retrospective effect. Mr. Satyakam, learned Counsel appearing for the respondent, submits that since the petitioner contends that it has documents to establish the inter State sales and there is no dispute that the adjudicating authorities have the jurisdiction to examine the relevant documents, the matter should be remanded to the concerned authority for deciding afresh, after affording the petitioner, an opportunity to be heard. The impugned notices of penalty and assessment dated 22.05.2019 and 02.08.2018 are set aside - matter is remanded to the assessing authority to determine the petitioner s claim afresh - Petition allowed.

Summary

Issues Involved:
1. Impugning notice of default assessment and penalty under Section 9(2) of the Central Sales Tax Act, 1956.
2. Challenge to levy of penalty under Section 86(10) of the Delhi Value Added Tax Act, 2004 in conjunction with Section 9(2) of the Central Sales Tax Act, 1956.
3. Denial of concessional rate of duty on inter State turnover.

Comprehensive details of the judgment for each issue involved:

1. The petitioner challenged the notice of default assessment and penalty dated 22.05.2019 and 02.08.2018 under Section 9(2) of the Central Sales Tax Act, 1956. The adjudicating authority had raised a demand of &8377;6,51,132/- on the ground that certain transactions were not proven to be covered under Section 3 of the Central Sales Tax Act, 1956, resulting in additional tax liability at 12.5% instead of the concessional rate of 2%. The petitioner contested the notices for the second, third, and fourth quarters of the financial year 2016-17.

2. Following the default assessment notices, penalty notices were issued under Section 86(10) of the Delhi Value Added Tax Act, 2004, along with Section 9(2) of the Central Sales Tax Act, 1956. The petitioner objected to these notices challenging the assessment and penalty for the three quarters of the financial year 2016-17.

3. The petitioner's claim for the concessional rate of duty on inter State turnover was rejected by the Special Objection Hearing Authority (SOHA) in orders dated 22.05.2019. The petitioner failed to produce documents regarding transactions with a specific entity, leading to the denial of the concessional rate. The petitioner contended non-receipt of the notice under Section 59(2) of the DVAT Act, which affected its ability to present relevant documents.

The judgment by the Delhi High Court, delivered by Hon'ble Mr. Justice Vibhu Bakharu and Hon'ble Mr. Justice Amit Mahajan, allowed the petition, setting aside the impugned notices of penalty and assessment dated 22.05.2019 and 02.08.2018. The matter was remanded to the assessing authority for a fresh determination in light of relevant court decisions. The assessing authority was directed to complete the proceedings within three months, providing the petitioner with a fair opportunity to present its case.