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TMI Blog2016 (4) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be “concealment, omission or failure to disclose fully material particulars” by the Petitioner. In relation to the claim for exemption there is nothing in the “reasons to believe” as recorded by the Respondent to show that there was any concealment or omission or failure by the Petitioner to disclose material particulars. The materials gathered by the DT&T, if any, ought to have a live nexus to the formation of the belief that there is escapement of turnover from assessment. The reasons to believe as recorded make no reference to any such material. Power and jurisdiction of the Assistant Commissioner (VAT Audit) - Issuance of notice of reopening the reassessment made by the orderSpecial Commissioner (Special Zone) under Section 67(2) of the DVAT Act - Held that:- Under Section 67(2) of DVAT Act there is no power of delegation as such but the power to issue orders “for the due and proper administration” of the DVAT Act and “all such persons engaged in the administration of this Act shall observe and follow such orders, instructions and directions of the Commissioners.” It is not understood how the Special Commissioner (Special Zone) could have delegated powers in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice. In response to the above notice, the Petitioner appeared on several dates before the VATO and produced documents including records, books of accounts, invoices, details of purchases (DVAT-30 31) apart from the audit report including the balances sheet and chart showing the method of claiming deductions towards various expenses claimed in the return. 4. The limitation of four years for making the default assessment for the period 2009-10 expired on 31st March 2014. Till that time, no assessment notice under Section 32 of the DVAT Act was framed as the proceedings continued thereafter. It is stated that the audit proceedings which were initiated on 2nd August 2013 concluded on 23rd June 2014. The audit report, prepared on 4th July 2014, inter alia covered the period from 1st April 2009 to 31st March 2010. It was a month-by-month analysis of the returns filed. It calculated month-wise, the gross turnover. At the end of audit report, a demand of ₹ 14,43,95,186 towards tax, ₹ 10,61,40,115 towards interest, ₹ 36,84,90,564 towards penalty (a total sum of ₹ 61,90,25,865) was proposed. 5. The VATO issued default notices of tax, interest and penalty u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub: Request for Extension of time to conduct Audit of Cases pertaining to CWG. May kindly see the list of cases allotted to this branch for audit of business affairs, for the year 2009-10 2010-11. These cases have been recommended for audit by the CVC as these firms were engaged in Common Wealth Games related projects. It is pertinent to mention here, that all the officers of the Branch are currently engaged in Enforcement duties in accordance with the order of the Competent Authority. Besides, the ensuing Election duties are sure to keep these officer occupied up to mid May, 2014. Since, the cases for the year 2009-10 are due to get time-barred by 31.03.2014, it is important W.P.(C) No.5231/2014 Page 8 of 9 to seek extension of time limit for these cases for the year 2009- 10. If, agree, we may request the Competent Authority to kindly consider for extension of time-limit as per provision of the Act Rules (u/s 34 of DVAT). Sd/- 9-3-14 Asst. Commissioner (HQ) Addl. Commissioner. (VAT Audit) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,81,44,236. It appears that the dealer has concealed a substantial part of his turnover, thereby, apparently avoiding/under-calculating his tax liabilities. It is the reason to believe that due tax has not been paid by the dealer and there is every likelihood of concealment, omission or failure to disclose full material particulars on the part of the dealer. 12. The note therefore proposes that the Commissioner, VAT is to allow extension of time for assessment for the period 2011-12 up to six years in terms of the proviso to Section 34 of the DVAT Act and the above extension is required for the purpose of verifying concealment etc. after scrutiny of records of the dealer for the year 2009-10. 13. When the above note was placed before the Additional Commissioner (Audit) who made, in his handwriting, an endorsement referring to as the Assessing Authority has clearly indicated high possibility of concealment, omission or failure to disclose full material particulars on the part of the dealer resulting in lower gross turnover and tax liability. 14. With the Commissioner, VAT having approved the above note, a notice under DVAT-37 was duly issued to the Petitioner on 7th J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to be undertaken for the very same period, i.e., 1st April, 2009 to 31st March, 2010. 5. On the previous date, i.e., 27th January, 2016, this Court had, while directing notice to be issued to the Respondent, ordered that the Value Added Tax Officer (VATO) would not pass any order in respect of the impugned notice. Learned counsel for the Respondent had stated that he would take instructions in the matter. 6. Today, Mr Gautam Narayan, learned Additional Standing Counsel for the Respondent, has produced before the Court a letter dated 30th January, 2016 addressed to him by the Assistant Commissioner, VAT Audit Branch of the Department of Trade and Taxes, GNCTD which, inter alia, states that in light of the observations of this Court on the previous date, the Department of Trade and Taxes, GNCTD does not want to insist on fresh audit proceedings under Section 58 of the DVAT Act, 2004 and the Audit Notice issued for the same shall be withdrawn with the permission of the Hon ble High Court . The letter proceeds to state that the Department intends to initiate fresh assessment proceedings under Sections 32 and 33 of the DVAT Act on the basis of the records available wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nformation other than what has already been submitted by the dealer, concerning assessment of tax liabilities for the year 2009-10, which he may find relevant to be submitted, before assessment is framed. It is, therefore, directed that the same may be submitted to the undersigned on or before 16th February 2016. 17. The Petitioner then filed a detailed objection, by its letter dated 15 th February 2016 wherein various grounds were taken why re-assessment proceedings under Sections 32 and 33 of the DVAT Act could not be initiated. 18. On 24th February 2016 the Assistant Commissioner (Special Zone VAT) responded to the above letter dated 15th February 2016 in which the Petitioner was asked to furnish additional information before 2nd March 2016. 19. Aggrieved by the above order, the Petitioner filed the present writ petition. At the first hearing, i.e., on 2nd March 2016 while accepting notice, Mr. Gautam Narayan, learned Additional Standing counsel for the DT T, stated that he would produce the file in which the reasons to believe that the turnover of the Petitioner/dealer has escaped assessment for the period in question, have been recorded. Mr. Narayan also stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of issuance of the notice to the Petitioner. Mr. Narayan further submitted that since it was only a notice and not an assessment order, it would be open to the Petitioner to appear before the Assistant Commissioner (VAT Audit) and place the entire documents available to it to substantiate the claim for exemption in the sum of ₹ 274,20,36,059. 23. The law is well settled that the reasons for reopening the re-assessment by invoking the extended period of limitation under Section 34 of the DVAT Act have to be recorded in the file was explained by this Court in H.M. Industries v. Commissioner of Value Added Tax (2015) 78 VST 382 (Del) : The said reasons to believe have to be formed by the Commissioner. Secondly, the said expression reasons to believe must have nexus and live link with failure to pay tax because of concealment, omission or failure to disclose material particulars by the Assessee. Thus, the Commissioner is required to form an opinion in the nature of reasons to believe that there was failure, omission or concealment to disclose material particulars which had the effect of short-payment or non-payment of tax. The reasons to believe and satisfac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of litigation. It will be recalled that the notice of default assessment of tax dated 9th July, 2014 was based on the said audit report and the said notice was quashed by this Court by the order dated 14th May 2015 in W.P.(C) 5231/2014 on the ground that it was time barred. Merely because the Court in the said order reserved the right of the DT T to take recourse to such other action as may be permissible in law did not permit it to initiate one more round of litigation on the very same material. That would be an abuse of the process of law. Such other action would have to be based on some fresh material. Thirdly, the Court cannot possibly read into the reasons as recorded in the file, all of the above fresh reasons being put forth by the DT T to justify what is a legally indefensible course of action. 28. There is yet another issue that has been raised by the Petitioner which concerns the power and jurisdiction of the Assistant Commissioner (VAT Audit). It is seen that the assignment to Mr. Praveen Verma, Assistant Commissioner (VAT Audit) to undertake the task of issuance of notice of reopening the reassessment was made by the order dated 23rd December 2015 of the Special ..... X X X X Extracts X X X X X X X X Extracts X X X X
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