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TMI Blog2016 (5) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... o the interest of revenue.” In other words, the language of Section 46 of the DST Act has been reproduced. The reasons fail to specify how the original assessment order is erroneous or prejudicial to the interests of the Revenue and in what manner deductions had been wrongly claimed and allowed to the petitioner. While it is true that in its judgment the Court concluded that no assessment order could be passed on account of limitation, the fact remains that there had to be strong reasons even prima facie for the Deputy Commissioner to invoke revisional powers under Section 46 of the DST Act. It is found that there was no subjective satisfaction of the Deputy Commissioner for initiation of the revisional proceedings by applying objective criteria. The Petitioner had been allowed deductions in violation of Rule 5 of the DSTWC Rules. Thus the decision to invoke the revisional power under Section 46 of the DST Act was not made independently by the Deputy Commissioner. She was acting on the directions of her superior officers. It is well settled legal position that a quasi judicial authority should discharge the statutory discretionary powers independently and not under the dictation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Inspector of the Sales Tax Department verified the TDS challans and also submitted his report. 5. However, the Assessing Authority issued a notice for re-assessment in form ST-15 (WC) under Section 24 of the DST Act on 5th July 2007. The said notice stated that deductions had been claimed wrongly by the Petitioner and hence the turnover escaped assessment to tax under Rule 5 of the Delhi Sales Tax Act on Works Contract Rules, 1999 ( DSTWC Rules ). It is stated that for some reason the said notice was not proceeded with and no reassessment order was passed. Writ Petition 8526 of 2008 6. Meanwhile, aggrieved by the inaction of the Department as far as the issue of refund was concerned and instead initiating reassessment proceedings under Section 24 of the DST Act, the Petitioner filed Writ Petition (Civil) No. 8526 of 2008 in this Court. 7. It may be noticed that in the meanwhile, with effect from 1st April 2005 the DST Act stood repealed by the Delhi Value Added Tax Act, 2004 ( DVAT Act ). 8. In the writ petition, with the Respondent not filing any counter-affidavit, this Court on 15th November 2008 directed the Respondent to deposit the entire sum of ₹ 1,78, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the above order by the Respondent, the above order has become final. Pursuant to the above order, the said sum of ₹ 1,78,58,291 together with interest accrued thereon was refunded to the Petitioner by the Respondent. Revisional power under the DVAT Act 12. Section 74A of the DVAT Act provides for powers of revision of the Commissioner. Section 74A (1) of DVAT Act states that the Commissioner may, of his own motion or upon information received by him, call for the record of any order or assessment passed under this Act by any officer or person subordinate to him and examine whether (a) any turnover of sales has not been brought to tax or has been brought to tax at lower rate or has been incorrectly classified or any claims incorrectly granted or that that liability to tax is understated or (b) in any case, the order is erroneous, insofar as it is prejudicial to the interest of Revenue and after examination, the Commissioner may pass an order to the best of his judgment, where necessary. 13. By way of Amendment to the DVAT Act, by the Delhi Value Added Tax (Amendment) Act, 2009 notified on 6th January 2010, sub-Section 5 was inserted in Section 74A of the DVAT Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (28)/93-PPR/13368-384 dated 12th September 1994 delegating the power of revision read with Section 106 (2) of the DVAT Act requiring the Petitioner to appear before the said officer with the books of accounts and other relevant record and to show cause as to why the said assessment order dated 24th February 2005 be not revised under Section 16 of the DSTWC Act read with Section 46 of the DST Act. 17. Inter alia it was stated in para 5 of the said notice that whereas it has come to the notice of the undersigned that in the assessment order for the year 2003-04 deductions have been wrongly allowed hence said order is erroneous and prejudicial to the interest of revenue. Earlier decision of this Court 18. In this very writ petition it was decided in the first instance by a Division Bench of this Court by its judgment dated 22nd May 2012 that the impugned show cause notice was invalid as it was barred by limitation. In the said judgment, the Court took note of the detailed observations in the judgment dated 2nd September 2011 of the Full Bench of this Court in Writ Petition (Civil) No. 274 of 2010 (Dharam Pal Satya Pal Limited v. The Commissioner, Value Added Tax) where it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red. Review petition of the Department 22. Soon thereafter the Department filed Review Petition No. 420 of 2012 drawing the attention of the Court to Section 106 (4) of the DVAT Act which had been inserted with effect from 1st April 2005 and was not noticed by the Court in the above decision. 23. On 2nd May 2014 the Division Bench of this Court allowed the review petition after noticing Section 106 (4) of the DVAT Act and held that It is absolutely clear that the entire provision of revision as contemplated under Section 46 of the 1975 Act including the period of limitation prescribed therein would be applicable to such revisions notwithstanding the repeal of the said Act by the DVAT Act, 2004. Accordingly, the order dated 22nd May 2012 is recalled and the matter was again placed for hearing on the other grounds taken by the Petitioner. Submissions of the Petitioner on merits of the impugned SCN 24. There are two broad submissions made by Mr. Rajesh Jain, learned counsel for the Petitioner to assail the impugned SCN dated 2nd February 2010. The first concerns the power of jurisdiction of the officer concerned to issue the said impugned SCN. The second concerns the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irements for issuing the SCN stand complied with. The SCN did not specify (a) which deductions have been wrongly allowed, (b) to what extent, (c) what are the relied upon documents to support the stand taken in the SCN and (d) which sub-rule of Rule 5 of DSTWC Rules has been violated etc. In other words, in the absence of any specific finding given and without adducing any document to support such finding, Respondent No. 2 cannot purport to exercise suo motu power seeking to revisit the original assessment order dated 24th February 2005. (e) The impugned SCN has been issued by Respondent No. 2 on the instruction of the higher authority. In other words, Respondent No. 2 has not applied her mind on her own and without satisfying herself whether the conditions to invoke the powers under Section 46 of DST Act exist. Reliance was placed on the decision of the Supreme Court in Orient Paper Mills v. Union of India 1978 (2) ELT 345 (SC) and this court in Sita Juneja Associates v. Commissioner of Sales Tax 38 DSTC J- 60 (Del). (f) The reasons supplied on the request by the Petitioner for invoking the powers under Section 46 of the DST Act had revealed that the original assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Additional Standing counsel for the Respondent that the SCN does not itself have to set out all the grounds on which the revisional power has been exercised and that in any event the detailed reasons are available in the note prepared by the officer, a copy of which has been made available to the Petitioner. Consequently, it is submitted that the Petitioner could reply to the SCN and in the proceedings pursuant to the SCN the case of the Petitioner would be considered and an appropriate order passed exercising the revisional power under Section 46 of the DST Act. 31. It must be remembered at this stage that the grounds on which the revisional power sought to be exercised is identical to the ground on which the power under Section 24 of the DST Act to reopen the assessment was invoked by issuing the notice dated 5th July 2007. In other words it is the very same reason viz., alleged wrong claim of deductions under the DSTWC Act, that prompted the reopening of the assessment for AY 2003-04. This attempt was negatived by the Court by its judgment dated 25th November 2009. 32. Secondly, it must be recalled that reassessment was done at the stage where the refund order was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The above note was prepared by the Deputy Commissioner (Special Zone) on 6th January 2010. The photocopy of the said note together with further endorsement thereunder had been placed on record. The above note was marked to the Joint Commissioner (Law Justice) who recorded in his own handwriting: revision proceedings to safeguard the interest of Revenue may be initiated immediately. The said proceedings may be completed within the limitation period. (emphasis in original) 38. The note was further marked to the Commissioner (VAT) who approved it. 39. The note reveals that it was straightway presumed that the assessment order dated 24th February 2005 was prejudicial to the Revenue since a refund had been ordered. Further, the note makes it clear that the Deputy Commissioner was seeking instructions from her superior officers to file either an SLP or undertake a revision. The Joint Commissioner (L J) directed that it should be done immediately, and it was pursuant to the said direction that the Deputy Commissioner proceeded to issue the SCN to the Petitioner. Acting under dictation 40. The fact remains that there was no subjective satisfaction of the Deputy Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he DST Act, the Deputy Commissioner did not bear in mind the previous history of the case where the Court had quashed the notice dated 5th July 2007 which sought to reopen the assessment for AY 2003-04 on the same ground viz., that the deductions had wrongly been allowed to the Petitioner. The Court is, therefore, satisfied that in the present case the invoking of the revisional power by the Deputy Commissioner under Section 46 of the DST Act was unjustified and unwarranted. The impugned SCN dated 2nd February 2010 requires to be quashed on this ground alone. Power and jurisdiction of the officer issuing the SCN 44. The other major point urged in the writ petition concerns the authority of the jurisdiction of the Deputy Commissioner to issue the impugned SCN. 45. In this regard the Court has been shown an order dated 20th August 2008 issued by the Commissioner (VAT), delegating her powers to Joint Commissioners/Deputy Commissioners appointed under Section 66 of the DVAT Act. This includes the power of revision under Section 74A in respect of the orders passed by VATOs/AVATOs working under their respective jurisdictions. 46. It is pointed out by an order dated 12th Septe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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