9911796707
TMI Blog2016 (8) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... uashed. The Petitioner is entitled to the refund claimed for the said periods along with interest. - Decided in favor of assessee. - W.P.(C) 2528/2013, W.P. (C) 3119/2013 & CM No. 5916/2013 - - - Dated:- 27-7-2016 - S. MURALIDHAR JUSTICE NAJMI WAZIRI JJ. Petitioner Through: Mr. Ruchir Bhatia, Advocate. Respondents Through: Mr. Sanjoy Ghose, Additional Standing counsel. O R D E R Dr. S. Muralidhar, J.: 1. The Petitioner, Communication World, a dealer registered under the Delhi Value Added Tax Act, 2004 ( DVAT Act ) has filed these two writ petitions against the Commissioner, Trade Taxes. In W.P. (C) No. 2528 of 2013, the Petitioner inter alia has prayed for a direction to the Respondent to refund a sum of ₹ 81,81,066 due to the Petitioner along with interest for the period May 2007 and July 2007. In W. P. (C) No. 3119 of 2013, the prayer is to quash the notice dated 4th April 2013 issued to the Petitioner by the Respondent under Section 74A (2) of the DVAT Act proposing to revise an order dated 9th October 2009 passed by the Objection Hearing Authority ( OHA )/Additional Commissioner setting aside the notices of default assessment of tax, inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 74 of the DVAT Act. The said objections were allowed by the OHA by an order 9th October 2009. 6. Inter alia it was argued before the OHA by the Respondent that the Petitioner was being granted subsidy by TTL in order to attract the customers from whom they could generate revenue from call charges etc. The subsidy was given soon after the purchase to enable to sellers to sell the handsets at prices well below the market price. The subsidy therefore ought to be included in the sale price. The OHA negatived the above contention by pointing out that the Petitioner was liable to pay tax at the rates specified in Section 4 of the DVAT Act on sales effected by it. The Petitioner was also entitled to claim input tax credit ( ITC ) on turnover of purchases as provided in Section 9 of the DVAT Act. The ITC to which a purchasing dealer was entitled would be equal to the output tax liability of his selling dealer and it could not be different from the output tax liability of the selling dealer on that transaction. M/s. Drive India was the selling dealer from whom the Petitioner had made the purchases. Consequent upon the grant of subsidy by TTL to the Petitioner the output tax liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low the purchase price would eventually result in the loss to the dealer and thus in order to compensate, TTL was paying subsidy to the dealer. Although the purchase price of the dealer was reduced, he could still claim the entire ITC on the basis of tax invoices issued prior to the release of the subsidy. As a result the Department lost revenue. Despite there being no value addition, it had to allow ITC on the higher purchase price. Therefore, it was concluded that the levy of tax is appropriate and the default assessment orders are upheld regarding levy of tax is appropriate . The OHA further held that merely because a claim made by the dealer was not allowed, the return filed cannot be branded as false, misleading or deceptive. Therefore, the notice of assessment of penalty was set aside. 10. Aggrieved by the above order dated 16th December 2009 of the OHA the Petitioner filed a review application which is stated to be pending. 11. On 4th April 2013 the following notice was issued by the Respondent to the Petitioner under Section 74A (2) of the DVAT Act: Whereas it appears that in the order No. 981 dated 9th October 2009 passed under Section 74 of Delhi Value Added T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent discount or subsidy offered to the purchasing dealer would not affect the ITC claimed. He submitted that notice issued under Section 74 A (2) of the DVAT Act was bad in law as it was a mere reproduction of the provision without specifying the ground on which the order dated 9th October 2009 of the OHA was sought to be revised. He placed reliance on the decisions in Commissioner of Central Excise, Bangalore v. Brindavan Beverages (P) Limited 2007 (213) ELT 487 (SC); Amrit Foods v. Commissioner of Central Excise 2005 (190) ELT 433 (SC); Rawani Dal Flour Mills v. Commissioner of Sales Tax, Orissa (1992) 86 STC 409 (Orissa) and Om Shri Jigar Association v. Union of India (1994) 209 ITR 608 (Guj). He also referred to the decision of this Court in Swarn Darshan Impex (P) Limited v. Commissioner, Value Added Tax (2010) 31 VST 475 (Del) and the decision dated 19th February 2016 in Writ Petition (Civil) No. 134 of 2014 (Lotus Impex v. The Commissioner, Department of Trade Taxes). 15. Countering the above submissions, Mr. Sanjoy Ghose, learned Additional standing counsel for the Department, submitted that the Court should issue a time-bound direction for disposal of bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Limited v. Commercial Tax Officer, Cuddalore (supra) the issue was whether the retention price received by the Appellant, a manufacturer of fertilizers, from the Government of India, could form part of the sale price and be included in the turnover for the purpose of the Tamil Nadu General Sales Tax Act, 1959. The Supreme Court answered the question in the negative. It held that the payment made by the government to a manufacturer could not be regarded as a discharge of any liability or obligation by the Government towards the purchase of the fertiliser. The two payments received by the manufacturer, viz., the subsidy and the price fixed under the Control Order were independent of each other. The subsidy under the Government Scheme did not form part of the bargain between the manufacturer and the purchaser of the fertilizer. The amount given by the Government under the administrative scheme of furnishing subsidy was not part of the sale price or consideration for the sale of fertilizers by the Appellant (manufacturer) and did not form part of the turnover for the purposes of the Tamil Nadu General Sales Tax Act, 1959. 20. In Rashtriya Chemicals and Fertilizers Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsidy was for the purpose of generating revenue from call charges etc paid by the consumer. It was not towards the sale of handsets. It, therefore, did not affect the sale price of the handsets. In the light of the law explained in the above decisions, the Court holds that the subsidy offered by TTL to the Petitioner cannot be included in the sale price for the purposes of VAT. 24. The order dated 9th October 2009 of the OHA sustaining the objections filed by the Petitioner against the notices of default assessments of tax and penalty for May 2007, July 2007 and August 2008 is upheld as laying down the correct legal position. 25. Learned counsel for the Petitioner is right is his contention that the notice issued to the Petitioner under Section 74A (1) of the DVAT Act is unsustainable in law. Section 74A (1) reads as under: Section 74 A- (1) After any order including an order under this section or any decision in objection is passed under this Act, rules or notifications made thereunder, by any officer or person subordinate to him, the Commissioner may, of his own motion or upon information received by him, call for the record of such order and examine whether - ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
