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TMI Blog2016 (8) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... itiate disciplinary action against those officers of the DT&T who are found disobeying the instructions issued by the Commissioner from time to time in this regard. The Commissioner should undertake a periodic review, at least once in two weeks, as to how many refund applications have been processed and within what time. Responsibility should be fixed on derelict officers and disciplinary proceedings initiated where there is a clear breach of the statutory duties. The collective failure of such officers is imposing a huge interest burden on the exchequer which is clearly avoidable. Revenue directed to release refund with interest. - Decided in favor of petitioners. - W.P.(C) 6013/2016 & CM No. 24776/2016, W.P.(C) 6014/2016 & CM No. 24777/2016, W.P.(C) 6015/2016 & CM No. 24778/2016, W.P.(C) 6020/2016 & CM No. 24783/2016, W.P.(C) 6022/2016 & CM No. 24785/2016, W.P.(C) 6023/2016 & CM No. 24786/2016, W.P.(C) 5944/ - - - Dated:- 28-7-2016 - S.MURALIDHAR NAJMI WAZIRI JJ. Petitioner Through: Mr. Vasdev Lalwani with Mr. Mohit Gautam and Mr. Rohit Gautam, Advocates Respondent Through: Mr. Satyakam, Advocate, Additional Standing Counsel, Govt. of NCT of Delhi with Ms. Jyo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re additional information sought that has not been furnished. 3. It is further pointed out by the Petitioner that as recently as on 20th July 2016, for the period 1st April 2012 to 31st March 2013, the Department of Trade ad Taxes (DT T) has issued a notice to the Petitioner under Section 59(2) of the DVAT Act seeking certain documents/books to be produced. 4. Notice. Mr. Satyakam, learned Additional Standing Counsel accepts notice for the Respondents and presents a chart which inter alia shows that in respect of the refunds claimed for the 4th quarter of 2010-11 and the first quarter of 2011-12, notice of default assessment has already been issued by the VATO concerned on 14th October, 2011 creating demands for those periods and effectively determining that no refund is due on those periods. The submission of Mr Satyakam is that the said orders were uploaded on the website in the account of the Petitioner dealer soon after they were passed. Both orders refer to notice dated 10th September, 2011 having been issued to the Petitioner under Section 59(2) of the DVAT Act requiring the Petitioner to produce certain documents. It is submitted that on the failure of the Petitioner t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d against the dealer for failure to furnish the requisite forms and to raise a tax demand if so warranted in accordance with the provisions of the DVAT Act. In other words, the powers of the Commissioner or an officer authorized to proceed under Section 59 of the DVAT Act or to create demand for any of the periods for which the refund is granted in accordance with the provisions of the DVAT Act remands unaffected. 7. In the first place a reference is required to be made to Section 38 of the DVAT Act which reads thus: 38. Refunds (1) Subject to the other provisions of this section and the rules, the Commissioner shall refund to a person the amount of tax, penalty and interest, if any, paid by such person in excess of the amount due from him. (2) Before making any refund, the Commissioner shall first apply such excess towards the recovery of any other amount due under this Act, or under the CST Act, 1956 (74 of 1956). (3) Subject to sub-section (4) and sub-section (5) of this section, any amount remaining after the application referred to in sub-section (2) of this section shall be at the election of the dealer, either (a) refunded to the person, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of tax payable under this Act, the amount may be refunded to the seller or may be applied by the seller under clause (b) of sub-section (3) of this section and the Commissioner may reassess the buyer to deny the amount of the corresponding tax credit claimed by such buyer, whether or not the seller refunds the amount to the buyer. (10) Where a registered dealer sells goods and the price charged for the goods is expressed not to include an amount of tax payable under this Act the amount may be refunded to the seller or may be applied by the seller under clause (b) of sub-section (3) of this section without the seller being required to refund an amount to the purchaser. (11) Notwithstanding anything contained to the contrary in subsection (3) of this section, no refund shall be allowed to a dealer who has not filed any return due under this Act. 8. There have been numerous judgements rendered by this Court emphasizing the mandatory nature of the time limit set out under Section 38 of the DVAT Act. Instead of burdening this judgement again with the extracts of those decisions, the Court would only like to set out the list of such decisions as under: (i) Swarn Dar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming refund. The recent instructions issued by the Commissioner, VAT on 21st July 2016 regarding speedy disposal of refund claims also emphasises the mandatory nature of the instructions. There is therefore no question of the DT T, and in particular the VATO concerned, not responding immediately to the refund claim made. Where it is felt that more information should be called for then the notice under Section 59(2) DVAT Act has to necessarily be issued within fifteen days thereafter. 12. In the instant case, the return for the fourth quarter of 2010-11 was filed on 28th April, 2011. Yet, the notice under Section 59 (2) of the DVAT Act was issued only on 10th September 2011, well beyond the 15 day time limit in term of Circular No. 6 of 2005. The return for the first quarter of 2011-12 was filed on 27th July, 2011. The notices under section 59 (2) DVAT Act was issued on 10th September, 2011 again beyond the 15 day time limit. In both instances the notices of default assessments were issued on 14th October, 2011. It is another matter that the Petitioner claims not to have received the above notices under Section 59 (2) DVAT Act and the consequent notices of default assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner thereafter to provide the information or documents then possibly the question of the time limit under Section 38 (3) being correspondingly postponed might arise. 16. As regards the other periods for which refunds have been claimed, viz., the third and fourth quarters of 2011-12 and the second and fourth quarters of 2012-13 and the fourth quarters of 2013-14 and 2014-15, it is not disputed even by the Respondent, that the claims were not processed within the time limit set out under Section 38 of the DVAT Act. It appears that in relation to the return filed for the second quarter of 2012-13, a notice under Section 59(2) was issued on 25th July, 2016. Clearly, therefore it is way beyond the two months period envisaged under Section 38(3)(a)(ii) within which refund had to be processed and issued. 17. Mr. Satyakam urged the Court to grant the Respondent sufficient time so that entire exercise pursuant to the notices issued under Section 59 of the DVAT could be completed. The Court is not, in these petitions, concerned with the outcome of the proceedings sought to be initiated by the Respondent by issuing notices under Section 59 of the DVAT Act. The issue that is befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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