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TMI Blog2016 (8) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... on 38 (4) of the DVAT Act, it was open to the Commissioner, if he sought to make inquiries while processing the refund, to go in for an audit of the business affairs of the Petitioner under Section 58 of the DVAT Act or seek additional information under Section 59 of the DVAT Act. In the present case, none of these steps were taken by the Respondent/Department of Trade & Taxes ("DT&T"). Consequently, the time limit in terms of Section 38(3) (a) (i) commenced from 27th March 2008. In terms of Section 42(1) DVAT Act, the interest on the refund due also started accruing from that date. According to the Petitioner, as of 31st May 2016 the interest worked out at 6% on the refund due worked out to Rs. 50,12,356. 4. The Petitioner states that it is a major supplier to "Ready Concrete Mix" plants. It is stated that many of these plants are located outside Delhi and therefore the sales of cement take place as inter-state sales. The Petitoner makes purchases locally from local registered dealers against tax invoices after paying VAT to its selling dealers. IT thereafter makes inter-state sales. This results in excess input tax credit which generates a refund for the Petitioner. 5. While no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x, interest and penalty, the Petitioner filed objections under Section 74 of the DVAT Act before the Special Commissioner i.e., the Objection Hearing Authority ("OHA"). It is stated that the objection was also filed against the aforementioned adjustment order dated 30th December 2010 by which the Petitioner"s refund claim was rejected in toto. 10. The OHA on 25th June 2013 passed an order, the relevant portion of which reads as under: "3. Sh. Vineet Bhatia, (Adv) presented the case on behalf of the objector. The Department was represented by Sh. Anil Kumar, VATO. The counsel assailed impugned orders on the ground that the Assessing Authority (AA), had not given sufficient opportunity to submit the relevant documents in support of claim of refund and also that it was not confronted with the adverse report of VATI on non functioning of Transporters. It has been stated by the objector that the major supplies of the objector is to "Ready Concrete Mix" Plants at Gurgaon (Haryana) and nearby areas in view of ban of hot mix plants in Delhi. As such majority of sales of 'Cements' is interstate (Central Sale). The counsel averred that he has in possession necessary documents with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O was nevertheless required in law to proceed to pass an assessment order since the earlier order passed by him, which was challenged before the OHA and in respect of which the OHA passed the above order dated 25th June 2013, did not survive. 14. An attempt was made by Mr. Ramji Srinivasan, learned senior counsel appearing for the Respondent, to urge that the OHA had not actually set aside the order of the AO, which was the subject matter of the objection before the OHA, and that in the event of the Petitioner not appearing before the AA on 15th July 2013 the earlier order passed by the AO creating the demand for the aforementioned period in 2007-08 would somehow revive. 15. The Court is unable to accept the above submission. Para 5 of the order dated 25th June 2013 is categorical that the AO shall provide sufficient opportunity to the Assessee for seeking any clarification/confrontation on any adverse material and "a speaking order thereafter shall be passed afresh giving proper reasons for allowing/disallowing the refund as per the law.". It was further added "Imposition of penalty shall be consequential to the default of any tax due". There could be, therefore, no manner of do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... series of judgments emphasised the mandatory nature of the time limits under Section 38 of the DVAT Act for processing of the refunds. Reference in this regard may be made to the decision in Swarn Darshan Impex (P) Limited v. Commissioner, Value Added Tax (2010) 31 VST 475 (Del), Lotus Impex v. Commissioner DT&T (2016) 89 VST 450 (Del); Dish TV India Ltd. v. GNCTD (2016) 92 VST 83 (Del), Nucleus Marketing & Communication v. Commissioner of DVAT [decision dated 12th July 2016 in W.P.(C) 7511/2015] and recently in Prime Papers and Packers v. Commissioner, VAT [decision dated 28th July 2016 in W.P. (C) No. 6013 of 2016]. It has further been clarified by the Court that any action the DT&T proposes to take in the form of reopening the assessment, the period within which the refund is to be issued will have to be taken into account. 20. For instance, in the present case, in respect of the assessment for the period 2007-2008, even if the DT&T wished to revisit them, the limitation under Section 34 of the DVAT Act would apply. There are two periods of limitation under Section 34 of the DVAT Act. One is the period of four years from the end of year comprising one or more time period for wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Del). "53. The CVAT should also hold regular orientation and training courses for the VAT Authorities at various levels on the law and procedure governing the collection of VAT. The CVAT can also consult the Delhi State Judicial Academy for that purpose." 25. Due to the careless action of the VATO in the present matter, who issued the issued the 'adjustment order' dated 30th December 2010 unmindful of the law, an interest burden of nearly Rs. 56 lakhs is now placed on the exchequer. A question then arises as to who should be made responsible for this and whether any action on the disciplinary side is not called for? Consequently, the Commissioner, VAT is directed to seek an explanation from the VATO who issued the above 'adjustment order' and to pass appropriate orders on the disciplinary side as he deems fit not later than four weeks from today. A copy of this order be delivered forthwith to the Commissioner, VAT by the Registry through a Special Messenger for compliance with the above direction. 26. The writ petition is allowed and the application is disposed of in the above terms with costs of Rs. 10,000 which, as requested by learned counsel for the Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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