Back
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
UJJAL BHUYAN, MILIND N. JADHAV, JJ.
M/s. Yogi Petroleum – Petitioner
Versus
Commissioner of VAT, Dadra and Nagar Haveli – Respondent
Writ Petition (STAMP) Nos. 93644, 93646, 93647, 93648, 93649, 94113, 94222, 94223, 94449, 94450 of 2020
Decided On : 21-05-2021
Dadra and Nagar Haveli Value Added Tax Regulations, 2005 - Sections 35, 58, 86, 32, 33, 34 - Re-assessment - Petitioner is a proprietorship firm having business of retail petrol pump dealership - Deputy Commissioner (VAT), issued notice for audit of business affairs to petitioner - By said notice, it was stated that Deputy Commissioner was satisfied that an audit of petitioner’s business affairs as a dealer was required to be undertaken for period 2010-11, 2011-12 and 2012-13 - Petitioner replied to Deputy Commissioner vide letter stating that petitioner’s outlet was already assessed for period 2010-11, 2011-12 and 2012-13 - Pointing out that petitioner’s tax consultant is based at Vapi, Gujarat, petitioner stated that because of restrictions due to Covid-19 pandemic, some time would be required to trace out papers - Time was sought for - Petitioner has stated that it had already been assessed for financial years 2010-11 on 25.10.2013, 2011-12 on 25.10.2013 and 2012-13 on 22.01.2014 - Deputy Commissioner passed audit reports (orders) under section 58 of VAT Regulations for three financial years - By said audit reports (orders), Deputy Commissioner came to conclusion that information received from various refineries indicated differences with returns furnished by retailers for which VAT Department had decided to conduct audit in respect of all petroleum dealers - Deputy Commissioner recorded that there was violation of sub-section (9) of section 86 and, therefore, dealer is liable to pay tax and interest, besides payment of penalty - After passing such audit reports (orders), Deputy Commissioner issued notice of default assessment of tax and interest under section 32 in Form DVAT-24 as well as notice of assessment of penalty under section 33 in Form DVAT-24A.
Finding of the Court:
Powers under section 34(8A) and under section 35 operate in different fields and under different circumstances - Applying limitation prescribed under section 35 to proceedings under section 34(8A) would be re-writing section 34(8A) and to provide limitation which is not there in the said section - Subsequent Division Bench while not agreeing with the view taken by the earlier Division Bench had requested the matter to be referred to a Full Bench on the question as to whether period of limitation prescribed under section 35 can be made applicable with respect to proceedings under section 34(8A) - There is a conflict of opinion within the Gujarat High Court as to whether limitation prescribed in section 35 of Gujarat Value Added Tax Act, 2003 can be read into section 34(8A) thereof - In any case, decisions of Gujarat High Court at most can have a persuasive value and are certainly not binding on this Court - Court is of the view that be it the decision in H. Tribhovandas (supra) or Samay Sales (supra), none have any relevance to the issue before this Court - Court have already arrived at the conclusion that the impugned orders of audit were passed in violation of the principles of natural justice - Court have also arrived at conclusion that impugned notices and consequential orders of audit are barred by limitation and thus without jurisdiction - Question of relegating petitioners to appellate remedy simply does not arise.
Result: Writ Petitions Allowed.
JUDGMENT :
UJJAL BHUYAN, J.
1. Subject matter and reliefs sought for in all the writ petitions being identical, those were heard together and are being disposed of by this common judgment and order.
2. We have heard Mr. Rafiq Dada, Mr. Vijaysinh Thorat and Mr. V. Sridharan, learned senior counsel for the petitioners and Mr. H.S. Venegaonkar, learned counsel for the respondents in all the writ petitions.
3. For the sake of convenience, we have divided the bunch of cases into three groups; one argued by senior counsel Mr. Dada, the other by senior counsel Mr. Thorat and the last group by Mr. Sridharan, learned senior counsel.
4. The group of cases argued by Mr. Dada comprises of the following:-
Of these, Mr. Dada argued the case of M/s. Shubham Petroleum, Writ Petition (St.) No. 94450 of 2020 as the lead case.
4.1. Writ Petition (St.) No. 94222 of 2020 and 94223 of 2020 were argued by Mr. Thorat, learned senior counsel.
4.2. Lastly, Writ Petition (St.) No. 94113 of 2020, Khanvel Petroleum vs. Commissioner of VAT, Dadra and Nagar Haveli was argued by Mr. V. Sridharan, learned senior counsel.
4.3. Since the facts and reliefs sought for in all the writ petitions are identical (besides all the petitioners are similarly placed, being retail petrol pump dealers in the union territory of Dadra and Nagar Haveli), the facts of M/s. Shubham Petroleum vs. Commissioner of VAT, Dadra and Nagar Haveli, Writ Petition (St.) No. 94450 of 2020 argued as the lead case are being referred to for the sake of convenience.
5. Petitioner is a proprietorship firm having its place of business at Khanvel Road, Village Kahdoli in the union territory of Dadra and Nagar Haveli. It is duly registered under the Dadra and Nagar Haveli Value Added Tax Regulations, 2005 (briefly “the VAT Regulations” hereinafter). Petitioner is carrying on the business of retail petrol pump dealership.
6. Deputy Commissioner (VAT), Dadra and Nagar Haveli, Silvassa (briefly referred to as the ‘Deputy Commissioner’) issued notice for audit of business affairs dated 25.09.2020 to the petitioner. By the said notice, it was stated that the Deputy Commissioner was satisfied that an audit of petitioner’s business affairs as a dealer was required to be undertaken for the period 2010-11, 2011-12 and 2012-13. Petitioner was, therefore, directed to attend office of Value Added Tax (VAT) Department on 03.10.2020 at 11:00 a.m. and to produce/cause to be produced the books of accounts and all evidence on which petitioner would rely in support of the returns filed by the petitioner, including tax invoices, if any, and in addition to produce or cause to be produced the following documents:-
(ii) VAT returns.
(iii) Assessment orders.
(iv) Balance-sheet.
(v) Audit report.
6.1. Petitioner was cautioned that in the event of failure to comply with the notice, audit of the business affairs for the period under consideration would be made to the best of judgment of the Deputy Commissioner without any further notice.
7. Upon receipt of the said notice, petitioner replied to the Deputy Commissioner vide letter dated 30.09.2020 stating that petitioner’s outlet was already assessed for the period 2010-11, 2011-12 and 2012-13. Pointing out that petitioner’s tax consultant is based at Vapi, Gujarat, petitioner stated that because of restrictions due to Covid-19 pandemic, some time would be required to trace out the papers. Therefore, time was sought for. However, without reference to the aforesaid reply of the petitioner, Deputy Commissioner informed the petitioner vide letter dated 05.10.2020 that time was extended till 12.10.2020 for production of documents in terms of the notice dated 25.09.2020.
8. On 12.10.2020, petitioner submitted the following documents to the Deputy Commissioner:-
(ii) Audit report and balance-sheet.
(iii) Returns and challans.
(iv) Summary sta
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
