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IN THE HIGH COURT OF DELHI
RAJIV SAHAI ENDLAW, SANJEEV NARULA, JJ.
K.R. Anand – Petitioner
Versus
Commissioner Of Central Goods And Services Tax & Another – Respondent
W.P.(C). No. 2047 of 2021
Decided On : 16-02-2021
DVAT Act - Challenge to default assessment of tax and interest - Section 9(2)(g) of the Delhi Value Added Tax Act, 2004 - [Section 9(2)(g), Section 32, Section 33, Section 34] - The court discussed the vires of Section 9(2)(g) of the DVAT Act and the notice of default assessment of tax and interest dated 28th March, 2015, as well as notice of assessment of penalty dated 28th March, 2015 for the year 2010-11. The judgment in the lead case W.P.(C.) 6093/2017 and batch set aside the notices for default assessment of tax and interest under Section 32 of the DVAT Act and default assessment of penalty under Section 33 of the DVAT Act. The Supreme Court dismissed the Special Leave Petition and granted liberty to approach the High Court in cases where transactions are not bona fide. The Respondents passed an order dated 15th January, 2021, which was impugned in the present writ petition on the ground of limitation. The court analyzed Section 34 of the DVAT Act and held that the impugned order was barred by limitation and quashed it.
Fact of the Case:
The petitioner challenged the vires of Section 9(2)(g) of the DVAT Act and the notice of default assessment of tax and interest dated 28th March, 2015, as well as notice of assessment of penalty dated 28th March, 2015 for the year 2010-11. The impugned order dated 15th January, 2021, was challenged on the ground of limitation.
Finding of the Court:
The court found that the impugned order was barred by limitation in terms of Section 34 of the DVAT Act and quashed it.
Issues: Challenge to default assessment of tax and interest, vires of Section 9(2)(g) of the DVAT Act, and the impugned order dated 15th January, 2021, on the ground of limitation.
Ratio Decidendi: The impugned order was barred by limitation in terms of Section 34 of the DVAT Act.
Final Decision: The present writ petition is allowed, and the impugned order dated 15th January, 2021, is hereby quashed.
JUDGMENT :
SANJEEV NARULA, J.
[Via Video Conferencing]
CM APPL. 6001/2021 (for exemption)
1. Allowed, subject to all just exceptions.
2. The application is disposed of.
W.P.(C) 2047/2021 & CM APPL. 6002/2021 (for ex-parte ad-interim stay)
3. Before we deal with the challenge made in the present petition, it would be apposite to note the brief factual background. Petitioner had earlier approached this Court by way of a W.P.(C.) 4904/2015 under Article 226 and 227 of the Constitution of India challenging the vires of Section 9(2)(g) of the Delhi Value Added Tax Act, 2004 (hereinafter referred to as ‘DVAT Act’), the notice of default assessment of tax and interest dated 28th March, 2015 as well as notice of assessment of penalty dated 28th March, 2015 for the year 2010-11.
4. The said petition was allowed in favour of the Petitioner vide judgment dated 26th October 2017 along with other batch of matters, holding, inter alia, as under:
“The present petition has been disposed of by a common judgment passed today in W.P.(C) 6093/2017 and batch. Consequently, the notices for default assessment of tax and interest under Section 32 of the Delhi Value Added Tax Act, 2004 ('DVAT Act') and default assessment of penalty under Section 33 of the DVAT Act, dated 28th March 2015, are set aside. A copy of the said judgment is placed below.”
5. Aggrieved with the order in the lead case (being W.P.(C.) 6093/2017) titled M/s On Quest Merchandising India Pvt. Ltd. v. Government of NCT of Delhi & Ors., the Respondents filed a Special Leave Petition before the Supreme Court bearing SLP (C.) No. 36750/2017 titled Commissioner of Trade and Taxes vs. Arise India Ltd., which was dismissed on 10th January, 2018, while granting liberty to the Respondents in the following terms:
“On hearing learned Additional Solicitor General appearing for the petitioner, we are not inclined to interfere with the impugned order. The special leave petition is dismissed.
Learned Additional Solicitor General, however, submits that a batch of petitions were decided by the impugned order and here are some of the cases where the purchase transactions are not bonafide like the present case and those cases ought to have been remitted back to the competent authority.
Learned Additional solicitor General submits that the petitioner would move the High Court with necessary particulars for directions in this behalf for which liberty is granted, as prayed for.”
6. In terms of the aforesaid liberty granted to it, the Petitioner filed a civil miscellaneous application being CM Appl. 27370/2018 in W.P.(C.) 4904/2015 before this Court. Although initially notice was issued on the said application, however after hearing both the sides, the application was subsequently dismissed vide order dated 17th January, 2020, granting liberty to the Applicant to issue a show cause notice in accordance with law. The relevant portion of said order reads as under:
“1. Counsel for the Applicant seeks leave to withdraw this application with liberty to issue a further show cause notice in accordance with law and to pursue further proceedings consistent with the law laid down by this Court in its judgment dated 26th October, 2017 in W.P.(C) No. 6093/2017 (On Quest Merchandising India Pvt. Ltd. v. Govt. of NCT of Delhi) which has been affirmed by the Supreme Court in its order dated 10th January, 2018.
2. The application is dismissed as withdrawn with liberty as prayed/or.”
7. In terms of the aforesaid liberty, the Respondents have passed the order dated 15th January, 2021 which is titled as “Notice of default assessment of tax and interest under Section 32”, which has been impugned in the present writ petition.
8. The primary ground for impugning the said order is that the same is barred by limitation.
9. Mr. Satyakam, Additional Standing Counsel for GNCTD appearing on advance notice, defends the impugned order and submits that it is within limitation in terms of Sub-section (2) of Section 34 of the DVAT Act. He submits that in
The impugned order was barred by limitation in terms of Section 34 of the DVAT Act.
The court established that tax assessment orders must adhere to statutory limitation periods, emphasizing that extensions to limitation cannot be granted post-expiration of the statutory timeline.
Limitation would arise under Section 29(6) of the Act, only in the event and at the stage of the application filed under Section 32 being allowed.
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