JUDGMENT

S. Muralidhar, J. These writ petitions raise a challenge to the constitutional validity of Section 9(2)(g) of the Delhi Value Added Tax, 2004 (`DVAT Act') as being violative of Articles 14 and 19(1)(g) of the Constitution of India.

2. Illustratively, the facts relating to two of the writ petitioners, i.e. Suvasini Charitable Trust (`SCT'.) in W.P. (C) No. 4086/2013 and Arun Jain (HUF) in W.P. (C) Nos. 4573, 4574, 4704, 4709, 4710, 4713, 4714 and 4788/2016, are discussed.

Facts concerning Suvasini Charitable Trust

3. SCT is a charitable trust organization registered under the DVAT Act. It is engaged in the activity of providing food items in the Akshardham Temple complex. It states that it has paid Value Added Tax (`VAT') on its purchases. It avails Input Tax Credit (`ITC') on the VAT paid on its sales. SCT states that it has made purchases from selling dealers registered under the DVAT Act on the strength of tax invoices which prove the collection of tax by the vendor from the purchasing dealer and is a valid document for availing ITC.

4. SCT states that on 1st June 2012, a fire broke out in the premises of the one of selling dealers - M/s. Vidya Polymers. The report of the Delhi Fire Service and the First Information Report (`FIR') lodged with the Station House Officer (`SHO'), Ashok Vihar Police Station are relied upon by SCT in support of this contention. It is stated that on account of said fire and destruction of records, M/s. Vidya Polymers failed to deposit the VAT collected from its buyers, which included SCT.

5. On 17th August 2012, the Value Added Tax Officer (`VATO') issued a default assessment order for the month of May, 2012 invoking Section 9(2)(g) of the DVAT Act. Apart from raising a tax demand, another default assessment order imposing a penalty under Section 86(10) of the DVAT Act was also passed by the VATO. SCT states that the above orders were passed without affording it an opportunity of being heard and solely on the basis that the ITC availed by SCT on the purchases did not match with the sale details filed by the vendor.

6. The appeals filed by SCT against the aforementioned default assessment orders were dismissed by the Objection Hearing Authority (`OHA') on 25th March 2013. These orders have also been challenged in W.P. (C) No. 4086 of 2013.

Facts concerning Arun Jain (HUF)

7. Arun Jain (HUF) (`AJ') deals in the sale and purchase of Foreign Trade Licenses (`FTLs') issued under Section 5 of Foreign Trade (Development & Regulation) Act, 1992. It is stated that the FTL is valid for 18 months from the date of issuance. FTLs are transferable and are covered under the definition of `goods' and their sales are exigible to VAT under the DVAT Act.

8. AJ states that during the Assessment Years (`AY') 2013-14 and 2014-15, it made intra-state purchases from registered selling dealers and paid VAT on such purchases. AJ made sure that the selling dealer had a valid Tax Identification Number (`TIN') at the time of entering into the transaction. Later, AJ claimed ITC of the VAT so paid. 80% of the FTLs are sold to customers who actually utilize them to discharge the burden of import duty. The purchase and sale of FTLs are duly recorded in the books of accounts and payments. It is stated that the payments made against purchases and payment received against sales are only through banking channels and are duly accounted for.

9. Under Section 26 of the DVAT Act read with Rule 28 of the Delhi Value Added Tax Rules, 2005 (DVAT Rules), a registered dealer is required to submit a return for each tax period. Along with the return, the dealer has to submit information regarding the summary of purchases and sales made and the VAT paid thereon in Annexures 2A and 2B respectively. It is pointed out that in case the selling dealer does not reflect the sales made to a particular purchasing dealer, a mismatch report gets generated on the website of the Department of Trade and Taxes (`Department'). Conversel