Delhi District Court
Rita Sharma vs Amit Mittal on 27 September, 2023
IN THE COURT OF SH. RAKESH SYAL,
DISTRICT JUDGE (COMMERCIAL COURT)-03,
SOUTH-WEST DISTRICT, DWARKA COURTS,
NEW DELHI.
CS (COMM) 458/2022
Ms. Rita Sharma
Proprietor of M/s Aadinath Pack India,
W/o Sh. Umesh Sharma,
R/o D-136, II Floor,
Karampura,
Delhi-110015. ... Plaintiff
VERSUS
Sh. Amit Mittal
Proprietor of M/s Shiv Packers,
S/o Ashok Kumar,
R/o Plot no. 3/2, Khasra no. 22,
Nangli, Sakrawati, Najafgarh,
Delhi. ...Defendant
Date of institution : 30.09.2022
Date of final arguments : 20.09.2023
Date of decision : 27.09.2023
JUDGMENT
1.1 The plaintiff has filed the present suit against the defendant for recovery of Rs.4,44,756/- (Rupees four lac forty four thousand seven hundred and fifty six only), alongwith pendente lite CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 1 of 31 and future interest @ 18.00%, per annum, till realization, and costs of the suit.
2.1 The plaintiff's case is that she is proprietor of the firm M/s Aadinath Pack India and has been engaged in the business of corrugated boxes. The defendant, proprietor of M/s Shiv Packers, is engaged in the business of corrugated boxes, paper rolls and allied products and has business dealing with the plaintiff since the year 2014-2015. The plaintiff has been purchasing the material from the defendant through bills on a regular basis and making payment of the tax as per the bills through NEFT/RTGS and cash. The plaintiff while purchasing the goods had made the entries in his ledger account and uploaded the details of the purchases on the website of Department of Trade and Taxes for the Second Quarter and Fourth Quarter of the Financial Year (hereinafter referred to as "FY") 2015-2016 and for the First Quarter and Second Quarter of FY 2016-2017.
2.2 It is further stated that the plaintiff has bought goods for Rs. 11,47,512/- during the Second Quarter of FY 2015-2016, against the following bills:-
S.no. Date Bill no. Amount (Rs. )
1 11.07.2015 6806 2,39,347.50
2 14.07.2015 6818 60,175/-
3 15.07.2015 6828 22,218/-
4 16.07.2015 6831 24,780/-
5 18.07.2015 6844 17,847.60
6 20.07.2015 6850 43,843.80
7 22.07.2015 6863 23,160/-
8 23.07.2015 6875 23,913.95
9 24.07.2015 6881 19,188/-
CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 2 of 31
10 25.07.2015 6893 30,700/-
11 28.07.2015 6909 30,691.50
12 29.07.2015 6917 24,225/-
13 30.07.2015 6922 19,950/-
14 03.08.2015 6942 21,934/-
15 04.08.2015 6953 36,234/-
16 05.08.2015 6962 19,786/-
17 08.08.2015 6976 26,314.10
18 11.08.2015 6992 20,466/-
19 17.08.2015 7015 34,980/-
20 19.08.2015 7030 20,844/-
21 20.08.2015 7044 34,985.55
22 21.08.2015 7053 21,761.10
23 24.08.2015 7066 18,128.80
24 26.08.2015 7083 16,408/-
25 27.08.2015 7091 21,209.30
26 01.09.2015 7111 19,932.60
27 04.09.2015 7139 22,688/-
28 08.09.2015 7157 22,436/-
29 10.09.2015 7167 19,251.70
30 12.09.2015 7180 20,150/-
31 14.09.2015 7188 20,163/-
32 18.09.2015 7225 23,870/-
33 23.09.2015 7257 18,160/-
34 23.09.2015 7256 37,122.90
35 24.09.2015 7265 34,763/-
36 26.09.2015 7282 16,598.60
37 28.09.2015 7288 19,285/-
Total 11,47,513.40
On the above amount, the plaintiff had paid Rs.
57,375.64 as the Value Added Tax (hereinafter referred to as the "VAT") to the defendant. It was the duty of the defendant to deposit the same with the VAT Department. But the defendant has failed to show any sale to the plaintiff in his return filed with the VAT Department. Therefore, a mismatch was noticed by the department CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 3 of 31 and a notice of default assessment of tax and interest u/s 32 of the Delhi VAT Act, 2004, was issued and the plaintiff was asked to deposit Rs. 89,561/-, including interest, on or before 23.19.2019. As there was transition from VAT to GST, the said notice came into the knowledge of the plaintiff in the year 2022, when the plaintiff received a notice from the department to get his assessment done.
2.3 It is further stated that similarly, the plaintiff has bought goods for Rs. 9,32,560.75, during the Fourth Quarter of FY 2015- 2016, against the following bills:-
S.No. Date Bill no. Amount (Rs. )
1 04.01.2016 7914 27,390/-
2 05.01.2016 7930 24,115/-
3 05.01.2016 7929 35,728/-
4 06.01.2016 7943 20,378.50
5 07.01.2016 7957 27,264/-
6 09.01.2016 7969 25,493/-
7 12.01.2016 7992 30,933.75
8 14.01.2016 8005 26,028/-
9 16.01.2016 8016 22,308/-
10 18.01.2016 8028 29,275/-
11 19.01.2016 8039 21,285/-
12 21.01.2016 8051 23,667/-
13 23.01.2016 8070 30,024/-
14 25.01.2016 8080 18,228/-
15 25.01.2016 8124 23,081.50
16 01.02.2016 8142 27,042/-
17 03.02.2016 8156 25,455.50
18 05.02.2016 8167 24,775/-
19 06.02.2016 8189 26,588/-
20 09.02.2016 8202 33,176/-
21 10.02.2016 8231 23,826/-
22 13.02.2016 8248 20,625/-
23 16.02.2016 8269 20,700/-
24 19.02.2016 8300 21,988.50/-
CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 4 of 31
25 24.02.2016 8324 20,895/-
26 27.02.2016 8335 29,000/-
27 01.03.2016 8356 29,127/-
28 03.03.2016 8370 19,812
29 05.03.2016 8373 19,050/-
30 07.03.2016 8393 21,768/-
31 10.03.2016 8414 22,577.70
32 14.03.2016 8438 21,495.90
33 16.03.2016 8454 24,058/-
34 18.03.2016 8478 20,154.40
35 22.03.2016 8493 21,785.40
36 26.03.2016 8516 41,401/-
37 30.03.2016 8517 32,060.80
Total 9,32,560.75
On the above amount, the plaintiff had paid Rs. 46,628/- as VAT to the defendant. It was the duty of the defendant to deposit the same with the VAT Department. But the defendant has failed to show any sale to the plaintiff in his return filed with the VAT Department. Therefore, a mismatch was noticed by the department and a notice of default assessment of tax and interest u/s 32 of the Delhi VAT Act, 2004, was issued and the plaintiff was asked to deposit Rs. 69,891/-, including interest, on or before 25.10.2019.
2.4 It is further stated that similarly, the plaintiff has bought goods for Rs. 9,08,931/-, during the First Quarter of FY 2016-2017, against the following bills:-
S.No. Date Bill No. Amount (Rs)
1 02.04.2016 8539 31,482/-
2 04.04.2016 8544 20,029/-
3 05.04.2016 8551 37,300/-
CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 5 of 31
4 08.04.2016 8576 22,377/-
5 12.04.2016 8603 24,939/-
6 18.04.2016 8643 24,357/-
7 19.04.2016 8649 28,952.70
8 26.04.2016 8692 23,610/-
9 29.04.2016 8719 34,710/-
10 04.05.2016 8755 20,893.80
11 05.05.2016 8759 28,207.20
12 05.05.2016 8760 43,761/-
13 06.05.2016 8765 39,723.20
14 07.05.2016 8773 32,937.30
15 09.05.2016 8784 34,987/-
16 11.05.2016 8802 22,110/-
17 13.05.2016 8812 37,606.20
18 14.05.2016 8816 30,624/-
19 17.05.2016 8829 22,400/-
20 18.05.2016 8838 32,333.80
21 24.05.2016 8870 34,722/-
22 27.05.2016 8903 35,126/-
23 03.06.2016 8954 24,507.90
24 07.06.2016 8975 22,576/-
25 11.06.2016 9008 23,004/-
26 13.06.2016 9017 22,068.90
27 16.06.2016 9039 23,155/-
28 21.06.2016 9071 23,430/-
29 24.06.2016 9094 32,395/-
30 27.06.2016 9101 19,292/-
31 29.06.2016 9113 24,688.40
32 30.06.2016 9123 30,625/-
Total 9,08,931.20
On the above amount, the plaintiff had paid Rs. 45,670/-, as VAT to the defendant. It was the duty of the defendant to deposit the same with the VAT Department. But the defendant has failed to show any sale to the plaintiff in his return filed with the VAT Department. Therefore, a mismatch was noticed by the department and a notice of CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 6 of 31 default assessment of tax and interest u/s 32 of the Delhi VAT Act, 2004, was issued and the plaintiff was asked to deposit Rs. 67,141/-, including interest, on or before 15.11.2019.
2.5 It is further stated that similarly, the plaintiff has bought the goods for Rs. 14,67,920/-, during the Second Quarter of FY 2016- 2017, against the following bills:-
S.No. Date Bill no. Amount (Rs)
1 01.07.2016 9127 40,271.60
2 02.07.2016 9134 31,212/-
3 05.07.2016 9143 22,528.50
4 09.07.2016 9172 22,304/-
5 11.07.2016 9180 22,030/-
6 12.07.2016 9184 20,665.50
7 15.07.2016 9202 24,273/-
8 16.07.2016 9204 32,195/-
9 18.07.2016 9210 42,857/-
10 19.07.2016 9224 20,930/-
11 22.07.2016 9245 22,041/-
12 22.07.2016 9246 28,539/-
13 23.07.2016 9251 36,355/-
14 27.07.2016 9270 23,031/-
15 29.07.2016 9282 28,755/-
16 01.08.2016 9296 25,636/-
17 03.08.2016 9311 21,467.50
18 05.08.2016 9324 22,230/-
19 08.08.2016 9333 22,796/-
20 11.08.2016 9359 35,844/-
21 13.08.2016 9371 35,856/-
22 17.08.2016 9390 28,600/-
23 22.08.2016 9404 22,710.50
24 23.08.2016 9416 22,302/-
25 26.08.2016 9431 22,110/-
26 26.08.2016 9426 40,000/-
CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 7 of 31
27 30.08.2016 9449 25,375/-
28 01.09.2016 9458 20,930/-
29 01.09.2016 9456 1,40,125/-
30 03.09.2016 9472 34,781.70
31 04.09.2016 9480 41422/-
32 07.09.2016 9486 23,848/-
33 08.09.2016 9494 36,729/-
34 10.09.2016 9509 28,249/-
35 12.09.2016 9521 34,384/-
36 12.09.2016 9522 30,051/-
37 15.09.2016 9532 36,682/-
38 16.09.2016 9540 32,381.30
39 17.09.2016 9544 29,808/-
40 19.09.2016 9551 23,946/-
41 21.09.2016 9567 25,987.50
42 23.09.2016 9581 23,908/-
43 26.09.2016 9594 9,999.90
44 28.09.2016 9612 25,281/-
45 30.09.2016 9619 25,592/-
Total 14,67,920/-
On the above amount, the plaintiff had paid Rs. 73,396/- as VAT to the defendant. It was the duty of the defendant to deposit the same with the VAT Department. But the defendant has failed to show any sale to the plaintiff in his return filed with the VAT Department. Therefore, a mismatch was noticed by the department and a notice of default assessment of tax and interest u/s 32 of the Delhi VAT Act, 2004, was issued and the plaintiff was asked to deposit Rs. 1,07,932/-, including interest, on or before 16.02.2020.
2.6 It is further stated that the defendant had filed a recovery suit against the plaintiff which is pending in the court of Ld. ADJ, Dwarka Courts, wherein the defendant had shown all the above CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 8 of 31 transactions but the same have not been disclosed to the Department of Trade and Taxes. Even in the amended plaint filed by the defendant, the defendant had shown all the transactions of sale and purchase but to cheat and defraud the plaintiff and to suit his case, he has deleted all the entries of sale and intimated to the Department that no sale has been made by him qua the plaintiff.
2.7 It is further stated that the defendant had collected the VAT on the sales made by him to the plaintiff on the basis of each bill for Second and Fourth Quarters of FY 2015-2016 and First and Second Quarters of FY 2016-2017. He had collected a total of Rs. 2,23,670/- from the plaintiff as VAT. However, he has not deposited the said amount with the government, because of which the burden to pay the tax has been shifted on the plaintiff.
2.8 It is also stated that the defendant has illegally withheld the tax due to the government on account of purchase made by the plaintiff. He has tried to illegally enrich himself and cause financial loss to the plaintiff. As per the Delhi VAT Act, 2004, every dealer has to get his assessment done for every FY to ensure correctness of sale and purchase made. In May, 2022, when the plaintiff went to the VAT Department, along with his Chartered Accountant, she was shocked to find out that the defendant had not shown sale of a single penny to the plaintiff. Therefore, the plaintiff could not get her assessment done as the liability and the burden would have been shifted upon her and she would have to pay the amount to the Government despite the defendant collecting the same from the CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 9 of 31 plaintiff. While calculating the value of the suit to be Rs. 4,44,756/-, it is stated that the principal amount was Rs. 3,34,525/- and interest there on was Rs. 1,10,378/- The plaintiff has, thus, prayed for a decree of Rs. 4,44,756/- along with pendente-lite and future interest @ 18.00%, per annum, from the date of filing of the suit till its actual realization and costs of the suit.
3.1 Summons of the suit was served upon the defendant on 18.11.2022. The defendant has appeared through his authorized representative Sh. Abhishek Gupta on 05.12.2022 and filed written statement.
4.1 In the written statement, it is stated that the suit is not maintainable and is liable to be dismissed. The suit is time barred as the same has been filed beyond the period of limitation. It has been filed as a counter blast to the suit filed by the defendant against the plaintiff for recovery, which is pending in the court of Ms. Kiran Gupta, Ld. ADJ, South-West, Dwarka Courts, Delhi. The plaintiff has conceded that the defendant has filed a complaint case u/s 138 NI Act, 1881, on the basis of cheques issued by her. The said case is pending in the court of Sh. Satinder Gautam, Ld. Special M.M. South-West, Dwarka Courts, New Delhi.
4.2 In reply to para 5 of the plaint, it is stated that the defendant was having another customer, namely, M/s Aditi Enterprises. Inadvertently, the VAT for the Second Quarter of FY 2015-2016 was deposited in the name of M/s Aditi Enterprises. The CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 10 of 31 defendant was having transactions of Rs. 1,62,489/- with M/s Aditi Enterprises and of Rs. 12,04,889/- with Aadinath Pack India, totalling Rs. 13,67,378/-, with VAT. Inadvertently, he has submitted the particulars of transaction in the name of M/s Aditi Enterprises. Accordingly, the defendant has deposited VAT for the Second Quarter of FY 2015-2016, in TIN no. 07716905366 of M/s Aditi Enterprises. Due to the said reason, there was mismatch in the record of VAT Department. It is stated that the said error occurred in the year 2015- 2016, but the same was not in his knowledge. It is further stated that the defendant came to know about this error after receiving summons from this court. It is further stated that the plaintiff has also not served any legal notice in this regard upon the defendant prior to filing of the present suit. It is stated that after coming to know about this error, after receiving summons from this court, the defendant has approached the VAT Department for rectification. However, the VAT Department informed that the period for rectification of error has expired. It is also stated that the defendant has deposited Rs. 65,113/- as VAT for the Second Quarter, which pertains to both M/s Aadinath Pack India and M/s Aditi Enterprises. The department further informed that this error can be rectified upon the request of the plaintiff only.
4.3 In reply to para 6 of the plaint, it is stated that the defendant has, inadvertently, committed the same mistake. He has deposited the VAT for the Fourth Quarter of FY 2015-2016 in TIN no. 07716905366 of M/s Aditi Enterprises. Due to the said mistake, there is mismatch in the records of VAT Department. The defendant has, CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 11 of 31 inadvertently, deposited VAT of Rs. 48,936/- for this quarter in the account of M/s Aditi Enterprises, which is inclusive of M/s Aadinath Pack India. Sale to M/s Aadinath Pack India was Rs. 9,79,189/- and sale to M/s Aditi Enterprises was Rs. 48,507/- i.e. a total sale of Rs. 10,27,696/-, inclusive of VAT.
4.4 In reply to para 7 of the plaint, it is stated that the defendant has, inadvertently, committed the same mistake. He has deposited VAT of Rs. 45,446/- for the First Quarter of FY 2016-2017 in TIN No. 07716905366 of Aditi Enterprises in place of M/s Aadinath Pack India, and Rs. 530/- as VAT of M/s Aditi Enterprises was deposited separately. Due to the said mistake, there is mismatch in the records of VAT Department. The defendant has, inadvertently, deposited the VAT of M/s Aadinath Pack India in the account of M/s Aditi Enterprises. As per record, sale in this quarter, to M/s Aadinath Pack India was Rs. 9,54,379, inclusive of VAT, and to M/s Aditi Enterprises, it was Rs. 11,316/-, inclusive of VAT.
4.5 In reply to para 8 of the plaint, it is stated that the defendant has inadvertently, committed the same mistake. The defendant has deposited VAT Rs. 73,396/- for the Second Quarter of FY 2016-2017 in TIN No. 07716905366 of M/s Aditi Enterprises in place of M/s Aadinath Pack India. Due to the said mistake, there is mismatch in the records of VAT Department. The defendant has, inadvertently, deposited the VAT of M/s Aadinath Pack India in the account of M/s Aditi Enterprises. In this quarter, sale to M/s Aadinath CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 12 of 31 Pack India was Rs. 15,41,319/-, inclusive of VAT. There was no sale to M/s Aditi Enterprises.
4.6 In reply to para 13 of the plaint, it is stated that as per Delhi VAT Act, 2004, the plaintiff should have also approached the concerned department for assessment for every Financial Year since 2015-2016 onwards. As per the submission of the plaintiff, he has approached the concerned department in May, 2022. It is clear from the submission of the plaintiff that he had not approached the department every year for assessment which resulted in the expiry of limitation. If the plaintiff had approached the VAT Department in time, then the mistake could have been rectified from the defendant's side also. Thus, the plaintiff cannot take advantage of her own wrong.
4.7 In reply to para 14 of the plaint, it is stated that the defendant has deposited the VAT, inadvertently, by mistake in the name of M/s Aditi Enterprises. The period of limitation has expired from the side of defendant. However, it is alive from the side of the plaintiff and the mistake can be still rectified with the help of the plaintiff. Other averments made in the plaint have been generally denied. The defendant has, thus, prayed for dismissal of the suit.
5.1 The plaintiff has filed replication to the written statement, wherein he has generally denied the contentious averments made in the written statement and reiterated those made in the plaint.
CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 13 of 31 6.1 From the pleadings, the following issues were framed on 17.03.2023 :-
"1. Whether the plaintiff is entitled to recover from the defendant a sum of Rs. 4,44,756/- (Rupees four lac forty-four thousand seven hundred and fifty six only), as prayed in the plaint? OPP.
2. If answer to issue no. 1 is in affirmative, whether the plaintiff is entitled to interest ? If so, at what rate and for which period ? OPP.
3. Relief.
No other issue was pressed by the parties.
7.1 In order to prove her case, the plaintiff has herself deposed as PW-2 and examined three other witnesses, namely, PW-1 Sh. Umesh Sharma, PW-3 Sh. Ajay Kumar, Junior Assistant, Ward 61, Department of Trade and Taxes, Delhi and PW-4 Ms. Sai Jyoti Kangandra, GST Inspector of Ward 52, Department of Trade and Taxes, Government of NCT of Delhi.
8.1 The defendant has examined only one witness, namely, DW-1 Sh. Abhishek Gupta.
9.1 Sh. Shashank Sharma, Ld. Counsel for the plaintiff has argued that the purchase of goods by the plaintiff from the defendant, the payment of VAT by the plaintiff to the defendant and non-deposit of such VAT amount by the defendant with the VAT authorities have CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 14 of 31 been admitted by the defendant in his written statement. He has submitted that for all the four quarters in question i.e. Second and Fourt Quarters of FY 2015-16 and First and Second Quarters of FY 2016-17, the plaintiff has paid VAT to the defendant as under:-
S.No. Quarter FY Amount of VAT paid to
the defendant
1 II 2015-16 Rs. 57,375.64
2 IV 2015-16 Rs.46,628/-
3 I 2016-17 Rs. 45,670/-
4 II 2016-17 Rs. 73,396/-
However, the defendant has not deposited the said amount with the VAT Department because of which, the plaintff has received Notices of Default of Assessment, Ex. PW1/5 (Colly), for payment of VAT, plus interest, as under:-
S.No. Quarter FY Amount of VAT 1 II 2015-16 Rs. 89,561/- 2 IV 2015-16 Rs. 69,891/- 3 I 2016-17 Rs. 67,141/- 4 II 2016-17 Rs. 1,07,932/-
He has further submitted that the assessment orders passed by the VAT Authority in this regard have become final and his remedy has become time barred. Thus, he is burdened with the liability to pay the tax and interest as aforesaid. The VAT Department is not issuing No Objection Certificate to the plaintiff because of the pending liability of the VAT. He also contended that during his cross CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 15 of 31 examination, DW-1 has admitted that the defendant has filed revised return which show that their original return were wrong. Thus, the plaintiff is entitled to recover the amount, with interest @ 18.00%, per annum, as prayed in the plaint.
10.1 Sh. M.P. Choudhary, Ld. Counsel for the defendant has argued that the defendant has deposited the tax and filed his tax return in time. However, the VAT paid by the plaintiff was deposited under a wrong TIN number, in the account of M/s Aditi Enterprises. He has contended that the plaintiff has not communicated to him about any mismatch. The defendant has approached the VAT Department for rectification but the same has become time barred. Now, the defendant is helpless. On the other hand, the plaintiff did not get the assessment done for these quarters and was negligent in getting the mismatch rectified. Further, the plaintiff has also not made any payment of the tax as demanded in the Notices of Default of Assessment, Ex. PW1/5 (Colly). Thus, the suit is premature. He has also contended that the Notices of Default of Assessment were received by the plaintiff in the year 2019, but he has not taken any action. He, thus, submitted that the plaintiff has not been able to prove her case and, thus, the suit may be dismissed.
11.1 I have heard Sh. Shashank Sharma, Ld. Counsel for the plaintiff and Sh. M. P. Choudhary, Ld. Counsel for the defendant and also perused the record.
CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 16 of 31 12.1 It is well settled that a civil case is to be decided on the basis of preponderance of probabilities. It is pertinent to mention that as per section 3 of The Indian Evidence Act, 1872, a fact is said to be 'proved' when, after considering "the matters before it", the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. A fact is said to be 'disproved' when after considering the "matters before it", the court either believes that it does not exist, or considers its non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist. A fact is said to be 'not proved' when it is neither proved nor disproved. It is well settled that the expression, "the matters before it" is wide enough to cover even matters which are other than "evidence". It includes statements of the witnesses, admissions, oral or written, documents proved in evidence, demeanour of witnesses, local inspections and presumption etc. Further, while appreciating the evidence, a court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case. Courts of Justice are to use their own common sense and experience in judging the effect of particular facts, and they are to be subject to no particular rule whatever on the subject. In this regard, a reference can be made to Ved Parkash Kharbanda Vs. Vimal Bindal, (2013) 198 DLT 55.
13.1 The issue wise findings are as under:-
CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 17 of 31 Issue No.1 "1. Whether the plaintiff is entitled to recover from the defendant a sum of Rs. 4,44,756/- (Rupees four lac forty-four thousand seven hundred and fifty six only), as prayed in the plaint?
OPP."
PW-1 Sh. Umesh Sharma has tendered his affidavit, Ex. PW1/A, wherein he has generally reiterated the facts stated in the plaint. He has also deposed about various Bills and Challans from 11.07.2015 to 28.09.2015, Ex. PW1/1 (Colly), Bills and Challans from 04.01.2016 to 30.03.2016, Ex. PW1/2 (Colly), Bills and Challans from 12.04.2015 to 30.06.2016, Ex. PW1/3 (Colly) and Bills and Challans from 01.07.2016 to 16.09.2016, Ex. PW1/4 (Colly), Copies of other Bills and Challans, Mark A-1 to A-7. Notices dated 25.07.2019, 26.08.2019, 16.09.2019 and 18.12.2019, of Default of Assessment of Tax and Interest u/s 32 of Delhi VAT Act, 2004, issued by the VAT Department, Ex. PW1/5 (Colly), Notice dated 24.02.2021, u/s 59 (2) of Delhi VAT Act, 2004, issued to M/s Aadinath Pack India for getting the assessment done for the FY 2016-17, Ex. PW1/6, Copy of Ledger Account, Mark-B and Certificate u/s 65 B of the Indian Evidence Act, Ex. PW1/8.
13.2 During his cross examination, PW-1 stated that his wife is the proprietor of M/s Aadinath Pack India. He used to look after the accounts, field work and the factory. His wife Mrs. Rita Sharma used to sit in the factory. He stated that he used to maintain ledger and cash book. In May, 2022, they came to know about the default in VAT when they went to the Department of Trade and Taxes. He stated that CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 18 of 31 they had not received any notice from the Department of Trade and Taxes by post. They came to know about the notice only when they visited the Department of Trade and Taxes in May, 2022. To the question as to whether he had gone to the Department of Trade and Taxes with respect to quarterly returns for the financial year 2015- 2016, he stated that they had gone there in May, 2022. He admitted that the assessment for the Second Quarter and the Fourth Quarter of FY 2015-16 was not got done in time. He does not remember when they had uploaded the VAT details for the Second Quarter of FY 2015- 2016, the Fourth Quarter of FY 2015-2016 or the First Quarter of FY 2016-2017. To the question as to whether, after receipt of default notice, they had supplied the documents and got the assessment done, he stated that they had not got the assessment done because the same could not be done till the time the complete VAT amount is deposited. He admitted that they had not deposited the VAT amount, with interest, as mentioned in the notices. To the question as to whether after receipt of default notice, they had given any notice to the defendant, he stated that they had not done so because before they could do so, the defendant has filed a case against them. He stated that their CA did not tell them about the mismatch between the sale and purchase. He denied that they are not entitled to recover the amount as claimed because they have not deposited the said amount in the Department of Trade and Taxes. He admitted that the defendant has filed case against them for recovery of Rs. 18,50,000/- (Rupees eighteen lac fifty thousand only), on the ground that the said amount is outstanding against them.
CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 19 of 31 13.3 PW-2 Ms. Rita Sharma has tendered her affidavit, Ex. PW2/A, wherein she has generally reiterated the facts stated in the plaint.
13.4 During her cross examination, she deposed that she is the proprietor of M/s Aadinath Pack India but her husband was doing the business and she has no knowledge about the same. In her affidavit, Ex. PW2/A, she stated only what she was told by her husband. The amount claimed in the suit was also told to her by her husband and she has no personal knowledge about the same. The testimonies of PW-1 Sh. Umesh Sharma and PW-2 Ms. Rita Sharma have, by and large, gone unimpeached, as during their cross examination, nothing contrary to the plaint could be elicited.
13.5 PW-3 Sh. Ajay Kumar, has deposed about the record with regard to M/s Shiv Packers, TIN no. 0764034156 viz. VAT Return i.e. DVAT-16 for the Quarter 01.07.2015 to 30.09.2015, filed online by M/s Shiv Packers, Ex. PW3/1, Revised VAT Return i.e. DVAT-16 for the Quarter 01.07.2015 to 30.09.2015, Ex.PW3/2, VAT Return i.e. DVAT-16 for the Quarter 01.01.2016 to 31.03.2016, filed online by M/s Shiv Packers, Ex. PW3/3, Revised VAT Return i.e. DVAT-16 for the Quarter 01.01.2016 to 31.03.2016, filed online by M/s Shiv Packers, Ex. PW3/4, VAT Return i.e. DVAT-16 for the Quarter 01.04.2016 to 30.06.2016, filed online by M/s Shiv Packers, Ex. PW3/5, Revised VAT Return i.e. DVAT-16 for the Quarter 01.04.2016 to 30.06.2016, filed online by M/s Shiv Packers, Ex. PW3/6, VAT Return i.e. DVAT-16 for the Quarter 01.07.2016 to CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 20 of 31 30.09.2016, filed online by M/s Shiv Packers, Ex.PW3/7, Revised Annexure - 2B i.e Summary of Sales for the period 01.07.2015 to 30.09.2015, filed online by M/s Shiv Packers, Ex. PW3/8, Revised Annexure - 2B i.e Summary of Sales for the period 01.01.2016 to 31.03.2016, filed online by M/s Shiv Packers, Ex. PW3/9, Revised Annexure - 2B i.e Summary of Sales for the period 01.04.2016 to 30.06.2016, filed online by M/s Shiv Packers, Ex. PW3/10, and Revised Annexure - 2B i.e Summary of Sales for the period 01.07.2016 to 30.09.2016, filed online by M/s Shiv Packers, Ex. PW3/11.
13.6. PW-4 Ms. Sai Jyoti Kangandra has testified about record with respect to Aadinath Pack India, TIN No. 07900305624. She stated that Notices of Default dated 25.07.2019, 26.08.2019, 16.09.2019 and 18.12.2019, Ex. PW1/5 (Colly), were issued to Aadinath Pack India by her office i.e. Ward 52, Department of Trade and Taxes, Goverment of NCT of Delhi. Notice of Default Assessment of Tax and Interest of CST Act, dated 04.03.2021, issued to Aadinath Pack India is Ex. PW4/1. The testimonies of PW-3 Sh. Ajay Kumar and PW-4 Ms. Sai Jyoti Kangandra have gone unimpeached as they were not cross-examined.
13.7 DW-1 Sh. Abhishek Gupta has tendered his affidavit, Ex.DW1/A, wherein he has generally reiterated the facts stated in the written statement. He has also deposed about Ledger Account of the plaintiff M/s Adinath Pack India for the Second Quarter of FY 2015- 2016, Ex. DW1/1, Ledger Account of M/s Aditi Enterprises, Ex.
CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 21 of 31 DW1/2, Annexure-2B, i.e. Summary of Sale / Outward Branch Transfer Register, at Serial no. 31, reflecting the TIN no. and name of M/s Aditi Enterprises at point-A, Ex. DW1/3, Ledger Account of the plaintiff M/s Adinath Pack India for the Fourth Quarter of FY 2015- 2016, Ex. DW1/4, Ledger Account of M/s Aditi Enterprises reflecting the sale/turnover for the Fourth Quarter of FY 2015-2016 as Rs. 46,197.20 and VAT of Rs. 2,309.80/-, Ex. DW1/5, Annexure - 2B, showing the name of the buyer M/s Aditi Enterprises, at point no. 12, against the total sale of Rs. 9,78,758/-, and output tax as Rs. 48,937.9/- at point B, Ex. DW1/6, Ledger Account of the plaintiff M/s Adinath Pack India, for the First Quarter of the year 2016-2017, Ex. DW1/7, Ledger Account of M/s Aditi Enterprises showing sale of Rs. 10,605.60/- and VAT of Rs. 530.28, Ex. DW1/8, Annexure-2B, at serial no. 22, reflecting the Sale and Output Tax at point C, Ex. DW1/9, Ledger Account of the plaintiff M/s Adinath Pack India for the Second Quarter 2016-2017, Ex. DW1/10, Annexure-2B at Serial no. 2, showing the sale and buyer's name and output tax in the name of M/s Aditi Enterprises at point D, Ex.DW1/11, and Certificate u/s 65 B of the Indian Evidence Act, 1872, Ex. DW1/12.
13.8 During his cross examination, DW-1 has stated that their CA is filing VAT Returns. He is not filing the same. The data is provided to CA by them. He does not know as to how many times the VAT Return for the Second Quarter of FY 2015-2016 was revised. He does not know as to how many times the VAT Return for any quarter of any FY was revised. They used to supply paper to M/s Adinath Pack India. He cannot say whether the commodity codes for 'paper' CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 22 of 31 i.e. 3049001 and 'paper and newsprint' i.e. 3049000, are different or not. They used to supply paper to M/s Aditi Enterprises. To the suggestion that they had given wrong information to the VAT Department that they were supplying 'paper and newsprint' to M/s Adinath Pack India, he stated that he has no knowledge about the same as their CA was filing the VAT Return. To the suggestion that M/s Shiv Packers and M/s Aditi Enterprises have been assessed for the Financial years 2015-2016 and 2016-2017, he stated that he has no knowledge about the same. After filing of this case, they had not issued any notice to M/s Aditi Enterprises for return of excess input claimed by M/s Aditi Enterprises. To the suggestion that they can still appeal against the assessment order but they are deliberately not doing it, he stated that he has no knowledge about the same. To the suggestion that in the Second Quarter in the FY 2016-17, there was no sale by M/s Shiv Packers to M/s Aditi Enterprises, but still the sale was shown to the VAT Department, he stated that for one Quarter, inadvertently, the sale made by M/s Shiv Packers to M/s Adinath Pack India was shown as sale by M/s Shiv Packers to M/s Aditi Enterprises. To the question as to why this mistake occured for Second and Fourth Quarters of FY 2015-2016 and First and Second Quarters of FY 2016-2017, he stated that they used to send data to their CA and the mistake has taken place at the CA's end. He does not know as to why in the original return for Fourth Quarter of FY 2015- 2016, M/s Adinath Pack India was shown but the said firm was not shown in the revised return for the aforesaid Quarter.
CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 23 of 31 13.9 It can be seen that in the written statement, the defendant has admitted that with regard to the Second Quarter of FY 2015-16, he was having transactions with M/s Aditi Enterprises of Rs. 1,62,489/- and with M/s Aadinath Pack India of Rs. 12,04,889/- totalling Rs. 13,67,378/-, with VAT. Inadvertently, he has submitted the particulars of transactions in the name of M/s Aditi Enterprises and, accordingly, the defendant has deposited VAT of sale transactions of Second Quarter of FY 2015-16 in TIN no. 07716905366 of M/s Aditi Enterprises. Due to above reason, there was mismatch in the record of VAT Department. It is further stated that the said error occurred in the FY 2015-16, but the same was not in the knowledge of the defendant. The defendant came to know about it after receiving summons from the court. The defendant approached the concerned department of VAT for rectification. The VAT Department informed that the period of rectification of error has expired. With regard to Fourth Quarter of FY 2015-16, the defendant stated that he has inadvertently committed the same mistake. He has deposited the VAT for the said Quarter in TIN no. 07716905366 in the name of M/s Aditi Enterprises. Due to the above mistake, there is a mismatch in the record of the VAT Department. He has inadvertently deposited Rs. 48,936/- in the accout of M/s Aditi Enterprises, which is inclusive of VAT paid by M/s Aadinath Pack India. The total sale to M/s Aadinath Pack India was of Rs. 9,79,189/- and sale to M/s Aditi Enterprises was of Rs. 48,507/-, i.e. a total of Rs. 10,27,696/-, inclusive of VAT. Further, with regard to First Quarter of FY 2016-17 also, the defendant has stated that inadvertenly he has committed the same mistake and deposited VAT of Rs. 45,446/- in TIN no. 07716905366, in the name of M/s CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 24 of 31 Aditi Enterprises in place of M/s Aadinath Pack India and Rs. 530/- as VAT of M/s Aditi Enterprises, which was deposited separately. The sale of this Quarter to M/s Aadinath Pack India was of Rs. 9,54,379/-, inclusive of VAT and to M/s Aditi Enterprises it was of Rs. 11,136/-, inclusive of VAT. With regard to Second Quarter of FY 2016-17, it is stated that the defendant has inadvertently committed the same mistake and deposited VAT of Rs. 73,396/-, for the Second Quarter of FY 2016-17, in TIN no. 07716905366, in the name of M/s Aditi Enterprises in place of M/s Aadinath Pack India. With regard to Second Quarter of FY 2016-17, the sale to M/s Aadinath Pack India is of Rs. 15,41,319/-, inclusive of VAT, but there was no sale transaction with M/s Aditi Enterprises.
13.10 Thus, it can be seen that the defendant has admitted the sale of goods to the plaintiff, payment of VAT by the plaintiff to the defendant and non-deposit of such VAT to the Department of VAT. Notices of Default of Assessment dated 25.07.2019, 26.08.2019, 16.09.2019 and 18.12.2019, Ex. PW1/5 (Colly) have also not been disputed. The only defence of the defendant is that the plaintiff should have taken timely action to get the mismatch rectified and that the defendant, despite approaching the VAT Department, has not been able to get the same rectified.
13.11 In this regard it is pertinent to refer to Sections 72 and 73 of the Contract Act, 1872, which provide as under:-
"72. Liability of person to whom money is paid, or thing delivered, by mistake or under coercion.--A person to whom money CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 25 of 31 has been paid, or anything delivered, by mistake or under coercion, must repay or return it. --A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it."
"73. Compensation for loss or damage caused by breach of contract.--When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. --When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it." Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.
Compensation for failure to discharge obligation resembling those created by contract.--When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract. --When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 26 of 31 discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract.
Explanation.--In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account."
13.12 In Dhan Singh Yadav v. Badri Prasad, 1963 SCC OnLine Raj 6, the Hon'ble High Court of Rajasthan has held, "3.......There is ample authority for the proposition that the doctrine embodied in this section of the Indian Contract Act has for its foundation the doctrine of equity that whatever has been done under a mistake has to be repaired. That being the position of law the only question is who has the right to claim the repayment or return of money of anything delivered by mistake or under coercion. Sec. 72 of the Indian Contract Act is located in Chapter V of the said Act, the title whereof is very significant, namely, "Of certain relations resembling those created by contract.".........
"...............Even sec. 72 itself says that payment made by mistake has to be repaid. Mistake of fact has the effect of destroying the very foundation of a contract. A reference in this connection be made to sec. 20 of the Indian Contract Act. Therefore, the liability which arises under sec. 72 is not dependant on the existence of a contract but arises on account of an advantage taken by a person due to a mistake or coercion on another. Both the courts below have held that there has been an over-payment due to a mistake of fact and that the mistake CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 27 of 31 was bona fide and excess payment therefore was recoverable under sec. 72 of the Contract Act. The only question which now remains to be determined is as to who can enforce this liability. Paragraph 3 of sec. 73 of the Contract Act lays down that when an obligation resembling that created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract........"
".................... The use of the expression 'as if' in paragraph 3 of sec. 73 justifies this conclusion. From this provision it seems to me that a party, who is ultimately injured on account of the failure to discharge a liability under sec. 72, has a right to enforce that liability against a person who is guilty of a default in the performance of an obligation............."
"................I have already discussed that the language of sec. 72 merely lays down a doctrine of equitable restitution, without specifying the party to whom restitution has to be made. The enforcement of the liability arising under sec. 72 of the Indian Contract Act is available to a person injured due to the failure to discharge the liability." (emphasis supplied) 13.13 Further, in Sudesh Prabhakar Volvoikar v. Gopal Baboo Savoikar, 1994 SCC OnLine Bom 562, the Hon'ble High Court of Bombay has held, CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 28 of 31 "9. .......It is a well settled principle that in a breach of contract the party who suffers the breach is entitled to damages from the party who committed breach......."
13.14 In the instant case, the Bills/Tax invoices, Ex. PW1/1 to Ex. PW1/14 show that the plaintiff has paid VAT @ 5.00%, on the goods purchased from the defendant. The same is also admitted by the defendant. The defendant has not deposited the same with the VAT Department. It is considered that the defendant was under an obligation to deposit the amount of VAT paid to him by the plaintiff, with the Department of VAT. He has failed to discharge his liability to deposit the VAT, collected from the plaintiff, with the Government. The said failure of the defendant has resulted in the VAT Department issuing Notices of Default of Assessment, Ex. PW1/5 (Colly) to the plaintiff. The ultimate sufferer or injured, due to the above breach of the obligation by the defendant, is the plaintiff. The fact that the plaintiff has not got his assessment done in time is of no help to the defendant as the plaintiff has already paid the VAT to the defendant. Thus, the plaintiff is entitled to receive compensation/repayment from the defendant in this regard. The total amount demanded in the Notices of Default of Assessment, Ex. PW1/5 (Colly), is Rs. 3,34,525/-. The plaintiff has also claimed pre-institution interest of Rs. 1,10,378/- on the said amount. However, the plaintiff has not given any detail, in terms of Order VII Rule 2 A CPC, as amended by the Commercial Courts Act, 2015. Thus, it is considered that the plaintiff is entitled to recover Rs. 3,34,525/- (Rupees three lac thirty four thousand five hundred and twenty five only), from the defendant.
CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 29 of 31 Issue no. 1 is decided accordingly, in favour of the plaintiff and against the defendant.
14.1 Issue No.2.
"If answer to issue no. 1 is in affirmative, whether the plaintiff is entitled to interest ? If so, at what rate and for which period ? OPP."
The plaintiff has also claimed pendente-lite and future interest @ 18.00% per annum, on the outstanding amount. Ld. Counsel for the plaintiff has submitted that the plaintiff has been harassed on account of non-deposit of VAT by the defendant and is being shown as the defaulter in the record of the VAT Department. He further submitted that he has to pay interest @ 18.00%, per annum, to the VAT Department. It is pertinent to note that in the Tax Invoices/Bills, Ex. PW1/1 to Ex. PW1/4, there is a stipulation at Serial no. 2 of the Terms and Conditions that the bill should be paid within 15 days, failing which 24.00% interest will be charged. It is thus, considered that the plaintiff is also entitled to interest on the amount of liability imposed upon him due to non-deposit of VAT received by the defendant from the plaintiff, with the VAT Department. In the facts and circumstances of the case, it is considered that pendente-lite and future interest @ 18.00%, per annum, on the above amount, would be just and reasonable. Thus, it is held that the plaintiff is entitled to pendente-lite and future interest @ 18.00%, per annum, on the amount of Rs. 3,34,525/- (Rupees three lac thirty four thousand five hundred and twenty five only), till the realization of the entire amount. Issue CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 30 of 31 no. 2 is decided accordingly in favour of the plaintiff and against the defendant.
15.1 Relief.
In view of the aforesaid, the suit is decreed in favour of the plaintiff and against the defendant, for a sum of Rs. 3,34,525/- (Rupees three lac thirty four thousand five hundred and twenty five only), along with pendente-lite and future interest @ 18.00%, per annum, till the realization of the entire amount.
16.1 The plaintiff is also awarded costs of the suit.
17.1 Decree be drawn accordingly.
18.1 A copy of this judgment be issued to all the parties to the dispute through electronic mail, if the particulars of the same have been furnished, or otherwise, in terms of Order XX Rule 1 of the Code of Civil Procedure, 1908 (as amended by the Commercial Courts Act, 2015).
19.1 File be consigned to Record Room.
Announced in open Court on 27.09.2023.
(Rakesh Syal) District Judge (Commercial Court)-03, South-West, Dwarka Courts, New Delhi 27.09.2023 CS(Comm) No 458/2022 Ms. Rita Sharma vs Sh. Amit Mittal Page no. 31 of 31