Delhi High Court - Orders
M/S Evogreen Trading (P) Ltd vs Commissioner Of Vat & Anr on 14 September, 2023
Author: Yashwant Varma
Bench: Yashwant Varma, Dharmesh Sharma
$~9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ VAT APPEAL 1/2023
M/S EVOGREEN TRADING (P) LTD ..... Appellant
Through: Mr. Vasudev Lalwani and Mr.
Rohit Gautam, Advs.
versus
COMMISSIONER OF VAT & ANR. ..... Respondents
Through: Mr. Rajeev Aggarwal, ASC
along with Ms. Shaguftha
Hameed and Mr. Prateek
Badwar, Advs.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE DHARMESH SHARMA
ORDER
% 14.09.2023 CM APPL. 1524/2023 ( delay of 39 days in filing the appeal)
1. Bearing in mind the disclosures made, the delay of 39 days in filing the appeal is condoned.
2. The application shall stand disposed of.
VAT APPEAL 1/20233. The instant appeal under Section 81 of Delhi Value Added Tax Act 20041 is directed against the order of the Appellate Tribunal, Delhi2 dated 11 August 2022 which has affirmed the initiation of default assessment proceedings against the appellant and has upheld 1 the Act 2 Tribunal This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/09/2023 at 21:07:35 the order of the Objection Hearing Authority3 dated 30 November 2018. For the purposes of appreciating the narrow question which arises for our consideration, it would be pertinent to note the following facts.
4. The dispute itself emanates from the four quarters of Assessment Year4 2010-2011 and in respect of which returns were filed on a quarterly basis by the appellant. Those details have been duly noted by the Tribunal in its order in paragraph 8 which is extracted hereinbelow:-
"8. As per claim of the appellant, for all the 4 quarters of 2010-11, dealer-appellant filed returns on the following dates:
S. No. Month & Year Original return filed on
1. 1st Qr. 2010 12-02-2011
2. 2nd Qr. 2010 12-02-2011
3. 3rd Qr. 2010 12-02-2011
th
4. 4 Qr. 2010-11 22-08-2011 (05-09-2011)
Revised
Case of the dealer-appellant is that default assessments were framed on 30-03-2015, whereas as regards 1st, 2nd and 3rd quarter, the default assessments were to be completed by 11-02-2015 and for the 4th quarter, the default assessment was to be completed by 21-08-2015."
5. The case of the appellant was that the Default Assessment Notices5 which came to be issued on 30 March 2015 would clearly be barred by limitation bearing in mind the language as employed in Section 34 of the Act as it stood at the relevant time and prior to its amendment by the Delhi VAT (Amdt.) Act, 2013 (Act No. 01 of 2013).
6. The original Section 34 of the Act as well as how it stands 3 OHA 4 AY 5 Notices This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/09/2023 at 21:07:35 today are extracted in the form of a table hereinbelow:-
Before Delhi VAT (Amdt.) Act, 2013 Post Delhi VAT (Amdt.) Act, 2013 (01 of 2013), dated 28.03.2013 (01 of 2013), dated 28.03.2013, w.e.f.
01.04.2013
34. Limitation on assessment and re- 34. Limitation on assessment and re-
assessment. assessment.
1. No assessment or re-assessment 1. No assessment or re-assessment
under section 32 of this Act shall be under section 32 of this Act shall be
made by the Commissioner after the made by the Commissioner after the
expiry of four years from- expiry of four years from-
(a) the date on which the person (a) the end of the year comprising of
furnished a return under section 26 or one or more tax periods for which the
sub-section (1) of section 28 of this person furnished a return under section
Act; or 26 or 28 of this Act; or
(b) the date on which the Commissioner (b) the date on which the Commissioner
made an assessment of tax for the tax made an assessment of tax for the tax
period whichever is the earlier: period whichever is the earlier:
Provided that where the commissioner Provided that where the commissioner
has reason to believe that tax was not has reason to believe that tax was not
paid by reason of concealment, paid by reason of concealment,
omission or failure to disclose fully omission or failure to disclose fully
material particulars on the part of the material particulars on the part of the
person, the said period shall stand person, the said period shall stand
extended to six years. extended to six years.
(2). Notwithstanding sub-section (1) of (2). Notwithstanding sub-section (1) of
this section, the Commissioner may this section, the Commissioner may
make an assessment of tax within one make an assessment of tax within one
year after the date of any decision of year after the date of any decision of
the Appellate Tribunal or court where the Appellate Tribunal or court where
the assessment is required to be made in the assessment is required to be made in
consequence of, or to give effect to, the consequence of, or to give effect to, the
decision of the Appellate Tribunal or decision of the Appellate Tribunal or
court which requires the re-assessment court which requires the re-assessment
of the person. of the person.
7. Before us it is not disputed that it is the unamended Section 34 of the Act which would apply. Section 34(1) of the unamended Act clearly prescribed that no assessment or re-assessment shall be made This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/09/2023 at 21:07:36 by the Commissioner after the expiry of four years from the date on which the person had furnished a return. Undisputedly, and in terms of Section 26 or sub-section (1) of Section 28 of the Act, it is open to the assessee to file returns either on a monthly, quarterly or a yearly basis. Each such self assessment return which is submitted, therefore, would have to be construed independently and the period of limitation as prescribed in Section 34 of the unamended Act would be liable to be computed accordingly.
8. If the aforesaid position is borne in mind, it would be manifest that the Notices of 30 March 2015 insofar as they came to be issued for the 1st, 2nd and 3rd quarters of AY 2010-2011 would clearly not sustain. The Court notes that the position of limitation as prescribed in terms of Section 34 of the Act is an issue which is no longer res integra and stands concluded in terms of judgment of the Division Bench of the Court in Samsung India Electronics Private Ltd. v. Govt. (NCT of Delhi)6.
9. Dealing with the construct of Section 34 of the Act, the Court had in Samsung observed as follows:-
"34. The Court is unable to accept with the above submission of the DT&T. Given the overall scheme of the DVAT Act and Section 31, 32 and 34 in particular, the Court accepts the manner of computation of the four year period as depicted by the Petitioner. The notices for reopening of the assessment for the months comprising the Assessment Year 2009-10 ought to have been issued before the expiry of the respective dates as shown in the above table. Barring the reopening of the assessments for February and March 2010, where the dates of the notices of default assessment were prior to the completion of four years, i.e., 26th March and 23rd April 2014, in respect of all other returns by way of self-assessment made by the Petitioner from April 2009 to January 2010, the re-opening of the assessment was sought to be done on a date after the expiry of the four-year period.6
[2016 SCC OnLine Del 2231].
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/09/2023 at 21:07:36
35. In H.M. Industries v. Commissioner of Value Added Tax (decision dated 26th September 2014 in ST. Appl. 32/2013), this Court held that unless the conditions of Section 32(1) of the DVAT Act are satisfied, default assessment cannot be made and if made will be liable to be struck down. In a recent decision dated 14th May 2015 in Writ Petition (C) No. 5231/2014 (ITD-ITD Chem JV v. Commissioner of Trade and Taxes) it was emphasised by this Court that for invoking the powers under Section 34 read with Section 32 of the DVAT Act, the jurisdictional pre-conditions must be satisfied.
36. The reasons for re-opening have to be recorded in writing by the Commissioner. In particular the reasons must indicate which of the four contingencies in Section 32(1) of the DVAT Act stand attracted in the facts and circumstances of the case. In the present case, since the first proviso to Section 34 of the DVAT Act has not even been invoked, there was no possibility of invoking the extended period of limitation, i.e., beyond the expiry of four years. The phrase „whichever is earlier‟ occurring in Section 34(1) of the DVAT Act is an indication that the date on which the Petitioner makes an assessment in terms of Section 31(1)(a) of the DVAT Act is crucial for determining the expiry of the limitation of four years for completion of the reassessment.
37. In that view of the matter, the Court is satisfied that barring the default notices of assessment pertaining to the months of February and March 2010, all the other notices of default assessment issued for the remaining months of AY 2009-10 by the impugned notices dated 31st March 2014 are barred by limitation and deserve to be set aside on that ground."
10. We note further from the order passed by the Tribunal itself that the factual position was not disputed. The Tribunal however, has perfunctorily observed that in light of the "peculiar" facts and circumstances distinguishable from the decision and which was cited for its consideration, the issue of limitation was liable to be answered against the appellant. We find ourselves unable to sustain the aforesaid line of reasoning as assigned.
11. Samsung India was an authority which clearly bound the Tribunal on the imperatives of the limitation as prescribed by Section 34 of the Act being strictly adhered to. Tested on the aforesaid lines it This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/09/2023 at 21:07:36 is manifest that the Notices which would survive would only be with respect to the return which was submitted for the fourth quarter of AY 2010-2011 on 22 August 2011 and a revised return in respect whereof had been filed on 05 September 2011. It is the notice in respect of the said quarter alone which would survive the curtain of limitation which stands constructed under Section 34 of the unamended Act.
12. Accordingly, the instant appeal is partly allowed. The order of the Tribunal dated 11 August 2022 insofar as it upholds the initiation of proceedings for the 1st, 2nd and 3rd quarters of AY 2010-2011 is set aside. Insofar as the proceedings relating to the fourth quarter are concerned, we leave it open to the appellant to initiate such proceedings as may be permissible in law.
13. We also take note of the contention of learned counsel for the appellant who contended that it derived knowledge of the initiation of proceedings in respect of that quarter only by way of the returns filed by the respondents in the present proceedings. However, the said issue as well as others that may be available to be canvassed for the purposes of condonation of delay in respect of any appeal that is proposed to be filed in respect of that quarter, are kept open to be addressed before the competent authority. All contentions of respective parties are kept open.
14. Consequently, the appeal shall stand disposed of.
YASHWANT VARMA, J.
DHARMESH SHARMA, J.
SEPTEMBER 14, 2023 / SU This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/09/2023 at 21:07:36