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L G Balakrishnan And Bros Limited vs Government Of Nct Of Delhi & Ors. on 21 September, 2022

Author: Rajiv Shakdher

Bench: Rajiv Shakdher

                                                   NEUTRAL CITATION NO:2022/DHC/005302




                           $~36
                           *       IN THE HIGH COURT OF DELHI AT NEW DELHI
                           %                                               Date of Decision: 21.09.2022
                           +       W.P.(C) 13703/2022
                                   L G BALAKRISHNAN AND BROS LIMITED ..... Petitioner
                                                Through: Ms. Charanya Lakshmikumaran with
                                                         Mr Karan Sachdev, Mr Kunal Kapoor
                                                         and Mr Agrim Arora, Advs.

                                                        versus

                                   GOVERNMENT OF NCT OF DELHI & ORS.      ..... Respondents
                                                 Through: Mr Satyakam, Addl. Standing
                                                          Counsel for GNCTD.
                                   CORAM:
                                   HON'BLE MR. JUSTICE RAJIV SHAKDHER
                                   HON'BLE MS. JUSTICE TARA VITASTA GANJU
                                         [Physical Hearing/Hybrid Hearing (as per request)]


                           RAJIV SHAKDHER, J. (Oral):

1. Allowed, subject to just exceptions.

W.P.(C) 13703/2022 & CM Appl.41827/2022[Application filed on behalf of the petitioner seeking interim relief]

2. Issue notice.

2.1. Mr Satyakam accepts notice on behalf of the respondents/revenue.

3. Mr Satyakam says that since he has received instructions in the matter, he does not wish to file a counter-affidavit.

NEUTRAL CITATION NO:2022/DHC/005302

4. The substantive prayers made in the writ petition read as follows:

"a) Issue a writ of certiorari or any other appropriate writ, order or direction in the nature thereof, quashing the impugned demand notice issued by the Respondent No. 2 under Section 142(8)(a) of the CGST Act read with Rule 142A(1) of the CGST Rules in Form GST DRC-7A bearing Ref. No. ZD0705220002722 dated 02.05.2022;

b) Issue a writ of certiorari or any other appropriate writ, order or direction in the nature thereof, quashing the impugned certificate of demand bearing No.30416214 dated 01.10.2020 issued by the Respondent No. 4 under Section 43(6)of the DVAT Act read with Rule 37(3) of the DVAT Rules;

c) Issue a writ of certiorari or any other appropriate writ, order or direction in the nature thereof, quashing the remand assessment proceedings pending before the Respondent No. 4 pursuant to the remand order dated 08.11.2013 passed by the Hon'ble Tribunal;

d) Issue a writ of certiorari or any other appropriate writ, order or direction in the nature thereof, quashing the tax, interest and penalty proceedings pending before the Respondent No. 3 for the period April 2007, May 2007, June 2007, August 2007, September 2007, November 2007 and January 2008 and March 2008;"

5. Briefly, the contours of the case run along the following lines:

5.1. For the period spanning between April 2007 and March 2008, monthly returns had been filed by the petitioner.

5.2. The assessing officer, according to the petitioner, treated certain stock transfers as local sales, which led to the issuance of twelve (12) adverse assessment orders and equal number of penalty orders. Qua these, the petitioner filed objections, which were 24 in number. 5.3. Respondent no.5/Additional Commissioner, Zone V, i.e., the Objection Hearing Authority [in short "OHA"] before whom eleven (11) objections were placed, decided the same, albeit, against the interest of the petitioner.

5.4. Resultantly, the petitioner, being aggrieved, carried the matter in W.P.(C) 13703/2022 2/5 Signature Not Verified Digitally Signed By:PREM MOHAN CHOUDHARY Signing Date:05.12.2022 11:44:34 NEUTRAL CITATION NO:2022/DHC/005302 appeal before the Appellate Tribunal, Value Added Tax, Delhi [in short "Tribunal"].

5.5. The Tribunal, via the order dated 08.11.2013, has set aside the orders impugned before it and remanded the matter to the OHA/VATO for fresh consideration.

5.7. Insofar as the remaining thirteen (13) objections are concerned, they are pending adjudication before respondent no.3/Joint Commissioner of VAT, Zone-V.

6. It is in these circumstances that the petitioner has approached this Court to assail the recovery notices dated 01.10.2020 and 02.05.2022.

These recovery notices, as is evident from the extract above, are challenged in prayer clauses (a) and (b) of the writ petition. 6.1. We may note that the other grievance that the petitioner raises in the writ petition is that the legal efficacy of the remand direction issued by the Tribunal via dated 08.11.2013, had come to an end on account of the expiry of statutory timeframe set forth in sub-section (2) of Section 34 of the Delhi Value Added Tax Act, 2004 [in short, "DVAT Act"].

7. It is in this context that the reliefs in terms of prayer clauses (c) and

(d) are sought by the petitioner.

8. On the other hand, Mr Satyakam, having regard to the aforesaid backdrop, has fairly stated that the recovery proceedings, at this stage, are premature and therefore, he has instructions to withdraw the impugned recovery notice dated 01.10.2020 and 02.05.2022.

9. It is Mr Satyakam's submission that if necessary, fresh recovery notices will be issued at an appropriate stage, albeit, as per law.

NEUTRAL CITATION NO:2022/DHC/005302

10. Insofar as other grievance raised by the petitioner is concerned i.e., the expiry of limitation, Mr Satyakam says that the petitioner would be free to raise the objection before the adjudicating authority. 10.1. It is also Mr Satyakam's submission that all 24 objections can be placed before one officer i.e., Special Commissioner-I, Department of Trade and Taxes.

11. Given the aforesaid, the writ petition is disposed of with the following directions:

(i) The impugned recovery notices dated 01.10.2020 and 02.05.2022 shall stand withdrawn, in accordance with the statement made before us by Mr Satyakam, albeit, on instructions.

(ii) The 24 objections, which have been filed by the petitioner will be dealt with and decided by Special Commissioner-I, Department of Trade and Taxes.

(iii) The said authority will grant personal hearing to the authorized representative of the petitioner before proceeding to decide the objections.

(iv) The said authority will pass a speaking order, while dealing with the objections. Furthermore, at the time of passing of the order the said authority will bear in mind the objection raised by the petitioner before us with regard to the expiration of the prescribed of limitation. We may note that in this behalf, not only Section 34(2), but also Section 74 of the DVAT Act has been relied upon by the petitioner. Having said so, it is also necessary for us to note that Mr Satyakan says that the proceedings are not barred by limitation under W.P.(C) 13703/2022 4/5 Signature Not Verified Digitally Signed By:PREM MOHAN CHOUDHARY Signing Date:05.12.2022 11:44:34 NEUTRAL CITATION NO:2022/DHC/005302 either of these provisions. Therefore, it becomes all the more necessary for the aforesaid authority to pass a speaking order vis-a-vis the contentions that have been raised before us having regard to the provisions referred to hereinabove.

12. In case the order passed by the Special Commissioner-I, Department of Trade and Taxes, is adverse to the interests of the petitioner, the petitioner will have liberty to take recourse to an appropriate remedy, albeit, as per law.

13. Consequently, pending application shall stand closed.

RAJIV SHAKDHER, J TARA VITASTA GANJU, J SEPTEMBER 21, 2022/pmc Click here to check corrigendum, if any W.P.(C) 13703/2022 5/5 Signature Not Verified Digitally Signed By:PREM MOHAN CHOUDHARY Signing Date:05.12.2022 11:44:34