Delid Waste Management Ltd v. Commissioner, Trade and Taxes

1. The grievance of the petitioner is with regard to the sealing of the premises belonging to the petitioner. Learned counsel for the petitioner has undertaken that all the relevant documents which are available with them would be supplied to the Joint Commissioner, respondent No.2, within two days. In case any additional information is required that will also be complied with expeditiously. 2013:DHC:7572-DB

2. The learned counsel for the petitioner has pointed out that no amount can be demanded by way oftax unless and until an assessment has been carried out in terms of Section 30 of the Delhi Value Added Tax, 2004 and, therefore, he submitted that the demand of~20 crores as a pre-condition for de-sealing the premises is outrageous. The learned counsel for the respondents, however, pointed out that under Section 60(4), the Commissioner can de-seal the premises on such terms and conditions including furnishing of security for such sum in such form and manner as he direct. He submits that it is in terms ofthis provision that the said condition ofde-sealing has been imposed on the petitioner.

3. Having heard the counsel for the parties, we are of the view that the condition of depositing ~20 crores is extremely harsh and onerous and does not have any foundation, prima-facie. This is so because in the previous years, the petitioner has been paying value added tax at an average of about ~2.[5] crores to ~3 crores annually. Therefore, a sum of ~20 crores as expected tax liability is really farfetched. Considering the fact, that, according to the counsel for the petitioner, they have already paid a sum of~1.[2] crores approximately by way ofvalue added tax, this year, and considering the past record, that the petitioner at an average pays a sum of ~2.[5] crores annually, we find that the difference between the two sums is about ~1.[3] crores.

4. The penalties provided under the Delhi Value Added Tax Act, 2004 are prescribed in Section 86 thereof

5. Section 86(13) specifically deals with preparation of records, retention of records or accounts etc.

6. Ifthere is failure on the part ofthe person to retain the records and accounts for the prescribed period, the person shall be liable to pay, by way of penalty, a sum of fifty thousand rupees or twenty percent of the tax deficiency, if any, whichever is greater.

7. Even if Section 86(13) is invoked, which of course needs to be established, if there is such an allegation, the maximum penalty is a sum of fifty thousand rupees or twenty percent ofthe tax deficiency.

8. In the present case, even if we assume that the tax deficiency is ~1.[3] crores, 20% ofthat would be ~26 lacs. Consequently, the only security that ought to be taken under Section 60(4) and which would be reasonable, would be for a sum of~26 lacs. Therefore, we direct that the petitioner shall furnish a bank guarantee in the sum of ~26 lacs within three days.

9. On furnishing the bank guarantee to the satisfaction ofthe respondent No.2, the premises in question shall be de-sealed. The writ petition stands disposed ofwith these directions. We may point out that the bank guarantee is to be given with respect to the W.P.(C) No.1209/2013 and not in respect of W.P.(C) No.1203/2013 because in that case there are no proceedings qua sealing as oftoday. Dasti under signature ofthe Court Master.

FEBRUARY 27, 2013 rb R.V.EASWAR,J