Full Text
17.
ROSHAN LAL LALIT MOHAN & ANR. Petitioners
Through: Mr A. Maitri, Ms Radhika Chandrashekhar and Mr Naresh Goel, Advocates.
Through: Mr Gautam Narayan, Additional Standing counsel and Mr R. A. Iyer, Advocate along with Mr Ram Avtar Meena and Mr R. S.
Ruhil, VATO.
18.
ROSHAN LAL LALIT MOHAN & ANR Petitioners
Through: Mr A. Maitri, Ms Radhika Chandrashekhar and Mr Naresh Goel, Advocates.
Through: Mr Satyakam, Additional Standing counsel along with Mr Ram Avtar Meena, VATO and Mr R. S. Ruhil, VATO.
23.05.2016
ORDER
1. The challenge in W.P.(C) No.610/2016 is to the letter dated 29^ lune. ^.P.(C) Nos.610 & 1117/2016 Page I of[9] 2016:DHC:8960-DB y 2015 issued by the Assistant Commissioner, Ward-16 rejecting the application of the Petitioner No. 1 proprietory concern, of which Petitioner No. 2 is the Proprietor, seeking refund of a sum of Rs.34,62,662/- which is outstanding witheffectfrom 1^^ April, 2005.
2. There is a long history to the present petition. Petitioner No. 1 was registered with the VAT Authorities way back in 2004. By the assessment order dated 30^'* October, 2007 for the year 2006-07 a refund oftax credit of Rs.45,32,825/- was determined by the Department of Trade and Taxes (DT&T). Petitioner No. 1 was allowed to carry forward the said amount in the returns for the subsequent years. According to the Petitioners, between 2007 and 2012 it submitted returns under the Delhi Value Added Tax Act, 2004 (DVAT Act) regularly and kept carrying forward the above amount under the column "refund".
3. On 1May, 2012, the registration ofPetitioner No. 1 was cancelled. The objections by the Petitioners to the cancellation were ultimately allowed and theregistration was restored on 17^^ October, 2014.
4. On 20"^ December, 2014, Petitioner No. I filed its return and in the column R-9.[2] claimed refundable amount of tax credit of Rs.34,62,662/-. With the refund not being processed, the Petitioners filed W.P.(G) NO. 2524/2015 in this Court. When the writ petition was heard on 13*'' March 2015, the Respondent pointed out that it had by email dated 7"^ March 2015 rejected the claim of Petitioner No. 1 on the ground that only a sum of Rs. 1,08,831 was found refundable. Thereafter, on 28''^ April 2015, Petitioner W.P.(C)Nos.6J0&II17/2016 ' Page2of[9] % No. 1 received a letter from the Department again rejecting the refund claimed by stating that the return for August 2006 reflected NIL as carry forward refund, whereas a refund was shown in the subsequent return of September, 2006 onwards. The DT&T observed that the claim was incorrect and, therefore, could not be entertained.
5. On 30 March, 2015, the Petitioners made a detailed representation to the Assistant Commissioner, Ward-16 protesting against the above rejection. Thereafter, W.P.(C) No. 4905/2015 was filed challenging the rejection. By order dated IS''^ May 2015, the Court allowed the writ petition and set aside the above communications on the ground that they could not be considered as orders in the proper format in terms of Section 38 of the DVAT Act. The Court directed that the reftind application of Petitioner No. 1 should be disposed of in terms ofSection 38 ofthe DVAT Act within six weeks.
6. Pursuant to the above direction, on 29"^ June 2015, the Assistant Commissioner, Ward-16 passed the impugned order, in which, after setting outthe brought forward and carry forward figures from April 2006 to March 2007, it was observed as under: "The above mentioned Chart based on the information of the dealer filed in DVAT-16 clearly reflects that there is no continuity in brought forward and carry forward or refunds. As such the claim of the dealer of refund is not correct and cannot be considered at this stage and the same is hereby rejected."
7. Initially, against the above order the Petitioners filed Contempt Case (C) No.754/2015 which was disposed of28*'' September, 2015 after recording W.P.(C) Nos.610 &1117/2016 Page 3of[9] -1 that the Petitioners wished to file a writ petition challenging the order. Thereafter, the present writ petition was filed.
8. On 22"*^ January 2016, this Court directed that "not later than two weeks from today, a decision will be taken by the Respondents on the Petitioner's application and communicated to this Court by the next date". What happened thereafter is recorded in the subsequent order dated lO"^ February, 2016, the relevant portion ofwhich reads as under: "4. A counter affidavit has been filed in W.P. (C) 610/2016 stating that a notice was issued to the Petitioner under Section 59 (2) of the Delhi Value Added Tax, 2004 ('DVAT Act') on 22"^ January, 2016 requiring the Petitioner to produce documents for the period 1®' April, 2005 to 22"'^ January, 2016. It is further stated that upon failure by the Petitioner to produce the documents, even within the time sought by the Petitioner, an order of notice of default assessment of tax and interest under Section 32 for the 4th quarter was passed on 6^^ February, 2016 raising a total demand oftax and interest in the sum of Rs. 1,96,68,525. On the same date a notice of assessment of penalty was also issued under Section 33 of the DVAT Act for the 4'^ quarter of2013 levying a penalty ofRs. 84,46,393. The Petitionerhas challenged the subsequentnotice dated 22"*^ January, 2016 under Section 59(2) in the second W.P. (01117/2016..
5. When asked what prompted the issuance of notice under Section 59 (2) of the DVAT Act, Mr GautamNarayan, learned counsel for the Respondent, informs the Court that the records of the Petitioner were unable to be traced and which is why it became necessary to seek information from the Petitioner. Mr Narayan states that the Respondent will file an affidavit at leastone week prior to the next date of hearing explaining the circumstances under which the records of the Petitioner's assessment were unable to be traced and why the Petitioner's {V.P.(C)Nos.6I0&}l17/2016 Page4of[9] 'tJ claim for refund was not processed and a decision taken thereon within the time limit set out under Section 38 of the DVAT Act.
6. The complete records of the case be kept ready for perusal by the Court on the next date. An officer of the Department conversant with the facts of the case will also remain present. Rejoinder, if any, be filed before the next date ofhearing.
7. List on 8^ April, 2016.
8. Till the next date of the hearing no coercive steps be taken to enforce the demand and penalty in terms of aforementioned orders dated 6th February 2016."
9. The Court on 8"^ April, 2016 granted the Respondents further time to file an affidavit and directed that the complete records of the case be kept ready for perusal ofthe Court.
10. Today, the Court is informed by Mr Gautara Narayan and Mr. Satyakam, Additional Standing counsel for the Respondents that the records ofthe case are not traceable. It is stated that during the time when the registration of Petitioner No. 1 stood cancelled, a decision was taken by the Department to weed out records earlier to 2010 and in that process the entire record of Petitioner No. 1 was destroyed. The counsel for the respondents made an earnest plea that Petitioner No. 1 should therefore be asked to produce the records that are available with it before the Assistant Commissioner to enable him to verify the record and process the refund application within a period oftwo weeks from today. W.P.(C) Nos.610 & 1117/2016 Page[5] of[9] (\
11. If there was no background to the present case, and the long history which has been adverted to, the Court may have been persuadedto consider the aforesaid request of the Respondents. When the Court inquired what records should be asked to be produced, the counsel for the Respondents referred to the notice dated 22nd January 2016 issued under Section 59 (2) of the DVAT Act asking the Petitioner to produce 25 documents for aperiod of over ten years from 1^' April, 2005 to 22"'' January, 2016. Some of the documents sought are 'GR/RRs,' sale register, form DVAT-31, stock register and so on. In other words, documents that are usually sought for making an assessment are now being asked from the Petitioner since the Respondents admittedly have weeded out the record.
12. In the circumstances in which the request is being made, it appears to be wholly unreasonable. In the first place the Respondents were statutorily bound, in terms of Section 38 of the DVAT Act, to process the refund application made by the Petitioner within two months from first receiving it on 20th December 2014. Instead a casual communication, and not even an order, was sent on 7th March 2015 informing the Petitioner that the refund was rejected on the ground that only a sum of Rs.1,08,831 was found refundable. Thereafter, again on 28''' April 2015 a letter, and not an order, was sent again rejecting the refund. This time the ground was different. It was said that the return for August 2006 reflected NIL as carry forward refund whereas a refund was shown in the subsequent return of September,
2006. There was nothing said in either ofthe said occasions about the record having gone missing. If the Respondents are now to be believed, then the above rejections were not on the basis of the record of the case. The Court ^.P.(C)Nos.6I0& U17/2016 Page6o/9 /V set aside both communications by its order dated 18th May 2015 and directing the Respondents to decide the refund application afresh. For a third time, the refund was rejected y the impugned order dated 29th June 2015, not on the ground that the records were not available but because "there is no continuity in brought forward and carry forward or refunds." For the second time this Court directed the Respondents, by its order dated 22nd January 2016, to decide the refund application within two weeks. However, instead the Respondents issued the above notice under Section 59 (2) ofthe DVAT Act and followed that up with a notice dated 6th February 2016 of default assessment tax and interest under Section 32 of the DVAT Act for the 4th quarter raising a total demand of Rs.1,96,68,525 and a notice of the same date of default assessment of penalty of Rs. 84,46,393 under Section 33 of the DVAT Act. The said orders too were passed not on the basis of any record. Onthis ground itselfthesaid demands arerendered arbitrary and unsustainable in law. To befair to learned counsel for the Respondents, they made no attempt to defend the said patently illegal default assessments of tax, interest and penalty.
13. Considering that there has been an abject failure by the Respondents to comply with the statutory mandate of Section 38 of the DVAT Act, the Court sees no purpose being served in thePetitioners at this stage producing records of over ten years from 1stApril 2005 till 21stJanuary 2016. Since the Respondents in any event do nothave the records, it will notbe possible for them to verify the correctness of the records to be produced by the Petitioners. Also, the stage for the Department to now question the correctness of the self assessment return filed by the Petitioner No.l way Nos.610 &1117/2016 Page.[7] of[9] I') back on 30^ October, 2007 for the year 2006-07 has long been crossed. There is no possibility of the said assessment being reopened. The carry forward ofthe refund amount inthe succeeding returns up to 2012 was also never questioned by the Respondents. In the circumstances, the production of records at this stage by the Petitioner No. 1 will only delay the refund further. Considering the number of times the Petitioners have had to approach this Court, the request of counsel for the Respondents for yet another opportunity to consider afresh the issue of refund due to Petitioner No. 1 is notjustified. The whole object of stipulating a time schedule under Section 38 ofthe DVAT Act for processing refunds will be defeated if any further indulgence is shown to theRespondents.
14. In the circumstances, for the aforementioned reasons the Court sets aside
(i) the impugned order dated 29th June 2015 issued by the Assistant
(ii) the notice dated 22nd January 2016 issued to Petitioner No. 1;
(iii) the notice dated 6th February 2016 of default assessment tax and interest under Section 32 ofthe DVAT Act for the 4th quarter inthe sum of Rs. 1,96,68,525 and
(iv) the notice dated 6th February 2016 of assessment of penalty of Rs.
15. The Court directs the Respondents to issue in favour of Petitioner No. 1 the refund order in the sum of Rs. 34,62,662 together with 6% interest per annum from 20'^ February, 2015 till the date ofits payment, which shall not be not laterthan31®' May, 2016.
16. Given the history ofthe case which has witnessed the Petitioners coming to this Court time and again for relief, the Court makes it clear to the Respondents that this order, which is being passed in the presence of with Mr Ram Avtar Meena, VATO and Mr R. S. Ruhil, VATO, should be compiled with by the next date ofhearing failing which the said officers will be made liable in law for disobedience ofthe order of the Court.
17. List on 2"*^ June 2016. In the event that the refund along with interest is not issued to the Petitioner No. 1 by 31st May 2016, Mr Ram Avtar Meena, VATO and Mr R. S. Ruhil, VATO shall remain personally present in Court.
18. Dasti under the signature ofthe Court Master. MAY 23,2016 MK S.MURALIDHAR, J VIBHIT^AKHRU, J iy.P.(C)Nos.6W & }117/2016 Page9of[9]