2024 (11) TMI 284 - HC - VAT / Sales Tax

Maintainability of appeal under Delhi Value Added Tax Act 2004 - obligation to approach the Appellate Tribunal for drawing up a statement of case for the consideration of this Court and that the appeals which have come to be directly instituted would not be maintainable - HELD THAT - As is evident from a reading of Section 45 of the DST Act a person desirous of challenging an order passed by the Appellate Tribunal was required to submit a request to that Tribunal to refer a question of law arising out of such order for the consideration of the High Court. In terms of Section 45 (2) if the Appellate Tribunal were to refuse to state the case on forming the opinion that no question of law arose both the dealer as well as the Commissioner stood enabled to apply to the High Court against such refusal. The hierarchy of remedies as created under the DST Act insofar as appeals are concerned is essentially replicated and re-enacted by the DVAT Act. Under the DVAT Act the assessee stands accorded the remedy of preferring an appeal to the Appellate Tribunal which stands constituted. The DVAT Act further enables an aggrieved person to approach the High Court by way of an appeal in respect of every order passed by the Appellate Tribunal. The appeal to the High Court however is subject to the appellant establishing that the case involves a substantial question of law . The obligation to petition the Tribunal for drawal of a statement of case cannot be construed as a liability accrued or incurred. It was merely a matter of procedure and which did not impair the right of appeal. This more so since a referral by the Tribunal to draw a statement of case was subject to review and correction. The appeals as instituted before this Court in accordance with Section 81 of the DVAT are consequently held to be maintainable - let these matters be listed on 17.12.2024.

Summary

Issues Involved:

1. Maintainability of appeals under the Delhi Sales Tax Act, 1975 (DST Act) and the Delhi Value Added Tax Act, 2004 (DVAT Act).
2. Interpretation of Section 106 of the DVAT Act, particularly sub-section (4), in relation to appeals and procedural requirements.
3. The effect of the DVAT Act on rights and liabilities under the repealed DST Act.

Detailed Analysis:

1. Maintainability of Appeals:

The primary issue revolved around whether the appeals filed directly before the High Court were maintainable under the DVAT Act or if they should have followed the procedure under the repealed DST Act. The respondents contended that appeals should adhere to the procedure outlined in Section 45 of the DST Act since the tax period in question was before 01 April 2005. This section required the Appellate Tribunal to refer questions of law to the High Court. However, the Court held that under the DVAT Act, an appeal could be made directly to the High Court if it involved a substantial question of law, as per Section 81 of the DVAT Act. The Court concluded that the appeals were maintainable under the DVAT Act, rejecting the preliminary objection.

2. Interpretation of Section 106 of the DVAT Act:

The Court analyzed Section 106 of the DVAT Act, which deals with the repeal and savings of the DST Act. Sub-section (4) was introduced by the DVAT (Amendment) Act, 2012, with retrospective effect from 01 April 2005. The respondents argued that this sub-section mandated adherence to the procedural requirements of the DST Act for appeals pertaining to periods before 01 April 2005. However, the Court interpreted sub-section (4) as a savings clause intended to preserve rights and liabilities under the DST Act, not to regulate procedural matters such as the filing of appeals. The Court emphasized that the DVAT Act did not intend to annihilate existing rights and liabilities but rather to modify the procedure for appeals, allowing direct appeals to the High Court.

3. Effect of the DVAT Act on Rights and Liabilities:

The Court examined the effect of the DVAT Act on rights and liabilities accrued under the DST Act. It referenced the principle that repeal and re-enactment of similar legislation, as in the case of the DVAT Act replacing the DST Act, typically does not obliterate rights and liabilities unless explicitly stated. The DVAT Act, as a cognate statute, was seen as a continuation of the DST Act's provisions concerning the levy of tax on the sale of goods. The Court noted that the Statement of Objects and Reasons for the 2012 Amendment indicated that sub-section (4) of Section 106 was introduced to provide a specific savings clause for the power of revision under the DST Act, rather than to dictate procedural requirements for appeals.

Ultimately, the Court held that the appeals were maintainable under the DVAT Act and negated the preliminary objection raised by the respondents. The matter was scheduled for further proceedings.