Signature of return - specific provisions:
Under various law tax laws there is requirement to sign the return required to be filed under that law. Generally we find specific provisions in this regard under the law. Sometimes provisions from some other law are also adopted. This creates requirement to look at such other law and also cases decided under that law. Many times it is noticed that what was intended under such other law may not be strictly applicable under the law in which such provision is adopted. This can be avoided, if the definition found in other law is reproduced, with necessary modifications so that the wholesome definition or provision is found and one need not to take recourse of other law.
Provisions must be simple:
It is desirable that the provisions which require concerned persons to comply with the legal requirements should be simple. In such provisions there should also be some alternatives available so that compliance can be done without difficulty. However, unfortunately we find that even in case of provisions relating to signing of return there are complexities, and in some situations desired flexibility is not provided.
Specific provision under the Delhi Value Added Tax act, 2004:
We find specific provision in S. 29. The section (with highlights, for easy analysis) is reproduced in the column 1 of the following table and in column 2 necessary discussion is made:
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From provision |
Discussion |
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29. Signing returns.- |
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(1) Every return under this Chapter shall be signed and verified - |
It is mandatory to sign and verify the return. Word 'shall' has been used. |
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(a) in the case of an individual, by the individual himself, and where the individual is absent from India, either by the individual or by some person duly authorised by him in this behalf and where the individual is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf;
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In case of individual he himself has to sign in normal circumstances. In case he is out of India, then he himself or specifically authorized person can sign and not a general power attorney holder. In case of mental incapacitation his guardian or person competent to sign on his behalf can sign he return. |
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(b) in the case of a Hindu Undivided Family, by a Karta and where the Karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such family;
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In case of HUF the karta will normally sign. If Karta is absent from India or mentally incapacitated then any adult member of such family can sign.
Here we find a difference in comparison to individual. In case of individual even if he is out of India, he can sign return but in case Karta of HUF is out of India, then he cannot sign but any other adult member has to sign. |
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(c) in the case of a company or local authority, by the principal officer thereof; |
Principal officer- vide Explanation 1 to the section definition under Income-tax Act, 1961 is adopted. The said definition is discussed lateron. |
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(d) in the case of a firm, by any partner thereof, not being a minor;
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In case of firm any partner who is major can sign. There is no provision to meet contingency of all partners being out of India or mentally incapacitated ( may be temporarily) |
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(e) in the case of any other association, by any member of the association or persons; |
In case of association, any member can sign. |
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(f) in the case of a trust, by the trustee or any trustee; and |
In case of a trust any trustee can sign. |
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(g) in the case of any other person, by some person competent to act on his behalf. |
In case of any other person, any person competent to act on his behalf can sign the return. |
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Explanation 1.- For the purposes of this section the expression "principal officer" shall have the meaning assigned to it under sub-section (35) of section 2 of the Income Tax Act, 1961 (43 of 1961). |
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Explanation 2.- For the purposes of this Act, any return signed by a person who is not authorized under this section shall be treated as if no return has been furnished.
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Though this is given as an Explanation, however, in fact this is a specific and mandatory provision. A return which is not signed by a person who is authorized as per this section, shall be treated as if no return has been furnished. And therefore, all consequences will follow for not filing of return. |
The principal officer of company or local authority for DVAT:
In case of company or local authority the return is to be signed by the principal officer. The definition of principal officer is adopted from the Income-tax Act, 1961. We find the said definition in sub-section (35) of section 2 of the said Act. The definition in the I.T.Act is wider in scope as it covers many other entities also. However, so far the DVAT Act is concerned, the said definition is applicable only in relation to company or local authority.
The definition as per I.T.Act is analyzed below in tabular manner, but discussion is made only so far relevant to the DVAT Act:
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From provision |
Discussion |
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2. In this Act, unless the context otherwise requires,— |
The definition is subject to context. Therefore, in case of DVAT Act also the definition will be subject to context. |
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35) "principal officer", used with reference to a local authority or a company or any other public body or any association of persons or any body of individuals, means— |
It is given as meaning, therefore, rule of contextual interpretation may not apply. |
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(a) the secretary, treasurer, manager or agent of the authority, company, association or body, or
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Secretary, treasurer, manager or agent of the company or local authority will be considered as principal officer. In regard to these officers, any specific order of the A.O. is not required.
The term 'agent' has not been defined. This is likely to create confusion as well as chaos because there can be several agents for different work having limited authority and responsibility.
Surprisingly managing director, whole time director, executive director or any director is not specifically treated as principal officer. |
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(b) any person connected with the management or administration of the local authority, company, association or body upon whom the Assessing Officer has served a notice of is intention of treating him as the principal officer thereof ;
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Any person connected with the management or administration can be considered as principal officer only if the A.O. has served a notice of his intention or treating him as the principal officer thereof.
Thus, it seems that managing director, whole time director, executive director or any director is not specifically treated as principal officer. They can be so considered only if the A.O. under the DVAT Act serves a notice in this regard on such person.
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Care required in signing of return:
In view of provisions as analyzed above it is very important to take care that return of VAT is signed by a person who is authorized in this regard as per the above provisions. In case a return is not so signed it will not be considered as a return, therefore, filing of return will be useless.
Care should also be taken to ensure that the return is signed in the signature of the same style in which the application for registration is signed or in case of new signatory the signature should be in standard style. In case of doubt about signature, even the existence of valid return can be in doubt.
Amendment desirable:
It is desirable that the requirement as to signature should be expressed in simple and straight language and there should also be more flexibility. Ground realities of business should be recognized and person in charge of dealer should also be considered as authorized person to sign return, appeals, petitions etc. A return signed by a constituted attorney of the dealer in this regard should be considered as valid return. Due to complexity in law, there have been lot of litigation in regard to signature of return and validity of return etc. This can be avoided by adopting proper legal and simple provisions.
It can be left on the dealer and his team to decide as to who should look after VAT administration, so that the most appropriate person who is dealing with the matter and who is conversant with the subject matter sign the return. Fiscal responsibility to pay tax always remain on the dealer.
