Furnishing of security by spouse/sister concerns u/s 25 of the DVAT Act, 2004 - VAT - Delhi - 023

Furnishing of security by spouse/sister concerns u/s 25 of the DVAT Act, 2004 OFFICE OF THE COMMISSIONER, SALES TAX GOVT OF NCT OF DELHI , DEPARTMENT OF VALUE ADDED TAX BIKRI KAR BHAWAN, NEW DELHI CIRCULAR NO. 23 2005-06 Dated: 09.08.2005 Sub.: Furnishing of security by spouse/sister concerns u/s 25 of the DVAT Act, 2004 Under sub-rule (7) of Rule 23 of the Delhi Value Added Tax Rules, 2005, various forms of securities alongwith conditions have been prescribed and one of the forms of filing the surety is described under the above stated rule at item No. (8) which includes among other forms, personal security, which usually, is furnished by the dealer duly executed by other registered dealer of Trade Taxes Department. The objective of demanding of security as a pre condition for registering a person as a dealer and for making refund under section 38 of the Act, 2004 and for proper performance of the responsibilities under the Act and CST Act, 1956 is to meet those eventualities when a registered dealer is unable to discharge his liability under the DVAT Act, 2005 and the CST Act, 1956. In some cases, it has been brought to the notice of the department that VATOs/AVATOs are accepting security bonds duly executed by such persons/dealers who are spouse/sister concerns of the applicant dealer and have common proprietor/partner thereby rendering the presenting of security infructuous as "self" is standing security against "self". It is brought to the notice of all VATO's/AVATO's that security of the type referred to above may not be accepted as it virtually defeats the very purpose of obtaining security. The instructions should be followed scrupulously. Acceptance of security in contravention to the above directions will be viewed seriously. This issues with the approval of the Commissioner, Value Added Tax. Sd/- PRADEEP BAIJAL Value Added Tax Officer (Policy-II) All VATOs/AVATOs No.F.VATO/Policy-II/2005-06/970 Dated the : 09.08.2005 Copy to :- 1. P.S. to Commissioner, VAT 2. All Addl. Commissioners 3. All Jt. Commissioners 4. All Zonal Dy./Jt. Commissioners 5. All VATOs/AVATOs 6. Manager (EDP) for placing the circular on the official website(s) for circulation for the public. 7. President, Sales Tax Bar Association (Regd.) 8. Guard file. Sd/- PRADEEP BAIJAL Value Added Tax Officer (Policy-II)