Recovery of tax without authority - Powers of survey, search, seizure and assessment under Delhi Value Added Tax (DVAT) - Delhi High Court directed the Commissioner Value Added Tax (CVAT) to take corrective steps

Hon'ble High Court issued the following direction to the CVAT:-

The Court would like to impress upon the CVAT that given the frequency with which the Court has been constrained in the recent past to interfere with the illegal exercise of powers and jurisdiction by the VAT Authorities, it has become imperative for the CVAT to issue clear instructions/directions to the VAT Officers to follow regarding the scope of their powers and jurisdiction. The delegation of powers and the jurisdiction of the VAT Authorities must be specific and leave no room for ambiguity. It must be ensured that there is no possible overlapping of the exercise of powers and jurisdiction by different VAT Authorities. The CVAT should issue clear instructions that no VAT Authority will collect in cash or by cheque any alleged tax demand on the spot/field while undertaking a survey, or a search or seizure operation. In this regard, it should also be made clear that if any of the officers of the DT&T are found violating any of the instructions, they would be subject to disciplinary proceedings

The CVAT should also hold regular orientation and training courses for the VAT Authorities at various levels on the law and procedure governing the collection of VAT. The CVAT can also consult the Delhi State Judicial Academy for that purpose.

See:- Capri Bathaid Private Limited, Sanyog Enterprises Private Limited, Nutek Establishments, Shakti Metal Co. Versus Commissioner of Trade and Taxes - 2016 (3) TMI 378 - DELHI HIGH COURT