9911796707
TMI Blog2014 (8) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of the Delhi Value Added Tax Act, 2004 (DVAT), value added tax (VAT) is levied at the applicable rate on the entire sale on the turnover in question at the point of sale. Apparently the product undergoes evaporation loss of around 0.6 per cent for petroleum products. However, the tax at the point of purchase is paid on the value of entire goods as if the whole quantity of petrol is actually received. At the time of sale, when credit is claimed, the dealer adds the cost of purchase,-the commission (by the petroleum-company or corporation, as the case may be) and administrative costs. It is argued that even the evaporation loss component is added as credit claim. In these circumstances, the impugned circular was issued in January 2006. It reads as follows: "Circular No. 47 of 2005-06 It has been brought to the notice of the Commissioner that some petrol pump dealers in Delhi are claiming input-tax credit on their purchases in respect of the total purchased quantities. As regards sales, the dealers are showing sales of quantity lower than that purchased the difference being on account of loss due to evaporation, etc. In this connection, attention is drawn to sub-rule (3) of rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law since it encroaches on the power and functioning of quasi-judicial bodies who are enjoined to take into account all relevant circumstances and facts which include the claim for credit for the evaporation loss said to have been loaded on to the cost at the time of sale to customers. It was submitted that having once claimed tax credit for tax payable on the component despite evaporation loss, at the time of supply, the Commissioner could not have, consistent with logic and consistent with the right of the dealers, at one stroke, directed the assessing authorities to disallow such credit and make reversals. 4. The learned counsel for the Revenue relied upon the powers vested in the Commissioner-more particularly, section 7. It was urged that the circular cannot be read as a direction to take a particular position with regard to assessment proceedings but has to be construed more as a guidance. Learned counsel emphasized that if the court were to accept the petitioner's contentions, the Commissioner would be denuded of its powers under section 67(2) of the Act. 5. Section 67 of the VAT reads as follows: "67 Powers and responsibilities of the Commissioner.-(1) The Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terminable question occurred. Explanation.-For the purposes of this sub-section, the Commissioner shall be deemed to have commenced the audit of a person under section 58 of this Act when the Commissioner serves a notice to this effect. (4) For the purposes of this section, the following shall be determinable questions: (a) whether any person, society, club or association or any firm or any branch or department of any firm is or would be a dealer; (b) whether any dealer is or would be required to be registered under this Act; (c) the amount of the taxable quantum of a dealer for a period; (d) whether a transaction is or would be a sale, or requires an adjustment to be made under section 8 of this Act arising out of a sale; (e) whether a transaction is or would be in the nature of works contract, or transfer of right to use any goods; (f) whether a sale is not liable to tax under section 7 of this Act; (g) whether a sale is exempt from tax under section 6 of this Act; (h) the sale price of a transaction; (i) the proportion of the turnover or turnover of purchases of a dealer which arises in a tax period, and the time at which an adjustment to tax or tax credit arises; (j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermination under this section but such question may be raised in an objection or appeal against such order. (9) Where,- (a) the Commissioner has issued to a person a determination in respect of a particular transaction; and (b) the person implements the transaction based on the determination issued to him under this section and in the manner described in the application; no assessment may be raised by the Commissioner against that person which is inconsistent with the determination and no penalty may be imposed on the person if the determination is later held incorrect. (10) The Commissioner may, by notice served on the person, withdraw or qualify a determination issued under this section but such withdrawal or qualification shall not affect the entitlement of any person to rely on the determination with respect to any transaction or action which he has commenced or which he has completed prior to the withdrawal or qualification." 7. Section 67 empowers the Commissioner to decide or determine specific questions. It places in position an elaborate procedure for determination of such questions; it is not as if all questions can be taken on board and decided as specific questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either be tampered nor tinkered." 9. It is brought to the notice of this court that recently, in a decision of the Supreme Court (Commissioner of Central Excise, Bhopal v. Minwool Rock Fibres Ltd. [2012] 14 GSTR 131 (SC); 2012 (278) ELT 581 (SC)), somewhat similar questions had arisen. The Central excise authorities had relied upon a circular to urge that the Central Board of Excise and Customs had taken a particular view as regards relevant head within which the goods had to be assessed which the adjudicating authorities had to respect. The court held as follows (page 135 in 14 GSTR): ". . . In our view, the Departmental circulars are not binding on the assessee or quasi-judicial authorities or courts and therefore, in that view of the matter, the circular/instructions issued by the Board, would not assist them." 10. The Revenue had urged in the course of the proceedings before this court that section 67 made a departure from the pre-existing Delhi Sales Tax Act. Learned counsel particularly had emphasized that while deciding Sita Juneja (CWP No. 1932 of 1998, decided on September 22, 1998) the Division Bench had noticed that no power existed with the Revenue or its authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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