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2015 (12) TMI 1197 - DELHI HIGH COURT

2015 (12) TMI 1197 - DELHI HIGH COURT - TMI - Liability to tax - Taxability under DVAT or CST Act - no notice of reassessment under Section 32 of the DVAT Act was issued - Whether a transaction can be taxed twice, once under the Delhi VAT Act as intra-State sale in the State of Delhi and again as interstate sale under the CST Act - Held that:- It requires the Assessee to appear before the VATO on 19th September 2011 for recording his statement, produce his book of accounts and evidence being rel .....

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11 for filing the documents and given the Assessee a final opportunity of submitting the requisite documents by 31st October 2011.

In light of the documents that have been emerged during the course of the present hearing and which the Appellant claims not to have received earlier, and since these documents have a vital bearing on the validity of the assessments initially made and the reassessment made subsequently, the Court considered it appropriate to remand the matter to the VATO f .....

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er the initial assessment made under Section 9(2) of the CST Act unsustainable in law.

Appellant has been given all the documents, which the counsel for the Respondent assures form part of the record, there should be no difficulty in the VATO proceeding further in the matter on the basis of the said documents. Nevertheless, to allay the concerns expressed by counsel for the Appellant, the Court directs that the VATO will ascertain whether the documents that have been produced before t .....

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ASC with Mr. R.A. Iyer, Advocate ORDER 1. These are eight appeals by the Petitioner Assessee under Section 81 of the Delhi Value Added Tax Act, 2004 ( DVAT Act ) against an order dated 29th August 2014 passed by the Appellate Tribunal for Value Added Tax ( Tribunal ) for the assessments made for the four quarters of Assessment Year ( AY ) 2008-09. While four of the appeals deal with the issue of the quantum of tax, four deal with the issue of penalty. 2. The facts leading to the filing of these .....

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which he claimed were inter-state sales. A default assessment order was passed on 7th February 2011 by the Value Added Tax Officer ( VATO ) under Section 9 (2) of the Central Sales Tax Act, 1956 (CST Act) directing the Appellant to pay tax in the sum of ₹ 12,695 after accepting the above C and H Forms in respect of inter-state sales and export sales respectively. The tax amount computed was to the extent of sales made by the dealer for which he was unable to furnish C-Forms. It is not in .....

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d Movers (P) Ltd., Kolkata, Vijay Lakshmi Transport Company, Delhi and Assam Bombay Cargo Carriers, New Delhi it appeared that the goods receipts ( GRs ) which were furnished by the Appellant were unable to be verified. It was accordingly stated by the VATO that in the absence of such verification, the entire central sales against the C-Forms and H-Forms were liable to be rejected and were to be treated as local sales which would be taxable at 12.5%. The differential tax amount was computed for .....

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as, by the impugned order dated 29th August 2014, dismissed the appeals after taking note of the fact that the reopening happened as a result of information gathered by the Audit Team . 6. In the present appeals, one of the points urged is that the Respondents could not have brought the same transaction to tax both under the DVAT Act as well as the CST Act. It is further submitted that no notice of reassessment under Section 32 of the DVAT Act was issued. During the course of the hearing a point .....

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sion in Sri Krishna Das v. Town Area Committee, Chirgaon [1990] 183 ITR 401 and R.H. Enterprises v. Sales Tax & Others [1992] 85 STC 251. 7. However, the issue concerning the initial assessment under Section 9 (2) of the CST Act was not raised in the memo of appeal and was also not urged at the time this Court framed the following questions in the present appeal by its order dated 13th July 2015: (i) Whether a transaction can be taxed twice, once under the Delhi VAT Act as intra-State sale i .....

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rust of the submission was that evidence had been gathered behind the Appellant without any opportunity to the Appellant to counter such evidence. Further, that evidence formed the basis for reopening an assessment which already attained finality under Section 9 (2) of the CST Act. 9. In light of the above submissions, one of the questions that arose was whether any notice at all had been issued to the Assessee in the course of the audit proceedings prior to issuance of the notice for reassessme .....

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nts including copy of the notice purportedly issued to the Assessee 8th September, 2011. Copies of the said notice, the statement made by the Assessee in writing in response thereto and any other relevant document be filed by the Respondent as a compilation, with an advance copy to counsel for the Appellant, before the next date of hearing. 2. List on 11th December, 2015. 10. Since then Mr. Narayan, learned counsel for the Respondent, has filed a compilation of documents. The first document in t .....

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of goods along with statutory declaration form, supporting documents regarding export sales...", "GR/RRs, Form-4 and Form-7 and copy of returns and balance sheet with audit report. A second document in this compilation is a notice dated 19th October 2011 issued by the VATO to the Assessee noting that the Assessee had appeared and sought time from the VATO till 23rd September 2011 for filing the documents and given the Assessee a final opportunity of submitting the requisite documents .....

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the Assessee, Mr. Harbinder Pal Singh. This runs into four pages and each of the pages bears his signature with the rubber stamp of the proprietary concern. Inter alia, in para 5 he refers to the fact that the audit of the business affairs of the concern was conducted by the VAT Audit Branch "vide notice dated 8th September 2011, date of first appearance as 19th September 2011". The compilation also contains further show cause notice issued on 16th November 2011 to the other two transp .....

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h November 2011 given by the sole proprietor of the Appellant was doubted and it was suggested that it was possibly obtained under coercion. Significantly, Mr. Srivastava, learned counsel for the Assessee did not at that stage dispute that the letter was in the handwriting of Mr. Harbinder Pal Singh and that it was signed by him on each page. He maintained that the notice purportedly issued by the VATO to the Appellant on 8th November 2011 did not show that such a notice had in fact been either .....

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the assessments initially made and the reassessment made subsequently, the Court considered it appropriate to remand the matter to the VATO for a de novo re-assessment proceeding after giving the Appellant a proper opportunity to explain the materials now placed on record. 14. Mr. Srivastava contended that the above course was not available to the Court since in any event the assessment made on 7th February 2011 under Section 9 (2) of the CST Act has not been set aside by following the procedure .....

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13th February 2012. That notice was within limitation. Merely because this Court in appeal is remanding those very proceedings to the VATO will not mean that the further proceedings in continuation of the assessment proceedings would be barred by limitation within the meaning of Section 34 of the DVAT Act. 16. As regards the first submission concerning Section 9(2), the Court is of the view that if it is able to be established by the Department that an audit did take place in accordance with Sec .....

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he proprietor of the Appellant was given voluntarily. He will also examine if the entire exercise of audit took place in accordance with the procedure laid down under Section 58 of the DVAT Act and the relevant Rules. 18. A further point that arises is whether the assessment under Section 9(2) of the CST Act pertained, as is contended by the Appellant, to all the quarters of AY 2008-09 or only the first quarter as is contended by learned counsel for the Respondent. 19. Even the issue raised by M .....

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