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2016 (2) TMI 437 - DELHI HIGH COURT

2016 (2) TMI 437 - DELHI HIGH COURT - TMI - Writ petition Challenging the order of default assessment of tax, interest u/s 32 of the DVAT Act and the other an order levying penalty under Section 33 of the DVAT Act) for the third quarter of 2013-14 as well as two penalty notices - computer/machine generated notices - Held that:- The above order in Form DVAT-24 is in a pre-printed format and is unsigned. Therefore, it is not possible to make out which of the above alternatives provided in the capt .....

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ter remanded back. - W.P.(C) 7434/2015 & CM No. 13724/2015 - Dated:- 3-2-2016 - S.MURALIDHAR & VIBHU BAKHRU, JJ. For The Appellant:- Mr Rajesh Jain, Mr Virag Tiwari and Mr K.J. Bhat, Advocates. For The Respondent:- Mr Avtar Singh, Advocate. ORDER 1. The challenge in this writ petition by Progressive Alloys (India) Pvt. Ltd., a dealer registered under the Delhi Value Added Tax, 2004 ( DVAT Act ), is to two orders dated 9th March, 2015 (one being the order of default assessment of tax, interes .....

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Petitioner-Assessee from Global Sales Agency ( GSA ) and Omega Sales Corp. ( OSC ) for the third quarter of 2013 and from JBN Impex Private Ltd. ( JBN Impex ) for the second quarter of 2013 and to the orders dated 19th June 2015 which were subsequently withdrawn by the order dated 17th July, 2015. 3. The reason for the subsequent order dated 17th July, 2015 was, as noted in that order itself, that the default assessment orders in respect of the notices dated 19th June, 2015 were computer/machin .....

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e Petitioner s registration by an order dated 5th January, 2015. In what appears to be yet another error by the Respondent, both the show cause notice in respect of the said cancellation as well as the order of cancellation of registration were issued on the same date i.e. 5th January, 2015. The cancellation was proposed from the date of registration of the Petitioner as a dealer i.e. 15th December, 2011. Clearly, the Petitioner could not have been expected to answer the show cause notice on the .....

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alls upon the Petitioner to pay an amount of ₹ 66,68,079 as the total tax due for the third quarter of 2013 in respect of two purchases made - one each from GSA and OSC. The said purchases were termed as purchases were made from 'suspicious/bogus' dealers. The said order sought to reverse the input tax credit claimed in respect of both the said purchases. The tax amount was assessed at ₹ 57,18,630/- and interest calculated at ₹ 9,49,449/- on the said tax amount. The sai .....

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titioner had failed to produce the books of accounts, records and registers and also failed to file any reply to the said notices. It is stated that registration certificate of both GSA and OSC have been cancelled by the DT&T and neither of these entities has sought a revival of their respective registration certificates. It is further stated that since the Petitioner had chosen not to respond to the notices or to produce the relevant records, there was no option left with the VATO but to pr .....

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nsel for the Respondent states that there was a general problem as a result of system generated notices being issued and the mistake was realized subsequently and those notices stood withdrawn. It is further pointed out that similar system generated notices dated 19th June, 2015, which stood withdrawn by the letter dated 17th July, 2015, have been set aside by this Court in its judgment dated 28th August, 2015 in W.P. (C) 7379/2015 (Bhumika Enterprises v. Commissioner Value Added Tax). 8. It is .....

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complete confusion as to whether the order dated 9th March 2015 survived at all. Further in the subsequent order dated 17th July, 2015, whereas the first part of the order purported to rectify the error in issuing the notice order dated 19th June 2015, the last portion again required the Petitioner to appear before the VATO in terms of the earlier notice dated 19th June 2015 (already issued under Section 59(2) of the DVAT Act). 10. It is further pointed out by the learned counsel for the Petitio .....

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he order dated 9th March, 2015 of the DVAT Act reveals that it is another machine generated order. The said order fails to note what transpired at the hearing before the VATO. The preamble of the said order which reads as under: Whereas I am satisfied that the dealer has not furnished returns/furnished incomplete returns/or incorrect returns/furnished a return that does not comply with the requirements of Delhi Value Added Tax Act, 2004/ any other reason The above order in Form DVAT-24 is in a p .....

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e Petitioner that the Petitioner did appear before the VATO and produced the relevant records. However, in the writ petition there is nothing to indicate whether the Petitioner, in fact, produced the relevant records before the VATO. On the other hand, the order dated 9th March, 2015 also does not state that it is on account of the failure of the Petitioner to produce the records that the default assessment order under Section 32 of the DVAT Act has been passed. 13. There is yet another aspect o .....

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system has verified the match. It is inconceivable that on the one hand the system verifies the match in respect of purchase transactions and, on the other hand, the DT&T treats those very transactions as having been made from 'bogus/suspicious' dealers whose registrations have been cancelled. Where the registration of a dealer has been cancelled for whatever reason, the system cannot possibly verify the matching of Annexures 2A and 2B in respect of the transactions involving such d .....

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created by the DT&T by resorting to machine generated orders which were unsigned. These were issued without application of mind by the VATO concerned. Therefore, although in the normal course, the Petitioner would be expected to challenge the order of default assessment by filing an appeal before the OHA in terms of the DVAT Act, given the fact that so many mistakes have been committed by the VATO concerned, with respect to just one period of the third quarter of 2013, this is an appropriate .....

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