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Larsen And Toubro Ltd And Another Versus Govt. of NCT of Delhi And Others

2016 (4) TMI 320 - DELHI HIGH COURT

Validity of survey conducted in the premises of petitioner - Held that:- it is now evident from the report filed by the CVAT that the decision to survey the premises of the Petitioner was based on a study of the profile in the computer system including indicators like High GTO- Low Tax, frequent change in returns etc. There were only oral discussions between the officers concerned without any written approval of the Commissioner on file. This by itself is sufficient for the Court to proceed to a .....

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g, Senior Advocate with Mr Gautam Narayan, Additional Standing Counsel and Mr R. A. Iyer, Advocate with Mr Manish Verma, Assistant Commissioner (Spl. Zone.) ORDER 1. This order should be read in continuation of the order dated 3rd February 2016 which sets out the background facts. 2. Pursuant to the above order, an affidavit has been filed by Mr S. S. Yadav, Commissioner, Value Added Tax (CVAT). He has enclosed with the affidavit a copy of the inquiry report prepared by him on 10th March, 2016. .....

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ch surveys to maintain secrecy of the operation. (ii) On the basis of information available in the computer system, the Joint Commissioner and his team had reasonable ground to believe that M/s L&T Limited was attempting to avoid or evade tax and was concealing material facts. These grounds were verbally discussed before undertaking the survey. However, these grounds were not written down in any file. The grounds as stated by then Joint Commissioner include high GTO low tax, frequent revisio .....

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ion, supervision and monitoring of entire operation. (v) The approval of the Commissioner VAT was not obtained in any file before the survey of M/s L&T Limited as the powers of the Commissioner under Section 60 stood delegated to the officers upto the level of Value Added Tax officers of the department vide order dated 31.10.2005. (vi) The authority to exercise powers under chapter X of DVAT Act, 2004 in the prescribed form i.e. Form DVAT 50 was not issued. In fact such authorization were no .....

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he order passed by the Court on 3rd February 2016. This concerns the file in this case which, as was stated by Mr P. R. Meena, Special Commissioner (Special Zone), Department of Trade & Taxes, Government of NCT of Delhi in his additional affidavit dated 2nd February, 2016, was unable to be traced. It now transpires from the report of the CVAT that there was no file in the first place. Clearly, therefore, there is a contradiction in what was stated before this Court on affidavit by Mr Meena a .....

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t also does not state what corrective mechanism has been envisaged by the CVAT in light of the egregious violations of the law as is evident from the conclusions of his inquiry. Mr Rajesh Jain, learned counsel for the Petitioner, states that the violations which have been pointed out by the CVAT are continuing till this date notwithstanding that several orders have been passed by this Court even subsequent to the order dated 3rd February, 2016 in this case. 6. Mr Nandrajog, again assures the Cou .....

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icer (VATO) to undertake the survey of the premises of the Petitioner. While, the CVAT's report in para 9 mentions the general order of delegation dated 31st October 2005 issued by the CVAT in exercise of his powers under Section 68 of the DVAT Act, the report fails to notice that by the said order, the powers under Section 60(2) of the DVAT Act were delegated to officers of the rank of VATO and above to be exercised within their respective jurisdiction . This has been explained by the Court .....

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ore the court copies of the file notings whereby the CVAT on 25th September, 2014 merely made an endorsement on the file authorising the Special Commissioner (HR) to issue authority in Form DVAT 50. No order of authorization as such was issued by the Commissioner on that date. Surprisingly, the order dated 15th October 29014 makes no reference to the earlier order of 31st October 2005 which delegated those powers only to officers of VATO and above. On the other hand the order dated 15th October, .....

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that rendered the order dated 15th October 2014 invalid, what is stark is that it seeks to validate all actions taken by the officers of the DT&T of a rank below the VATO between 1st April, 2015 and 28th August 2015 during which period obviously there was no such authorization in their favour. 10. The Court has mentioned the above details only to draw the attention of the CVAT to the egregious violations of the law. This has resulted from a lack of application of mind by officers at the high .....

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ncere very attempt should be made to clean up the system, rectify the obvious legal defects that have been pointed out time and again by the Court and fix responsibility on the officers found to be acting in violation of the law. With reference to the case on hand, the Court expected the CVAT, in compliance of the said directions in para 8 of the order dated 3rd February, 2016, to name the officers involved, fix responsibility on them and address the issue of initiating disciplinary action prece .....

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