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Siemens Ltd. Versus The Commissioner, Department of Trade And Taxes & Another

2016 (4) TMI 404 - DELHI HIGH COURT

Waiver of penalty for the quarters II, III and IV for the year 2006-07 - under the Amnesty Scheme of the Department of Trade & Taxes and Government of National Capital Territory of Delhi - Already paid demand of tax and interest in terms of the rectification orders - Interpretation sought to be placed by the Respondents on the relevant clause is not consistent with the overall purpose of the Amnesty Scheme and the main purpose was to incentivise self-compliance by the dealer with the tax demand .....

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e tax and interest and challenged the levy of penalty would not be entitled to seek waiver. In other words the Scheme is sought to be interpreted in such a manner that compliance with part of the demand, i.e., payment of tax and interest but not penalty, would make a person ineligible to the Amnesty Scheme qua the penalty amount under challenge whereas a person who defaults in paying the tax and interest as well as penalty would be entitled to be benefit of the Amnesty Scheme and claim waiver of .....

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jendra Maheshwari with Ms. Swati Thapa, Advocates For the Respondents : Mr. Satyakam, Additional Standing counsel ORDER 1. This writ petition by the Petitioner, Siemens Limited, seeks quashing the Form DSC-3 dated 23rd July 2014 issued by the Respondents rejecting the Petitioner's request under the Delhi Tax Compliance Achievement Scheme 2013 ( Amnesty Scheme ) for waiver of penalty for the quarters II, III and IV for the year 2006-07. 2. The claim of the Petitioner for waiving the penalty u .....

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4. It is stated that the building technology business which was originally acquired by the Petitioner was demerged and a new company, i.e., Siemens Building Technology Private Limited ( SBTPL ) was formed. On 1st January 2007, SBTPL was again merged with the Petitioner herein as a going concern. 5. Under the aegis of the demerged concern in the year 2006-07, an order was received by the Petitioner for supply of building technology goods that were manufactured/available outside India. Consequent .....

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exports to foreign countries from Delhi and was not supported by any documents proof. The Petitioner s objection against the aforementioned assessment order was disposed of by the Objecting Hearing Authority ( OHA ) by an order dated 10th May 2011 with a direction to the VATO to frame a fresh assessment order after verifying the books of accounts and the supporting documents available with it in view of the sale conducted under Section 5 (2) of the CST Act, i.e., High Seas Sale and Sale Occasion .....

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le to trace all the documents in view of the difficulty in tracking the files due to frequent transfer of records during the mergers and demergers, it decided to pay the tax and interest as determined by the rectification orders. 8. However, as far as the penalty was concerned, the Petitioner preferred an appeal before the OHA, i.e., the Special Commissioner-I. This appeal was rejected by the OHA by an order dated 1st February 2013 on the ground that the Petitioner had subsequently deposited the .....

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overnment may by notification in the official gazette, notified Amnesty Scheme (s) covering payment of tax, interest, penalty or any other dues under the Act, which relate to any period ending before 1st day of April, 2013, and subject to such conditions and restrictions as may be specified therein, covering period of limitation, rates of tax, tax, interest, penalty or any other dues payable by a class of dealers or classes of dealers or all dealers." 10. By a notification dated 20th Septem .....

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se 3 of the Scheme and (ii) tax due and payable under the Central Sales Tax Act, 1956 or the erstwhile Delhi Sales Tax Act 1975 (43 of 1975) or the Delhi Sales Tax on Works Contract Act, 1999 (Delhi Act 9 of 1999) or the Delhi Sales Tax on Right to Use Goods Act, 2002 (Delhi Act 13 of 2002) or the Delhi Tax on Entry of Motor Vehicles into Local Areas Act, 1994 (Delhi Act 4 of 1995) for the period prior to 1st April 2005, but not paid or partly paid till the 31st day of August 2013 and calculated .....

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rms of notice of assessment or assessment order issued under any of the Acts referred to in this sub-clause, whether pending in objection/revision before the objection hearing authority (OHA) or in appeal/revision before appellate authority/Tribunal or any higher court, including writ petition and special leave petition. Explanation.-2- Where a notice of assessment or assessment order has been issued to a person in respect of some default(s), the term "tax dues" shall also include tax .....

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clause (i) of clause 2(l)(d) by the dealer on whom notice of assessment under section 32 of the Act has not been served shall be calculated by him in the following manner; (i) The dealer shall first determine the commodity wise taxable turnover in respect of which declaration is to be made under this Scheme; (ii) He shall then ascertain the rate of tax of that commodity applicable as per Schedules appended to the Act for the period under declaration. (iii) Tax dues shall be calculated by multipl .....

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refund by virtue of such waiver . 13. The Petitioner filed an application before the Nodal Officer under the Amnesty Scheme on 26th December 2013 on the strength of Question No. 13 of the Frequent Asked Questions ( FAQ ) which provided for waiver of penalty. The Petitioner informed that it had already paid the demand of tax and interest in terms of the rectification orders. The said application was examined in terms of clause 4 of the Amnesty Scheme and was rejected on 13th December 2014. The P .....

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which a rejoinder has been filed by the Petitioner. 16. Mr. Gajendra Maheshwari, learned counsel for the Petitioner, submitted that the Petitioner's case is answered by the FAQs issued by the DT&T explaining the Amnesty Scheme. Mr. Maheshwari further submitted that under Explanation 1 to Clause 2(1)(d) of the Amnesty Scheme, the term tax dues was extended to the cases pending in the appeal before the AT. The case of the Petitioner did not fall within the ambit of Explanation 3 to Clause .....

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he scheme. He pointed out that even though the Respondent gave no reasons for rejecting the Petitioner s application for waiver of penalty, and no appeal was preferred against it, remanding the matter to the authorities for a fresh decision. 17. Countering the above submissions, Mr. Satyakam, learned Additional Standing counsel for the Respondents submitted that although the reasons have been spelt out in the order rejecting the claim of the Petitioner under the Amnesty Scheme, the Petitioner wa .....

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s carried an unambiguous and clear disclaimer that this paper is an attempt to answer the frequent queries in a simple language. For an authentic legal interpretation, the Scheme itself should be referred." 18. Mr. Satyakam submitted that where the tax and interest has been fully paid prior to 31st August 2013, one of the pre-requisites for applicability of the Amnesty Scheme is not satisfied. In other words, unless the tax and interest was either not paid or partly paid as on 31st August 2 .....

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nd no penalty is paid and such penalty is challenged, then the dealer would not be entitled to avail of the Amnesty Scheme. The dealer would not be entitled to either refund of any excess amount or waiver of penalty. 19. Having considered the above submissions, it appears to the Court that the interpretation sought to be placed by the Respondents on the relevant clause is not consistent with the overall purpose of the Amnesty Scheme. The main purpose was to incentivise self-compliance by the dea .....

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Amnesty Scheme to seek waiver of penalty whereas the person who paid the tax and interest and challenged the levy of penalty would not be entitled to seek waiver. In other words the Scheme is sought to be interpreted in such a manner that compliance with part of the demand, i.e., payment of tax and interest but not penalty, would make a person ineligible to the Amnesty Scheme qua the penalty amount under challenge whereas a person who defaults in paying the tax and interest as well as penalty w .....

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ey and encashed; can such advance, payment be adjusted from the amount of tax deficiency stated by the team in its report? If yes, where the amount of advance tax is more than the tax dues, can that excess payment be carry forward by the declarant and adjusted from his future tax liability? Yes, the advance tax collection can be adjusted by the declarant from his tax dues. Any excess payment can also be adjusted from his future VAT liability. However, he shall file the relevant details along wit .....

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ble? Yes, the dealer can file DSC-1, along with proof of payment of tax and interest, to avail the benefit?" 21. While it is true that there is a disclaimer in the FAQs which states that a correct legal interpretation of the Scheme itself should be referred, in the considered view of the Court, the stand taken by the Respondents in the FAQs is consistent with the object of the Amnesty Scheme would constitute an instance of contemporanea expositio and would bind the DT&T. 22. The Court f .....

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