Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Bajrang Fabrics Pvt. Ltd. Versus Commissioner of Vat & Anr.

2016 (6) TMI 391 - DELHI HIGH COURT

Validity of default notices of assessment of tax and interest issued u/s 32, 33 and 59(2) of DVAT - Availability of alternative remedy - Ex parte notices - notice deemed to be served - pasting of the notices on the web page of the dealer - Held that:- the Court finds, that there are obvious glaring errors in each of the impugned orders which appear to system generated and issued without application of mind. In the circumstances relegating the Petitioner to the alternative remedy of going before .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

th November 2005, enables the Commissioner to issue summons/notices/orders in electronic form. Section 100A of the DVAT Act appears to be in conformity and consistence with Sections 12 and 13 of the IT Act. The originator of the notices is a statutory authority, having the powers in terms of the DVAT Act read with the DVAT Rules to prescribe the manner of service of electronic orders, summons, notices etc. The Commissioner, as the originator of the notices under Section 59 (2) of the DVAT Act, h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ails to the DT&T, it would have received SMS alerts as well. The failure by the Petitioner to go to the website to view the impugned notices, notwithstanding the order dated 17th January 2014 of the Commissioner, disables it from contending that there is no proper service on it of the said notices under Section 59 (2) of the DVAT Act.

Issuance of notices by Record Keeper - Held that:- while there is a noting signed by the Record Keeper that reads: “default assessment orders and penal .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n 32 & 33 of the DVAT Act - Inter-state sales - Held that:- each of the impugned notices of default assessment of tax and interest reveal inter alia the tax period for which the demand has been raised. While Column 2 titled 'turnover reported by dealer' contains a figure (presumably as shown in the return filed by the dealer), Columns 3 and 4 titled 'turnover assessed' and 'tax paid' are shown as '0'. The remaining Columns 5, 6, 7 and 8 titled 'tax assessed', 'additional tax due, 'interest' and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

state sales to the dealer in Rajasthan who was found to be a 'suspicious/bogus' dealer. The notices proceeds to state that “since the dealer has made ISS of fabrics to the tune of.”, he is being asked to pay additional tax and penalty under Section 86 (10) of the DVAT Act. If indeed the sale was an inter-state one, then only the CST Act would apply and not the DVAT Act.

Therefore, each of the notices issued are set aside. Mr Narayan maintains that what the DT&T is seeking from the Pet .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

BAKHRU JJ. For the Appellant: Mr. Vasdev Lalwani and Mr. Rohit Gautam, Advocates. For the Respondent: Mr Gautam Narayan, ASC with Mr. R.A. Iyer, Advocate. WITH W.P.(C) 11384/2015 & CM No. 29955/2015 (for stay), W.P.(C) 11556/2015 & CM No. 30602/2015 (for stay), W.P.(C) 11557/2015 & CM No. 30603/2015 (for stay) W.P.(C) 11558/2015 & CM No. 30605/2015 (for stay), W.P.(C) 11559/2015 & CM No. 30606/2015 (for stay), W.P.(C) 11561/2015 & CM No. 30608/2015 (for stay), W.P.(C) 115 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

quarters of the year 2013-14 and 2014-15 and default notices of assessment of penalty of the same date under Section 33 of the DVAT Act. The Petitioner also challenges the corresponding notices dated 11th August 2015 issued to the Petitioner under Section 59 (2) of the DVAT Act as being contrary to both the DVAT Act and the Central Sales Tax Act, 1956 ('CST Act'). 2. The Petitioner is functioning in the jurisdiction of the Assistant Commissioner VAT/Assessing Authority Ward No. 70 and is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t and the CST Act. Where there were interstate sales, the Petitioner obtained the requisite 'C' Forms from the purchasing dealers to claim the concessional rate of CST in terms of Section 8 (4) of the CST Act. Notices under Section 59 (2) DVAT Act 4. Notices were received by the Petitioner on 11th August 2015 under Section 59 (2) of the DVAT Act from the VATO Ward 70, directing it to furnish various information/documents in respect of interstate sales made to M/s. Rajesh Traders, a regis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the Information Technology Act, 2002 ('IT Act') it is contended that as long as the notices in electronic form were not viewed and downloaded by the Petitioner they could not be said to have been served on the Petitioner. Ex parte notices of default assessments of tax and penalty 6. The Petitioner says that since it was not aware of the above notices, it did not appear before the VATO Ward 70 on the date mentioned in the notice. Consequently, the impugned ex parte notices of default .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

4 11th August 2015 7th September 2015 2,29,292 W.P.(C) 11222/2015 1st quarter of 2014 11th August 2015 7th September 2015 14,43,938 W.P.(C) 11279/2015 4th quarter of 2014 11th August 2015 7th September 2015 2,44,275 W.P.(C) 11280/2015 1st quarter of 2014 11th August 2015 7th September 2015 17,00,880 W.P.(C) 11383/2015 3rd quarter of 2013 11th August 2015 7th September 2015 7,32,972 W.P.(C) 11384/2015 1st quarter of 2013 11th August 2015 7th September 2015 7,35,678 W.P.(C) 11556/2015 4th quarter .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arter of 2013 11th August 2015 7th September 2015 9,17,922 W.P.(C) 11640/2015 2nd quarter of 2013 11th August 2015 7th September 2015 11,74,361 7. The reasons given in each of the notices is identical except for change in the periods and the figures. The reasons in one such notice dated 7th September 2015 of default assessment of tax and interest for 1st, 2nd and 4th quarters of 2014-15 reads as under: A notice under Section 59 (2) of DVAT Act 2004 was issued to the dealer on 11th August 2015 di .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ainst the dealer along with interest up to date. Petitioner's contentions on merits 8. It is contended by the Petitioner that if indeed it had undertaken inter-state sales as alleged in the above notices of default assessment, then clearly such transactions could not be taxed under Section 32 of the DVAT Act and no penalty under Section 33 of the DVAT could have been levied. Inter-state sales would be taxable only under the CST Act. Secondly, it is pointed out with reference to the notes in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mands. Stand of the DT&T 10. In reply to the petitions it is stated by the DT&T that the Petitioner has an equally efficacious alternative remedy to challenge the impugned order under Section 74 of the DVAT Act before the Objection Hearing Authority ('OHA'). 11. On merits it is submitted by the DT&T that uploading of the notices on the website constituted deemed service on the Petitioner. Reference is made to an order issued by the Commissioner, Trade and Taxes on 17th Januar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

were framed by the Record Keeper and not by the concerned VATO. It is denied that VATO has not disputed that the transactions between the Petitioner and M/s. Rajesh Traders were interstate sales and that the impugned order was passed without application of mind. 13. The Court has heard the submissions of Mr. Vasdev Lalwani, learned counsel for the Petitioners, as well as Mr. Gautam Narayan, learned Additional Standing counsel for the Respondents. Alternative remedy 14. The first issue concerns t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s. Therefore, the above preliminary objection is rejected. Service of notice 15. The second issue concerns the service of the notices under Section 59 (2) DVAT Act on the Petitioner. Section 100 A of the DVAT Act 2004 speaks of automation i.e. the preparation and issue of notice and orders in electronic form. It reads as under: 100A Automation (1) The Government may, by notification in the Official Gazette, provide that the provisions contained in the Information Technology Act, 2000 (21 of 2000 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d on any automated data processing system and is properly served on any dealer or person, then the said notice or communication shall not be required to be personally signed by the Commissioner or any other officer subordinate to him, and the said notice or communication shall not be deemed to be invalid only on the ground that it is not personally signed by the Commissioner. 16. Under Rule 62 of the DVAT Rules the manner of service of notices, documents and orders has been set out. Under Rule 6 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

orders to the dealers by electronic means by passing the same on webpage of individual letters. In addition to this, an SMS alert on the registered mobile numbers of the respective dealer may also be sent, wherever a mobile number has been furnished to the Department. The documents shall also be emailed to the dealers, if the email id has been intimated by dealer to the department. (b) The documents so generated will be available on the department's website www.dvat.gov.in and will be access .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that as soon as the dealer logs on to its web page, a pop-up message will appear and after reading the 'document', the dealer shall click on 'ok' button available at the end of the notice, as a proof of reading the document. Afterwards, the dealer may access other links. It is then stated the manner of service, shall be deemed to be a service of document for the purpose of Rule 62 of the Delhi Value Added Tax Rules, 2005 at par with other manners prescribed under the said Rule . .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt to indicate to the originator that the electronic record has been received. (2) Where the originator has stipulated that the electronic record shall be binding only on receipt of an acknowledgement of such electronic record by him, then unless acknowledgement has been so received, the electronic record shall be deemed to have been never sent by the originator. (3) Where the originator has not stipulated that the electronic record shall be binding only on receipt of such acknowledgement, and t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ecord as though it has never been sent. 13. Time and place of despatch and receipt of electronic record -(1) - Save as otherwise agreed between the originator and the addressee, the dispatch of an electronic record occurs when it enters a computer resource outside the control of the originator. (2) Save as otherwise agreed between the originator and the addressee, the time of receipt of electronic record shall be determined as follows - namely, (a) if the addressee has designated a computer reso .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nters the computer resource of the addressee. (3) Save as otherwise agreed to between the originator and the addressee; an electronic record is deemed to be dispatch at the place where the originator has his place of business, and is deemed to be received at the place where the addressee has his place of business. (4) the provisions of Sub-section (2) shall apply notwithstanding that the place where the computer resource is located may be different from the place where the electronic record is d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

originator of the notice in the present case is the Commissioner, VAT. Unless it has been agreed to the contrary between the originator and the noticee, the service of an electronic record will occur only when it enters a computer resource outside the control of the originator. Section 100A of the DVAT Act, inserted with effect from 16th November 2005, enables the Commissioner to issue summons/notices/orders in electronic form. Section 100A of the DVAT Act appears to be in conformity and consis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the dealer. 20. The Court is unable to find a legal infirmity in the Order dated 17th January 2014. It is not inconsistent with Section 13 (1) read with Section 13 (2) of the IT Act. While there may not be an express agreement between the originator and the notice, an order validly passed by the Commissioner in exercise of his powers under Rule 62 (1) (vi) of the DVAT Rules is binding on the registered dealers. Therefore, the system put in place by the Commissioner by the order dated 17th Januar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

view the notices posted on the said website. If the Petitioner had given the mobile phone details to the DT&T, it would have received SMS alerts as well. The failure by the Petitioner to go to the website to view the impugned notices, notwithstanding the order dated 17th January 2014 of the Commissioner, disables it from contending that there is no proper service on it of the said notices under Section 59 (2) of the DVAT Act. Notices not issued by the Record Keeper 22. The next contention th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he Record Keeper that reads: default assessment orders and penalty framed under Section 32 and 33", there is nothing beyond that to suggest that it was the Record Keeper who framed such orders. It is plausible that the Record Keeper was merely noting the fact of the notices having been framed. From this it is not possible to infer that the impugned notices of default assessments of tax, interest and penalty were issued by the Record Keeper and not by the VATO. Default assessments unsustaina .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aler on 11th August 2015 asking him to file documents before 14th August 2015 in respect of the inter- state sales made to M/s. Rajesh Traders, a dealer in Rajasthan which was found to be a 'suspicious/bogus dealer'. The next paragraph simply directs the dealer to pay a sum as tax and furnish proof of such payment on or before 6th October 2015. 25. Each of the impugned notices of default assessment of tax and interest reveal inter alia the tax period for which the demand has been raised. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

14,43,938 for the first quarter of 2014. This sort of obvious error can only be explained by some defect in the system through which the said notices have been generated. No attempt has been made by the DT&T to explain the error. 26. The second obvious error is that the impugned notices of default assessment claim that the Petitioner made inter-state sales to the dealer in Rajasthan who was found to be a 'suspicious/bogus' dealer. The notices proceeds to state that since the dealer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version