While allowing a bunch of petitions filed by a group of Chartered Accountant Firms, the Delhi High Court held that chartered accountants cannot be denied of their remuneration for work of special audit done under Section 58 A (1) of the Delhi Value Added Tax Act (DVAT) for the failure on the part of the dealer to make payment of the bills.
The special audit work was entrusted by the Commissioner under Section 58 A (1) of the DVAT Act to the petitioner-Firm. The remuneration to the petitioners were denied by the department on account of the failure of the dealers, who were required to make payment of the above bills in terms of Section 58A (4) of the DVAT Act as it stood prior to the amendment on 28th March 2013.
Petitioners claimed that the remuneration for the work was to be in terms of the norms fixed by the Institute of Chartered Accountants of India (‘ICAI’). They also pointed out that Commissioner, in his order directing the Petitioner to undertake the audit work has specifically stated that “the remuneration including expenses of the above name auditor shall be paid by the dealer as per the scales of fees prescribed by the Institute of Chartered Accountants of India.”
Allowing the petition, the bench noted that the Petitioner is a firm of professional auditors and it would be unfair to expect it to remain unremunerated for the special audit work undertaken by it on orders of the Commissioner. “They cannot be made to suffer only because of the default committed by the registered dealers. The Petitioner was not engaged by the registered dealers but by the Commissioner. The Petitioner performed the task of special audit in aid of the Commissioner’s statutory functions.”
“It is precisely for dealing with a situation where a professional chartered accountant may be left high and dry by a defaulting dealer whose accounts have been specially audited, that Section 58A (4) of the DVAT Act was amended. The Court sees no reason why the benefit of this amendment should not be extended to the Petitioner considering that the fees payable to the Petitioner has been fixed by the Commissioner only after the amendment came into effect. Nevertheless the Court is also of the view that the power of the Commissioner in these cases to recover from the defaulting dealer the amount paid to the Petitioner should be kept reserved. For the purposes of such recovery, the amount due from the defaulting dealers would be treated as being due in terms of Section 30 of the DVAT Act, particularly since Section 58A (4) of the DVAT Act as it stood prior to 18th June 2012 permitted such recovery.”
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