In a taxpayer-friendly ruling, the Delhi High Court has directed the VAT department to create a portal/online mechanism for intimation of notices issued under subsection (8) of Section 74 of the Delhi VAT Act.
The petitioner, Sanjay Enterprises approached the High Court contending that the objections to the VAT assessment notices were filed by the petitioner under Section 74 of the Act on 20.06.2014. The reminders qua disposal of the same appear to have been sent on 06.01.2021, 22.07.2021, and 10.02.2022.
As per sub-section (8) of Section 74 of the Act, in case of objections are not decided within three months, the assessee is entitled to serve upon the Commissioner a written notice requiring him to take a decision within the next fifteen days.
According to sub-section (9) of Section 74 of the Act, if at the end of fifteen days of such notice being served, a decision is not taken by the Commissioner, the objections filed are deemed as having been allowed.
The department contended that in terms of Rule 56 of the Delhi Value Added Tax Rules, 2005, the said notice had to be personally served on the Commissioner.
Justice Rajiv Shakdher and Justice Poonam A. Bamba held that there is complete sloth and procrastination on the part of the respondents/revenue.
“According to us, while Mr. Aggarwal may have a talking point as to the mechanics set forth in the Act for service of notice under sub-section (8) of Section 74 of the Act, there is certainly an unpardonable delay on the part of the respondents/revenue in dealing with the objections; eight years is too long a time for the respondents/revenue to not have moved the matter,” the bench said.
Imposing a cost of Rs. 7500 on the department, the bench added that “In our view, the respondents/revenue has to adapt itself to the times in which we live. Given the fact that the physical interaction often, for various reasons, is not possible with the Commissioner, the respondents/revenue are directed to create a portal/online mechanism for intimation of notices issued under subsection (8) of Section 74 of the Act, read with Rule 56 of the 2005 Rules.”
Mr. Dinesh Mohan Sinha and Mr. Rajiv Kumar Deora, Advocates appeared for the petitioner-assessee.
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