In Garg Roadlines v. Commissioner, Trade & Taxes, the division bench of the Delhi High Court held that the revisionary power conferred under section 74A of the Delhi VAT Act cannot be exercised by the Commissioner to delay refund claim of the assesse.
The division bench comprising of Justice S Muralidhar and Justice Najmi Waziri said that such an act would result in abuse of power granted to the authorities under the Act.
Assessee, in the instant case, claimed refund of excess input tax paid by them under the DVAT Act. Following this, the Department initiated default assessment proceedings against the assessee under sections 32 and 33 of the Act. However, the proposals contained in the notice were dropped as the authority was satisfied with the objections raised against it. Later, the authority proposed to revise the said order on the basis of revisionary jurisdiction conferred on it under the DVAT Act. The undated and unsigned notice was posted at the Web ID of the Petitioner for “revision under Section 74 (A) of the orders of the learned Special Commissioner-II/OHA” requiring the Petitioner to appear before the Commissioner, Trade & Taxes. The assessee impugned the notice before the High Court.
After considering all the relevant documents along with the impugned notice, the bench noted that there is nothing to indicate that the Commissioner, VAT took a conscious decision that the revisionary power under Section 74A should be invoked.
It was also noted that apart from the fact that there are no reasons penned by the Commissioner, to justify the invocation of the revisionary power, the impugned unsigned note is not even referred to. “Even the note prepared by the Joint Commissioner (JC) (Zone-VI) makes no reference to the said note. It gives no justifiable reason for invoking the revisionary power under Section 74 A of the DVAT Act. Even the reasons why the order of the OHA is unacceptable to the DT&T are absent. As noticed earlier, the impugned notice (undated and unsigned) uploaded on the Petitioner’s web id proposing the exercise of the revisionary power under Section 74 A DVAT Act is equally vague and without any reasons.”
The bench observed that, “There is also no application of mind to the consequences of the decision to invoke the revisionary power under Section 74 A DVAT Act. go in for revision. For instance, the note by the JC fails to note that under Section 38 of the DVAT Act the Department was bound to process the refund application, which in this case was pending since July 2010, within one month from the date of the filing of the return. It further failed to note that interest had payable under Section 42 of the DVAT Act had by this time grown to a substantial sum by now. The exercise of the power under Section 74 A of the DVAT at this stage would entail an additional burden on the exchequer in the event the attempt was not successful.”
“The power under Section 74A of the DVAT Act is not to be exercised slightly. It is a power coupled “with the duty to act responsibly and by the competent authority applying mind to the relevant facts and circumstances of the case. The notes on file proposing the exercise of power under Section 74A of the DVAT Act in this case do not satisfy this basic requirement. In the present case the undated and unsigned notice proposing the exercise of the revisionary jurisdiction was at best vague. It did not satisfy the basic requirement of the law, as explained in Commissioner of Central Excise, Bangalore v. Brindavan Beverages (P) Limited 2007 (213) ELT 487 (SC), viz., that the grounds should be clearly specified” the bench also added.
Read the full text of the Order below.
