In a recent judgement, the Delhi High Court (HC) has held that refund under section 42(1) of the Delhi Value Added Tax Act, 2004 (DVAT Act ) can’t be allowed on the failure of the Objection Hearing Authority (OHA) to pass an order in the prescribed time.
Jutla&Co, the petitioner has filed the present petition, inter alia, praying that the respondents be directed to refund an amount of ₹14,12,185/- along with interest in terms of Section 42 of the DVAT Act.
The petitioner had filed its Value Added Tax (VAT) return for the quarter 01.04.2017 to 30.06.2017, on 28.09.2017. According to the petitioner, in terms of the said return, a refund of ₹14,12,185/- of VAT was due for the said period. The Assessing Officer ( AO) did not accept the said returns and framed a default assessment of VAT for the years 2014 – 15 and 2016-17 by assessment orders, both dated 18.06.2018.
The petitioner filed its objections before the OHA whichwas dismissed by an order dated 22.12.2020 and the petitioner appealed the said order dated 22.12.2020 before the Delhi Value Added Tax Appellate Tribunal (‘the Tribunal’).
The Tribunal noted that the petitioner had submitted various documents during the course of proceedings before the OHA, including copies of ledger accounts, original cash vouchers, original purchase bills and other expense bills in compliance with the directions issued by the OHA. The petitioner claimed that it was entitled to exemption in respect of certain charges towards labour expenses etc.
The petitioner claimed that it was now entitled to a refund on the ground that the time for the OHA to pass an order has elapsed and therefore, its return claiming a refund of ₹14,12,185/- stands. The petitioner also claims that it is entitled to a refund along with interest under Section 42(1) of the DVAT Act.
Mr Gautam, the counsel who appeared for the petitioner, also relied on the provisions of Section 74 of the DVAT Act and submitted that since the OHA did not pass any order after the matter was remanded by the Tribunal, it is deemed that the objections raised by the petitioner in respect of the default assessments are allowed.
It was viewed in light of the case, Commissioner of Sales Tax v. BEHL Construction (supra),it is mandatory that a notice under Section 74(8) of the DVAT Act is issued for triggering the deeming provisions of Section 74(9) of the DVAT Act.
A two-member bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that the prayer of the petitioner for the refund of the amount of ₹14,12,185/- along with interest cannot be acceded to at this stage. Further directed the concerned OHA to pass an appropriate order, in compliance with the order dated 17.09.2021 passed by the Tribunal, as expeditiously as possible.
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