Judgment:
$~36 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision:
4. h March, 2014 % + ST.APPL. 35/2013 AMCO BATTERIES LTD ..... Petitioner Through Mr Virag Tiwari, Mr Rajesh Jain and Mr K J Bhat, Advs. versus COMMISSIONER OF VALUE ADDED TAX ..... Respondent Through Ms Chandni Mehta, Adv. for Ms Avnish Ahlawat, Adv. CORAM: MR. JUSTICE S. RAVINDRA BHAT MR. JUSTICE R.V. EASWAR S. RAVINDRA BHAT, J.
(OPEN COURT) The following substantial question of law was made out at the stage of admission:
“Whether the Objection Hearing Authority could have directed imposition of interest under Section 74(7) of the Delhi Value Added Tax Act, 2004?.”
2. The petitioner’s grievance is regarding the objection to the order of the Commissioner under section 74(7) that even though its objection was accepted substantially yet in the operative directions the Objection Hearing Authority (hereinafter called as “OHA”) under sections 74 of the Delhi Value Added Tax Act, 2004 (hereinafter called the “Act”) was accepted. Yet in the operative portion, the OHA as the Commissioner is called in such cases has directed the assessing authority to determine not only the tax due after verification but also the interest component.
3. The assessee relies upon several judgments and contends that the power of the OHA under section 74(7) is extremely limited and circumscribed and certainly does not extend to the jurisdiction to direct recovery of interest. It is contended that even though section 42 is indicative of the legislative intent, the interest has to be mandatorily paid. There is a great degree of subjectivity in the given facts of particular case. The counsel relies upon section 32(2) to state that precise liability of any assessee or dealer would crystallise having regard to the period in issue and the fact as to whether its contentions are accepted by the assessing officer in the circumstances. By way of an illustration it is stated that where default or development adjustment is made the assessing authority partly accepted the contentions of the dealer; the law may be restricted in the event the period for which interest may be levied could be entirely different. In other words, the interest is not a blanket and omnibus one admitting only one shade of submissions. In the impugned order the OHA accepted the submissions of the dealer, with respect to the tax period in question i.e. 2007-08 for various periods. The appellant’s argument was that in the light of the decision of this Court in M/s Kirloskar Electric Company Ltd. vs. CST(1991) 83 STC485(Delhi), the assessee had to be granted the benefit of concessional duty upon proper verification of the records as to the expenses or furnishing of the concerned forms. The OHA pertinently held as follows :
“6. I have gone through the documents submitted by the dealer in support of the objection against default assessments u/s 9(2) of CST Act and have also heard the arguments of the counsel, whereupon, i am of the considered view that since the dealer is in possession of above said statutory forms; it would be just and fair to consider the said form for the purpose of concessional rate of tax in the light of judgment of Hon‟ble High Court of Delhi in the case of M/s Kirloskar Electric Co. Ltd., Vs. CST wherein it has been held that the State was entitled only to the tax which was legitimately due to it and statutory forms can be accepted even at the appellate stage if the dealer could not procure the same at the time of assessment.
7. Keeping in view the facts stated above, the objection relating to default assessments u/s 9 of CST Act for the tax period stated above is accepted and VATO concerned is directed to consider the above – said C/F Forms for the purpose of allowing concessional rate of tax subject to verification of the said form and the transactions related thereto in the light of books of accounts and documents like GRs, bank statement, sale invoices etc. The order may be passed by the Assessing Authority in accordance with the provisions of the CST Act and the Rules framed there under. The VATO concerned is further directed to ascertain that, if refund for the period in question has been released, then the amount of tax due, not duly supported by C forms is to be recovered along with interest. Also, interest on the entire amount is to be charged from the due date of tax for all the „C/F‟ forms not deposited, in view of the judgment of Hon‟ble High Court in the matter of CTT Central Switchgear.”
4. The dealer was aggrieved by this order and sought modification which was declined on 30.3.2013. The Tribunal’s view is that the proceedings before OHA appear to be wide since the power of the Commissioner is an appellate power. The Tribunal also indicated that the power of the OHA to insist upon payment of interest is by way of incidental or supplementary one to enable enforcement of other provisions of the Act. In this case as is evident from the extracted portions of the OHA’s order, the merits of the dealer’s contentions with regard to the assessing authority overlooking that certain concessional rate of tax stood accepted. Yet the OHA while noticing that a question of reduction is likely to arise directed the OHA to determine the interest. Whilst two views may be possible given the mandate of section 42(2) which requires dealers to pay interest in addition to the “amount assessed”, yet there can be a degree of relativity having regard to the circumstances in each case. In the present instance the dealer’s argument with respect to its entitlement to claim some concessional rate in view of the documentation furnished by it was substantially accepted. In these circumstances, the direction to recover interest on the non-submission due to non-availability of forms in fact amounts to pre-judging the issue. Having regard to these facts the latter directions of the Tribunal are hereby set aside. The appeal is partly allowed in the above terms. (S. RAVINDRA BHAT) JUDGE (R.V. EASWAR) JUDGE MARCH4 2014 vld