e.i. Dupont India Private Limited vs.commissioner, Vat, Delhi & Anr. - Court Judgment

SooperKanoon Citationsooperkanoon.com/1217914
CourtDelhi High Court
Decided OnSep-13-2018
Appellante.i. Dupont India Private Limited
RespondentCommissioner, Vat, Delhi & Anr.
Excerpt:
$~ * % in the high court of delhi at new delhi date of judgment:13. 09.2018 wp(c) 49e.i. dupont india private limited ........ petitioner through : mr ashok k.bhardwaj and mr manish kumar hirani, advocates. versus commissioner, vat, delhi & anr. ........ respondents through : mr satyakam, standing counsel. coram: hon'ble mr. justice s. ravindra bhat hon'ble mr. justice a.k.chawla s.ravindra bhat, j.1. in this writ petition, a direction to quash the letter/order issued by the second respondent i.e. the assistant commissioner, department of trade and taxes (hereafter referred to as “dvat authority”) is sought. a further direction to the respondents to grant permission for the revision of returns for the tax period 2012-13, is also claimed.2. the petitioner states that it had made genuine inter-state inward branch transfers for the period 2012-13 against f-form. these transfers amounted to `1.79 crores but were incorrectly reflected in annexure 2a filed wp(c) 4952/2017 page 1 of 8 online with the return for june, 2012 and in column f11.1.3 of form dvat16 section 28 of the delhi value added tax act, 2004 (hereafter as “dvat act”) prescribes a time limit for furnishing revised returns i.e. one year from the date end of the financial year to which the transactions pertain. the procedure for obtaining f-forms under the dvat act, is through a website which is automated. the details are in terms of annexure 2a filed online. if inward transfers details are missing in the annexure 2a filed online, the corresponding f-forms for the said inwards transfers cannot be generated. upon realizing this problem, the petitioner approached the respondent- dvat authorities on 26.05.2016 to permit it to revise the returns and include the omitted transfers which could enable it to download the f-forms. this was based on its understanding of the dvat provisions which conferred the assessing officer with discretionary powers under section 33 read with section 86(9)(c) of the dvat act to impose penalty for failure to furnish the revised returns, by the due date.3. much later on 23.05.2017, the petitioners request was rejected on the ground that the time period for filing the revised returns under section 28 of the dvat act had elapsed. the petitioner contends that the revision sought does not cause any prejudice to the revenue and that its inability to file the revised returns in time was not on account of any deliberate omission but it was because of the very nature of the online facility portal, which automatically reflects in form f, the inaccurate particulars provided in the corresponding annexure to the dvat forms. it is submitted that the default or omission in not providing the correct or accurate details is not so glaring or absolute that it cannot be condoned in the exercise of discretionary powers to wp(c) 4952/2017 page 2 of 8 impose a penalty under section 86(9)(c) of the dvat act. the petitioner relies upon section 28 and 86(9) for this purpose.4. the petitioner relies upon the judgment of this court dated 01.02.2016 in ingram micro india pvt. ltd. v. commissioner, department of trade and taxes (2016) 89 vst312delhi). it is submitted that in that case undoubtedly, the court was not dealing with c-forms but, with respect to delay in the claiming of correct credit or concession and the inconsequential nature of the relief on the part of the department, it was held that the request for issuance of form had to be given.5. the government of nct resists the petition stating that the decision in ingram micro pvt. ltd. (supra) pending consideration before the supreme court which has granted special leave to appeal against it. it is stated that section 26 of the dvat act requires a dealer to pay tax under the act and furnish returns in the prescribed form. furthermore, rule 5(iv) read with rule 8(ii) of the central sales tax (delhi) rules, empowers the vat department to withhold issuance of f-form to dealers in the case of concealment of purchase particulars or for furnishing inadequate particulars. it is stated that the right of a dealer in respect of purchased goods to not pay tax or without furnishing a prescribed declaration is not a vested right but is conditional upon fulfillment of all the requirements spelt out by the statute. in this case, since the petitioner did not fulfill the conditions, the question of granting it the f-forms, after a time prescribed for revision of the returns, cannot be granted.6. learned counsel also distinguished that the judgment in ingram micro pvt. ltd. (supra) stating that in that case the dealer sought issuance of c-forms whereas in the present case f-forms have been sought which are for providing information of transfer of stocks – a fact always within the knowledge of a wp(c) 4952/2017 page 3 of 8 dealer. it is also pointed that while whereas purchase amounts were included in the original returns they were reflected in the revised returns in ingram micro pvt. ltd. (supra) which is not the case in the present instance. it is also stated that the petitioner has not shown any material to substantiate its averment that selling dealers, had sought declarations in the statutory form.7. sections 28 and 86 of the dvat act, reads as follows: “28 correction of deficiencies rrule:29. fforms:16, 17 [if a person discovers a discrepancy in a return furnished by him for a tax period under this act, he shall remove such discrepancy and furnish a revised return within the year following the year of such tax period: provided that if, as a result of the discrepancy, the person has paid less tax than was due under this act, he shall, pay the tax owed and interest thereon: provided further that for the years 2008-09, 2009-10 and 2010-11, except for those returns pertaining to any tax period of 2010-11, which were scheduled to be furnished in the year 2011-12, the revised return shall be required to be furnished by 31st december, 2012.]. 86 penalties rrule: nil fform: nil [(1) in this section “tax deficiency” means the difference between the tax properly payable by the person in accordance with the provisions of this act and the amount of tax paid by the person in respect of a calendar month. explanations-1 - „tax properly payable‟ includes the amount of tax assessed under section 32 of the „act‟.2. due tax paid after the period specified in sub-section (4) of section 3 of the act, is also a tax deficiency.]. wp(c) 4952/2017 page 4 of 8 (2) the government may, from time to time, if it deems it necessary, vary the amount of any penalty due under this section by a notification to that effect in the official gazette: provided that any penalty which is increased under this section shall have effect only for offences or failures occurring after the date of such notification; (3) where two or more penalties arise under this act in respect of the same conduct of a person, the person shall be liable to pay only the greater penalty. (4) where a person who is required to be registered under this act has failed to apply for registration within one month from the day on which the requirement arose, the person shall be liable to pay, by way of penalty, an amount equal to one thousand rupees per day from the day immediately following the expiry of the said period until the person makes an application for registration in the prescribed form, containing such particulars and information and accompanied by such fee, security and other documents as may be prescribed: provided that the amount of penalty payable under this sub-section shall not exceed one lakh rupees.]. (5) if, a registered dealer fails to comply with the provisions of sub-section (1) of section 21 of this act, the person shall be liable to pay, by way of penalty, a sum of 1 [five]. hundred rupees per day of default subject to a maximum of 2 [ten]. thousand rupees. (6) if a registered dealer – (a) fails to comply with the provisions of sub-section (2) of section 22 of this act; or (b) fails to surrender his certificate of registration as provided in sub-section (7) of section 22 of this act; the registered dealer shall be liable to pay, by way of penalty, a sum equal to one 3 [thousand]. rupees for every day of default subject to a maximum of 4 [twenty five]. thousand rupees. (7) if any person falsely represents that he is registered as a dealer under this act, he shall be liable to a penalty equal to the amount of tax wrongly collected or one lakh rupees, whichever is the greater. wp(c) 4952/2017 page 5 of 8 8. ************ ************** (9) if a person required to furnish a return under chapter v or to comply with a requirement in a notification issued under section 70 of this act – (a) fails to furnish any return by the due date; or (b) fails to furnish with a return any other document that is required to be furnished with the return; or (c) being required to revise a return already furnished, fails to furnish the revised return by the due date; or (d) fails to comply with a requirement in a notification issued under section 70; the person shall be liable to pay, by way of penalty, a sum of five hundred rupees per day from the day immediately following the due date until the failure is rectified: provided that the amount of penalty payable under this sub-section shall not exceed fifty thousand rupees.]. ….” in ingram micro india pvt. ltd., this court stated as follows:"19. turning to the facts of the present case it is not the stand of the... respondents that the inter-state purchase transactions in respect of which the c-forms are being asked for by the... petitioner are not genuine. as far as the furnishing of bank statements is concerned, it is stated that the... petitioner has by a letter dated 10th july 2015 furnished the said documents. as regards the apprehension expressed by mr. ghose that this would open a pandora‟s box and make it difficult for proper administration of collection of taxes by the... respondents, it is trite that each such request for issuance of c-forms would have to be individually examined on a case to case basis. it is incumbent on the authority while examining such request in light of rule 5(4) of the cst delhi rules to satisfy himself whether any of the grounds spelt out therein is actually attracted. in the present case there is a valid explanation offered regarding the mistake made by it in not including the aforementioned inter- state purchases in the revised returns filed. also, the authorities appear to be satisfied that these are genuine inter-state purchase transactions with no adverse impact on the revenue of the state. thirdly, the authority is not wp(c) 4952/2017 page 6 of 8 precluded from issuing the c-forms subject to any condition, like the furnishing of an indemnity bond by the dealer. indeed the... petitioner enclosed such an indemnity bond with its letter dated 10th june 2015.20. for the aforementioned reasons, the court holds that this was not a case where the respondent no.2 was justified in declining to issue c-forms to the... petitioner. consequently, the impugned order dated 12th june 2015 issued by respondent no.2 is hereby set aside and a direction is issued to the respondent no.2 to issue to the... petitioner a c-form pertaining inter-state purchase transactions undertaken by it in the third and fourth quarter of fy201011 within a period of three weeks from today.21. if the... respondents desire an indemnity bond to be furnished by the... petitioner in any other format, they will communicate such requirement to the... petitioner not later than two weeks from today and proceed to issue the aforementioned c-form not later than three weeks from today subject to the... petitioner furnishing such indemnity bond in revised format." the aforementioned to 9. in the present case, to what the respondents are not per se contesting the genuineness of the transactions which the petitioner claims to have actually entered into. what is set up as a bar to the relief is that the time period prescribed in section 28 has elapsed. section 86(9)(c) facially suggests that if some particulars which should have been disclosed in the return are not disclosed, the tax payer is liable by way of penalty `200 per day from the date falling the due date until the failure is rectified. the respondent’s argument that ingram micro india pvt. ltd. dealt with c-forms whereas the claim today is in respect of f-forms, in the opinion of this court is without merit. undoubtedly, while f-forms relate to the stock available with the dealer, which the petitioner does not dispute was in its knowledge, nevertheless in argument, it is not disputed that the transactions claimed for which wp(c) 4952/2017 page 7 of 8 examination is sought are not genuine. no doubt, the petitioner might have been aware but its case is that the incorrect particulars were reflected in the final return files. keeping these broad similarities in mind, this court is of the opinion that the petitioner is entitled to relief of the kind that ingram micro india pvt. ltd. provided to the tax payers in the judgment.10. for the above reasons, the respondent is directed to issue the concerned f-forms pertaining to the transactions undertaken by the petitioner in the concerned quarter of financial year 2012-13 within four weeks from today. in case the respondents wish to secure an indemnity bond from the petitioner in this regard, a letter or communication should be addressed to the petitioner within two weeks. subject to these, the f-forms shall be released within the time spelt out. it is made clear that these directions are subject to the final decision of the supreme court in ingram micro pvt. ltd. (supra) and the other pending appeals.11. the writ petition is allowed in the above terms. order dasti. s. ravindra bhat (judge) september13 2018 a.k.chawla (judge) wp(c) 4952/2017 page 8 of 8
Judgment:

$~ * % IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Judgment:

13. 09.2018 WP(C) 49
E.I. DUPONT INDIA PRIVATE LIMITED ........ Petitioner

Through : Mr Ashok K.Bhardwaj and Mr Manish Kumar Hirani, Advocates. versus COMMISSIONER, VAT, DELHI & ANR. ........ RESPONDENTS

Through : Mr Satyakam, Standing Counsel. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A.K.CHAWLA S.RAVINDRA BHAT, J.

1. In this writ petition, a direction to quash the letter/order issued by the second respondent i.e. the Assistant Commissioner, Department of Trade and Taxes (hereafter referred to as “DVAT Authority”) is sought. A further direction to the respondents to grant permission for the revision of returns for the tax period 2012-13, is also claimed.

2. The petitioner states that it had made genuine inter-state inward branch transfers for the period 2012-13 against F-Form. These transfers amounted to `1.79 crores but were incorrectly reflected in Annexure 2A filed WP(C) 4952/2017 Page 1 of 8 online with the return for June, 2012 and in Column F11.1.3 of Form DVAT16 Section 28 of the Delhi Value Added Tax Act, 2004 (hereafter as “DVAT Act”) prescribes a time limit for furnishing revised returns i.e. one year from the date end of the Financial Year to which the transactions pertain. The procedure for obtaining F-Forms under the DVAT Act, is through a website which is automated. The details are in terms of Annexure 2A filed online. If inward transfers details are missing in the Annexure 2A filed online, the corresponding F-Forms for the said inwards transfers cannot be generated. Upon realizing this problem, the petitioner approached the respondent- DVAT authorities on 26.05.2016 to permit it to revise the returns and include the omitted transfers which could enable it to download the F-Forms. This was based on its understanding of the DVAT provisions which conferred the Assessing Officer with discretionary powers under Section 33 read with Section 86(9)(c) of the DVAT Act to impose penalty for failure to furnish the revised returns, by the due date.

3. Much later on 23.05.2017, the petitioners request was rejected on the ground that the time period for filing the revised returns under Section 28 of the DVAT Act had elapsed. The petitioner contends that the revision sought does not cause any prejudice to the revenue and that its inability to file the revised returns in time was not on account of any deliberate omission but it was because of the very nature of the online facility portal, which automatically reflects in Form F, the inaccurate particulars provided in the corresponding Annexure to the DVAT Forms. It is submitted that the default or omission in not providing the correct or accurate details is not so glaring or absolute that it cannot be condoned in the exercise of discretionary powers to WP(C) 4952/2017 Page 2 of 8 impose a penalty under Section 86(9)(c) of the DVAT Act. The petitioner relies upon Section 28 and 86(9) for this purpose.

4. The petitioner relies upon the judgment of this Court dated 01.02.2016 in Ingram Micro India Pvt. Ltd. v. Commissioner, Department of Trade and Taxes (2016) 89 VST312Delhi). It is submitted that in that case undoubtedly, the Court was not dealing with C-Forms but, with respect to delay in the claiming of correct credit or concession and the inconsequential nature of the relief on the part of the department, it was held that the request for issuance of form had to be given.

5. The Government of NCT resists the petition stating that the decision in Ingram Micro Pvt. Ltd. (supra) pending consideration before the Supreme Court which has granted special leave to appeal against it. It is stated that Section 26 of the DVAT Act requires a dealer to pay tax under the Act and furnish returns in the prescribed form. Furthermore, Rule 5(iv) read with Rule 8(ii) of the Central Sales Tax (Delhi) Rules, empowers the VAT Department to withhold issuance of F-Form to dealers in the case of concealment of purchase particulars or for furnishing inadequate particulars. It is stated that the right of a dealer in respect of purchased goods to not pay tax or without furnishing a prescribed declaration is not a vested right but is conditional upon fulfillment of all the requirements spelt out by the Statute. In this case, since the petitioner did not fulfill the conditions, the question of granting it the F-Forms, after a time prescribed for revision of the returns, cannot be granted.

6. Learned counsel also distinguished that the judgment in Ingram Micro Pvt. Ltd. (supra) stating that in that case the dealer sought issuance of C-Forms whereas in the present case F-Forms have been sought which are for providing information of transfer of stocks – a fact always within the knowledge of a WP(C) 4952/2017 Page 3 of 8 dealer. It is also pointed that while whereas purchase amounts were included in the original returns they were reflected in the revised returns in Ingram Micro Pvt. Ltd. (supra) which is not the case in the present instance. It is also stated that the petitioner has not shown any material to substantiate its averment that selling dealers, had sought declarations in the statutory form.

7. Sections 28 and 86 of the DVAT Act, reads as follows: “28 Correction of deficiencies RRule:

29. FForms:16, 17 [If a person discovers a discrepancy in a return furnished by him for a tax period under this Act, he shall remove such discrepancy and furnish a revised return within the year following the year of such tax period: PROVIDED that if, as a result of the discrepancy, the person has paid less tax than was due under this Act, he shall, pay the tax owed and interest thereon: PROVIDED FURTHER that for the years 2008-09, 2009-10 and 2010-11, except for those returns pertaining to any tax period of 2010-11, which were scheduled to be furnished in the year 2011-12, the revised return shall be required to be furnished by 31st December, 2012.]. 86 Penalties RRule: Nil FForm: Nil [(1) In this section “tax deficiency” means the difference between the tax properly payable by the person in accordance with the provisions of this Act and the amount of tax paid by the person in respect of a calendar month. Explanations-1 - „Tax properly payable‟ includes the amount of tax assessed under section 32 of the „Act‟.

2. Due tax paid after the period specified in sub-section (4) of section 3 of the Act, is also a tax deficiency.]. WP(C) 4952/2017 Page 4 of 8 (2) The Government may, from time to time, if it deems it necessary, vary the amount of any penalty due under this section by a notification to that effect in the official Gazette: PROVIDED that any penalty which is increased under this section shall have effect only for offences or failures occurring after the date of such notification; (3) Where two or more penalties arise under this Act in respect of the same conduct of a person, the person shall be liable to pay only the greater penalty. (4) Where a person who is required to be registered under this Act has failed to apply for registration within one month from the day on which the requirement arose, the person shall be liable to pay, by way of penalty, an amount equal to one thousand rupees per day from the day immediately following the expiry of the said period until the person makes an application for registration in the prescribed form, containing such particulars and information and accompanied by such fee, security and other documents as may be prescribed: PROVIDED that the amount of penalty payable under this sub-section shall not exceed one lakh rupees.]. (5) If, a registered dealer fails to comply with the provisions of sub-section (1) of section 21 of this Act, the person shall be liable to pay, by way of penalty, a sum of 1 [five]. hundred rupees per day of default subject to a maximum of 2 [ten]. thousand rupees. (6) If a registered dealer – (a) fails to comply with the provisions of sub-section (2) of section 22 of this Act; or (b) fails to surrender his certificate of registration as provided in sub-section (7) of section 22 of this Act; the registered dealer shall be liable to pay, by way of penalty, a sum equal to one 3 [thousand]. rupees for every day of default subject to a maximum of 4 [twenty five]. thousand rupees. (7) If any person falsely represents that he is registered as a dealer under this Act, he shall be liable to a penalty equal to the amount of tax wrongly collected or one lakh rupees, whichever is the greater. WP(C) 4952/2017 Page 5 of 8 8. ************ ************** (9) If a person required to furnish a return under Chapter V or to comply with a requirement in a notification issued under section 70 of this Act – (a) fails to furnish any return by the due date; or (b) fails to furnish with a return any other document that is required to be furnished with the return; or (c) being required to revise a return already furnished, fails to furnish the revised return by the due date; or (d) fails to comply with a requirement in a notification issued under section 70; the person shall be liable to pay, by way of penalty, a sum of five hundred rupees per day from the day immediately following the due date until the failure is rectified: PROVIDED that the amount of penalty payable under this sub-section shall not exceed fifty thousand rupees.]. ….” In Ingram micro India Pvt. Ltd., this Court stated as follows:

"19. Turning to the facts of the present case it is not the stand of the... RESPONDENTS

that the inter-state purchase transactions in respect of which the C-Forms are being asked for by the... Petitioner

are not genuine. As far as the furnishing of bank statements is concerned, it is stated that the... Petitioner

has by a letter dated 10th July 2015 furnished the said documents. As regards the apprehension expressed by Mr. Ghose that this would open a pandora‟s box and make it difficult for proper administration of collection of taxes by the... RESPONDENTS

, it is trite that each such request for issuance of C-Forms would have to be individually examined on a case to case basis. It is incumbent on the authority while examining such request in light of Rule 5(4) of the CST Delhi Rules to satisfy himself whether any of the grounds spelt out therein is actually attracted. In the present case there is a valid explanation offered regarding the mistake made by it in not including the aforementioned inter- state purchases in the revised returns filed. Also, the authorities appear to be satisfied that these are genuine inter-state purchase transactions with no adverse impact on the revenue of the State. Thirdly, the authority is not WP(C) 4952/2017 Page 6 of 8 precluded from issuing the C-Forms subject to any condition, like the furnishing of an indemnity bond by the dealer. Indeed the... Petitioner

enclosed such an indemnity bond with its letter dated 10th June 2015.

20. For the aforementioned reasons, the Court holds that this was not a case where the Respondent No.2 was justified in declining to issue C-Forms to the... Petitioner

. Consequently, the impugned order dated 12th June 2015 issued by Respondent No.2 is hereby set aside and a direction is issued to the Respondent No.2 to issue to the... Petitioner

a C-Form pertaining inter-state purchase transactions undertaken by it in the third and fourth quarter of FY201011 within a period of three weeks from today.

21. If the... RESPONDENTS

desire an indemnity bond to be furnished by the... Petitioner

in any other format, they will communicate such requirement to the... Petitioner

not later than two weeks from today and proceed to issue the aforementioned C-Form not later than three weeks from today subject to the... Petitioner

furnishing such indemnity bond in revised format."

the aforementioned to 9. In the present case, to what the respondents are not per se contesting the genuineness of the transactions which the petitioner claims to have actually entered into. What is set up as a bar to the relief is that the time period prescribed in Section 28 has elapsed. Section 86(9)(c) facially suggests that if some particulars which should have been disclosed in the return are not disclosed, the tax payer is liable by way of penalty `200 per day from the date falling the due date until the failure is rectified. The respondent’s argument that Ingram Micro India Pvt. Ltd. dealt with C-Forms whereas the claim today is in respect of F-Forms, in the opinion of this Court is without merit. Undoubtedly, while F-Forms relate to the stock available with the dealer, which the petitioner does not dispute was in its knowledge, nevertheless in argument, it is not disputed that the transactions claimed for which WP(C) 4952/2017 Page 7 of 8 examination is sought are not genuine. No doubt, the petitioner might have been aware but its case is that the incorrect particulars were reflected in the final return files. Keeping these broad similarities in mind, this Court is of the opinion that the petitioner is entitled to relief of the kind that Ingram Micro India Pvt. Ltd. provided to the tax payers in the judgment.

10. For the above reasons, the respondent is directed to issue the concerned F-Forms pertaining to the transactions undertaken by the petitioner in the concerned quarter of Financial Year 2012-13 within four weeks from today. In case the respondents wish to secure an indemnity bond from the petitioner in this regard, a letter or communication should be addressed to the petitioner within two weeks. Subject to these, the F-Forms shall be released within the time spelt out. It is made clear that these directions are subject to the final decision of the Supreme Court in Ingram Micro Pvt. Ltd. (supra) and the other pending appeals.

11. The writ petition is allowed in the above terms. Order dasti. S. RAVINDRA BHAT (JUDGE) SEPTEMBER13 2018 A.K.CHAWLA (JUDGE) WP(C) 4952/2017 Page 8 of 8