2015 (5) TMI 839 - HC - VAT and Sales Tax

Supreme Court clarifies DVAT Act time limits, emphasizes objections must be decided promptly

COMMISSIONER OF VALUE ADDED TAX Versus M/s ABHISHEK ELECTRICALS

The Supreme Court allowed the appeal after condoning a 14-day delay in filing under the DVAT Act. The Court clarified that time limits in Section 74 are ... Validity of Tribunal's order - Allowing of objection after lapse of 8 months - Where on the expiry of time specified in section 74(7) of the Delhi Value Added Tax Act, 2004 the Commissioner has not exercised either of the options set out in section 74(7)(a) or 74(7)(b), whether the objection pending before the Commissioner shall be deemed to be allowed - Held that:- Since the decision in M/s Behl Constructions (2009 (1) TMI 787 - DELHI HIGH COURT) has ultimately settled the law i.e. the objections cannot automatically deemed to have been allowed if they are not decided within 8 months, the matter is remitted to the first appellate authority/objection hearing authority who shall hear and decide the contentions of the parties after issuing due notice to the parties and granting due liberty in that regard - Decided in favour of Revenue. Issues:Delay in filing the appeal under the DVAT Act, 2004. Interpretation of time limits under Section 74 of the DVAT Act.Analysis:1. The appeal was initially dismissed due to a delay in filing, following a previous ruling. Amendments to the DVAT Act inserted provisos to Section 81(2)(a), allowing the High Court to entertain delayed appeals. The Supreme Court granted the Revenue liberty to approach the High Court in a review petition.2. The Revenue filed for a review seeking condonation of the delay, which was allowed. The appeal was listed for consideration, and after reviewing the submissions, the delay of 14 days was condoned in the interest of justice.3. The main issue in the appeal (STA No. 33/2009) was the DVAT Tribunal's decision regarding the lapse of 8 months in considering the assessee's objection. Citing previous judgments, the Court ruled that the time limits in Section 74 are 'merely directory' and not mandatory. The Court clarified that objections cannot be deemed accepted solely based on the expiration of the specified time limit without fulfilling the conditions under the Act.4. The Court noted the DVAT Tribunal's observation that objections were deemed allowed due to exceeding the 8-month period. However, since the law was settled by a previous judgment, the matter was remitted to the first appellate authority for a fresh hearing and decision after issuing notices to the parties.5. The decision in the Behl Constructions case clarified that objections must be decided within the stipulated time frame and cannot be automatically deemed allowed. The appeal was allowed, and the case was remanded to the DVAT Tribunal for further proceedings.6. The Court directed the communication of the order to the respondent assessee and the counsel, with additional service by the Revenue. The judgment clarified the interpretation of time limits under the DVAT Act and emphasized the importance of following statutory provisions without reinterpreting them.