2016 (8) TMI 1621 - HC - VAT / Sales Tax

VAT audit orders under Section 58 DVAT Act quashed for lack of valid authorisation; interest and penalties set aside

JMD DIGITAL ART XCHANGE PVT. LTD. Versus COMMISSIONER OF TRADE & TAXES

HC examined a challenge to orders imposing VAT, interest, and penalty based on an audit conducted under Section 58 of the DVAT Act, 2004. The petitioner ... Challenge to order made by the Special Commissioner as well as the default notices of assessment of VAT, interest and penalty - no authorisation on behalf of the respondent State, permitting the VATO for conduct of audit under Section 58 of the DVAT Act, 2004 - HELD THAT:- This issue is squarely covered by a decision of this Court in Capri Bathaid Pvt. Ltd. and Ors. v. Commissioner of Trade and Taxes [2016 (3) TMI 378 - DELHI HIGH COURT]. In the circumstances, this position has not been fairly disputed on behalf of the respondent/department. In the circumstances, the writ petition is allowed; the impugned order dated 09.12.2014 as well as the order of the VATO dated 21.05.2014 for VAT, interest and penalty are hereby quashed. Writ petition challenged Special Commissioner's order dated 09.12.2014 and VATO's default assessment notices dated 21.05.2014 for VAT, interest and penalty. Assessee's primary contentions were absence of any State 'authorisation ... permitting the VATO for conduct of audit under Section 58 of the DVAT Act, 2004' and that the auditing officer was 'not competent to complete the assessment.' Court held the issue was 'squarely covered' by precedent in Capri Bathaid Pvt. Ltd. v. Commissioner of Trade and Taxes, and noted the Department did not fairly dispute that position. Applying that precedent, the Court quashed the impugned order dated 09.12.2014 and the VATO's order dated 21.05.2014 insofar as they imposed VAT, interest and penalty, and allowed the writ petition 'to the above limited extent.'