2016 (10) TMI 1410 - HC - VAT / Sales Tax

Tax audit and default notices under DVAT Sections 58, 32, 33 quashed for lack of proper authorization

ITD-ITD CEM JV Versus COMMISSIONER OF TRADE & TAXES

HC examined a challenge to an audit report and consequential default notices imposing tax, interest and penalty under Sections 58, 32 and 33 of the Delhi ... Challenge to impugned Audit Report and default notices of assessment of tax, interest and penalty issued under Sections 58, 32 and 33 of the Delhi Value Added Tax Act, 2004 - Audit Officer lacks power to complete the assessment proceedings - no authorisation on behalf of the respondent State, permitting the VATO for conducting the audit under Section 58 of the Act - 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. The writ petition deserves to be allowed; the impugned order dated 16.07.2014 as well as the order of the VATO demanding VAT, interest and penalty are hereby quashed. Petition allowed. Petitioner challenged the Audit Report and default notices dated 16.7.2014 assessing tax, interest and penalty under Sections 58, 32 and 33 of the Delhi Value Added Tax Act, 2004 on grounds that the VATO lacked authorisation to conduct an audit and the Audit Officer was not competent to complete assessment. The court held the issue was 'squarely covered by a decision of this Court in Capri Bathaid Pvt. Ltd. and Ors. v. Commissioner of Trade and Taxes 2016 (155) DRJ 526 (DB),' a position not disputed by the department. Applying that precedent, the court concluded the impugned audit and assessments were unsustainable and therefore 'the impugned order dated 16.07.2014 as well as the order of the VATO demanding VAT, interest and penalty are hereby quashed.' Writ petition allowed.