2025 (10) TMI 173 - HC - VAT / Sales Tax

Petition for sales-tax assessment details and reward denied; records exempt under Section 98(3)(d) DVAT Act and Section 8(1)(d) RTI Act

Shri Virendra Kumar Jain Versus The Commissioner Of Sales Tax Department & Ors.

The HC dismissed the petition seeking information about sales-tax assessment and entitlement to a reward, finding no court direction required under ... Direction to provide information to the petitioner with regard to assessment of sales tax - entitlement to a reward of up to 10% of the tax realized on the basis of the information provided to the Department - HELD THAT:- A bare perusal of Section 98 (3)(d) of the DVAT Act, would show that the exception is with regard to certain proceedings pending before the Civil Court to which the Government or any Value Added Tax Authority is a party. In the present case, there was no direction from any Court to provide the information as sought by the petitioner. In these circumstances, this Court finds no reason to interfere with the orders passed by the Appellate Authorities. It is further noted that the department has taken a categorical stand that there was no realisation of any evaded tax on the basis of the information given by the petitioner’s late father. Moreover, the information as sought in the present petition, as pointed out hereinabove has already been adjudicated upon by the concerned Authorities under RTI Act holding that the same cannot be supplied to the petitioner in view of the provisions of Section 98 of the DVAT and Section 8(1)(d) of the RTI Act. The present petition is dismissed and disposed of. ISSUES PRESENTED AND CONSIDERED 1. Whether information relating to assessments, additional tax demands, deposits/realisation and appeals under the Delhi Value Added Tax regime for a specific dealer falls within the confidentiality provision of Section 98 of the Delhi Value Added Tax Act and hence is exempt from disclosure under Section 8(1)(d) and/or Section 8(1)(j) of the Right to Information Act, 2005. 2. Whether the exception in Section 98(3)(d) of the Delhi VAT Act (disclosure to a civil court in certain suits or proceedings to which the Government or VAT authority is a party) applies to permit disclosure in the absence of any court direction requiring production of such records. 3. Whether the public interest (larger public interest) requirement under Section 8(1)(d) of the RTI Act is satisfied to override the protection of commercial/confidential information and permit disclosure. 4. Whether administrative findings (committee report and departmental affidavits) that no tax was realised on the basis of the informant's information affect the entitlement to disclosure of the assessment records sought under RTI. ISSUE-WISE DETAILED ANALYSIS Issue 1: Applicability of Section 98 (confidentiality) of the DVAT and exemption under Sections 8(1)(d) and 8(1)(j) of the RTI Act Legal framework: Section 98(1) DVAT treats particulars contained in returns, statements, accounts or documents produced under the Act as confidential, permitting disclosure only as provided in subsection (3). Sections 8(1)(d) and 8(1)(j) RTI Act exempt commercial confidence/trade secrets and personal information where disclosure has no relation to public activity or causes unwarranted invasion of privacy, unless larger public interest justifies disclosure. Precedent treatment: The Second Appellate Authority relied on earlier Commission decisions in income-tax contexts to treat similar tax-return related information as covered by confidentiality/exemption principles; the First Appellate Authority applied Section 98 DVAT and Section 8 exemptions to deny disclosure as commercial confidence lacking larger public interest. Interpretation and reasoning: The Court examined whether the material sought - assessment orders, details of additional demand, realisations and appeals - fall within the scope of confidential material under Section 98(1). The Court observed that the subject-matter sought originates as particulars supplied in proceedings under the DVAT and is therefore prima facie covered by Section 98(1). The Court further noted that the First Appellate Authority found no larger public interest in disclosure and characterized the records as commercial confidence under Section 8(1)(d). The Court gave weight to the departmental stance and the adjudicatory conclusions of statutory authorities under the RTI regime that the information is exempt. Ratio vs. Obiter: Ratio - Information comprising returns/assessment particulars under DVAT is protected by Section 98(1) and can be refused under Section 8(1)(d)/8(1)(j) RTI unless an applicable exception in Section 98(3) or a demonstrable larger public interest is shown. Obiter - reliance on specific departmental facts (e.g., nature of assessments) is factual narrative supporting the legal conclusion. Conclusion: The Court upheld the finding that the information sought is covered by confidentiality under Section 98(1) DVAT and exempt under Sections 8(1)(d) and/or 8(1)(j) RTI Act in the absence of a demonstrable larger public interest to outweigh the confidentiality. Issue 2: Scope of Section 98(3)(d) DVAT - whether disclosure is permissible in absence of court direction Legal framework: Section 98(3)(d) DVAT permits disclosure of particulars to a civil court in any suit or proceeding to which Government or a VAT authority is a party and which relates to matters arising out of proceedings under the Act. Precedent treatment: No prior court direction or court order compelling disclosure was placed before the Court; Appellate Authorities' decisions were made under RTI without recourse to Section 98(3)(d). Interpretation and reasoning: The Court interpreted Section 98(3)(d) as an exception contingent upon production to a civil court in proceedings where the Government/VAT authority is a party. The Court found that in the present matter there was no court direction or judgment requiring disclosure of the requested particulars to the petitioner. Merely being a litigant or having had related litigation does not import the Section 98(3)(d) exception unless a civil court directs production or the suit/proceeding itself invokes the exception. Ratio vs. Obiter: Ratio - Section 98(3)(d) exception does not operate in favour of a requester unless there is a civil court proceeding to which the Government or VAT authority is a party and which mandates or otherwise contemplates disclosure; absence of such a court order means confidentiality continues to apply. Conclusion: The Section 98(3)(d) exception is inapplicable in the absence of any court direction or qualifying civil proceeding; therefore confidentiality under Section 98(1) remains applicable to the records sought. Issue 3: Assessment of 'larger public interest' to override statutory confidentiality Legal framework: The RTI Act requires a balancing test where exemptions for commercial confidence or personal information may be overridden if the competent authority is satisfied that larger public interest warrants disclosure. Precedent treatment: Appellate authorities applied the larger public interest test and concluded disclosure would not serve any larger public interest; the Second Appellate Authority reinforced analogous Commission rulings in tax matters. Interpretation and reasoning: The petitioner asserted public interest in revealing that an additional demand of tax had been raised (and thus to vindicate an informant's claim to reward). The Court observed that the departmental records and affidavits stated that no extra-ordinary demand was realized as a result of informant's information and that assessments were routine and based on the dealer's own books. In the circumstances, the Court found no compelling larger public interest shown to outweigh the statutory confidentiality. Ratio vs. Obiter: Ratio - Absent credible, demonstrable nexus between disclosure and a genuine larger public interest (e.g., exposure of public wrongdoing leading to recovery), the exemption for commercial/confidential information under Section 8(1)(d)/(j) will not be overridden. Conclusion: The petitioner failed to establish larger public interest sufficient to justify disclosure; the exemption under the RTI Act therefore stands. Issue 4: Effect of departmental findings that no tax was realized due to the informant's information Legal framework: Entitlement to rewards under the notified scheme depends on realization of evaded tax linked to information provided by an informant; RTI rights are independent but subject to statutory confidentiality. Precedent treatment: Administrative committee examined records and concluded assessments were routine and based on the dealer's documents; no clear nexus between informant's information and additional tax demand was found. Interpretation and reasoning: The Court considered the departmental affidavit and committee report as relevant factual determinations undermining the petitioner's claim that disclosure was necessary to vindicate entitlement to a reward. Those findings reinforced the absence of a larger public interest and supported the view that the information was not required for any court-directed proceeding under Section 98(3)(d). Ratio vs. Obiter: Ratio - Administrative findings that no tax was realized due to the informant's information are material to the public-interest balance under RTI and to the applicability of the statutory reward scheme; where the department affirmatively states lack of nexus, disclosure is less likely to be justified. Conclusion: The departmental conclusions that assessments were routine and not consequent upon informant's disclosures supported refusal to disclose; they underpinned the Court's decision to dismiss the petition. Overall Conclusion The Court dismissed the petition, holding that the requested assessment-related information is covered by Section 98(1) DVAT and exempt under Sections 8(1)(d)/(j) RTI Act; Section 98(3)(d) does not assist the petitioner in the absence of any civil court directive; and the petitioner failed to demonstrate a larger public interest or a factual nexus between the informant's disclosures and any realised additional tax that would justify overriding statutory confidentiality. The petitioner remains at liberty to pursue other remedies available in law.