AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1430
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....he Respondent Through: Mr. K. Gopalakrishnan, Adv. JUDGMENT PRATHIBA M. SINGH, J. 1. This hearing has been done through hybrid mode. 2. This is a batch of VAT appeals which have been filed by the Appellants challenging the various assessment orders which have been upheld at different stages. 3. The facts giving rise to the appeals are that, default assessment orders were issued to the Appellants by the concerned assessing authority for their respective periods of assessment. The said assessment orders determined the tax and interest under Section 32 of the Delhi Value Added Tax Act, 2004 (hereinafter, 'DVAT Act') as under: S.No. Appeal No & Name of the Appellant Period of assessment Date of Order Demand Raised (Tax + Interest + Penalty) Ward No. of territorial jurisdiction Assessment framed by 1. ST. APPL63/2014 H.G. International 2nd, 3rd and 4^th Quarter of 2008 15.03.2010 Rs. 20,29,877/- Ward-17 The Assessing Officer at the time of March-2010: Mr. Sham Chand, VATO (Ward 17) AVATO (Audit) Mr. Subhash Chander 15.03.2010 Rs. 22,01,632/- 30.03.2010 Rs. 50,39,960/- 2. VAT APPL. 30/2022 M/s ....
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.... claims of ITC were also disallowed in the assessment orders. The demands in each of these appeals is as under: 5. Pursuant to such orders, objections were filed by the Appellants/assessees. The said objections were rejected by the Objection Hearing Authority (hereinafter, 'OHA') vide the respective orders wherein the OHA upheld the demand of tax and interest raised upon the Appellants by the assessing authorities. 6. Thereafter, the orders passed by the OHA were challenged by the Appellants before the Appellate Tribunal, Value Added Tax, New Delhi and the Appellate Tribunal upheld the assessment orders issued by the assessing authorities, thus rejecting the appeals filed by the Appellants. 7. The said orders passed by the Appellate Tribunal, Value Added Tax, New Delhi stand impugned in the present batch of appeals filed under Section 81 of the DVAT Act. 8. Vide Order dated 4th August, 2016 the Court had framed the following question of law in ST.APPL. 63/2014 H.G. International v. The Commissioner of Trade & Taxes, Delhi for its consideration: "Whether the VATO(Audit) can pass an assessment Order in terms of the Delhi Value Added Tax Act, 2004?" 9. This que....
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....w which the appellant sought to raise in the appeal have not been framed as question of law and consequently not answered. The submission is that the order would show that the question of law answered was only an additional question of law. In fact he seeks remit to the High Court to take a view whether the other questions of law raised are required to be framed or not and if so, frame those questions of Law. On hearing learned counsel for the parties the aforesaid contention of the learned counsel for the petitioner has merit and thus we remit the matter back to the High Court for consideration as to whether the question of law originally pleaded in ST Appeal 63/2014 actually arises for consideration or not and if the High Court considers it appropriate to frame so, to take a view on the same. Insofar as the question of law in the present case is concerned, as to whether that Audit Officer can also pass an assessment order or not, we consider it appropriate to list for hearing. List for the aforesaid purpose on 21st January, 2020 on top of the Board." 12. Thereafter on 28th January, 2020, the Supreme Court finally remitted the entire matter for consideration o....
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.... that in terms of the order dated 27.09.2019, we had remitted the matter back, to the High Court except on the question whether the Audit Officer can also pass an assessment order or not, we deem it appropriate to remit this issue also to the High Court. It is stated that the matter is to be listed on 21.5.2020 in the High Court. The appeals are accordingly disposed of." 13. After the above two orders dated 27th September, 2019 and 28th January, 2020 were passed by the Supreme Court and the matter was remitted to this Court, the questions of law were again framed in these appeals [S.T. APPL. 63/2014, VAT APPL. 30.2022, VAT APPL. 36/2022, VAT APPL. 39/2022 & VAT APPL. 9/2023] vide order dated 19th July, 2023 in the following terms: "A. Whether ITC could have been refused in the present matters taking recourse to Sections 9(2)(g) of the Delhi Value Added Tax Act 2004 [DVAT Act] since the said provision came into effect only from 01 April 2010? B. Whether the VATO (Audit)/VATO (Enforcement)/VATO (Special Cell) officer is empowered under the DVAT Act to pass an assessment order? C. Whether the absence of authority being conferred on the V....
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.... of law have also been framed vide order dated 21st January, 2024: "a) Whether the VATO (Audit)/VATO (Enforcement)/VATO (Special Cell) officer is empowered under the DVAT Act to pass an assessment order? b) Whether the absence of authority being conferred on the VATO (Audit)/VATO (Enforcement)/VATO (Special Cell) officer in terms of Form DVAT-50 would render that authority bereft of the power to assess/audit?" 17. Questions B and C in paragraph 13 are common in all appeals. On the said two questions of law, the court has heard the ld. Counsels for the parties. 18. Mr. Varun Nischal, ld. counsel for the Appellants has firstly submitted that some facts are not in dispute i.e. that the jurisdictional VATO in ST.APPL. 63/2014 was VATO Ward 17 [Mr. Shyam Chand]. However, the assessment was made by VATO (Audit) [Mr. Subhash Chander]. The dates of the assessment are 15th March, 2010 and 30th March, 2010 for the fourth quarter in the said appeal. Similarly the jurisdictional VATO in each of the cases is not in dispute. It is also not disputed that the VATO (Audit) had drawn the assessments in all these cases. The said VATO (Audit) was not the jurisdictional VATO. ....
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....uthority to whom such powers have been delegated. The explanation to Section 68 (3) makes it clear that the exercise of such power of "supervision, review or rectification will not lead to the issue of an assessment or reassessment after the expiry of the time referred to in Section 34 of this Act." 20. Thereafter, in the said case, the Court had also observed that the delegation order dated 12th November, 2013 which is relevant to the facts in the said case, clearly stipulated that "the officers would exercise powers and perform duties within their respective jurisdiction". Relevant portion of the said judgement are set out below: "27. What is significant as far as the above delegation of powers by the CVAT is concerned is that, in the first place, the officers to whom powers have been delegated are to exercise the powers and perform the duties of such powers "within their respective jurisdiction". This is critical since it conveys the intention that the exercise of powers by an officer is to be restricted to a certain jurisdiction. For instance, in terms of the above order, the officer not below the rank of AVATO will not exercise the power vested under Sections 32 an....
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.... Govt. of NCT of Delhi& Ors. (W.P.(C) 1820-1822/2013). In the said case, on the basis of Capri Bathaid Pvt. Ltd. (supra), the Court took on record the affidavit of the Commissioner (VAT) where he had categorically deposed that the authorization under Form DVAT-50 was issued only vide order dated 15th October, 2014 and not before. 24. Thus, as per the Appellants a combined reading of Capri Bathaid Pvt. Ltd. (supra) and Larsen & Toubro Ltd. (supra) leaves no doubt that on both grounds i.e. the lack of delegation and the non-issuance of Form DVAT-50, the initial audit as also the assessment were untenable. 25. Mr. Gopalkrishnan, ld. Counsel, on the other hand has made his submission to the effect that the jurisdictional objection ought to have been raised by the Appellant at the first stage itself, i.e. when the objections to the assessment order were raised. In fact, it is his submission that the same has not been raised at all, either before the assessing officer or before the appellate tribunal. Thus, such an objection cannot be permitted to be raised at the stage of second appeal. 26. He further submits that the transfer and posting orders of various VATOs and AVATOs woul....
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.... under Chapter X of the DVAT Act. To such effect, Form DVAT-50 is merely to be produced at the time of audit investigation and enforcement and not for carrying out the assessment. 30. The court has heard the ld. counsels for the parties and has considered the submissions made, along with the judgments relied upon. 31. The decision in Capri Bathaid Pvt. Ltd. (supra) was, unfortunately, not brought to the notice of the Court when the order dated 16th August, 2017 was passed in this matter, though, there is a commonality of one of the members in the Bench. 32. The judgment in Capri Bathaid Pvt. Ltd. (supra) has, in fact, resulted in the issuance of circular dated 11th April, 2016 by the VAT Department, which has been captured in the order of the Supreme Court dated 28th January, 2020, as extracted above. 33. Thus, in so far as the rationale in Capri Bathaid Pvt. Ltd. (supra) is concerned, the decision has been accepted by the VAT Department and the necessary Circular has been issued by the concerned commissioner. 34. With respect to the decision in Larsen & Toubro Ltd. (supra), an affidavit on behalf of Mr. S.S. Yadav, Commissioner, Value Added Tax (CVAT) was also filed....
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...., 2004 in the prescribed form i.e. Form DVAT 50 was not issued. In fact such authorization were not being issued in any case. The matter was discussed in a meeting chaired by the Commissioner on 23.9.2014 and the authorization was issued subsequently vide order dated 15.10.2014." 35. A conjoint reading of Capri Bathaid Pvt. Ltd. (supra) and Larsen & Toubro Ltd. (supra), as also the circular dated 11th April, 2016 and the report dated 10th March, 2016 leads to the following conclusions: (i) That prior to 11th April, 2016, no specific authorizations were given to VATO officers, who were conducting Audit, Survey & Inspection etc. for also closing assessments of other Jurisdictional officers. (ii) In addition, no Form DVAT - 50 authorization was given prior to 15th October, 2014. 36. The assessment orders in these appeals, however, are prior to these two dates i.e. 11th April, 2016 and 15th October, 2014. In fact, on the basis of the decisions in Capri Bathaid Pvt. Ltd. (supra) and Larsen & Toubro Ltd. (supra), the Coordinate Bench of this Court has quashed the assessments by VATO (Audit), for lack of jurisdiction. The said decisions are extracted below: ....