Globus Metal Trading Pvt Ltd v. Commissioner of Delhi Value Added Tax & Anr

ORDER %

28.08.2015 The commonissue in thesewritpetitionsis with regardto the issuanceofnotices under Section 59(2) of the Delhi Value Added Tax Act, 2004, which were all system generated on 19.06.2015. By virtue of each of the notices in these petitions, the petitionerswere requiredto producedocumentsrelatingto the purchasesspecifiedtherein in the office of the concernedVATO on 26.06.2015. However, without waiting for

26.06.2015,notices for default assessmentof tax and interest and penalty have been passedon 19.06.2015itselfpurportedlyby the concernedVATO. As pointedout by us on an earlieroccasion,the two noticesread togethermake out a very depressingstory insofar as the functioningof the Departmentof Trade and Taxes, GovernmentofNCT ofDelhi is concerned. We had indicatedthat, on the one hand, on the same day, a noticefor productionofrecordson 26.06.2015is issuedand on the otherhand, onthatvery day, the defaultassessmentnoticeswere issuedinwhichit is statedthatthe dealerhas not filed any reply/ satisfactoryreply. Apartfrom the fact that the principlesofnaturaljusticehave been violated,there is also the seriousconcernthat the notices under Section 59(2) of the DVAT Act as well as the default assessment noticeshave been 'systemgenerated'and have not, in fact, been 'humangenerated'by the concerned VATOs. We are now informedby the learnedcounsel appearingfor the Commissionerof Trade and Taxes, Governmentof NCT of Delhi that all the defaultassessmentnotices issued on 19.06.2015stand withdrawnwhereasthe notices issued on 19.06.2015under Section59(2) stand and have been continuedthroughlettersissued on 17.07.2015. We are ofthe view that sinceboth the noticesunderSection59(2) and the defaultassessment notices were system generated,both the notices have to go. Consequently,the notices under Section 59(2) of the said Act issued on 19.06.2015 in all these matters stand quashed. The lettersissuedon 17.07.2015are also quashed. The learned counsel appearing on behalf of the petitioners have drawn our attentionto acirculardated29.07.2015issuedby the AdditionalCommissioner(System) on the subjectof'Schedulefor systemgeneratedorders'. Acopy ofthe saidcircularis as under:- "DEPARTMENTOF TRADEAND TAXES,GOVERNMENTOF NCT OF DELHI VYAPARBHAWAN,I.P.ESTATE,NEWDELHI-110002 SYSTEM BRANCH Sub: Schedule for System Generated Orders Competentauthorityhas decidedto carryout the followingAssessment/ PenaltyOrdersas per the givenSchedule:- S.No. Subject of Assessment Expected date of Competition of Assessment Review of 2010-11 central assessment orders who havefiled from-9; however,assessment framed on the basis of returns.

25.07.2015 Penaltyassessmentordersfor late filingof Returnforfinancialyear2014-15(All Quarter).

30.07.2015 MismatchassessmentorderforAll Quarterof financial year 2014-15.

16.08.2015 Assessment for central forms for financial year 2011-12 based on form-09.

25.08.2015 Reviewof 1"- 4"' quarters(2014-15)2A/2B mismatch order.

15.09.2015 Assessmentof T' quarter2015-162A/2B Mismatch on 2015-16.

15.09.2015 Penaltyassessmentordersfor latefilingof return for financial year 2015-16 of 4* Quarter.

30.09.2015 Assessmentforcentralform forfinancialyear 2012-13 based on form-09

31.10.2015 (GOVIND JAISWAL) Addl. Commissioner(System) No. 4435 Dated29.07.2015 Copy to forwarded to

i) PS to Commissioner

ii) All Spl. Commissioners/Addl.Commissioners/JointCommissoners.

iii) Sales Taxes of Bar Association.

iv) JD (IT) withthe requesttoupload.

v) MD (ICSIL)AdministrativeBuilding,AbovePostOffice,OkhlaIndustrial Estate, Phase-II, New Delhi - 110020.

vi) Director ESPL." This circularhas beenplacedin CM No. 17437/2015in W.P.(C)6788/2015. On going throughthe above circular,we find that a directionhas been given for system generated orders. This is clearly in the teeth of our directionsgiven earlier. Consequently,this circular is also quashed. Interestingly,before we part with this discussionofthis circular,we note thatthe defaultassessmentordersfor the late filingof returnsfor the financialyear 2015-16for the fourth quarteris given as 30.09.2015when the fourth quarter itselfbegins in January 2016. We deprecatesuch kind of mindless ordersand circularswhichhas beenissuedby the respondent/ Department. As a result all the noticesunder Section 59(2) issued on 19.06.2015which were system generated stand quashed. The consequentpassed orders thereon are already withdrawn by the letters dated 17.07.2015. The circular dated 29.07.2015 is also quashed. This, however,does not come in the way ofthe Departmentto issue fresh notices under Section59(2) afterapplicationofmind by the concernedVATO and inaccordance with law and to take steps pursuanttheretowhichwould also be in accordancewith law andwouldnot be systemgeneratednoticesor orderswithouthumaninterface. The writ petitions stand allowed to the aforesaid extent. AUGUST 28, 2015 su BADAR DURREZ AHMED, J SANJEEV SACHDEVA, J ,^/Of

$-3,4,24,25,27to 30, 32to 35 & 61 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C)7379/2015andCMNo. 13592/2015 + W.P.(C)8107/2015andCMNo. 16780/2015 Peftioner Mr VasdevLalwani,Mr S.K.Kapoorand + + W.P.(C)6288/2015andCMNo. 13507/2015 NESTOR PHARMACEUTICALSLTD. Mr RajeshJain,Mr ViragTiwariand MrR.J.Bhat COMMISSIONEROF TRADE&TAXES Respondent Mr GautamNarayanfor R-1 + W.P.(C)6561/2015andCMNo. 13506/2015 J.P. METALS r,Petitioner Mr RajeshJain,Mr ViragTiwariand MrK.J.Bhat COMMISSIONEROF TRADE&TAXES Respondent Mr GautamNarayanfor R-1 W.P.(C)6788/2015and CM Nos. 12387/2015,13168/2015 hello FURNITURE .....Petitioner Mr RajeshJain,Mr ViragTiwariand MrK.J.Bhat COMMISSIONEROF TRADE&TAXES Respondent + W.P.(C)6789/2015and CM No. 12389/2015 SHIVAENTERPRISES Through: , Mr RajeshMahana,Mr SanjaySharma, Mr RamanandRoy andMr RakeshKumar GOVT. OF NCT OF DELHI&ORS. + W.P.(C)6934/2015and CMNo. 12705/2015 ESQUIREELECTROVISIONPVT. LTD Through; Mr RajeshMahana,Mr SanjaySharma, Mr RamanandRoy and Mr RakeshKumar GOVERNMENTOF NCT OF DELHI&ORS. Mr SatyakamforR-1 + W.P.(C)7276/2015andCMNo. 13349/2015 GLOBUSMETALTRADINGPVTLTD. .....Petitioner MrA.K. BabbarandMr Surinder COMMISSIONEROF DELHIVALUEADDEDTAX&ANR + W.P.(C)7512/2015andCMNo. 14350/2015 Mr VasdevLalwani,Mr S.K.Kapoorand Mr AvtarSingh + W.P.(C)7513/2015andCMNo. 14354/2015 Mr VasdevLalwani,Mr S.K.Kapoorand + W.P.(C)7514/2015and CMNo. 14355/2015 + W.P.(C) 7515/2015 and CMNo. 14356/2015 + W.P.(C) 8255/2015 and CM No. 17341/2015 R.D. SALESTHROUGHANILBANSAL,PARTNER Mr V.K. Sabharwal and Mr Ashok Babbar COMMISSIONEROF DELHIVALUEADDEDTAX, DEPARTMENTOF TRADE&TAXES ' Respondent CORAM: HON'BLE MR. JUSTICE BADARDURREZ AHMED HON'BLE MR. JUSTICE SANJEEV SACHDEVA