K R Anand vs. Commissioner Of Central Goods And Services Tax & Anr.

Held

The Court held that the "Notice of default assessment of tax and interest under Section 32" dated January 15, 2021, is ex-facie barred by limitation under Section 34 of the DVAT Act. The Court found that Section 34(1) prescribes a limitation period of four years for assessment, which expired on March 31, 2015, for the tax period 2010-11. The Court rejected the Respondents' submission that Sub-section (2) of Section 34 applied, stating it was entirely inapplicable as the impugned order was not passed in consequence of, or to give effect to, any decision of the Court requiring re-assessment. The Court clarified that its order dated January 17, 2020, only permitted the Respondents to take recourse to further proceedings consistent with extant laws and the law laid down by this Court, and could not extend the period of limitation contrary to the statute. Therefore, the contention of the Respondents was found to be untenable. The Court allowed the writ petition and quashed the impugned order on the ground of limitation.

Facts

The Petitioner, K.R. Anand, had previously challenged the vires of Section 9(2)(g) of the Delhi Value Added Tax Act, 2004 (DVAT Act), along with a notice of default assessment of tax and interest and a notice of assessment of penalty for the year 2010-11. This Court allowed the petition on October 26, 2017, setting aside the notices. The Revenue appealed to the Supreme Court, which dismissed the Special Leave Petition on January 10, 2018, but granted liberty to the Revenue to approach the High Court with necessary particulars for directions in cases where purchase transactions were not bonafide. Pursuant to this liberty, the Revenue filed an application before the High Court, which was dismissed as withdrawn on January 17, 2020, with liberty to issue a show cause notice in accordance with law. Consequently, the Revenue issued a "Notice of default assessment of tax and interest under Section 32" dated January 15, 2021, which is now impugned in the present writ petition.

Key Issues

1. Whether the "Notice of default assessment of tax and interest under Section 32" dated January 15, 2021, issued by the Respondents, is barred by limitation under Section 34 of the DVAT Act? Petitioner's contention: The Petitioner argues that the impugned order is barred by limitation, as Section 34 of the DVAT Act prescribes a limitation period of four years for the completion of assessment. The assessment relates to the year 2010-11, for which the limitation expired on March 31, 2015, making the January 15, 2021 notice ex-facie beyond the statutory period. Respondents' contention: The Respondents contend that the impugned order is within the limitation period as per Sub-section (2) of Section 34 of the DVAT Act. They argue that the order was passed pursuant to the liberty granted by this Court in its order dated January 17, 2020, which allowed them to issue a show cause notice and pursue further proceedings consistent with the law laid down by this Court. They further submit that the Supreme Court's order dated January 10, 2018, granted liberty to approach the High Court in cases of non-bonafide transactions.