“The approach and attitude of the DVAT Department towards refund claims has not changed one bit. The harassed dealers awaiting refunds for several years are compelled to repeatedly come to this Court for orders.”
Recently, in Asian Polymers v. Commissioner Of Trade & Taxes & Anr, the Delhi High Court reiterated that re-assessment cannot be used as a tool for causing delay in processing the refund applications.
While scrapping the assessment orders passed by the DVAT Department, the division bench criticized the Officials in harsh words.
Justice S Muralidhar, who penned the judgment, said that such actions from the officials amount to abuse of statutory powers.
In the instant case, on receipt of refund application from the petitioners, the department initiated re-assessment proceedings and demanded tax. The petitioners approached the High Court impugning the re-assessment orders.
The department contended that the impugned orders were not passed in consequent to the refund application, but with an object to issue the same before getting barred by limitation as prescribed under s. 34(1) of the Act.
Dissatisfied by the arguments of the department, the bench observed that there has been a persistent attempt by the DVAT Department to somehow ensure that the refund claims are defeated by creating fresh demands which are then adjusted against the refund amount. “This is a pattern that the Court has been observing in several petitions listed before it on a daily basis. Despite several judgments of this Court lamenting the utter failure of the DVAT Department to act in accordance with law, the approach and attitude of the DVAT Department towards refund claims has not changed one bit. The harassed dealers awaiting refunds for several years are compelled to repeatedly come to this Court for orders.”
While setting aside the orders, the bench added that “on a daily basis, the Court has been passing orders, giving time-bound directions to the DVAT Department to process the refund claims and pay amounts. Yet, nothing seems to alter the routine behaviour of the VATOs concerned. Like in the present case, they utilise the opportunity provided by the pendency of the writ petition seeking refund that is long overdue to create fresh demands. This conduct of the VATOs deserves the strongest condemnation. It is nothing but an abuse of statutory powers. The mere fact that default assessment of tax and interest is being passed on the last date of the expiry of the limitation period, will not in the circumstances noticed hereinbefore, save such orders from the vice of illegality.”
Read the full text of the Order below.
