While granting relief to La Mode Fashions Private Limited, the Delhi High Court has directed the VAT department to allow the dealer to amend the tax period in the challan since a bona fide error in the challan can be rectified.
The Petitioner had filed its returns on 31.03.2017. The VAT liability for the said period was Rs.7,87,038/- whereas liability under the CST Act was Rs.37,381/-. Petitioner deposited Rs.10,44,118/- towards DVAT and Rs.37,381/- towards CST, through challans and, therefore, a sum of Rs.2,58,912/- was deposited in excess for the 2nd quarter of 2015-2016. However, while depositing the challan dated 29.09.2016 for the aforesaid amount, Petitioner inadvertently mentioned in the challan that the amount was being deposited for the 2nd quarter of 2015- 2016 instead of 2nd quarter of 2016-2017, thereby depositing excess amount. The petitioner’s request to amend the challan and refund was declined by the department and therefore, the petitioners approached the Court for relief.
Before the High Court, the Revenue has suggested a methodology, which, Chief Justice Jyothi Singh found “complicated.”
“This methodology, however, cannot be accepted by the Court as this would entail a complicated procedure requiring the Petitioner to prefer an application for refund of Rs.2,58,912/-. Respondent would be thereafter required to pass an order of refund in favour of the Petitioner. After getting the refund, Petitioner would have to deposit the said amount for the period 01.08.2016 to 31.08.2016, for which the tax stands deposited. This may also entail imposition of penalty under Section 86(9) of the DVAT Act. Imposition of penalty is called for where the assessee fails to furnish returns by the due date, which is not the position in the present case. Admittedly, Petitioner has deposited the requisite tax for the relevant quarter of the assessment period but has inadvertently mentioned the wrong period in the challan and therefore, cannot be, in our view, saddled with the liability of penalty,” the Court said.
While allowing the writ petition by directing the department to accept the returns for the 2nd quarter of 2016-2017, the High Court held that “This, in our view, will obviate the lengthy and complicated procedure of applying for refund and deposit on the part of the Petitioner and will also save him from any penalty under the Tax Statute. We, therefore, direct the Respondent to read the period ‘01.08.2015 to 31.08.2015’ mentioned in the challan dated 29.09.2016, bearing No. 0510133290920160000156, issued by the HDFC Bank Ltd., as ‘01.08.2016 to 31.08.2016’.”
LA MODE FASHIONS PRIVATE LIMITED vs COMMISSIONER, VALUE ADDED TAX
CITATION: 2022 TAXSCAN (HC) 128
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