Capri Bathaid Private Limited vs Commissioner Of Trade & Taxes on 2 March, 2016

W.P. (C) 8913 of 2014
2. In this writ petition filed by Capri Bathaid Private Limited (CBPL), the
facts are that a survey was undertaken in the premises of CBPL by the
Department of Trade & Taxes (‘DT&T’) on 4th September 2014. According
to the DT&T a shortage of stock of the value of Rs. 6,79,463 and excess of
cash in the sum of Rs. 247 was detected. On 22nd July 2014 CBPL filed its
return for the first quarter of 2014 declaring local sales turnover of Rs.
86,66,077. Against the gross output tax liability of Rs. 4,44,728, CBPL
claimed input tax credit (‘ITC’) of Rs. 5,11,175. CBPL deposited a sum of
Rs. 74,500. According to CBPL, the claim of ITC was found matching with
the output tax liability declared by the selling dealers as per the verification
report in Form 2A and 2B available on the website of the DT&T. On 27th
September/1st October 2014 the Assistant Value Added Tax Officer,
Enforcement-I (AVATO Enf-I) issued default notices of assessment of tax,
interest and penalty under Sections 32 and 33 of the DVAT Act. This was
printed in pre-printed format which stated that “the dealer has not furnished
returns/furnished incomplete returns or incorrect returns/furnished a return
that does not comply with the requirements of Delhi Value Added Tax Act,
2004/any other person.” None of the above alternative grounds were
checked in the order. It was inter alia stated that the dealer had wrongly
claimed ITC of Rs. 5,16,028 with regard to some purchase from “the non-
functional dealer” during 2013-14 which was being disallowed under

W.P.(C) Nos. 8913/2014, 1228/2015, 3069/2015, 5080/2015 & 5499/2015 Page 3 of 30
Section 9 (2) (g) of the DVAT Act. The said order for default assessment of
tax and interest for the first quarter of 2014, pegged the taxable turnover at
Rs. 90,86,880 and computed the tax at Rs. 5,50,013 and interest at Rs.
5,199. By a separate order of the same date, penalty of Rs. 5,50,013 was
levied under Section 86 (10) of DVAT Act.

Source: Indian Kanoon

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