Delhi High Court
M/S Carrier Aircon Ltd. vs Commissioner Of Trade And Taxes on 7 July, 2014
$~33
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on : 07.07.2014
+ ST.APPL. 30/2014, C.M. APPL. 10525/2014 & 10526/2014
M/S. CARRIER AIRCON LTD. (NOW KNOWN AS
CARRIER AIR CONDITIONING & REFRIGERATION
LTD.) ..... Petitioner
Through: Sh. Rajesh Jain, Sh. R.N. Sharma
and Sh. Virag Tiwari, Advocates.
Versus
COMMISSIONER OF TRADE & TAXES ..... Respondent
Through : Sh. Raj. K. Batra, Advocate.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE VIBHU BAKHRU
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)\
%
1. The appellant is aggrieved by an order of the Appellate
Tribunal, VAT (hereafter "the Tribunal") dated 09.04.2014 whereby
its request for rehearing after restoration of the appeal preferred by it,
was rejected. The appeal also challenges the original order of
dismissal of the Tribunal dated 24.12.2013.
2. The appellant, a registered dealer had sold compressors to one
M/s. Chandraprabhu Commercial for `2,16,40,425/- for which it
ST.APPL.30/2014 Page 1
subsequently claimed benefit under Section 4(2)(a)(v) of the Delhi
Sales Tax Act, 1975. The appellant secured 23 ST-35 Forms in
compliance with the said Section 4(2)(a)(v) of the Delhi Sales Tax
Act, 1975 together with Rule 7(1) of the Delhi Sales Tax Rules, 1975
which were submitted for assessment. On 30.09.2000, the Assessing
Officer denied the benefit of deduction, stating that ST-35 Forms had
not been verified by Ward-71. The sales, however, were found to be
genuine and the transactions were accepted. The principal reason for
not granting the benefit was that 23 ST-35 Forms had not been
verified and, therefore, it was not known whether it was issued
through a registered dealer. The appellant's first appeal to the Addl.
Commissioner (VAT) was unsuccessful. Consequently, the appellant
approached the VAT Appellate Tribunal, Delhi. In its hearing dated
17.08.2010, that Tribunal noticed that the first appellate authority had
relied upon a report called from the lower authorities and that the said
report had not been furnished to the appellant. The order made on that
date reads as follows:
"Part arguments have been heard in this appeal. During the
course of the arguments, the Ld. Counsel for the appellant
drew the attention of this tribunal to the relevant part of the
impugned order of the Ld. First Appellate Authority wherein
the Ld. First Appellate Authority had relied upon the report
of the concerned ward officer regarding non-genuineness of
the ST-35 form but this report was not confronted to the
dealer. At this stage, Sh. Vasdev Lalwani, Adv., Ld. Counsel
for the Revenue has submitted that he would call for the
report of the ward officer for perusal by this tribunal.
ST.APPL.30/2014 Page 2
Sh. R.N. Sharma, Adv., Ld. Counsel for the appellant has
submitted that the report be also called from the Form
Issuing Section as to whether these forms were/were not
issued by that section. The Ld. Counsel for the Revenue is
directed accordingly.
Case stand adjourned for further arguments.............."
3. Pursuant to above, certain submissions appear to have been
made before the Tribunal itself by the learned counsel appearing for
the Revenue on 20.08.2010, the relevant part of which reads as
follows:
".....................Further the forms were verified from Ward
No.71 which reported that no such firm registered in
Ward No.71 but from the forms it seems that the dealer
was earlier registered in Ward No.45 or 47 which issued
the forms to the purchasing dealer. Therefore, with the
assistance of Sales Tax no. it may be verified from both
the Wards No.45 and 47 if such a dealer was registered
in any of the wards and was issued the above stated ST-
35 forms. The VATO of Ward No.96 (KDU) may kindly be
requested to contact the concerned Sales Tax
Officers/VATOs of the concerned ward and obtain proper
reports from both the wards 45 and 47 regarding the ST-
35 forms issued by M/s. Chandraprabhu Commercial.
XXXXXX XXXXXX XXXXXX"
4. It is submitted that in the above circumstances, the findings of
the Tribunal are considerably influenced by the report, a copy of
which was never furnished to the appellant, which is contrary to
principles of natural justice. It was also urged that even though the
Tribunal was informed that the petitioner's counsel could not attend
the hearing due to certain compelling circumstances, it refused to
ST.APPL.30/2014 Page 3
recall the order and rehear the appeal on merits. Learned counsel for
the Revenue did not dispute the fact so far as they are borne out by the
record. However, he submits that the appellant was aware and ought to
have made himself aware as to whether ST-35 forms were issued by
the registered dealer. The mere fact that the report was not made
available to the appellant did not, therefore, in any manner vitiate the
assessment.
5. It is evident from the above narrative that the Tribunal had
initially thought it appropriate to direct the authorities to furnish a
copy of the Verification Report as may be seen by its order dated
17.08.2010. However, this aspect appears to have completely escaped
its attention when it proceeded to make ex-parte final order adverse to
the appellant which proceeded on the assumption that the latter could
not afford any explanation to the adverse report. In the first instance,
such report was never made available to the appellant. In these
circumstances, this Court is of the opinion that the impugned orders
cannot be sustained. The impugned orders - of the Appellate Tribunal
- dated 20.02.2014 (imposing costs of `1000/-); dated 09.04.2014
(imposing costs of `2000/-); dated 24.12.2013 and of the Addl.
Commissioner (VAT) dated 03.10.2007, in the present appeal and the
consequent costs imposed upon the appellant are accordingly set-
aside. The matter is remitted to the assessing authority, who shall
examine the claim of the appellant with respect to the 23 ST-35 Forms
in question after furnishing a copy of the report which was considered
by the first appellate authority and the Tribunal in this case. We make
ST.APPL.30/2014 Page 4
it clear that the remand is limited to the verification of the ST-35
Forms involved, the benefit of which have been claimed by the
appellant. The appeal and pending applications are partly allowed in
the above terms.
S. RAVINDRA BHAT
(JUDGE)
VIBHU BAKHRU
(JUDGE)
JULY 07, 2014
'ajk'
ST.APPL.30/2014 Page 5
