Delhi High Court
Green Garden Association vs Government Of Nct Of Delhi on 16 January, 2017
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on: 16.01.2017
+ W.P.(C) 732/2014
GREEN GARDEN ASSOCIATION ...... Petitioner
Through : Sh. Joydeep Bhattacharya and Sh.
Vishnu. P.S. Langawat, Advocates.
versus
GOVERNMENT OF NCT OF DELHI ..... Respondent
Through : Sh. Anuj Aggarwal, ASC and Ms.
Deboshree Mukherjee, Advocate.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE NAJMI WAZIRI
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
1. The petitioner, an association, claims to be aggrieved by a Notification
No. F.3(393)/Policy/VAT/2013/1086-1096 dated 19.12.2013 and
Notification No.F.3(393)/Policy/VAT/2013/1137-1147 dated 27.12.2013
issued by Commissioner, Value Added Tax, Commercial Tax Department,
Govt. of NCT of Delhi as illegal and void.
2. The petitioner claims to be an association, whose members are mainly
farm house owners who allow others to organize social and religious
functions in their premises whereby they only permit use of the space (in the
farm houses) and the users are free to take services from other
vendor/service providers for arranging light, decorations, catering etc as per
their choice and such farm house owners do not have any control over such
vendor or service providers. Counsel submits that now, by the impugned
notification the owners/lessees/custodians of farm houses, banquet halls,
marriage/party halls, hotels, open ground etc, where food and/or liquor items
are to be supplied/provided and cost of booking exceeds Rupee One Lakh
per function, have been asked to get enrolled (registration) with the
Respondent VAT department by submitting Form-BE1 and also submit a
return in Form-BE2 at least 3 days before the start of the fortnight and also
portend to impose penalty in case of failure to submit the information/return
as desired.
3. It is submitted that the activity of the petitioners' members is plain and
simpliciter, hiring out of their premises, without providing any service or
sale of articles, that can attract DVAT levy. The hiring is not sale of goods,
or transfer of the right to use the goods, in any manner whatsoever. It is only
services by way of catering, licensing of other articles to the users, by other
vendors for temporary periods that may fall within the extended definition of
sale of right to use the goods, within the meaning of that term under Article
366 (29A) of the Constitution of India and the corresponding provisions of
the Delhi Value Added Tax Act ("DVAT Act" for short).
4. Learned counsel highlighted that the revenue is not authorized to
enlarge the meaning of the Act and ask for return/details from a person who
is not a dealer under the DVAT Act. In this regard, it is stated that the
revenue has failed to understand that farm houses are not in the supply of
goods being food and drink thus, transaction not being sale, the petitioners
members cannot be asked to file returns or questionnaires for the purpose of
levy of tax and filing of returns.
5. It is submitted that the VAT returns and the power to require filing of
such returns emanates from Section 27 of the DVAT Act. That cannot be
said to authorize those not subjected to levy, to file returns without liability.
Section 27 reads as follows:
"27. Power to require other returns
In addition to the returns specified in section 26 of this Act, the
Commissioner may require any person, whether a registered
dealer or not, to furnish (whether on that person's own behalf
or as an agent or trustee) him with such other returns in the
prescribed form as and when the Commissioner requires."
6. It is argued that the respondents are trying to create an artificial levy
of tax on the person, who is not required to pay VAT on the booking of farm
house by any person. Thus, such tax is beyond the authority of law and is in
violation of Article 265 of the Constitution of India as there is no specific
provision of law mandating imposition of such tax. Furthermore, there is no
element of quid pro quo in enrolling/registering and furnishing return as said
notifications did not spell out any special advantage/facilities being
conferred on or provided to the farm houses.
7. The Commissioner VAT, in response to the claim in this writ petition,
submits that the notifications cannot be invalidated. Defending them, it is
submitted that there is sufficient power under the DVAT Act, in the form of
Sections 59, 67, 70 and 100 to call individuals to fill forms in the manner
prescribed by notifications, for collection of statistics, etc. The present
notification is one endeavor to collect information as to which farm house
owners also provide catering and other forms of right to use of goods. There
is nothing objectionable or illegal for collection of such information.
8. The respondents also argue that the petitioners cannot maintain the
present proceedings under Article 226 of the Constitution, by way of public
interest litigation. It is submitted that in such matters, unless there is a
grievance in respect of a specified person, the court cannot examine the
validity of a notification, which deals with fiscal matters such as
augmentation of tax collection.
9. In the opinion of the court, the respondents' arguments with respect to
maintainability of the present petition is merited and sound. The petitioner
has not disclosed how many individuals or farm house owners are its
members; there is a vague reference to an amorphous group. More
fundamentally, the petition seeks a wide relief on the broad pleading that all
members of the petitioner association (a society) are farm house owners.
Now, this averment is vague, in the opinion of the court. It is unclear as to
which of the petitioner's members are aggrieved by what is essentially an
information gathering exercise. There is no objection as to the content of the
information sought. Nor can there be an assumption that all members of the
petitioner association only hire out their farm houses, without providing any
other service, or selling any article or goods that are subjected to VAT levy.
The petition, styled as a public interest litigation, therefore, has to fail.
10. On the merits, it is apparent to the court that there is sufficient power
with the DVAT in the course of one assessment, to elicit information; it can
also issue a general notification in exercise of the verisimilitude of its powers
(Sections 59, 67, 70 and 100) to call information for wider and more
effective tax coverage and collection of VAT. That some of the petitioners'
members are likely to be saddled with paper work is no reason for this court
to hold the impugned notification void and unenforceable. It is well known
that in tax and fiscal matters, the courts give greater deference to Parliament
and the executive with respect to policy formulation, as opposed to matters
of personal liberties.
11. For the above reasons, it is held that this petition is devoid of merit; it
is therefore, dismissed.
S. RAVINDRA BHAT
(JUDGE)
NAJMI WAZIRI
(JUDGE)
JANUARY 16, 2017
