Use of revisionary Power to delay DVAT Refund Claim is an Abuse of Power

The power under Section 74A of the DVAT Act is not to be exercised slightly. It is a power coupled with the duty to act responsibly and by the competent authority applying mind to the relevant facts and circumstances of the case. The notes on file proposing the exercise of power under Section 74A of the DVAT Act in this case do not satisfy this basic requirement. In the present case the undated and unsigned notice proposing the exercise of the revisionary jurisdiction was at best vague. It did not satisfy the basic requirement of the law, as explained in Commissioner of Central Excise, Bangalore v. Brindavan Beverages (F) Limited 2007 (213) ELT 487 (SC), viz., that the grounds should be clearly specified. In other words, “if the allegations in the show cause notice are not specific and are on the contrary vague, lack details and/or unintelligible that is sufficient to hold that the noticee was not given proper opportunity to meet the allegations indicated in the show cause notice.”

Why this exercise was sought to be undertaken at a stage when the refund was overdue, is not even adverted to. It appears to the Court that apart from the fact that there was a total non-application of mind to the facts of the case, there is sufficient indication from the notes on files that the invocation of the revisionary powers under Section 74A of the DVAT Act was to delay making the refund which was overdue for over six years. The Court is left no manner of doubt is that this was plainly an abuse of power vested in the Commissioner which calls for disapproval in strongest terms.

FULL TEXT OF HIGH COURT JUDGMENT / ORDER