DVAT – Objection Hearing Authority may impose a pre-condition to deposit disputed tax amount for the period after October 1, 2011

Objection Hearing Authority may impose a pre-condition to deposit disputed tax amount for the period after October 1, 2011

The third proviso to section 74 (1) of Delhi Value Added Tax Act, 2004 (“DVAT Act”) was inserted w.e.f. October 1, 2011 vide Notification No. No.3 (15) Fin. (Rev-I) /2011- 12/ssf/113 dated September 30, 2011 which empowered the Commissioner to impose a pre-condition on the dealer to deposit a certain amount out of total amount under dispute, before such objection is to be entertained. However, an opportunity of being heard to be given to the dealer before the issuance of direction to deposit the disputed tax amount is given.

Now, the Department of Trade and Taxes vide Circular No. 10 of 2014-15 dated September 3, 2014 has clarified that the pre-condition to deposit disputed amount would be applicable for the period after the amendment i.e. tax period after October 1, 2011.

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)

Related Notification is as follows :-

Delhi VAT – Commissioner through proviso empowered to direct pre-deposit in case of objection pertains to tax periods after amendment

GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI

DEPARTMENT OF TRADE AND TAXES

(POLICY BRANCH)

VYAPAR BHAWAN, I.P.ESTATE, NEW DELHI-110 002

No.F.3(458)/Policy/VAT/2014/335-341

Dated: 03/09/2014

CIRCULAR NO. 10 of 2014-15

Third proviso to section 74(1) of Delhi Value Added Tax Act, 2004 was inserted vide Notification No.F.14(6)/LA-2011/Iclaw/193 dated 28/09/11 which was made effective from 01/10/2011 vide Notification No. No.3(15)Fin.(Rev-I)/2011-12/ssf/113 dated 30/09/2011. The proviso is reproduced as under:-

“PROVIDED ALSO that the Commissioner may, after giving to the dealer an opportunity of being heard, may direct the dealer to deposit an amount deemed reasonable, out of the amount under dispute, before such objection is entertained.”

Since the above Notification came into effect from. 01/10/2011, the Objection Hearing Authorities can impose a pre-condition on the dealer to deposit an amount out of the amount under dispute, before such objection is entertained, only in case the objection pertains to tax periods after the above said amendment.

This issues with the approval of the Commissioner, Value Added Tax conveyed vide diary No. 1266 dated 27,08,2014.

(Sanjeev Ahuja)

Spl.Commissioner(Policy)

Dated: 03/09/2014