Case Law Details
Siemens Limited Vs Government of NCT of Delhi And Ors. (Delhi High Court)
Siemens Limited Vs. Government of NCT of Delhi And Ors.: Delhi HC Sets Aside DVAT Assessment Order due to Time Lag & Lack of Fair Hearing
Introduction: In a recent legal development, the Delhi High Court (HC) has set aside an order dated 11.10.2019, issued by the respondents, in the matter of Siemens Limited versus the Government of NCT of Delhi and others. The impugned order pertained to default assessment of tax and interest, as well as assessment of penalty under the Delhi Value Added Tax Act, 2004 (DVAT Act).
Chronology of Events: The notices of default assessment, tax, and interest, along with notices of penalty assessment, all dated 29.09.2014, were initially issued by the respondents under Section 32 and Section 33 of the DVAT Act. The petitioner, Siemens Limited, submitted objections to the default assessments on 19.11.2014, and subsequently, the recovery of demand was stayed upon payment of ₹23,00,000/- on 12.08.2015.
The petitioner was provided an opportunity to be heard on 23.09.2015 and 30.10.2015, and the orders were reserved. The order sheet was signed by Shri R.K. Mishra, Special Commissioner-II/ Objection Hearing Authority (OHA). However, no orders were passed for almost four years.
On 27.09.2019, a notice under Section 74(1)(a) of the DVAT Act was issued, leading to the subsequent issuance of the impugned order on 11.10.2019. Notably, the petitioner was heard by Shri K. Mishra, but the order was passed by Ms. Shilpa Shinde, Special Commissioner, OHA, who had not personally heard the petitioner.
Grounds for Setting Aside the Impugned Order: The HC, in its judgment, expressed dissatisfaction with the substantial time gap between the petitioner’s hearing and the issuance of the impugned order. The court held that the order was liable to be set aside considering this time lag. Additionally, it emphasized that the officer who passed the order had not heard the petitioner, raising concerns about procedural fairness.
Court’s Decision: The court, in response to the petitioner’s contentions, set aside the impugned order and remanded the matter to the OHA for fresh consideration. The HC directed the concerned OHA to pass a speaking order without being influenced by the earlier order, providing the petitioner with sufficient opportunity to be heard.
Furthermore, the court instructed the OHA to conclude the proceedings expeditiously, within a period of four months from the date of the judgment. The court clarified that all rights and contentions on the merits of the matter are reserved.
Conclusion: The Siemens Limited versus Government of NCT of Delhi case highlights the significance of procedural fairness and timely adjudication in tax assessment matters. The HC’s decision to set aside the order underscores the importance of a fair hearing and reasonable timelines in administrative proceedings. The remand to the OHA emphasizes the court’s commitment to ensuring a just and equitable resolution of the matter.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioner has filed the present petition, impugning an order dated 11.10.2019 (hereafter ‘the impugned order’), issued by the respondents. The relevant facts are that the notices of default assessment of tax and interest and notices of assessment of penalty, all dated 29.09.2014, were issued under Section 32 and Section 33 of the Delhi Value Added Tax Act, 2004 (hereafter ‘the DVAT Act’) by the respondents. The petitioner filed its objections to the default assessments on 19.11.2014. Thereafter, the recovery of demand was stayed upon the payment of ₹23,00,000/- on 12.08.2015.
2. The petitioner was also afforded an opportunity to be heard on 23.09.2015 and 30.10.2015 and the orders were reserved. The order sheet was signed by one, Shri R.K. Mishra, Special Commissioner-II/ Objection Hearing Authority (‘OHA’).
3. However, no orders were passed for a period of almost four years.
4. Thereafter, on 27.09.2019, a notice was issued under Section 74(1)(a) of the DVAT Act and, thereafter, the impugned order was passed on 11.10.2019.
5. Although, the petitioner was afforded the hearing by one, Shri K. Mishra, the impugned order was passed by Ms. Shilpa Shinde, Special Commissioner, OHA.
6. It is not disputed that Ms. Shinde had not heard the petitioner.
7. We are of the view that, considering the time gap between the hearing of the petitioner and the passing of the impugned order, the same is liable to be set aside. It is also liable to be set aside on the ground that the concerned officer, who had passed the impugned order, had not heard the petitioner.
8. Mr. Satyakam, learned counsel appearing for the respondent, does not contest the same. The present petition has been pending as the petitioner also seeks to resist an order remanding the matter to the concerned authority for considering it afresh. It is the petitioner’s contention that the impugned order was void and, therefore, now the option of the Department to proceed against the petitioner stands foreclosed by lapse of time. However, the learned counsel does not press this issue.
9. In view of the above, the present petition is allowed. The impugned order is set aside and the matter is remanded to the OHA to decide afresh. The concerned OHA shall pass a speaking order uninfluenced by the impugned order, after affording the petitioner, sufficient opportunity to be heard.
10. We also direct the concerned OHA to conclude the proceedings as expeditiously as possible and, in any event, within a period of four months from date. It is clarified that all rights and contention on the merits of the matter are reserved.
11. The petition is disposed of in the aforesaid terms. All pending applications also stand disposed of.
