This Article Covers the  statutory Provisions related to the following topics under Delhi Value Added Tax Act, 2004 & Central Sales Tax Act, 1956 :-

  • FAQs on Checking of Vehicles
  • Undertaking form for claiming goods with genuine bills before release of vehicles
  • Statutory Provisions related to Goods vehicles & transporters under DVAT Act, 2004
  • Commonly used provisions by E-II Branch
  • Standard Operating Procedure by E-II Branch

FAQs on Checking of Vehicles

   Q        Why the Department Conducts Checking of Vehicles?

Ans The Checking of Vehicles is conducted to ensure that all the interstate or intrastate transfer of goods from one business unit to another unit is done in compliance with the law i.e. Delhi Value Added Tax Act, 2004 & Central Sales Tax Act, 1956. Every vehicle carrying goods needs to have certain documents prescribed by the law so that the exchequer does not lose due tax revenue on account of business transaction. Over the time evasion of duties on account of transfer of goods without documents has become enormous which affect the revenue collection as well as creates unfair disadvantage to the honest dealer paying proper taxes.

Q          What are the legal provisions related to Checking of Vehicles

Ans     Sec 61 of the DVAT Act, 2004 states:

Power to stop, search and detain goods vehicles:

“To enable proper administration of the act, the Commissioner may, at any check post or barrier at any other place, require the owner, driver or person in charge of a goods vehicle to stop the vehicle and keep it stationary so long as may be required to search the vehicle, examine the contents therein and inspect all records relating to the goods carried, which are in the possession of such owner, driver or person in charge.”

The owner, driver or person in charge of a goods vehicle shall accordingly carry with him such records as may be prescribed in respect of the goods carried in the goods vehicle and produce the same before any officer in charge of a check post or banner or any other officer of any agent as may be empowered by the commissioner.

Q      What are the documents which must be in the vehicles carrying goods at the time of inspection

Ans     The documents which should be carried within the vehicle for satisfying the legal requirements are listed below for different scenarios:

Sale within Delhi

  • DVAT 32 (GR);
  • DVAT 33 (Delivery Challan); and
  • Copy of tax/retail invoice

Sale outside Delhi

  • DVAT 32 (GR);
  • DVAT 33(Delivery Challan);
  • Copy of retail invoice

Branch Transfer

  • DVAT 32(GR);
  • DVAT 33 (Delivery Challan);
  • Sale invoice clearly mentioning goods not for sale but for branch transfer and details of the addressee;
  • Copy of Purchase Invoice of the goods; and
  • Copy of Dealer’s RC indicating different premises which should match with recipient’s address in invoice.

Consignment Transfer

  • DVAT 32(GR);
  • DVAT 33 (Delivery Challan); and
  • Copy of Consignment Agreement between the parties

Job WorkDVAT 32(GR);

  • DVAT 33(Delivery Challan);
  • Invoice clearly mentioning goods not for sale but for job work and details of the addressee;
  • Copy of Purchase Invoice of the goods; and
  • Job Work must be mentioned in the stock register maintained by the Dealer.

Exports Sale

  • Copy of IEC Code of dealer;
  • Copy of sale invoice;
  • Packing list;
  • Copy of Purchase order;
  • DVAT 32(GR)
  • DVAT 33

Imports

  • Customs Documents which includes the following
    • Bill of Entry
    • Invoice/GR/Airway Bill/ Consignment Note
    • Gate Pass
  • GR DVAT 32 issued by transporter from Ware House to Dealer’s place of storage

Q What is the Penalty on the Goods being carried without proper documents?

Ans Penalty is imposed under section 86(19) of DVAT Act 2004. Penalty of 20% (w.e.f. from 12/09/2013) of value of goods is imposed in case of goods are being carried without proper documents/fake documents.

Assistant Commissioner (VAT)/AVATO is the competent authority to impose penalty u/s 86(19) of DVAT Act.

Q What is the Procedure of Search of Vehicle by the Enforcement Officials

Ans The Team leader will stop the vehicle and call for record from the person-in­charge of the vehicle on the spot. In a summary manner the goods are matched with the records available with the vehicle in-charge. If the documents are found prima facie genuine based on matching of the TIN nos. and other particulars, the vehicle is left to ply otherwise it is detained.

Q What are commonly observed deficiencies in vehicle checking?

Ans              

  • • Vehicles carry goods without documents
  • Vehicles carry documents without proper TIN Nos in the invoice
  • Improper/incorrect entries in the sale invoice
  • Vehicles plying on a deviant route than the commonly used route for movement from place of origin, as mentioned in GR, to destination
  • Vehicles carry different quantities/types of goods than those mentioned in the documents
  • The documents point to undervaluation of the goods than prevailing value of the goods

Q What are the main considerations in verification of documents?

Ans Documents are checked on the following aspects:

> Valuation of goods

> Matching of the route by seeing the place of dispatch & destination

> Appearance of documents & checking of TIN no of buyer & seller

> Checking of the documents from the dealer profile from online database

> Matching of particulars mentioned in the documents and those present in the vehicle

Q What is the procedure of detainment of vehicle?

Ans The Team Leader gives a “Maal Roko Adesh” ( Detention Order) on which the signature of vehicle-in-charge is taken. The order contains the vehicle registration no, name of person in-charge, name of the team leader and his contact information, reason for detainment along with  place of parking.       Signature    of the vehicle     in-charge          is also taken on the detainment order.

The statement of the vehicle in-charge and driver is also taken on the spot.

Q What is the process of release of vehicles?

Ans

> The transporter or his representative should apply to the Assistant Commissioner (HQ) Enforcement —II Branch in writing for assessment and release of the vehicles.

> The inventory of the goods in the vehicle is made by the VATI (Value Added Tax Inspector) in presence of the vehicle-in-charge.

> Thereafter the assessment of the inventory is done by the Assistant Commissioner and assessment order containing tax deficiency and penalty is made.

> The transporter or his representative makes the payment against the assessment orders.

> At present the payment can be deposited in the Punjab & Sind Bank housed in the Vyapar Bhawan. The Department is trying to introduce the system for online payment for Enforcement-II Assessments.

> Once the vehicle in-charge makes the payment and produce DVAT 20, the Assistant Commissioner passes the release order.

> Applicant goes to parking spot along with release order and can then take back the possession of the vehicle.

> Duty hour for assessment and release of vehicle is from 10 am to 6 pm

Q. What is the time limit to get the vehicles assessed and released?

Ans The Department endeavours to release the vehicle within 3 working days of application. For vehicles detained for verification of documents, the vehicle is normally released within 24 hours of detention.

Q. If the vehicle is having some goods with genuine documents and some goods with doubtful documents, can the vehicle in-charge claim the goods having proper documents before assessment?

Ans Yes, the vehicle in-charge/owner of goods with proper identification with orders from assessing Assistant Commissioner (E-II) can claim back goods with verified genuine documents by giving an undertaking annexed at the end of FAQ. These released goods can then be taken in a separate vehicle arranged by the claimant.

Q. How the valuation of the goods is done?

Ans The tax and penalty is imposed on the value of the goods u/s 86(19) of the DVAT Act, 2004. The “Value of the Goods” has been defined in Sec 2(zn) which states-

“value of the goods” means the fair market value of the goods at that time including insurance charges, excise duties, countervailing duties, tax paid or payable under the Central Sales Tax Act, 1956 in respect of the sale, transport charges, freight charges and all other charges incidental to the transaction of the goods.

U/s 2(l) “fair market value” means the value at which goods of like kind and quality are sold and would be sold in the same quantities between unrelated parties in the open market in Delhi.

Considering the definitions provided in the Act, the valuation becomes a highly subjective exercise as all the goods items are having different market characteristics and even similar class of goods have different quality standards and brand value/perceptible image associated with it. Hence, an elaborate exercise needs to be undertaken to accurately assess the value of goods.

However, if for any goods vehicle, a detailed exercise for arriving at proper valuation under the Act is carried out, it would only become too time consuming which can result in prolonged detention of the goods vehicles and result in increased demurrage charges, depreciation in the value of the goods kept inside the vehicle. Besides, detained goods and goods vehicle are a loss of economic value. Hence, the Department has tried to balance the pros and cons.

In order to arrive at proper valuation, the Assessing Officers are authorised to take the MRP printed on the cover of the particles as a benchmark and then in order to arrive at proper valuation, in practice Assessing Officer make valuation of the goods in the band of 10%-30% lesser than the MRP printed on the item.

If the applicant differs from the valuation arrived from the above method, then he can produce evidence of his claim to the satisfaction of the Assessing Officer by submitting an affidavit along with a certification from any registered tax­paying dealer of Delhi dealing in same commodity and having GTO in the past financial year more than Rs 1cr as to the valuation of goods.

Q.     If the dealer is not satisfied with the valuation, what options are available before him?

Ans The dealer may file an Objection us/ 74 before an Objection Hearing Authority defined under the DVAT Act, 2004, and/or prefer appeal to VAT Tribunal, Delhi High Court, or Supreme Court of India (Please refer to Chapter XII of the DVAT Act, 2004 for further details)

Q.           What is the process in case vehicles are not reclaimed by the Transporter?

Ans Under the provisions of Sec 63 of the DVAT Act, 2004 and Rule 41 of the DVAT Rules, 2005, the Department after waiting for sufficient time on case to case basis, normally for one month, conduct the default assessment of the vehicles in presence of independent witnesses and then conduct the sale of properties seized to realise the due tax and penalty as per the Act.

Q          Who can be contacted in case of complaint of harassment?

Ans   The senior officers in-charge of Enforcement-II can be contacted in cases of harassment. Their particulars are:

Dr(Mrs) Mrinalini Darswal, Special Commissioner (Enforcement)

3rd Floor Vyapar Bhawan, I.P. Estate Delhi

Ph: 011-23312079

Sh Kunal, Additional Commissioner (Enforcement-II)

10th Floor, Vyapar Bhawan, I.P. Estate Delhi

Ph: 011-23318021

Email: e2dvat@gmail.com

Department Phone No (011) 23352310-14

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