IN THE COURT OF COMMISSIONER
DEPARTMENT OF TRADE AND TAXES
GOVT OF N.C.T. OF DELHI,
VYAPAR BHAWAN, NEW DELHI
No.: 145/R/CDVAT/2007
Date of Order : 23.08.2007
M/s. G.S. Marketing Company
913/17, 2nd Floor, Mela Ram Market,
Chawri Bazar, Delhi-110006.
ORDER
Present for the Applicant
:
Sh. Rajiv Nanda, Advocate
Present for the Department
:
Sh. S.M. Dhasmana, DR
The above mentioned applicant had filed an application u/s 84 of DVAT
Act, 2004 before this court on 30.8.06 to determine on the following question:“Whether the dealer can take input Tax Credit of additional Custom Duty
Imposed on import to countervailing the Sales Tax, Value Added Tax, Local
Tax and other charges as per Notification No. 19/2006-Cus. Dt: 01.03.06”?
2.
The aforesaid application was disposed of vide order no. 145/CDVAT/
2006/126 dated 30.11.06 with the following observation:“I have heard the arguments put forth from both sides and have also perused
the application and gone through the aforesaid notification and of the
considered view that no input tax credit is allowed on the additional custom
duty imposed on imports. The application is hereby disposed off in above
terms”
3.
On being aggrieved the applicant approached the Hon’ble High Court of
Delhi challenging the order dated 30.11.06 and the Hon’ble court while disposing off
this writ petition No. 1056/2007 & CM No. 1848/2007 through order dated 9.2.07,
observed and directed as under:“Where vital interests of a citizen are being affected, it is expected of
officers of the State to articulate the reasons which have persuaded the
officer to take a decision one way or the other. The impugned order is
devoid of all reasons. It places us in a position where we are unable to agree
or disagree with the order. In these circumstances, the impugned order is set
aside with a direction to the Commissioner, T&T, Delhi, to pass a reasoned
and speaking order.
These Orders shall not be construed to indicate any opinion on the merits of
the case. Fresh orders shall be passed after giving an opportunity to the
Petitioner to be heard either in person or through counsel.”
4.
Following the directions of Hon’ble Delhi High Court the applicant was given
an opportunity of being heard.
5.
Sh. Rajiv Nanda, Advocate appeared on behalf of the applicant and while
furnishing a copy of Notification No. 19/2006-CUS dated 1.3.06 argued that the
Central Govt. vide Notification No. 19/2006-CUS dated 1.3.06 has imposed an
additional custom duty @ 4% on import to countervail State tax/VAT which is as
appended as under:
“Goods specified under Section 3(5) of the Customs Tariff Act- In exercise
of the powers conferred by sub-section (5) of section 3 of the Customs Tariff
Act, 1975 (51 of 1975), the Central Government, on being satisfied that it is
necessary in the public interest so to do, and in supersession of the
notification of the Government of India in the Ministry of Finance
(Department of Revenue), No. 19/2005-Customs, dated the 1st March, 2005
[number G.S.R. 117(E), dated the 1st March, 2005], hereby directs that all
goods specified under the Chapter, heading, sub-heading, sub-heading or
tariff item of the First Schedule to the said Act, having regard to the sales
tax, value added tax, local tax and other taxes or charges leviable on sale or
purchase or transportation of like goods in India, when imported into India,
shall be liable to an additional duty of customs at the rate of four percent ad
valorem.”
Sh. Nanda further pleaded that as per above mentioned notification the
applicant be allowed the input tax credit on this additional custom duty
imposed by Central Government.
6.
Shri Dhasmana, DR argued that there is no provision under the DVAT Act,
2004 nor under the Central Sales Tax Act, 1956 to allow input tax credit on
additional custom duty. The tax credit can be allowed under section 9 of DVAT Act,
2004 when purchases are made from a person who is a registered dealer and tax
credit can be claimed by a dealer only if he holds a tax invoice at the time the
prescribed return for the period is furnished. Further as per the aforesaid notification
there is nothing specific mentioned therein that the value added tax departments/state
governments have to allow tax credit on account of additional custom duty as such
the applicant is not entitled for any input tax credit on the additional custom duty
imposed by Central Govt. on any import of goods.
7.
I have heard both the parties and perused the aforesaid notification. Section 9 of
the DVAT Act, 2004 prescribed condition for restriction and limitation for claiming
Input Tax Credit and the dealer shall be entitled to tax credit on his purchases in the
course of his activities as a dealer and one of the conditions for claiming Input Tax
Credit is that the purchases should have been made from a registered dealer. There is
no provision under the DVAT Act, 2004 or CST Act, 1956 to allow the Input Tax
Credit of additional Custom Duty imposed on import.
8.
I am of the considered opinion that the applicant is not entitled to claim
input tax credit of the additional custom duty imposed on import since neither there
is any provision of such Input Tax Credit under Section 9 of the DVAT Act nor any
specific mention in the aforesaid notification that the Value Added Tax
Department/State Govt. have to allow the tax credit on account of additional Custom
Duty imposed by the Central Govt. The application is hereby disposed off in the
above terms.
(Archna Arora)
Commissioner, T&T, Delhi
Despatch No: 151
Dated : 23-8-07
Copy for information and necessary action to :
1. The Applicant
2. The Addl. Commissioner (Law & Judicial)
3. The Value Added Tax Officer (Policy Branch)
4. Deptt. of Trade and Taxes Bar Association
5. Guard File
(Archna Arora)
Commissioner, T&T, Delhi