Hdfc Bank v. Commissioner Of Value Added Tax, Delhi

$~14 * IN THE HIGH COURT OF DELHI AT NEW DELHI + VAT APPEAL 29/2016 & C.M.Nos.38893/2016 & 38961/2016 HDFC BANK ..... Appellant Through:

Ms.Kavita Jha, Mr.Shammi Kapoor and Ms.Purva Juneja, Advts.

versus COMMISSIONER OF VALUE ADDED TAX, DELHI ..... Respondent Through:

Mr.Satyakam, ASC, GNCTD

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MS. JUSTICE DEEPA SHARMA

O R D E R

% 21.10.2016 C.M.38961/2016 (for delay) For the reasons mentioned in the application, the delay in refiling the appeal is condoned. Applications stands disposed of.

C.M.Nos.38893/2016 (for exemption) Exemption is allowed subject to just exceptions. Application stands disposed of.

VAT APPEAL 29/2016 Issue notice. Mr.Satyakam, ASC, GNCTD accepts notice on behalf of the respondent.

In this appeal for 2006-2007, the question of law urged is whether the assessee/bank's action in sale of repossessed cars by it is

subject to VAT levy? The VAT Tribunal had ruled that such activity is subject to levy. In identical circumstances this court in its judgment reported as Citi Bank vs. Commissioner of Sales Tax 2016

(1) AD (Del) 581 had ruled against the assessee; that judgment was followed in HDFC Bank vs. Commissioner of Value Added Tax, Delhi (VAT APPEAL 26/2016 decided on 26.09.2016). At the same time, in HDFC Bank's case (supra) the court had held that levy of almost 200% penalty was not justified. In the present case, levy of penalty is above 150%.

The main question of law is answered against the assessee. However, the matter is remitted to the adjudicating authority as to the proportionality of the penalty to be imposed having regard to the fact that the issue is debatable.

The appeal is partly allowed to the above extent. S. RAVINDRA BHAT, J DEEPA SHARMA, J OCTOBER 21, 2016 rb