Vibhu Bakhru JUDGMENT
Dr. S. Muralidhar, J.
Introduction
1. The challenge in this batch of writ petitions is to the constitutional validity of Explanation 2 inserted by the Delhi Value Added Tax (Fourth Amendment) Act, 2012 to Section 2(1) (zd) of the Delhi Value Added Tax Act, 2004 ('DVAT Act') as well as to the amendment made in the return form i.e. Form DVAT-16.
2. In the writ petition filed by the Delhi Petrol Dealers Association (DPDA), 74 of its members who are all running petroleum retail outlets of various oil companies in the National Capital Territory of Delhi have joined in as co-petitioners. Some of them have also filed separate writ petitions for the same reliefs.
3. The Respondents are the Government of National Capital Territory of Delhi (Respondent No. 1), Commissioner of Trade and Taxes, Delhi (Respondent No. 2) and the Additional/Deputy Commissioner of Trade and Taxes, Delhi (Respondent No. 3).
4. The members of the DPDA sell petroleum products of oil companies to consumers. The supply and distribution of diesel and petrol is controlled by the Motor Spirit & High Speed Diesel (Regulation of Supply and Distribution and Prevention of Malpractices) Order, 1998 which in turn has been issued in exercise of the powers conferred on the Central Government under Section 3 of the Essential Commodities Act, 1955. The sale and purchase of petroleum products is exigible to sales tax under the DVAT Act.
5. The VAT system replaced the single point tax regime. Tax is now collected at every point of sale. The seller is entitled to adjust the tax paid by him on his purchases (input tax) against his tax liability on sales made by him (output tax). The concept of input tax credit has been dealt with under Section 9 of the DVAT Act. Under Section 11 of the DVAT Act there can be an adjustment of the input tax against output tax. Where there is a surplus i.e. where the net tax calculated under Section 11 (1) amounts to a negative value then the dealer can adjust the said amount in the same tax period against the tax payable by him under the Central Sales Tax Act, 1956 if any and also be entitled to claim refund of any surplus for which he can make an application before the Commissioner.
Definitions of relevant terms under the DVAT Act
6. Certain relevant terms and their definitions under the DVAT Act are set out as under:
Section 2 (l) (r) : 'Input Tax' in relation to the purchase of goods means the proportion of the price paid by the buyer for the goods which represents tax which the selling dealer is liable under this Act
Section 2 (l) (zm) : 'Turnover' means the aggregate of the amounts of sale price received or receivable by the person in any tax period, reduced by any tax for which the person is liable under Section 3 of this Act.
7. Prior to the amendment to the Explanation to Section 2 (1) (zd) of the DVAT Act with effect from 16th January 2013, the said provision read as under:
Section 2 (l) (zd) : 'sale price' means the amount paid or payable as valuable consideration for any sale, including........