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Delhi Value Added Tax Act, 2004 | Assessment

Section 32 of the DVAT Act, 2004: Default Assessment of Tax Payable

Section 32 authorises the Commissioner to make a reasoned best-judgment assessment of net tax when a required return is missing, defective, incorrect or unsatisfactory, and also addresses persons liable to tax who have not registered.

Applicability: GST commenced on 1 July 2017 for most goods. DVAT may remain relevant for pre-GST periods and goods outside GST, subject to the law, amendments and notifications applicable to the particular period. The official consolidated DVAT text linked below is historical; check subsequent changes.

Section 32: Statutory provisions

Sub-section (1): If any person:

  1. has not furnished returns required under this Act by the prescribed date; or
  2. has furnished incomplete or incorrect returns; or
  3. has furnished a return which does not comply with the requirements of this Act; or
  4. for any other reason the Commissioner is not satisfied with the return furnished by a person;

the Commissioner may, for reasons to be recorded in writing, assess or reassess, to the best of his judgment, the amount of net tax due for a tax period or more than one tax period by a single order, so long as all such tax periods are comprised in one year.

Sub-section (1A): If, on information coming into the Commissioner's possession, the Commissioner is satisfied that a person liable to pay tax for a period or periods has failed to get registered, the Commissioner may, for reasons recorded in writing, assess to the best of his judgment the net tax due for those tax periods and all subsequent tax periods.

Sub-section (2): After an assessment under this section, the Commissioner shall forthwith serve a notice of assessment specifying the additional tax due for the tax period.

Sub-section (3): Where further tax is assessed as owed, it is due and payable on the same date on which the net tax for that tax period was due.

Explanation: A person disagreeing with the notice of assessment may file an objection under section 74 of the Act.

The provision above follows the content of the supplied statutory page. For authoritative wording and any amendments, consult the official legislation and notifications.

When can a default assessment be made?

A default assessment is an assessment made by the tax authority rather than merely accepting a compliant dealer's self-assessed return. The grounds in section 32(1) include failure to file on time, an incomplete or incorrect return, non-compliance with statutory requirements, or another recorded reason for dissatisfaction with the return.

A best-judgment assessment is an estimate or determination made by the Commissioner on the available relevant material, subject to the Act's requirements. It is not an unrestricted power to determine tax arbitrarily: the section expressly requires reasons to be recorded in writing.

Assessment of unregistered persons: Section 32(1A)

Non-registration does not, by itself, remove an otherwise applicable tax liability. Where information establishes that a person liable to tax failed to register, sub-section (1A) permits an assessment for the relevant period or periods and subsequent tax periods, with written reasons.

Notice, payment and tax periods

  • Written reasons: Reasons supporting the default assessment or reassessment must be recorded.
  • Multiple periods: Under sub-section (1), one order may cover more than one tax period only where all such periods fall within one year.
  • Assessment notice: The Commissioner must serve notice of any additional tax due following an assessment.
  • Payment: Under sub-section (3), the additional tax is treated as due on the original date for payment of the net tax for that tax period; the consequences of delay must be determined under applicable provisions.

Rule 36 and Form DVAT-24

The supplied page identifies Rule 36 of the Delhi Value Added Tax Rules, 2005 and Form DVAT-24 as associated with default assessment. Check the version of the rule and prescribed notice form applicable to the assessment date, including later changes to electronic service and departmental procedure.

Objection under Section 74

The Explanation to section 32 expressly recognises the right to object to an assessment notice under section 74. A person disputing an assessment should examine the assessment order, reasons, supporting records, service date and the applicable statutory time limits and procedural requirements before filing an objection.

Section 26: Periodical returns | Section 28: Correction of deficiencies | Section 30: Assessment | Section 31: Self-assessment | Section 34: Limitation

Official government resources

Legal information only. Check the statutory version and departmental orders relevant to the assessment period.