Section 86(9) of the DVAT Act: Penalty for Late Returns, Revised Returns and Missing Documents

Section 86(9) of the Delhi Value Added Tax Act, 2004 deals with specified failures to furnish returns, supporting documents, revised returns and compliance required under Section 70. The provision was materially amended in 2013, so older penalty figures should not be used without checking the relevant period.

Meaning and scope of Section 86(9)

Chapter V of the DVAT Act concerns returns and related compliance. Section 86(9), as substituted by the Delhi Value Added Tax (Amendment) Act, 2013, addresses a person required to furnish a return under Chapter V or to comply with a requirement in a notification issued under Section 70.

Defaults covered

1. Section 86(9)(a): Failure to furnish a required return by its due date.
2. Section 86(9)(b): Failure to submit a document required to accompany a return.
3. Section 86(9)(c): Failure to furnish a revised return by the due date when revision is required.
4. Section 86(9)(d): Failure to comply with a requirement imposed through a notification under Section 70.

Penalty amount and calculation

Under the amended provision, the penalty runs from the day immediately following the applicable due date until the failure is rectified, subject to the statutory ceiling. The precise dates and the legally applicable version of the provision must be established before calculating a demand.

Illustration: If a default covered by the amended provision continues for 20 chargeable days, the statutory daily-rate calculation is 20 x Rs. 500 = Rs. 10,000, before considering any applicable legal relief or dispute. For 120 chargeable days, the daily-rate calculation would exceed the Rs. 50,000 statutory cap, so the capped figure applies under this subsection.

Related legal provisions

• Chapter V: The framework for DVAT returns and related reporting duties.
• Section 70: Provides for notification-based requirements; non-compliance with relevant notifications is expressly addressed in Section 86(9)(d).
• Section 33: Concerns assessment of penalties; the department publishes Form DVAT 24A as a notice of assessment of penalty.
• Section 74: Provides the objection mechanism for disputing an assessment or other objectionable decision, subject to statutory conditions and deadlines.

DVAT and GST: Which law applies?

Delhi VAT remains relevant to legacy assessments and to transactions that continue to fall within the applicable VAT regime. The Delhi Goods and Services Tax Act, 2017 separately governs supplies within its scope. A late GST return should not automatically be assessed using Section 86(9) of the DVAT Act. Identify the tax, period and applicable legislation before applying any penalty.

What to check when a DVAT penalty notice is received

1. Identify the return period, original due date and alleged failure.
2. Confirm whether Section 86(9)(a), (b), (c) or (d) is invoked.
3. Verify filing acknowledgements, supporting documents and the date of rectification.
4. Check the version of Section 86(9) applicable to the default and any relevant notifications.
5. Review the penalty assessment and the available statutory objection or appeal procedure promptly.

Frequently asked questions

What does Section 86(9) cover?

Failure to file a required DVAT return, attach a required document, file a required revised return, or comply with a notification issued under Section 70.

What is the penalty under Section 86(9)?

The amended statutory rate is Rs. 500 per day from the day after the due date until rectification, subject to a maximum of Rs. 50,000, subject to the law applicable to the relevant default.

Does this apply to GST returns?

No. DVAT and Delhi GST are separate statutory regimes. GST returns are governed by applicable GST legislation.

Official legal references

Information is provided for general legal awareness. For an actual case, verify the applicable statutory text, commencement dates, notifications and available remedies.