1982 (9) TMI 223 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to assessment order and recovery proceeding.
2. Failure to file second appeal to Appellate Tribunal.
3. Dismissal of writ petition for not exhausting alternative remedy.
4. Interpretation of retrospective amendment to Karnataka Sales Tax Act.
5. Exemption of steel products from sales tax based on retrospective amendment.
6. Quashing of assessment order and direction for fresh assessment.

Analysis:
1. The petitioner challenged the assessment order and recovery proceeding initiated by the first respondent. The assessment order was confirmed by the Deputy Commissioner of Commercial Taxes, and the appellate order was not filed with the Appellate Tribunal as required by the Karnataka Sales Tax Act. The High Court held that recovery proceedings cannot be challenged when the assessment order has become conclusive.

2. The appeal was filed against the order of the single Judge who dismissed the writ petition for not exhausting the remedy by filing an appeal. The Court noted that the existence of an alternative remedy does not affect the jurisdiction of the Court to entertain a writ petition. The retrospective amendment to the law altered the position, and the Court decided to exercise jurisdiction under Article 226 of the Constitution despite the failure to avail the remedy of appeal.

3. The assessee, a manufacturer of steel products, claimed exemption from sales tax on the ground that the goods were manufactured from raw materials on which sales tax had already been paid. The assessing officer rejected this claim, stating that the finished products were still liable to sales tax. However, a retrospective amendment to the Karnataka Sales Tax Act provided exemption for steel products manufactured from raw materials on which tax had been paid.

4. The Court allowed the appeal, reversed the single Judge's order, and quashed the assessment order for the relevant year. The Commercial Tax Officer was directed to make a fresh assessment in accordance with the law. The parties were directed to bear their own costs in the appeal.