1985 (3) TMI 243 - HC - VAT and Sales Tax

Issues Involved:
1. Validity of assessment orders (exhibits P13 to P21) passed without proper notice and opportunity.
2. Legality of simultaneous recovery proceedings and their impact on the petitioner.

Detailed Analysis:

Issue 1: Validity of Assessment Orders
The petitioner, a company engaged in the manufacture and sale of Indian-made foreign liquor, challenged the assessment orders for the years 1976-77 to 1979-80, and 1975-76 under the Kerala General Sales Tax Act and the Central Sales Tax Act. The petitioner argued that the assessments were made arbitrarily, without sufficient opportunity to substantiate its case, violating the principles of natural justice. The notices for verification of accounts were issued on various dates, and the petitioner was given limited time to file objections, which were ultimately rejected. The petitioner contended that the assessment orders were passed in undue haste and were thus void and illegal.

The court, however, noted that the petitioner had already filed appeals against the assessment orders before the Deputy Commissioner of Agricultural Income-tax and Sales Tax (Appeals), Quilon. The court emphasized that since the appeals were pending, it was not appropriate for the petitioner to simultaneously invoke the discretionary jurisdiction of the High Court under Article 226 of the Constitution. The court referenced several precedents, including Kunjahammad Haji v. State of Kerala and Jai Singh v. Union of India, to support the view that pursuing parallel remedies was not permissible. The court concluded that the appellate authority had the jurisdiction to adjudicate the complaints, and exercising the High Court's jurisdiction would undermine the appellate process. Thus, the court declined to interfere with the assessment orders.

Issue 2: Legality of Simultaneous Recovery Proceedings
The petitioner also challenged the simultaneous initiation of multiple recovery proceedings, arguing that it was unauthorized and would cause irreparable harm to the company, potentially crippling its operations and affecting its large workforce. The court examined Section 23(2) of the Kerala General Sales Tax Act, which allows for multiple modes of recovery, including treating the tax as an arrear of land revenue and recovering it as a fine imposed by a Magistrate. The court found that the recovery proceedings were sanctioned by the relevant statute and were not shown to be illegal or unauthorized.

The court noted that the petitioner had been granted a conditional stay by the appellate authority, requiring the payment of 50% of the balance tax and providing security for the remaining amount. The petitioner's arguments that the appellate authority acted mechanically and failed to provide reasons were found to be general and lacking in specifics. Moreover, there was no prayer to quash the conditional stay order (exhibit P6). The court referenced the Supreme Court decision in Third Income-tax Officer v. M. Damodar Bhat, which emphasized the need for specific particulars to support claims of arbitrary exercise of discretion by tax authorities.

The court concluded that it was not within its jurisdiction to direct the manner or method of tax recovery unless the recovery proceedings were independently shown to be vitiated or illegal. The court suggested that the circumstances highlighted by the petitioner could be considered sympathetically by the Government or revenue authorities but declined to interfere directly.

Conclusion:
The writ petition was dismissed, with the court declining to exercise its discretionary jurisdiction under Article 226 of the Constitution due to the pending appeals and the statutory provisions authorizing the recovery proceedings. The court left the matter of sympathetic consideration to the Government or revenue authorities. No costs were ordered.

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