1998 (3) TMI 633 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to assessment order under section 12(4) of the Orissa Sales Tax Act for the assessment year 1996-97. Allegations of not following principles laid down by the apex Court in previous cases. Dispute regarding factual aspects in the assessment. Petitioner's contention of high demands being raised with oblique motives. Jurisdiction of the High Court to entertain petitions under article 226 against assessment orders. Availability of statutory remedy through appeal. Direction for the petitioner to file appeal with application for condonation of delay. Stay of realization of balance amount pending disposal of first appeal. General grievance of high pitched assessments and strict assessments by revenue authorities. Importance of adherence to rule of law in assessments. Role of assessing officers as watch-dogs of revenue. Consideration of equity, convenience of taxpayer, economy, and certainty in tax levying.

Analysis:
The petitioner challenged the assessment order under section 12(4) of the Orissa Sales Tax Act for the assessment year 1996-97, raising concerns about the application of principles established by the apex Court in previous cases. The petitioner argued that the Sales Tax Officer had not provided a basis for calculating the allowable percentage and had drawn conclusions without considering the legal precedents. The High Court noted that factual controversies were involved in the assessment, and the petitioner had the option to avail the statutory remedy by filing an appeal. The Court emphasized that writ petitions under article 226 should not be entertained when an alternative legal remedy is available, except in cases of lack of jurisdiction, excess of jurisdiction, or violation of natural justice principles.

The petitioner also raised concerns about multiple assessments with substantial demands being raised, alleging oblique motives and hindrance in obtaining tax refunds. The Court highlighted the importance of exhausting statutory remedies before seeking intervention through writ petitions, except in extraordinary circumstances. The Court directed the petitioner to file an appeal with an application for condonation of delay, and upon depositing a specified amount, the realization of the balance was stayed pending the disposal of the first appeal. The appellate authority was instructed to expedite the hearing of all pending appeals, considering relevant aspects and legal precedents.

Regarding the general grievance of high pitched assessments and strict enforcement by revenue authorities, the Court emphasized the need for assessing officers to adhere to the rule of law and ensure just assessments without causing harassment. The Court underscored the dual role of assessing officers as guardians of revenue and emphasized the societal impact of tax evasion and arbitrary taxation. The judgment highlighted the importance of equity, taxpayer convenience, economy, and clarity in tax levying, emphasizing the adverse effects of arbitrary assessments on revenue collection and taxpayer rights. The Court emphasized the need for tax authorities to consider these principles while adjudicating tax matters to maintain justice and good conscience in tax administration.