1998 (2) TMI 548 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the Commissioner of Taxes has already taken a decision that the petitioner-firm is liable to pay sales tax under section 3A of the Tripura Sales Tax Act, 1976.
2. Whether a statutory authority can be prevented from exercising its statutory power.
3. Whether the petitioner has a cause of action to file the present writ petition.
4. Whether the Commissioner of Taxes acted within his jurisdiction and in accordance with natural justice.
5. Whether the petitioner should have availed the statutory remedy provided under the Tripura Sales Tax Act, 1976 instead of filing a writ petition.

Detailed Analysis:

Issue 1: Decision on Liability to Pay Sales Tax
The petitioner argued that the Commissioner of Taxes had already decided that the photography work falls under works contract, making the petitioner liable to pay sales tax. The Commissioner's order dated August 26, 1997, indicated that the business might be liable under section 3A of the Tripura Sales Tax Act, 1976. However, the court clarified that this was only an opinion formed for reopening the assessment and not a final decision.

Issue 2: Statutory Authority's Power
The court examined whether the Commissioner of Taxes could be prevented from exercising his statutory power under section 21(1) of the Tripura Sales Tax Act, 1976. It was held that the Commissioner has the authority to call for and examine records if he considers any order erroneous and prejudicial to the revenue. The Commissioner had merely formed an opinion that warranted reopening the assessment, which is within his statutory power.

Issue 3: Cause of Action for Writ Petition
The court addressed whether the petitioner had a cause of action to file the writ petition at this stage. It was noted that the Commissioner had not yet made a final assessment or imposed any tax. The mere formation of an opinion to reopen the case does not constitute a cause of action for a writ petition. The petitioner should have presented his case before the Commissioner as per the statutory procedure.

Issue 4: Jurisdiction and Natural Justice
The court found that the Commissioner had acted within his jurisdiction and had not violated principles of natural justice. The Commissioner had provided an opportunity for the petitioner to present his case and produce books of accounts. The refusal to grant further adjournment did not amount to a lack of jurisdiction or breach of natural justice.

Issue 5: Statutory Remedy
The court emphasized that the Tripura Sales Tax Act, 1976 provides a complete machinery for challenging an order of assessment. If the petitioner is aggrieved by the Commissioner's order, he can appeal to the Tribunal under section 22 of the Act. The court referenced the Supreme Court's decision in Titaghur Paper Mills Co. Ltd. v. State of Orissa, which held that statutory remedies must be availed of before approaching the court under Article 226 of the Constitution.

Conclusion
The court concluded that the Commissioner of Taxes had not made a final decision on the petitioner's liability to pay sales tax but had only formed an opinion that warranted reopening the assessment. The petitioner should have availed the statutory remedy provided under the Tripura Sales Tax Act, 1976. The writ petition was dismissed, and the petitioner was advised to present his case before the Commissioner of Taxes.

Judgment
The petition was dismissed, with no order as to costs. The petitioner is at liberty to present his case before the Commissioner of Taxes, who will decide the matter in accordance with the law and his best judgment.

← Previous Next →