2003 (9) TMI 712 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of G.O. Ms. No. 354 dated May 29, 2001 regarding the procedure for passing formal orders based on audit reports.
2. Jurisdiction of the High Court under Article 226 of the Constitution of India in the context of appeal remedy availability.
3. Compliance with formal order requirements by the assessing authority under A.P. General Sales Tax Act, 1957.

Analysis:
Issue 1:
The petitioner, a registered dealer in vegetable oil, filed an audit report claiming exemption on the purchase of groundnut seeds. The Government issued G.O. Ms. No. 354, stating that the assessing authority must pass a formal order within fifteen days of receiving the audit report. The petitioner contended that the assessing authority did not follow the procedure outlined in the G.O. and passed an order requiring the petitioner to pay tax. The Court noted that the assessing authority should issue a notice if there are objections or deviations from the claim made by the assessee. The Court found that the assessing authority did not follow the proper procedure and set aside the impugned order, remitting the matter back to the assessing authority for appropriate orders.

Issue 2:
The Special Government Pleader argued that the petitioner should have pursued the appeal remedy available under Section 19 of the A.P. General Sales Tax Act before approaching the High Court under Article 226 of the Constitution of India. The Court acknowledged the remedy of appeal but found that due to the nature of the dispute and the assessing authority's failure to follow proper procedures, it was a fit case for the High Court's interference under Article 226. The Court set aside the order and directed the petitioner to deposit a specified amount pending further proceedings.

Issue 3:
The Court observed that the order passed by the assessing authority, though labeled as formal, did not fully accept the petitioner's statement. The Court held that the assessing authority should have issued a notice to allow the assessee to provide additional material. Consequently, the Court set aside the order, allowing the petitioner to file objections and directing the assessing authority to decide the matter expeditiously after considering the objections. The Court also required the petitioner to deposit a specific amount pending the outcome of the assessment.

In conclusion, the High Court intervened under Article 226 due to procedural irregularities by the assessing authority, setting aside the order and remitting the matter for proper consideration while directing the petitioner to deposit a specified amount.