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2006 (11) TMI 582 - HC - VAT and Sales TaxMaintainability of petition - availability of alternative remedy - Levy of penalty - attempt to evade tax, by declaring in the invoice, accompanying the goods under transport - declared goods - annexure P 6 is ultra vires the provisions of section 14B of the Act or not - impugned order dated February 28, 2005, annexure P 6, is ante-dated inasmuch as it refers to release of goods on March 1, 2005 or not. Whether the writ petition is liable to be dismissed on account of alternative remedy available to the petitioner? - HELD THAT - In THE TRANSPORT CORPORATION OF INDIA LTD. VERSUS STATE OF ANDHRA PRADESH AND OTHERS (AND OTHER CASES) 1984 (12) TMI 273 - ANDHRA PRADESH HIGH COURT , the Andhra Pradesh High Court was dealing with a number of writ petitions filed to challenge show cause notice as to why penal action should not be taken for violation of the provisions of the Andhra Pradesh General Sales Tax Act, 1957 on the allegation that intra-State sales taking place in the State were being shown as inter-State sale and on enquiry, a scam came to the notice of the department - In TITAGHUR PAPER MILLS CO. LIMITED. AND ANOTHER VERSUS STATE OF ORISSA AND ANOTHER 1983 (4) TMI 49 - SUPREME COURT , the assessee filed a writ petition against the order of assessment treating the transaction of intra-State sales claimed by the assessee to be inter-State sales as taxable and disallowing deduction claimed by the assessee. The writ petition was dismissed by the High Court on the ground of availability of alternative remedy and the decision was upheld by the honourable Supreme Court. Though the general rule is that this court does not entertain a writ petition when an alternative remedy is available, but such a rule is not an absolute bar and in an appropriate case, inspite of availability of alternative remedy, this court is not debarred from entertaining writ petition where on undisputed facts, an authority is shown to have assumed jurisdiction which it does not possess. Article 226 of the Constitution of India, as such, does not debar entertainment of writ petitions but it is a self-imposed limitation put by the courts. The jurisdiction assumed by respondent No. 2 in passing the impugned order, annexure P 6 was without any legal basis and in the facts and circumstances of the case, the writ petition is not liable to be dismissed on account of availability of alternative remedy. Whether the impugned order dated February 28, 2005, annexure P 6 is ultra vires the provisions of section 14B of the Act? - HELD THAT - In SODHI TRANSPORT CO. AND ANOTHER VERSUS STATE OF UP. AND ANOTHER (AND OTHER APPEALS AND WRIT PETITIONS) 1986 (3) TMI 303 - SUPREME COURT , question was considered with reference to section 28B of the U.P. Sales Tax Act, 1948. It was held that the provisions being machinery provisions enacted to ensure that there was no evasion of tax, were incidental to entry 54, List II of the Seventh Schedule to the Constitution and presumption contained in section 28B of the Act not being conclusive, merely laid down a rule of evidence, shifting burden of proof on the persons not carrying the documents to show that goods were not sold inside the State - The above judgment relate to validity of statutory provisions requiring a transporter or owner to carry relevant documents and to give information at the check-post and in absence thereof, inference of evasion could be raised in which case, the transporter or owner of the goods was required to show that there was no attempt at evasion. It is well-settled that wherever exercise of power by any public authority is arbitrary, the same will be open to judicial review and will be liable to be quashed. Resume of case-law referred to above leads to the conclusion that exercise of power at the check-post should have nexus with attempt at evasion. The power conferred on a check-post officer is a drastic power necessary to check attempts at evasion but the same cannot be exercised arbitrarily. Wherever the action of check-post officer smacks of arbitrariness, the power of judicial review is available with this court under article 226 of the Constitution of India even if alternative remedy of appeal is available. Whether exercise of power in a given situation was called for or not, is a question which has to be decided from case to case and no principle of universal application could be laid down. If no inference of attempt at evasion can be drawn, exercise of power will not be called for. In the present case, contention raised by the assessee that the cast iron castings carried by it were not cast iron liable to tax at the first stage, could not be held to be requiring no adjudication or frivolous or mala fide - question answered in favour of the petitioner and assumption of jurisdiction by the check-post officer is held to be without jurisdiction. Whether the impugned order dated February 28, 2005, annexure P 6, is ante-dated inasmuch as it refers to release of goods on March 1, 2005 and its effect? - HELD THAT - The order annexure P 6 and order annexure R 1 are different orders and order annexure P 6 carries a reference to release of goods on March 1, 2005, though purported to have been passed on February 28, 2005. The same is obviously ante-dated. Explanation for the discrepancy does not appeal to us. We, however, do not express any final view in the matter and direct that matter be looked into by the Financial Commissioner-cum-Secretary, Government of Punjab, Department of Excise and Taxation, respondent No. 1 and such decision may be taken as may be considered appropriate. The writ petition is allowed and impugned order, annexure P 6 dated February 28, 2005 is set aside with no order as to costs.
Issues Involved:
1. Whether the writ petition is liable to be dismissed on account of alternative remedy available to the petitioner? 2. Whether the impugned order dated February 28, 2005, annexure P 6 is ultra vires the provisions of section 14B of the Act? 3. Whether the impugned order dated February 28, 2005, annexure P 6, is ante-dated inasmuch as it refers to release of goods on March 1, 2005, and its effect? Detailed Analysis: Re: Question No. (i) The court considered whether the writ petition should be dismissed due to the availability of an alternative remedy. The State cited several judgments to support its argument, including *Transport Corporation of India Ltd. v. State of Andhra Pradesh*, *State of Goa v. Leukoplast (India) Ltd.*, and *Titaghur Paper Mills Co. Ltd. v. State of Orissa*. These cases generally upheld the principle that writ petitions should not be entertained when an alternative remedy is available unless the order is without jurisdiction or in violation of natural justice. However, the court noted that Article 226 of the Constitution does not absolutely bar the entertainment of writ petitions where an authority is shown to have assumed jurisdiction it does not possess. The court referenced *Whirlpool Corporation v. Registrar of Trade Marks, Mumbai*, which clarified that the High Court could entertain writ petitions despite alternative remedies in cases involving fundamental rights, violations of natural justice, or actions without jurisdiction. The court concluded that since the jurisdiction assumed by the respondent was without legal basis, the writ petition was not liable to be dismissed on account of the alternative remedy. Re: Question No. (ii) The court examined whether the impugned order was ultra vires section 14B of the Act. The facts showed that the petitioner had declared the goods as liable to tax at the last stage, while the Check-post Officer determined they were liable at the first stage, leading to a penalty. The petitioner argued that the goods were "general goods" and cited the Supreme Court's judgment in *Vasantham Foundry v. Union of India*, which differentiated "cast iron" from "iron". The court reviewed several judgments, including *Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales Tax, Indore*, which emphasized that bona fide legal disputes should not be equated with tax evasion. The court also referenced *Automobile Products of India Limited v. State of Karnataka* and *Utkal Galvanisers Limited v. Commissioner of Commercial Taxes, Orissa*, which highlighted that Check-post Officers should not settle highly debatable issues. The court concluded that the petitioner's contention required adjudication and was not frivolous or mala fide. Therefore, the jurisdiction assumed by the Check-post Officer was without legal basis, making the impugned order ultra vires section 14B of the Act. Re: Question No. (iii) The court found that the impugned order, annexure P 6, and order annexure R 1 were different, with annexure P 6 referring to the release of goods on March 1, 2005, despite being dated February 28, 2005. This discrepancy indicated that the order was ante-dated. The court did not accept the explanation provided for this discrepancy and directed the Financial Commissioner-cum-Secretary, Government of Punjab, Department of Excise and Taxation, to look into the matter and take appropriate action. Conclusion: The writ petition was allowed, and the impugned order dated February 28, 2005, annexure P 6, was set aside with no order as to costs.
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