2004 (2) TMI 671 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Commercial Taxes Officer (Anti Evasion).
2. Availability of tax exemption under the CST Act based on specific notifications and circulars.
3. Maintainability of the writ petition in light of alternative remedies.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Commercial Taxes Officer (Anti Evasion):
The petitioner challenged the jurisdiction of the Commercial Taxes Officer (Anti Evasion), Bhilwara, who issued the assessment orders dated January 16, 2004, for the assessment years 1999-2000 and 2000-2001. The petitioner argued that the proceedings conducted by the respondent were without jurisdiction and that the imposition of tax was illegal. The petitioner claimed entitlement to tax exemption based on a notification dated March 6, 1978, and a circular dated May 26, 1995.

2. Availability of Tax Exemption under the CST Act:
The petitioner contended that under the CST Act, they were entitled to exemption from tax based on the recommendation of the Khadi and Gramodhyog Board, Rajasthan. The petitioner referred to notification dated March 6, 1978, which exempted certain goods from tax, and the circular dated May 26, 1995, which reiterated the continuation of this benefit for inter-State sales. Despite these provisions, the Commercial Taxes Officer issued show cause notices and subsequently passed assessment orders raising demands of Rs. 3,21,864 and Rs. 4,41,000 for the respective assessment years.

3. Maintainability of the Writ Petition in Light of Alternative Remedies:
The respondents argued that the writ petition was not maintainable due to the availability of an alternative remedy. They highlighted that the petitioner could appeal the assessment orders under sections 84, 85, and 86 of the Rajasthan Sales Tax Act, 1994. The court noted that the right of appeal is a substantive right and emphasized that where an alternative and equally efficacious remedy is available, the petitioner should pursue that remedy instead of invoking the special jurisdiction of the High Court under article 226 of the Constitution of India.

The court referenced several authorities, including Thansingh Nathmal v. Superintendent Taxes, Kerala State Electricity Board v. Kurien E. Kalathil, and United India Insurance Co. Ltd. v. Rajendra Singh, to support the principle that the High Court generally refrains from entertaining writ petitions when alternative remedies exist. The court also cited the Supreme Court's decision in Basant Kumar Sarkar v. Eagle Rolling Mills Ltd., which held that matters with alternative remedies should not be considered under article 226.

The court further elaborated that questions of fact or mixed questions of fact and law, such as the entitlement to exemption and the manufacturing process undertaken by the petitioner, should not be decided in writ jurisdiction. These issues should be addressed through the statutory appeal process.

Conclusion:
The court concluded that the writ petition was not maintainable due to the availability of an alternative remedy. The petitioner was advised to pursue the appeal process provided under the Rajasthan Sales Tax Act. Consequently, the writ petition was dismissed.