2007 (9) TMI 578 - HC - VAT and Sales Tax

Pre deposit - Held that - The affidavit filed in support of the writ petition discloses that the petitioner had already availed the alternative remedy of filing an appeal before the appellate authority, which has rejected the appeal on the ground that the petitioner has failed to comply with the statutory obligation of paying 25 per cent of the disputed tax for entertaining the appeal. Having availed the alternative remedy and failed to fulfil the statutory obligation by paying 25 per cent of the disputed tax, it is not open to the petitioner to short-circuit and circumvent the alternative remedy and file the writ petition before this court. The impugned order cannot be termed as highhanded or palpably illegal warranting interference under article 226 of the Constitution of India. W.P. dismissed.

Summary

Issues:
Challenging assessment order under Pondicherry General Sales Tax Act and Central Sales Tax Act.
Validity of revised assessment order dated July 26, 2006.
Imposition of penalty at 150%.
Availability of alternative remedy of filing an appeal.
Applicability of writ jurisdiction under article 226 of the Constitution of India.
Opportunity for cross-examination in case of reliance on third-party records.

Analysis:
The petitioner, a registered dealer in petroleum products, contested the assessment order dated July 26, 2006, challenging the revised assessment under the Pondicherry General Sales Tax Act and Central Sales Tax Act. The petitioner received "C" declaration forms to avail concessional tax rates but faced discrepancies in purchase details from the seller, Indian Oil Corporation, Chennai. The respondent proposed to revise the assessment under section 18(1) of the PGST Act, 1967, and imposed a penalty of 150% based on increased purchase details. The petitioner's appeal was rejected for non-payment of 25% of the disputed tax, leading to the writ petition.

The petitioner argued that insufficient time was granted to submit objections and requested an extension, emphasizing the need for details from the seller to refute the revised assessment. The petitioner's counsel cited precedents to support invoking writ jurisdiction under article 226 in cases of gross injustice. However, the respondent contended that the petitioner failed to submit objections within the stipulated time and should have pursued the statutory appeal process under the PGST Act.

The High Court analyzed the case, noting the discrepancy in purchase turnover detected during verification, leading to the revised assessment. The Court highlighted the importance of timely submission of objections and the availability of statutory remedies. It differentiated the present case from precedents involving cross-examination of third parties, as the assessment was based on verified purchase documents. The Court emphasized the petitioner's obligation to comply with statutory requirements, including payment for appeal consideration.

Ultimately, the Court dismissed the writ petition, advising the petitioner to re-present the appeal papers with the required payment. The judgment emphasized the importance of following statutory procedures and fulfilling obligations before seeking alternative remedies. No costs were awarded, concluding the matter with the option to pursue the appeal process further.