2008 (8) TMI 825 - HC - VAT and Sales Tax

Whether the statutory remedy against the impugned assessment orders is available to the petitioner under the Value Added Tax Act, 2005? Held that - Having already noticed that the alternative remedy provided in the statute is not unduly onerous and that neither the assessing officer lacked jurisdiction in passing the impugned assessment orders nor these orders have been passed in breach of principles of natural justice, we find no justification in invoking high prerogative jurisdiction under article 226 bypassing the statutory remedy of appeal and revision. Unable to accept the submission of the counsel for the petitioner that since error of law has been committed by the assessing officer in holding that the soaps sold by the petitioner are registered under the Trade Marks Act, the orders of assessment are rendered without jurisdiction. As to whether the view of the assessing officer is right or wrong has to be examined and considered by the statutory appellate authority or the revisional authority, as the case may be. Even if we assume that a wrong view has been taken by the assessing officer, that does not render the order without jurisdiction. Unless a case falls under the exceptions highlighted by the Supreme Court in the case of A.V. Venkateswaran 1961 (4) TMI 83 - SUPREME COURT OF INDIA which the present case does not, we are afraid there may not be any justification in bypassing alternative remedy provided in statute. In this view of the matter, the decision relied upon by the counsel for petitioner in the case of Mafatlal Industries Ltd. 1996 (12) TMI 50 - SUPREME COURT OF INDIA has no application to the present fact-situation. We refrain from making any observation about the correctness of the view taken by the assessing officer in the matter and the dismissal of these writ petitions by us must not be taken as an expression of opinion by us on the merits of the assessment orders as in our view, the correctness of the orders has to be examined and considered in the statutory remedy provided under the Act, 2005. W.P. dismissed.

Issues Involved:
1. Availability and adequacy of statutory remedy under the Value Added Tax Act, 2005.
2. Requirement of pre-deposit for maintaining an appeal.
3. Jurisdiction of the assessing officer.
4. Violation of principles of natural justice.
5. Applicability of alternative remedy doctrine in writ petitions under Article 226.

Detailed Analysis:

1. Availability and Adequacy of Statutory Remedy:
The court examined whether the statutory remedy against the impugned assessment orders was available under the Value Added Tax Act, 2005. The Act provides a comprehensive mechanism for appeals, revisions, and reviews, making it a self-contained code. The petitioner argued that the appeal process was onerous due to the requirement to deposit 25% of the assessed tax liability. However, the court held that the statutory remedy is adequate and efficient, as detailed in Chapter XII of the Act, which provides for appeals to the Deputy Commissioner, Joint Commissioner, and the Tribunal, and further appeal to the High Court on substantial questions of law.

2. Requirement of Pre-deposit for Maintaining an Appeal:
The petitioner contended that the requirement to deposit 25% of the assessed tax liability or the full amount of admitted tax, whichever is higher, rendered the appeal process onerous. The court disagreed, stating that the pre-deposit requirement does not make the remedy unduly onerous, especially considering the large scale of the petitioner's business. The court referenced the Supreme Court's decision in Thansingh Nathmal v. Superintendent of Taxes, which held that such pre-deposit requirements do not invalidate the statutory remedy.

3. Jurisdiction of the Assessing Officer:
The petitioner argued that the assessing officer committed an error of law by taxing the petitioner's hand-made soap at 12.5% despite it not being registered under any trade mark. The court found that the assessing officer had the jurisdiction to pass the assessment orders and that the petitioner's contention about the error of law should be addressed through the statutory appellate process. The court cited the Supreme Court's decision in A.V. Venkateswaran, which stated that errors of law do not render an order without jurisdiction.

4. Violation of Principles of Natural Justice:
The court examined whether the impugned orders were passed in violation of principles of natural justice. It found no evidence or allegation that the orders were issued without giving the petitioner an opportunity to be heard. Therefore, the court concluded that there was no violation of natural justice principles, referencing the Supreme Court's position that such violations could justify bypassing statutory remedies.

5. Applicability of Alternative Remedy Doctrine in Writ Petitions under Article 226:
The court reiterated the principle that the existence of an alternative remedy does not bar the jurisdiction of the High Court under Article 226 but is a factor in exercising discretion. The court cited the Supreme Court's decisions, including A.V. Venkateswaran and M.G. Abrol, emphasizing that writ petitions should not bypass statutory remedies unless there is a complete lack of jurisdiction or a violation of natural justice. The court found that neither condition applied in this case and thus dismissed the writ petitions, directing the petitioner to pursue the statutory remedies provided under the Act.

Conclusion:
The court dismissed the writ petitions in limine, reinforcing the adequacy of the statutory remedies under the Value Added Tax Act, 2005, and emphasizing the need to follow the prescribed appellate process. The decision underscores the principle that statutory remedies should not be bypassed unless exceptional circumstances exist, such as a lack of jurisdiction or a violation of natural justice.

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