2009 (5) TMI 869 - HC - VAT and Sales Tax

Whether the higher authorities in the hierarchy of Sales Tax Department, Haryana in the garb of exercising power of granting sanction under rule 36 of the Haryana General Sales Tax Rules, 1975 to the refund orders passed by the assessing officer, could set aside such order of assessment? Held that - The arguments of the learned State counsel that the petitioner should first exhaust the remedy of appeal as per the provisions of section 39 has not impressed us because in cases where question of jurisdiction of concerned authority is involved, writ petitions under article 226 could be filed before the High Courts. It has been held that in order to avoid filing of alternative remedy of appeal a writ petitioner under article 226 is required to show that there was complete lack of jurisdiction on the part of the officer or authority to pass an order. Similar view has been expressed in another judgment of the Supreme Court rendered in the case of Surya Dev Rai v. Ram Chander Rai 2003 (8) TMI 527 - SUPREME COURT . Therefore, there is no blanket bar on the power of the High Court to entertain a petition in the face of an order which is totally without jurisdiction. Accordingly the objection raised by the learned State counsel is rejected. Petitions succeed

Issues Involved:

1. Authority of higher officials in the Sales Tax Department to set aside assessment orders under the guise of sanctioning refunds.
2. Applicability of Section 15A of the Haryana General Sales Tax Act, 1973.
3. Jurisdiction of the Deputy Excise and Taxation Commissioner (DETC) in altering refund decisions.
4. Exhaustion of alternative remedies before approaching the High Court.

Issue-Wise Detailed Analysis:

1. Authority of Higher Officials in the Sales Tax Department:

The primary issue was whether higher authorities in the Sales Tax Department, Haryana, could set aside assessment orders while exercising their power to grant sanction under Rule 36 of the Haryana General Sales Tax Rules, 1975. The court examined Rule 36 and Section 43 of the GST Act, concluding that these provisions do not empower higher authorities to alter or review assessment orders. The court emphasized, "There is nothing in rule 36 which may go beyond the power to accord approval to the amount of refund by the higher authorities in hierarchy that may suggest that such an authority is competent to exercise power by substituting its own opinion with that of the Assessing Authority."

2. Applicability of Section 15A of the Haryana General Sales Tax Act, 1973:

The DETC had rejected the refund on the grounds that Section 15A of the GST Act, which pertains to the refund of purchase tax, was not applicable to traders but only to manufacturers. The court found that the DETC's interpretation of Section 15A was incorrect and that the refund should not have been denied based on this provision. The court noted, "The DETC interpreted section 15A of the GST Act observing that it prohibits the refund of purchase tax paid on paddy which is further subject to the provisions contained in clause (iii) of sub-section (1) of section 15."

3. Jurisdiction of the DETC in Altering Refund Decisions:

The court held that the DETC did not have the jurisdiction to alter the quantum of refund determined by the Assessing Authority. The court stated, "Once the power of the assessing officer for determination of amount of refund is confined only to the area of examining the accounts or making such inquiry to determine whether the amount of refund has been correctly worked out, the power of the higher sanctioning authorities in the hierarchy of administration would not extend to review the order of assessment, examine the same on merit and set it aside."

4. Exhaustion of Alternative Remedies:

The respondents argued that the petitioners should have exhausted alternative remedies of appeal and revision before approaching the High Court. However, the court rejected this argument, stating that in cases where the question of jurisdiction is involved, a writ petition under Article 226 of the Constitution is maintainable. The court cited precedents, including Isha Beevi v. Tax Recovery Officer and Surya Dev Rai v. Ram Chander Rai, to support its position. The court concluded, "There is no blanket bar on the power of the High Court to entertain a petition in the face of an order which is totally without jurisdiction."

Conclusion:

The court set aside the orders passed by the DETC, holding that the DETC had overstepped its jurisdiction by altering the assessment orders under the guise of sanctioning refunds. The court emphasized the distinct roles of assessment and refund determination, underscoring that the latter should not interfere with the former unless altered through proper appellate or revisional channels. The petitions succeeded, and the impugned orders were set aside.

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