2009 (2) TMI 763 - HC - VAT and Sales Tax

Whether any case is made out for quashment of impugned assessment orders (annexure P6) in writ jurisdiction under article 226/227 of the Constitution of India? Held that - The assessing officer has discussed and taken into considerations account books, entries, invoices, reports, affidavits and several other material while making additions. A finding of addition is, thus, based on this exercise and hence, it cannot be either upheld or reversed by High Court in its limited writ jurisdiction. If we do it then it would amount to overstepping of our writ jurisdiction. We, thus, while declining to entertain the writ, grant liberty to the petitioner to file regular appeal before the appellate authority prescribed under the VAT Act. In case if any such appeal is filed by the petitioner as per the provisions applicable to appeals within 30 days from the date of this order then the appellate authority would decide the appeal on merits within a period of one year as an outer-limit strictly in accordance with law.

Summary

Issues:
Challenge to assessment order under M.P. VAT Act, 2002 and M.P. Entry Tax Act, 1976 in writ jurisdiction under article 226/227 of the Constitution of India.

Analysis:
The petitioner, an assessee/debtor, filed a writ challenging the assessment order passed by the Assistant Commissioner of Commercial Tax. The petitioner contended that the assessment was arbitrary, capricious, and based on ex parte reports not admissible as evidence. The counsel emphasized that the findings were against the entries in the petitioner's regular books of account. The court considered the voluminous evidence submitted by the petitioner but decided not to entertain the writ on merits. Instead, the petitioner was granted liberty to file an appeal before the appellate authority against the assessment order.

The court highlighted that a writ court cannot function as an appellate authority to review factual and legal issues of an assessment order. The appellate authority is better suited to examine facts, evidence, and additions made by the assessing officer. The statutory remedies, including appeals and revisions, need to be exhausted before approaching the court through a writ under article 227 of the Constitution of India.

The judgment emphasized that a writ court's role is limited to jurisdictional legal issues affecting the case's merits and cannot interfere with factual findings made by the assessing officer or appellate authority. Only in cases of extreme perversity affecting the order's basis can a writ court intervene. The court refrained from delving into the factual matrix of the assessment order, which was extensive, and declined to entertain the petitioner's submissions challenging specific findings.

Ultimately, the court dismissed the petition, granting the petitioner the liberty to file a regular appeal within 30 days before the appellate authority specified under the VAT Act. The appellate authority was directed to decide on the appeal within one year, strictly following the law. The petitioner could seek interim orders pending the appeal as per legal provisions.

In conclusion, the petition was dismissed, and the petitioner was directed to follow the statutory appeal process, emphasizing the importance of exhausting statutory remedies before seeking relief through a writ petition.