2009 (2) TMI 776 - HC - VAT and Sales Tax

Whether the sale was actually in the course of import or export or otherwise? Held that - Examination of a question of this nature and to opine as to whether it is right or wrong calls for examination of further facts. It is not desirable for this court to venture into and examine all such questions in writ jurisdiction though ultimately the matter may involve a definite question of law and may be the assessee could succeed, but it is not necessary for this court to express any opinion on this question at this stage particularly in writ jurisdiction. It is for this reason not inclined to interfere in a writ petition. It is not necessary for this court to express any opinion on the merits of the matter, but reserving liberty to the petitioner to avail of the statutory remedy of appeal, this writ petition is dismissed. It is open to the petitioner to urge all grounds including the questions of law which is sought to be urged before this court even before the appellate authority and invite a suitable answer on all such questions.

Summary

Issues:
Assessment of sales tax liability under the Karnataka Sales Tax Act, 1957; Entitlement for exemption under section 5(2) of the Central Sales Tax Act, 1956; Legality of assessment order; Jurisdiction of the assessing authority; Efficacy of statutory appeal; Writ jurisdiction under articles 226 and 227 of the Constitution of India.

Analysis:
The judgment pertains to a writ petition filed by an assessee challenging the assessment order of sales tax liability under the Karnataka Sales Tax Act. The petitioner contended that the entire turnover should be exempted under section 5(2) of the Central Sales Tax Act as sales in the course of import/export. Despite having a statutory remedy of appeal, the petitioner approached the court, arguing that the appeal was not an efficacious remedy due to a pure question of law involved. The petitioner sought various reliefs, including a declaration of sales as exempt from tax and quashing of the assessment order. The assessing authority had rejected the petitioner's claim, leading to the dispute.

The petitioner's counsel argued that the matter was a pure question of law regarding liability under the sales tax laws. It was contended that the petitioner should not be compelled to pursue the statutory appeal and that the court could address the issue in the writ jurisdiction. The counsel cited several judgments supporting the proposition that the court could examine such matters in writ jurisdiction, even in the absence of disputed facts. The counsel highlighted that the lack of response from the respondents and the appellate authority's dependence on the state government made the statutory remedy ineffective.

The assessing authority's order indicated a dispute over whether the sales were in the course of import/export. The authority concluded that the goods were not sold in the course of movement as the petitioner had taken delivery from customs and sold them at the airport shops. The court, however, declined to delve into factual questions in the writ jurisdiction, emphasizing the importance of the appellate authority examining all aspects of the matter before making a determination. The court cited a Supreme Court case to support the view that intervening in revenue matters through writs when statutory remedies were available could lead to complications.

Ultimately, the court dismissed the writ petition, reserving the petitioner's right to pursue all grounds, including questions of law, before the appellate authority. The court emphasized that the appellate authority was better placed to assess the correctness of the assessment order, as it required a detailed examination of facts. The judgment underscored the importance of allowing the statutory appeal process to address the issues raised by the petitioner.