2011 (3) TMI 1520 - HC - VAT and Sales Tax

Legality of the assessment orders passed by the assessing authority under the provisions of the Karnataka Value Added Tax Act, 2003 determining the tax liability of the assessee for the periods from April 2005 to March 2007 and from April 2007 to March 2010 (annexures L and L1 to the writ petitions) in sum of ₹ 94,95,880 and mulcting penalty of ₹ 10,23,777 QUESTIONED Held that - It is not the function of this court to look into such facts for the purpose of granting relief in writ jurisdiction and to waste the precious judicial time required to be apportioned amongst all litigants, particularly when large number of litigants are waiting in the queue before this court and there is large pendency and even when adequate statutory remedies are provided. The second ground of no opportunity is only a ruse as the petitioner had ample opportunity and if the petitioner either deliberately or for whatever reason did not choose to place its books of accounts and other record and cannot be laid at the doorstep of the respondent-authority even assuming petitioner wants to place further material, it can always be attempted in the appeal and not before this court in a petition under article 227 of the Constitution of India. The third contention that the assessing officer is biased is again an idle contention as in tax matters it is only assessing authorities who pass the orders and just because the assessing officer also had caused investigation cannot of any consequence as the principle of bias is not attracted in that sense in respect of the assessing officer who are all inevitably employees of the Revenue Department. Appeal dismissed.

Summary

Issues:
Challenging legality of assessment orders under Karnataka Value Added Tax Act, 2003 for tax liability determination and penalty imposition, bypassing statutory appeal remedy, lack of opportunity to present records, bias allegation against assessing officer.

Analysis:
The judgment pertains to writ petitions filed by a company questioning the assessment orders passed under the Karnataka Value Added Tax Act, 2003. The company contested the tax liability determination and penalty imposition for specific periods, seeking relief through the High Court. The company chose to bypass the statutory appeal remedy available under section 62 of the Act. The issues raised included the assessing authority's failure to consider assessment periods that should not have been reopened, exceeding the five-year period for raising demands, and lack of opportunity to present voluminous records before the authority.

The company's counsel argued that despite being aware of the statutory remedy, approaching the High Court was necessary due to various justifiable reasons. It was contended that the assessing officer did not provide adequate opportunity to submit relevant books of accounts and records, which were voluminous, thereby justifying interference in writ jurisdiction. Additionally, the company raised concerns about bias, as the assessing officer had conducted a prior search investigation at the company's premises, leading to apprehensions of unfair treatment.

The judgment emphasized the availability of appellate remedies in taxation legislations for aggrieved parties to challenge legal and factual aspects of assessments. The court highlighted that extraordinary jurisdiction under Article 227 of the Constitution of India should not be invoked solely based on the size of the demand or the entity involved. The judgment underscored that grounds such as limitation issues and lack of opportunity should be raised before the appropriate authority and not in writ jurisdiction.

Regarding the allegation of bias against the assessing officer, the court dismissed it, stating that bias is not automatically implied in tax matters due to the nature of assessing authorities being employees of the Revenue Department. The court concluded by dismissing the writ petitions and advising the company to pursue statutory remedies as per the law. The judgment emphasized the importance of utilizing available appellate mechanisms and discouraged the misuse of extraordinary jurisdiction for matters that can be addressed through proper channels.