2011 (8) TMI 1034 - HC - VAT and Sales Tax

Whether on facts, a case was one falling under section 3(3) of the Act, could be decided in appeal as it is not a jurisdictional point or the one barred under the Act - Held that - There is no violation of statute in imposing penalty or in the findings recorded, holding that provisions of section 3(3) of the Act do not apply to fabric. The remedy with the petitioner was to file a statutory appeal, which the petitioner deliberately failed to file, and chose to move an application, under section 16D, by-passing the ordinary statutory remedy, to avoid payment of 25 per cent of the tax imposed - The jurisdiction of the Special Committee under section 16D is a limited jurisdiction, to check patent illegality regarding bar under statute or violation of natural justice. The Special Committee is not a substitute of appellate authority to decide the order on merit. Once, by the provisions of the Act, a particular category is taken out of the purview of section 3(3) of the Act, then the question, as to whether the petitioner was entitled to a benefit of purchase, by issuing form XVII for use of consumable is a question of fact, to be decided and jurisdictional point, which could be looked into by the Special Committee under section 16D - The order passed by the Special Committee, therefore, is in consonance with the jurisdiction vested in it, under the statute, which does not call for any interference by this court, specially when there is no violation of principle of natural justice, as the petitioner was given full opportunity before passing the order of assessment - Decided against assessee.

Summary

Issues:
Challenge to order passed by Special Committee under section 16D of Tamil Nadu General Sales Tax Act, 1959.

Analysis:
The petitioner approached the court to challenge the order passed by the Special Committee under section 16D of the Act, upholding the Deputy Commercial Tax Officer's decision. The application filed by the petitioner admitted that the impugned order was appealable, but no appeal was filed to avoid paying 25% of tax. The Special Committee dismissed the application, stating that the points raised could not be considered under section 16D as there was no violation of statutory provision. The petitioner contended that the Special Committee misinterpreted section 3(3) of the Act regarding the taxable nature of "furnace oil" used for manufacturing. The petitioner also argued against the penalty imposed.

The court found no merit in the petitioner's contentions. It held that there was no violation of statute in imposing the penalty or in the findings that the provisions of section 3(3) did not apply to fabric. The court emphasized that the petitioner should have filed a statutory appeal instead of bypassing the ordinary remedy under section 16D to avoid tax payment. The jurisdiction of the Special Committee under section 16D is limited to checking patent illegality or violation of natural justice, not to act as an appellate authority.

The court highlighted that the legislature intended to give limited jurisdiction to the Special Committee to interfere only in cases of violation of natural justice or statutory provisions. The court stressed that the provision must be strictly construed to prevent assessees from bypassing the statutory remedy of filing an appeal. The court concluded that the Special Committee's order was in line with its jurisdiction under the statute and did not warrant interference, especially since there was no violation of natural justice during the assessment process.

In summary, the court dismissed the petition, stating that there was no merit in the challenge against the Special Committee's order. The connected miscellaneous petition was closed without any costs.