2011 (8) TMI 1020 - HC - VAT and Sales Tax

Whether the impugned order is illegal and without jurisdiction as the 1957 Act does not permit the respondent to revise his own order on the self-same material? Held that - The contention of the respondent that the impugned order is appealable and therefore the writ petition is not maintainable as the extraordinary jurisdiction of this court under article 226 of the Constitution cannot be invoked to short-circuit or circumvent the statutory appellate remedies, cannot be countenanced for the reasons more than one that the impugned order is illegal, arbitrary, without jurisdiction and even barred by limitation as indicated hereinabove. For the foregoing reasons, the other contentions of the petitioner-company as well as the respondent need not be gone into. Consequently, the impugned order dated July 24, 2008 is liable to be set aside, which we accordingly do so. Appeal allowed.

Summary

Issues Involved:
1. Legality and Jurisdiction of the Revised Assessment Order.
2. Service of Show-Cause Notice and Revised Assessment Order.
3. Limitation Period for Passing the Revised Assessment Order.
4. Alternative Remedy and Maintainability of the Writ Petition.

Detailed Analysis:

1. Legality and Jurisdiction of the Revised Assessment Order:
The petitioner, M/s. Pratibha Constructions Engineers and Contractors (India) Private Limited, challenged the revised assessment order dated July 24, 2008, passed by the Commercial Tax Officer, on the grounds that it was illegal, arbitrary, without jurisdiction, and barred by time. The petitioner argued that the Andhra Pradesh General Sales Tax Act, 1957, does not permit the respondent to revise his own order on the same material. The court noted that the initial assessment order dated February 20, 2006, merged into the appellate order dated July 17, 2006, and any subsequent revision should be based on new material, which was not the case here. The respondent's reliance on the audit party's objections did not constitute fresh material. The court cited the judgment in Girdharlal and Company v. State of Andhra Pradesh [1995] 97 STC 442 (AP), emphasizing that the reopening of assessment must be based on new material outside the existing record.

2. Service of Show-Cause Notice and Revised Assessment Order:
The petitioner contended that the show-cause notice dated July 15, 2008, was not served as per the prescribed procedure under Rule 58 of the Andhra Pradesh General Sales Tax Rules. The respondent claimed that the notice was served by affixture as the petitioner had closed its business without intimation. However, the court found this claim dubious, noting the inconsistency in the timeline, as the notice was allegedly sent by ordinary post more than a year after the date of the notice. The court emphasized proper service procedures and cited the judgment in Kanaka Durga Wines, Gunur v. Commissioner of Commercial Taxes, Hyderabad [2001] 33 APSTJ 89, which mandates strict adherence to service procedures to ensure compliance with natural justice principles.

3. Limitation Period for Passing the Revised Assessment Order:
The court addressed the issue of limitation, noting that the original assessment order for 2002-03 was passed on February 20, 2006, and served on March 20, 2006. The revised assessment order dated July 24, 2008, was served on December 27, 2010, beyond the four-year limitation period prescribed for reassessment. The court found no plausible explanation for this delay and cited the Supreme Court judgment in State of Andhra Pradesh v. M. Ramakishtaiah and Co. [1994] 93 STC 406 (SC), which held that unexplained delays in serving orders beyond the limitation period render them invalid.

4. Alternative Remedy and Maintainability of the Writ Petition:
The respondent argued that the petitioner had an alternative remedy of appeal under the Andhra Pradesh Value Added Tax Act, 2005, and should not have approached the court directly. However, the court held that the writ petition was maintainable as the impugned order was illegal, arbitrary, without jurisdiction, and barred by limitation. The court emphasized that extraordinary jurisdiction under Article 226 of the Constitution is justified in cases where statutory remedies are inadequate or ineffective.

Conclusion:
The court concluded that the revised assessment order dated July 24, 2008, was illegal, arbitrary, without jurisdiction, and barred by limitation. Consequently, the writ petition was allowed, and the impugned order was set aside. The parties were directed to bear their own costs.