2011 (12) TMI 478 - HC - VAT and Sales Tax

Stock transfers - whether be treated as inter-State sales - refund of sales tax - Held that - Writ petitions are thoroughly misconceived and blatant attempt to invite the jurisdiction of this Court, it lacks both in terms of territorial jurisdiction as well as presidential allocation of work. No worthwhile explanation was forthcoming in not availing the Appellate remedy even before the Tribunal. Even in two cases, the appeals have been withdrawn from the Tribunal without therebeing any justification. Having availed such a remedy before the Tribunal, the reasons for coming to this Court is also not satisfactorily explained. Hence, all the writ petitions stand dismissed with a cost of ₹ 50,000/(Rupees Fifty Thousand Only) payable to the Commercial Tax Department.

Issues Involved:
1. Challenge to orders passed under the Central Sales Tax Act, 1956.
2. Jurisdiction of the Madurai Bench of the Madras High Court.
3. Forum shopping and bypassing statutory appellate remedies.
4. Misrepresentation and fraud in claiming stock transfers as inter-State sales.

Detailed Analysis:

1. Challenge to Orders Passed Under the Central Sales Tax Act, 1956:
The petitioner, M/s. G.K. Steel & Allied Industries Pvt., Ltd., filed eight writ petitions challenging various orders passed by the Commercial Tax Officers in Coimbatore and Kozhikode under the Central Sales Tax Act, 1956, and the Kerala General Sales Tax Act. The petitions sought to treat stock transfers as inter-State sales and requested refunds of sales tax.

2. Jurisdiction of the Madurai Bench of the Madras High Court:
The court noted that the writ petitions were filed before the Madurai Bench, which was inaugurated on July 24, 2004. The petitioner attempted to file cases that were not maintainable before this court, seeking to resurrect old claims. The court emphasized that the Madurai Bench lacked jurisdiction over matters where the cause of action arose exclusively in Kerala. The petitioner failed to provide a valid explanation for choosing the Madurai Bench, despite having remedies available in Coimbatore.

3. Forum Shopping and Bypassing Statutory Appellate Remedies:
The petitioner had previously filed appeals before the Appellate Assistant Commissioner, Coimbatore, and the Tamil Nadu Sales Tax Appellate Tribunal, Additional Bench, Coimbatore. However, the petitioner withdrew these appeals and moved the Madurai Bench without justification. The court highlighted that the petitioner indulged in forum shopping, attempting to bypass the statutory appellate remedies provided by the judicial authority. The court referred to the judgment in Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement, emphasizing that writ jurisdiction should not be entertained when a statutory forum is available for redressal of grievances.

4. Misrepresentation and Fraud in Claiming Stock Transfers as Inter-State Sales:
The Commercial Tax Officer, P.N. Palayam Circle, Coimbatore, filed a counter affidavit stating that the appellate Assistant Commissioner found the transactions to be sales to dealers in Kerala, not stock transfers. The court found that the petitioner misrepresented the transactions as branch transfers, whereas they were actually first sales in Kerala, assessable to tax. The court cited the Supreme Court's judgment in Ashok Leyland Ltd. Vs. Union of India, noting that the petitioner engaged in misrepresentation, fraud, and collusion.

Conclusion:
The court dismissed the writ petitions, finding them to be misconceived and an attempt to invite the jurisdiction of the Madurai Bench without valid grounds. The court imposed a cost of Rs. 50,000 on the petitioner, payable to the Commercial Tax Department, for the blatant attempt to bypass statutory remedies and engage in forum shopping. Consequently, the connected miscellaneous petition was also dismissed.

← Previous Next →