2011 (11) TMI 599 - HC - VAT and Sales Tax

Summary

Issues:
1. Exemption certificate under Rajasthan Value Added Tax Act, 2003.
2. Assessment order for works contract of gauge conversion of railway tracks.
3. Breach of principles of natural justice in granting adjournment.
4. Interpretation of exemption fees under notification dated August 11, 2006.
5. Maintainability of writ petition without seeking resolution from High Powered Committee of Disputes.
6. Availability of alternative remedy under the Rajasthan Value Added Tax Act, 2003.

Analysis:
The petitioner, a Government of India undertaking, filed a writ petition against an assessment order by the Commercial Taxes Officer for a works contract of gauge conversion of railway tracks. The petitioner sought exemption under a notification by paying a fixed exemption fee. Initially granted at 1.50%, the assessing authority later demanded 3% exemption fee, leading to a dispute. The petitioner alleged breach of natural justice due to refusal of adjournment on the advocate's unavailability for a family event. The petitioner argued that railway track laying is akin to road construction, justifying the 1.50% fee paid. The respondent contended that the petition lacked merit and an alternative remedy was available. The court expressed concern over the direct legal confrontation between a Government undertaking and the State Government without seeking resolution through a High Powered Committee of Disputes. The court dismissed the petition, emphasizing the availability of statutory remedies for tax disputes and the need for legal debates in appropriate forums rather than in extraordinary writ jurisdiction. The court highlighted the importance of exhausting regular remedies before approaching the court directly, emphasizing the complexity of legal and factual issues involved in tax disputes.

The court found no breach of natural justice and emphasized the need for utilizing statutory appeal mechanisms for tax disputes. The court criticized the petitioner for bypassing the High Powered Committee of Disputes and seeking direct legal redress. The court underscored the importance of legal debates and evidence presentation in tax matters, which are better suited for assessment, appellate, and revisional forums. The court dismissed the writ petition, citing the availability of alternative remedies and the unsuitability of addressing complex legal issues in the extraordinary jurisdiction of the court under Article 226 of the Constitution of India. The court highlighted the need for adherence to established legal procedures and the avoidance of burdening the court with tax disputes that can be resolved through statutory avenues.