2012 (10) TMI 978 - HC - VAT and Sales Tax

Rejection of application of rectification of mistake under Rule 50 of the Andhra Pradesh General Sales Tax Act, 1957 Whether there was any clerical or arithmetical mistake apparent from the record and whether the issue which has not been specifically raised in the assessment proceedings, the court under article 226 of the Constitution of India can go into the same by appreciating evidence and it can decide it or not - Held that - The petitioner had filed returns before the AOs for the relevant AYs without indicating which portion of its turnover for a particular AY is attributable to the items supplied free of cost by the South Central Railway - issues of fact are ordinarily not adjudicated in writ proceedings and have to be agitated before the statutory authorities the same has been decided in Titaghur Paper Mills Co. Ltd. v. State of Orissa 1983 (4) TMI 49 - SUPREME Court wherein it has been held that under the scheme of the Act, there is a hierarchy of authorities before which the petitioners can get adequate redress against the wrongful acts complained of - The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under article 226 of the Constitution - where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of thus, no relief of refund can be granted to the petitioner even if it did make the payment of tax to the Sales Tax Department under a mistake of law and even if it could bypass the statutory remedy as it has approached the court with laches Decided against petitioner.

Summary

Issues Involved:
1. Legality of the collection of sales tax on items supplied free of cost.
2. Entitlement to refund of sales tax paid under a mistaken impression.
3. Applicability of Rule 50 of the Andhra Pradesh General Sales Tax Act, 1957.
4. Admissibility of writ petitions under Article 226 of the Constitution of India.
5. Limitation period for filing writ petitions for refund of tax paid under mistake of law.

Detailed Analysis:

1. Legality of the Collection of Sales Tax on Items Supplied Free of Cost:
The petitioner, a private limited company engaged in the manufacture and supply of prestress concrete sleepers to the Indian Railways, included the value of items supplied free of cost by the South Central Railway in its sale invoices and paid sales tax on them. The Commercial Tax Department later stated that these items were not exigible to sales tax. The petitioner contended that the sales tax collected on these items was illegal.

2. Entitlement to Refund of Sales Tax Paid Under a Mistaken Impression:
The petitioner sought a refund of the sales tax paid on the items supplied free of cost, arguing that the payment was made under a mistaken impression. The court noted that the petitioner had filed returns and paid tax voluntarily without objecting to the levy of tax on the items supplied free of cost. The court held that the petitioner allowed the assessment orders to become final and could not seek a refund through writ petitions.

3. Applicability of Rule 50 of the Andhra Pradesh General Sales Tax Act, 1957:
The petitioner filed applications under Rule 50 for rectification of the assessment orders, claiming a clerical or arithmetical mistake. The applications were rejected on the grounds that there was no apparent mistake and that the petitioner had voluntarily declared and paid the tax. The court upheld the rejection of the applications, stating that Rule 50 did not apply to the petitioner's case.

4. Admissibility of Writ Petitions Under Article 226 of the Constitution of India:
The court emphasized that issues of fact are ordinarily not adjudicated in writ proceedings and should be agitated before statutory authorities. The Supreme Court's decisions in Titaghur Paper Mills Co. Ltd. v. State of Orissa and State of Goa v. Leukoplast (India) Ltd. were cited, reinforcing that statutory remedies must be exhausted before invoking writ jurisdiction. The court held that the petitioner could not bypass the statutory remedy and seek relief through writ petitions.

5. Limitation Period for Filing Writ Petitions for Refund of Tax Paid Under Mistake of Law:
The court noted that the petitioner filed the writ petitions more than three years after the assessment orders, exceeding the period prescribed under the Limitation Act. The Supreme Court's decision in Tilokchand Motichand v. H.B. Munshi and the Andhra Pradesh High Court's decision in Challa Appa Rao & Co. v. Commercial Tax Officer were cited, establishing that writ petitions for refund should be filed within a reasonable time, typically three years. The court held that the petitioner approached the court with laches and was not entitled to any relief.

Conclusion:
The court dismissed the writ petitions, holding that the petitioner was not entitled to a refund of the sales tax paid under a mistaken impression. The court emphasized the necessity of exhausting statutory remedies and adhering to the limitation period for filing writ petitions. The decision in KVR Construction's case was distinguished as not applicable to the present case. The petitions were dismissed without costs.