2012 (3) TMI 410 - HC - VAT and Sales Tax

Maintainability of petition - Alternative remedy - Held that - It is trite that the doctrine of alternative remedy is not a foreclosure of the jurisdiction of this court under Article 226 of the Constitution of India, and is only a self imposed limitation. Parameters for invoking self imposed limitation have been well enunciated by the courts. Thus, the doctrine of alternative remedy does not obstruct this court from doing substantial justice in the facts of given case - alternative remedy as may be available to the petitioner should not obstruct adjudication of writ petition - Petition disposed off.

Summary

Issues:
1. Interpretation of Rule 77 of the Rajasthan Value Added Tax Rules, 2006 regarding the mode of furnishing security.
2. Validity of the order directing the petitioner to furnish a bank guarantee instead of a bond in Form VAT-64.
3. Consideration of alternative remedy and jurisdiction under Article 226 of the Constitution of India.

Analysis:

1. The primary issue in this case revolves around the interpretation of Rule 77 of the Rajasthan Value Added Tax Rules, 2006 (2006 Rules) concerning the manner in which security is to be furnished. Rule 77 specifies various methods for furnishing security, including cash, savings certificates, bank guarantee, or executing a bond in Form VAT-64 with two acceptable sureties. The Deputy Commissioner (Appeals) initially directed the petitioner to furnish a bond in Form VAT-64 for a specific amount. However, the Tax Board later ordered the petitioner to provide a bank guarantee for a different amount, thereby deviating from the statutory provision without justification, rendering the order arbitrary and legally flawed.

2. Another critical aspect of the judgment pertains to the validity of the order mandating the petitioner to furnish a bank guarantee instead of a bond in Form VAT-64. The court found that the Tax Board's decision to require a bank guarantee for a portion of the outstanding amount, while allowing a bond for the rest, lacked proper reasoning and failed to apply the statutory provisions correctly. Consequently, the order dated 25-1-2012, which imposed the bank guarantee condition, was deemed arbitrary due to the non-application of mind by the Tax Board.

3. The judgment also delves into the consideration of alternative remedies and the court's jurisdiction under Article 226 of the Constitution of India. Despite the respondent's argument that the petitioner should have pursued a revision petition instead of a writ petition, the court clarified that the doctrine of alternative remedy does not preclude the court from providing substantial justice. The court emphasized that the availability of an alternative remedy should not hinder the adjudication of a writ petition, especially when seeking expeditious resolution of the pending appeal against the assessment order dated 19-9-2011.

In conclusion, the court directed the appeal pending before the Dy. Commissioner (Appeals) to be resolved promptly, maintained the attachment of the petitioner's bank accounts, and instructed the petitioner to furnish security in compliance with Rule 77 of the VAT Rules 2006. The judgment highlighted the importance of adhering to statutory provisions, ensuring proper application of law, and balancing the pursuit of justice with procedural requirements.