2015 (6) TMI 1155 - HC - VAT and Sales Tax

Maintainability of petition - alternative remedy - rate of VAT - H.P. VAT Act 2005 - sale of cellphone chargers and other accessories - Held that - It is not in dispute that respondents No. 3 and 4 are authorities constituted under the H.P. VAT Act, 2005, and therefore, even if it is assumed that there is an illegal or irregular exercise of jurisdiction the same would not result in the order being without jurisdiction. Even if there has been some defect in the procedure followed during the hearing of the case, it does not follow that the authority has acted without jurisdiction. It may make the order irregular or defective, but the order cannot be a nullity so long as it has been passed by an authority which was competent to pass the order. There is basic difference between want of jurisdiction and an illegal or irregular exercise of jurisdiction and if there is noncompliance of rules of procedure, the same cannot be a ground for granting one of the writs prayed for. In either case, the defect, if any, can according to the procedure established by law be corrected only by a court of appeal or revision. The writ petitioner has not only an alternative and efficacious, rather a proper remedy under the provisions of H.P. VAT Act, 2005 and therefore, the present petition is not maintainable. Petition dismissed being not maintainable.

Issues Involved:
1. Maintainability of the writ petition.
2. Jurisdiction and procedural compliance of the notice issued under the H.P. VAT Act, 2005.
3. Applicability of the Supreme Court judgment in Nokia's case to past assessments.
4. Availability and adequacy of alternative remedies under the H.P. VAT Act, 2005.

Detailed Analysis:

1. Maintainability of the Writ Petition:
The petitioner contended that despite the availability of an alternative remedy under the H.P. VAT Act, 2005, the writ petition should be entertained under Articles 226 and 227 of the Constitution of India. The petitioner cited the rule of exclusion of writ jurisdiction due to the availability of an alternative remedy as a rule of discretion, not compulsion. The court, however, emphasized the principle that when an effective alternative remedy is available, a writ petition should not be entertained. The court referred to multiple precedents, including the Supreme Court's decisions in Union of India vs. Guwahati Carbon Limited and Commissioner of Income Tax vs. Chhabil Dass Agarwal, which reinforce the necessity of exhausting statutory remedies before invoking writ jurisdiction.

2. Jurisdiction and Procedural Compliance:
The petitioner argued that the impugned notice dated 22.12.2014 proposing to levy penalty was issued without jurisdiction, as no prior notice for assessing tax at a higher rate was given. The court held that the authorities constituted under the H.P. VAT Act, 2005, even if assumed to have exercised jurisdiction illegally or irregularly, did not act without jurisdiction. The court differentiated between a lack of jurisdiction and an irregular exercise of jurisdiction, emphasizing that procedural defects do not render an order a nullity if passed by a competent authority.

3. Applicability of the Supreme Court Judgment in Nokia's Case:
The petitioner contended that the subsequent judgment in Nokia's case could not be used to alter past assessments. The court clarified that judicial decisions act retrospectively unless explicitly stated otherwise. It cited Sarwan Kumar vs. Madan Lal Aggarwal and Assistant Commissioner, Income Tax, Rajkot vs. Saurashtra Kutch Stock Exchange Limited, asserting that the law declared by the courts is deemed to be the law as it stood from the beginning.

4. Availability and Adequacy of Alternative Remedies:
The court reiterated that the H.P. VAT Act, 2005 provides a complete mechanism for redressal of grievances, including appeals and revisions. It cited the judgment in M/s Indian Technomac Company Ltd. vs. State of H.P., which was upheld by the Supreme Court, emphasizing that the existence of an alternative remedy bars the maintainability of a writ petition. The court noted that the petitioner's attempt to bypass the statutory appeal process, which requires the deposit of tax liability, interest, and penalty, was not permissible.

Conclusion:
The court dismissed the writ petition in limine, holding that the petitioner has an adequate and efficacious alternative remedy under the H.P. VAT Act, 2005. The observations made in the judgment were clarified to not prejudice the petitioner's right to file an appeal, and the period spent in prosecuting the writ petition would be excluded while computing the period of limitation for such an appeal.

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