2013 (6) TMI 110 - HC - VAT and Sales Tax

Tax on Steel Tubes and Pipes @ 4% under UP Act, 2008 - notification dated 29.9.2008 omitting Entry 94 meaning thereby the petitioner has to pay tax @ 12.5% - Thereafter another notification dated 15.9.2008 the Entry 94 was reinserted - Grievance of the petitioner that from 29.9.2008 to 15.1.2009, the goods is being treated as unclassified and 12.5% tax is being levied on it - Held that - It is now well recognized principle as laid down in Whirlpool Corporation Versus Registrar of Trade Marks, Mumbai & Ors. 1998 (10) TMI 510 - SUPREME COURT that 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. Ordinarily, relief under Article 226/227 of the Constitution of India, is not available, if an efficacious alternative remedy is available to an aggrieved person. As petitioner does not dispute that there is an efficacious statutory alternative remedy by approaching the Commissioner under Section 59 of the Act, but since vires of the notification has been challenged and as such, alternative remedy is not a bar, to which respondents submits that the Appellate Authority, while exercising the appellate jurisdiction, can also look into the legality of the notification and has every power to annul it, if the same is in breach of law. He further added that the Appellate Authority performs judicial functions independently and as such, submissions so advanced by petitioner cannot be accepted. In decided in United Bank of India v. Satyawati Tondon and others 2010 (7) TMI 829 - SUPREME COURT and Kanaiyalal Lalchand Sachdev and others v. State of Maharashtra and others 2011 (2) TMI 1277 - SUPREME COURT OF INDIA that the High Court should not interfere under Articles 226/227 of the Constitution of India, if an efficacious alternative remedy is available to any aggrieved person. Thus the petitioner has been able to make out any exception to circumvent the alternative remedy, which is efficacious and speedy. Therefore writ petition is dismissed on the ground of alternative remedy.

Summary

Issues:
1. Challenge to notification omitting entry in Schedule II of UP VAT Act, 2008
2. Imposition of 12.5% tax on steel tubes and pipes
3. Quashing of orders passed under Section 59 of the Act
4. Availability of alternative remedy and jurisdiction of High Court

Analysis:

1. The petitioner, a company engaged in manufacturing steel tubes and pipes, challenged a notification omitting Entry 94 of Schedule II of UP VAT Act, 2008, leading to a tax increase from 4% to 12.5%. The petitioner sought a writ declaring the notification as ultra vires. The High Court noted the availability of an alternative remedy under Section 59 of the Act for such disputes. The petitioner argued that the vires of the notification were challenged, making the alternative remedy not a bar. However, the court emphasized that the Appellate Authority could address the legality of the notification, dismissing the petition on the ground of an alternative remedy.

2. The petitioner further contested the imposition of 12.5% tax on steel tubes and pipes for a specific period, seeking a writ to quash the rectification orders. The court considered the principle that where a statutory remedy exists, it should be availed, except in certain circumstances like violation of fundamental rights or lack of jurisdiction. Referring to precedents, the court held that an alternative remedy, in this case, approaching the Appellate Authority, was efficacious and speedy. Therefore, the court dismissed the petition based on the availability of the alternative remedy.

3. The petitioner also sought to quash orders passed under Section 59 of the Act related to another firm's case. The court observed that taxing statutes' assessment proceedings are independent, and relief regarding quashing orders of a third party could not be granted. The petitioner withdrew this relief during the proceedings, acknowledging the individual scrutiny required in tax assessments.

4. The judgment referenced legal precedents emphasizing that the High Court should not interfere if an efficacious alternative remedy is available to the aggrieved party. The court highlighted that the Appellate Authority had the jurisdiction to address challenges to notifications and annul them if found unlawful. Considering the principles laid down by the Supreme Court, the High Court dismissed the writ petition, emphasizing the importance of availing alternative remedies when available.