2013 (6) TMI 295 - HC - VAT and Sales Tax

Levy of higher rate of VAT - declared goods - violation of Section 8(2) of CST Act - industrial valves - non-ferrous metals and alloys - for the turnover not covered by Form C , revenue levied tax at 12.5% on the ground that the petitioner-dealer itself reported and paid tax @ 12.5%. - held that - In the present case, the petitioner has not availed of the statutory remedy of appeal against the impugned order. The grievance of the petitioner in respect of levying higher rate of tax at 12.5% instead of 4%, is a matter which has to be adjudicated before the appellate authority. The approach of the petitioner in rushing to this Court by filing this Writ Petition, challenging the order of the original authority, without even availing of the statutory remedy of appeal before the appellate authority, cannot be sustained. - matter to be placed before the appellant authority - writ petition dismissed.

Summary

Issues:
Challenge to assessment order under CST Act and TNVAT Act, violation of principles of natural justice, jurisdictional validity of the order.

Analysis:
The petitioner challenged the assessment order passed by the second respondent under Assessment No.CST.32201/2010-11, dated 5.3.2013, seeking to quash it as being without jurisdiction. The petitioner argued that the order was contrary to Section 8(2) of the Central Sales Tax Act, Entries 67-A and 89 of Part-B of the First Schedule, and Section 48-A of the Tamil Nadu Value Added Tax Act, and violated principles of natural justice, rendering it invalid and illegal.

The petitioner, a registered dealer in non-ferrous metals and alloys, industrial valves, etc., contended that the tax levied at 12.5% instead of 4% on the turnover not covered by 'C' Form Declarations was against the provisions of the CST and TNVAT Acts. The second respondent had not issued a show cause notice before proposing the higher tax rate, leading the petitioner to challenge the assessment order as being without jurisdiction and contrary to the relevant legal provisions.

The court emphasized the principle that when an effective alternative statutory remedy of appeal exists against an order, it should be availed of before seeking Writ jurisdiction. The petitioner had not utilized the statutory remedy of appeal against the impugned order, which related to the dispute over the tax rate applied. The court directed the petitioner to file an appeal before the appellate authority within two weeks, allowing them to raise all grounds mentioned in the Writ Petition. The appellate authority was instructed to consider the appeal, provide a hearing, and dispose of it within four weeks from the filing date.

In conclusion, the court disposed of the Writ Petition, emphasizing the importance of exhausting statutory remedies before seeking Writ relief. The petitioner was directed to file an appeal within two weeks, and the appellate authority was tasked with considering the appeal and issuing appropriate orders within four weeks from the filing date.