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2014 (4) TMI 692 - HC - VAT and Sales TaxEntertainment of writ petition Available Alternate remedy of an appeal u/s 62 Invocation of Extraordinary Jurisdiction of High Court Article 226 of Constitution of India - Held that - For the reason that petitioner has an alternate and efficacious remedy available under law, this Court is not inclined to entertain this writ petition Time and again Apex Court as well as this Court has held that when there is a remedy available under the Act, exercise of extraordinary jurisdiction would be limited - Relying upon Titaghur Paper Mills Co. Ltd., and another vs. State of Orissa and another 1983 (4) TMI 49 - SUPREME Court - The remedy available to petitioner to invoke extraordinary jurisdiction and to exercise the discretion by this Court would be in extraordinary circumstances Relying upon K.S. Rashid and Son vs. Income Tax Investigation Commission and others 1954 (1) TMI 1 - SUPREME Court - Remedy provided under Article 226 is a discretionary remedy and if this Court is satisfied that the aggrieved party can have an adequate and suitable relief elsewhere, it should refrain from exercising extraordinary jurisdiction - Relying upon Assistant Collector of Central Excise, Chandan Nagar, West Bengal vs. Dunlop India Ltd., and others 1984 (11) TMI 63 - SUPREME Court - Article 226 of the Constitution is not meant to short circuit or circumvent or statutory procedure. It is no doubt true that extraordinary power of this Court cannot be taken away and the exercise of jurisdiction under Article 226 is essentially discretionary, all though founded on legal injury, still it is open for this Court to refrain from exercising said jurisdiction, if it is shown that alternate remedy available to the party is not only efficacious, but also it is a statutory alternate remedy available under the Act - When the facts on hand are examined, it would clearly indicate that an order of assessment has been passed by Assessing Authority on 02.03.2014, Annexure - E. Said order is an appellable order under Section 62 - Assessee is at liberty to file an appeal before the Appellate Authority Petition is dismissed Decided against Assessee.
Issues Involved:
1. Validity of the notice issued under Section 52(1) of the KVAT Act. 2. Concealed turnover and its implications under Sections 52(1)(i) and 39(1) of the KVAT Act. 3. Availability and efficacy of alternate remedies under Section 62 of the KVAT Act. 4. Exercise of extraordinary jurisdiction under Article 226 of the Constitution. Detailed Analysis: 1. Validity of the Notice Issued Under Section 52(1) of the KVAT Act: The respondent authorities conducted an inspection on 24.09.2007 at the petitioner's business premises under Section 52(1) of the Karnataka Value Added Tax Act, 2003 (KVAT Act). During the inspection, the authorities found that the petitioner had not issued a tax invoice for a test purchase of fireworks amounting to Rs. 270/-. The petitioner admitted the offense and compounded it by paying under Section 76 of the KVAT Act. Additionally, nine loose slips indicating sales without tax invoices were found, revealing a suppressed turnover of Rs. 11,693/-, which was taxed at 12.5%. The petitioner also claimed input tax in VAT returns for September 2007 but failed to produce purchase bills. Consequently, proceedings were initiated, and notices were issued on 08.02.2013 and 28.01.2014 under Section 52(1) of the KVAT Act, calling the petitioner to produce books of accounts and other documents. The petitioner contended that the notice issued under Section 52(1) was invalid for assessment under Section 38(5) and that the concealed turnover determined under Section 52(1)(i) could not be used for proceedings under Section 39(1). 2. Concealed Turnover and Its Implications Under Sections 52(1)(i) and 39(1) of the KVAT Act: The petitioner argued that the concealed turnover ascertained under Section 52(1)(i) of the KVAT Act, which escaped self-assessment, could not be utilized for proceedings under Section 39(1). However, the assessing authority passed an order on 02.03.2014, affirming the proposition notice and concluding that the petitioner had not appeared or produced the books of accounts for audit. Based on available records, the authority raised a net tax demand of Rs. 25,141/-, issuing a notice of demand on the same date. The petitioner challenged this assessment order and demand notice, seeking their quashing or annulment. 3. Availability and Efficacy of Alternate Remedies Under Section 62 of the KVAT Act: The respondent's counsel argued that the petitioner had an alternate remedy of an appeal under Section 62 of the KVAT Act and that without exhausting this remedy, the petitioner had improperly invoked the extraordinary jurisdiction of the Court. The Court noted that the Hon'ble Apex Court and this Court have consistently held that when a statutory remedy is available, the exercise of extraordinary jurisdiction is limited. The Court referred to the case of Titaghur Paper Mills Co. Ltd. vs. State of Orissa, where it was held that an efficacious alternative remedy by way of an appeal should be utilized before approaching the High Court under Article 226. 4. Exercise of Extraordinary Jurisdiction Under Article 226 of the Constitution: The Court emphasized that the remedy under Article 226 of the Constitution is discretionary and should not be exercised if an adequate and suitable relief is available elsewhere. It cited various judgments, including K.S. Rashid and Son vs. Income Tax Investigation Commission and others, and Assistant Collector of Central Excise, Chandan Nagar, West Bengal vs. Dunlop India Ltd., and others, which reinforced that Article 226 should not be used to circumvent statutory procedures. The Court concluded that the petitioner had an adequate statutory remedy under Section 62 of the KVAT Act and should pursue it instead of invoking the extraordinary jurisdiction of the Court. Conclusion: The Court dismissed the writ petition with costs, emphasizing that the petitioner should file an appeal under Section 62 of the KVAT Act. The Appellate Authority was directed to adjudicate the appeal on merits if filed within 15 days, without insisting on the delay. The petitioner was also ordered to pay costs of Rs. 5,000/- to the respondents within three weeks, failing which the respondents could recover it as arrears of land revenue.
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