2014 (5) TMI 532 - HC - VAT and Sales Tax

Recovery of difference in tax with interest Alternative remedy in fiscal matters Jurisdiction under Article 226 - Held That - This court is afraid it cannot go into the merits in the appeals - Admittedly, the orders impugned are appealable orders and there is no proper explanation given as to why the factual aspects cannot be decided by the appellate authority - Relying upon Raj Kumar Shivhare v. Assistant Director, Directorate of Enforcement & another 2010 (4) TMI 432 - SUPREME COURT and Titaghur Paper Mills Co. Ltd. v. State of Orissa and another 1983 (4) TMI 49 - SUPREME Court - The power under Article 226 of the Constitution of India is both extra-ordinary and discretionary in nature - When a statute specifically provides for an appeal by the legislature, then such a remedy cannot be bye-passed for a mere asking - This Court cannot act as a substitute for an appellate authority constituted under the statute - Such a self-imposed restriction has to be followed more particularly in a fiscal Statute - Therefore, the orders passed by the learned Single Judge do not warrant interference. Raising of new grounds in a Writ appeal - Writ Court is a Court of Record Held that - Merely based upon an additional ground is raised at the time of hearing the appeal filed this Court cannot accept the contention that the request made by the learned counsel for assessee was only for the purpose of getting orders to file Writ Appeals - In fact a perusal of the orders passed by the learned Single Judge would clearly show that specific directions have been given for the return of the original orders impugned passed by AO - Further, such a contention cannot be raised and decided before this Court as the appellant for the reason known to it has not chosen to file any review Therefore, no reason is found to interfere with the orders passed by the learned Single Judge Therefore, these Writ Appeals are dismissed - Consequently, connected M.Ps.(MD) No.1, 1, 1 and 1 of 2011 are dismissed Decided against Assessee.

Issues Involved:
1. Assessment of tax rate on sales of Concrete Sleepers.
2. Violation of principles of natural justice.
3. Applicability of circulars issued by the Commissioner.
4. Jurisdiction and application of alternative remedies under Article 226 of the Constitution of India.

Issue-Wise Detailed Analysis:

1. Assessment of Tax Rate on Sales of Concrete Sleepers:
The primary issue revolves around the tax rate applicable to the sales of Concrete Sleepers made by the assessee to the Southern Railways in other states. The Assessing Officer determined that the assessee was liable to pay tax at 12.5% instead of the 4% already paid, citing clarifications issued by the Principal Secretary and Commissioner of Commercial Tax, Chepauk, Chennai. This was based on the assessment that the sales were inter-state and hence subject to local VAT rates of the states where the purchasers were located.

2. Violation of Principles of Natural Justice:
The assessee contended that the principles of natural justice were violated as their request for further hearing was not granted. They argued that the Assessing Officer, after the initial assessment order was set aside for lack of personal hearing, should have initiated fresh proceedings rather than merely hearing the assessee in person. The learned Single Judge dismissed this contention, stating that the earlier Writ Petitions were allowed solely to provide an opportunity for a personal hearing, which was subsequently granted.

3. Applicability of Circulars Issued by the Commissioner:
The assessee argued that the circulars issued in 1981 and 2002, which were binding on the Assessing Officer, were not considered. The Assessing Officer, however, based the final assessment orders on the clarifications issued by the Principal Secretary and Commissioner of Commercial Tax, Chepauk, Chennai. The court noted that whether the Assessing Officer's reasoning, based on these circulars, was correct or not should be adjudicated by the appellate authority.

4. Jurisdiction and Application of Alternative Remedies under Article 226 of the Constitution of India:
The court emphasized that the power under Article 226 is extraordinary and discretionary, and should not be exercised when a statute provides a specific remedy. The court held that the orders impugned were appealable and there was no proper explanation from the assessee as to why the factual aspects could not be decided by the appellate authority. The court cited several judgments, including Raj Kumar Shivhare v. Assistant Director, Directorate of Enforcement & another, to reinforce that when a statutory forum is created for redressal, it should not be bypassed for a writ petition.

Conclusion:
The court dismissed the Writ Appeals, affirming that the only course open to the assessee was to file appeals against the assessment orders. The court granted the assessee four weeks to file appeals before the statutory authority, considering that they had been actively pursuing their rights through legal channels. The appellate authority was directed to consider the amount already deposited by the assessee and to decide the appeals on their merits without being influenced by observations made in the Writ Petitions or Writ Appeals.

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