2014 (7) TMI 816 - HC - VAT and Sales Tax

Writ petition - alternative remedy - Works Contract - inter state sale - divisible and indivisible nature of different customers - exemption as claimed on such inter-State sales turnover was disallowed holding that there could not be any such transaction in respect of client order to be of works contract nature - Held that - Admittedly, the petitioner has an alternative remedy of filing an appeal, under the VAT Act. The petitioner s pleas, in essence, are that the impugned order is erroneous on facts, and in law. A due consideration of the arguments reveals that the impugned order may, at best, disclose an erroneous exercise of jurisdiction but does not disclose an assumption of jurisdiction where there is none. Where a statute confers an alternative remedy, power under article 226 of the Constitution may be exercised if the impugned order discloses an assumption of jurisdiction, where there is none. Where, however, the impugned order, prima facie, discloses an erroneous exercise of jurisdiction, the party aggrieved would be required to approach the appellate forum. The petitioner s case pertains to an erroneous exercise of jurisdiction, namely, exigibility to sales tax of slump sale , applicability of the Full Bench judgment of the Andhra Pradesh High Court and legality of the penalty and, therefore, can be validly urged before the appellate forum. The petitioner has approached this court, as a precondition to the filing of an appeal is the requirement to predeposit a part of amount claimed by the Revenue. We are not inclined, to entertain the appeal merely because the petitioner is statutorily required to pre-deposit tax and penalty. - Decided against assessee.

Summary

Issues:
Challenge to assessment order under articles 226/227 of the Constitution of India.

Analysis:
The petitioner, engaged in construction business in Punjab, challenged an order levying tax on transactions assessable under the Central Sales Tax Act, 1956. The petitioner claimed exemption from tax on inter-State transactions, supported by C forms and E1 certificates. The assessing authority disallowed the exemption, leading to a significant additional demand. The petitioner contended that the assessment was without jurisdiction, citing violations of constitutional provisions and relevant statutes. The court considered the principles for entertaining a writ petition without exhausting statutory remedies, emphasizing fundamental rights enforcement, natural justice failure, or jurisdictional challenges. Referring to relevant judgments, the court held that the assessment order could not be challenged through a writ petition under article 226 of the Constitution. The court highlighted the hierarchy of authorities for challenging assessment orders and the need to follow the prescribed statutory remedies. Citing previous cases, the court reaffirmed that where a statute provides an alternative remedy, the party must approach the appellate forum for redressal. Consequently, the court refrained from interfering with the assessment order, directing the petitioner to challenge it before the appellate authority, with a directive for expeditious disposal of the appeal in accordance with the law.