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2015 (1) TMI 179 - HC - VAT and Sales Tax


Issues Involved:
1. Availability of an alternative remedy.
2. Jurisdiction of the assessing authority.
3. Adequacy of opportunity provided to the appellant.
4. Selective taxation and public sector undertaking status.
5. Merits of the assessment on interconnection charges.

Detailed Analysis:

1. Availability of an Alternative Remedy:
The court emphasized that the appellant had an efficacious alternative remedy under Section 34 of the Kerala General Sales Tax Act, 1963. The court cited the Supreme Court's precedent in Tin Plate Co. of India Ltd. v. State of Bihar, which stated that when an alternative remedy is available, it is a sound exercise of discretion to refuse a writ petition under Article 226 of the Constitution. The court reiterated that the rule of alternative remedy is a self-imposed restriction on judicial review under Article 226, and exceptions to this rule include enforcement of fundamental rights, violation of natural justice principles, and lack of jurisdiction.

2. Jurisdiction of the Assessing Authority:
The appellant contended that the assessing authority lacked jurisdiction to tax interconnection charges, arguing that these charges fall outside the purview of the Act. The court clarified that an erroneous exercise of power is different from lacking the necessary power. It stated that the appellant's registration under the Act and the competence of the respondents were undisputed, making it a matter of proper or improper exercise of taxing power rather than a jurisdictional error. The court concluded that the issue of jurisdiction did not warrant bypassing the alternative remedy.

3. Adequacy of Opportunity Provided to the Appellant:
The appellant argued that it was not provided with sufficient opportunity before the assessment orders were passed. The court noted the distinction between denial of opportunity and lack of sufficient opportunity. The learned Single Judge had observed that the appellant had been provided with sufficient opportunity, including personal hearings, before the assessment orders were passed. The court found no reason to interfere with this observation, stating that the issue of opportunity was adequately addressed.

4. Selective Taxation and Public Sector Undertaking Status:
The appellant claimed that the respondent authorities selectively imposed tax on it while leaving other private operators untaxed for similar interconnection charges. The court did not find this argument sufficient to override the rule of alternative remedy. It emphasized that the status of the appellant as a public sector undertaking did not warrant a different approach in assessing or adjudicating the issue. The court maintained that the appellant should pursue the statutory appellate remedy provided under the Act.

5. Merits of the Assessment on Interconnection Charges:
The appellant contended that interconnection charges did not constitute "turnover" under the Act and should not be taxed. The court refrained from making any reference to the case law cited by the appellant, stating that the complexity of interconnection services and the technical nature of the issue could not be decided in a summary manner under Article 226. The court concluded that the merits of the assessment should be adjudicated by the appellate authority as provided under the Act.

Conclusion:
The court dismissed the writ appeal, upholding the learned Single Judge's decision that the appellant had an efficacious alternative remedy. The court directed the appellant to file an appeal within two weeks from the date of receipt of the judgment, with the deferment of tax collection contingent upon this condition. No order as to costs was made.

 

 

 

 

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