2016 (6) TMI 187 - HC - VAT and Sales Tax

Maintainability of writ petitions - Assessment order raising a demand - S.39(2) of the Karnataka VAT Act, 2003 - Availability of an alternate remedy under S. 62 of the Act - Reassessment has been done after refusing the input tax credit to the assessee in respect of the goods purchased by him by the local registered dealers on which the assessee wrongly availed input tax credit as they are consumables - Held that - in view of the availability of an alternate remedy by way of an appeal against the impugned order under S.62 ibid, this Court is not inclined to entertain the writ petition under Art.226 of the Constitution of India. An effective alternate remedy by way of an appeal is available to the petitioner-assessee. Whether the input tax credit was rightly availed by the petitioner assessee or not and whether on the aforesaid items, the said credit is available to the petitioner or not, are mixed questions of fact and law which are required to be determined by the authorities created under the Act providing the assessee, the remedy of appeal. The writ petitions are, therefore, not entertained under Art.226 of the Constitution of India. - Writ petitions dismissed

Summary

Issues:
Challenge to assessment order under Karnataka VAT Act, 2003 - Availability of alternate remedy under S.62 - Validity of reassessment proceedings - Input tax credit dispute - Maintainability of writ petition under Art.226.

Analysis:
The writ petition challenged the assessment order under the Karnataka VAT Act, 2003, raising a demand of ?1,88,89,718. The petitioner was given time to decide whether to appeal under S.62 of the Act instead of pursuing the writ petition. The petitioner expressed willingness to deposit 30% of the disputed demand by adjusting refunds due. Citing relevant judgments, the petitioner argued against reassessment proceedings by the respondent authority. However, the Government Advocate contended that the writ petition was not maintainable due to the availability of an alternate remedy under S.62.

The Government Advocate highlighted that reassessment was conducted by the Assessing Authority after disallowing input tax credit on specific items wrongly claimed as consumables by the petitioner. After hearing both parties, the Court emphasized the availability of an alternate remedy through an appeal under S.62 of the Act. The Court refused to entertain the writ petition under Art.226, stating that the determination of whether the input tax credit was rightly availed and the availability of credit on disputed items are mixed questions of fact and law to be decided by the authorities under the Act.

Consequently, the Court dismissed the writ petitions and allowed the petitioner to file an appeal under S.62 within thirty days. The judgment emphasized the importance of utilizing the statutory appeal mechanism provided under the Act for resolving disputes related to input tax credit and assessment orders, ultimately upholding the principle of exhausting alternate remedies before seeking judicial intervention under Art.226 of the Constitution of India.