2016 (7) TMI 426 - HC - VAT and Sales Tax

Constitutional validity of Rule - KVAT - Determination of tax liability - Maintainability of writ petition - Held that - It is hardly required to be stated that when the writ powers are invoked under Article 226 of the Constitution of India, may be, for challenging the validity of the statutory rule, this Court in normal circumstance by way of self-imposed restriction would relegate the party to the statutory, alternative remedy. The appellant/original petitioner had the option of challenging the validity of the rule when the appeals were preferred in respect of earlier assessment order before this Court in STA.Nos.120/2012 and 1-10/2013, but the appellant did not challenge the validity of the rule. Not only that, but thereafter for the subsequent assessment years, notices were issued by the Assessing Officer, but the appellant did not challenge the validity of the rule by appropriate proceedings before this Court, but appeared in response to the notice and the assessment orders were passed. Not only that, but thereafter the appellant has preferred the statutory appeal before the Appellate Authority under the KVAT Act and those appeals are pending consideration. Under these circumstances, we find that the challenge to the validity of the rule if not entertained by the learned single Judge, it cannot be said that the discretion is perversely exercised or that the learned single Judge has committed an error on the face of the record in exercise of the discretion to entertain the petition under Article 226 of the Constitution. Under the circumstances, the exercise of discretion by the learned single Judge not to entertain the petition cannot be said to be erroneous, which may call for interference in exercise of the power under Article 226 of the constitution. - Decided against the petitioner.

Summary

Issues:
Challenge to validity of Rule in High Court, Appellate Power of High Court, Exercise of Discretion by Single Judge, Remedies Available to Appellant, Entertaining Petition under Article 226.

Analysis:
The appeal challenged an order dismissing a petition by a learned single Judge. The appellant contended that the issue was not covered by previous decisions and should have been entertained. The Division Bench had not pressed the challenge in an earlier case. The court noted that in an intra court appeal, scrutiny is limited to specific errors. The appellant had failed in previous litigations, and taxation liability was confirmed. The court distinguished between confirmed liabilities and pending assessments for subsequent years. Multiple writ petitions were dismissed on the same day by the single Judge. The court highlighted the statutory appeal process and the hierarchy of challenges available to the appellant. It emphasized the self-imposed restriction to relegate parties to statutory remedies before challenging rules under Article 226.

The court found that the discretion of the single Judge not to entertain the petition was not erroneous. It noted that challenges to the rule should have been made at earlier stages and not at the current juncture. The court emphasized that decisions of a co-ordinate bench should not be upset through Article 226. It differentiated between challenges to finalized liabilities and pending assessments. The court rejected the argument that withdrawal of a previous petition allowed for a fresh challenge under Article 226. Ultimately, the court found no grounds for interference and dismissed the appeal.