2016 (8) TMI 572 - HC - VAT and Sales Tax

Validity of writ petition - Article 226 of the Constitution of India - re-assessment order - Demand of tax, interest and penalty - Karnataka Value Added Tax - input tax credit - Held that - writ petition against the impugned reassessment order cannot be directly filed before this court under Article 226 of the Constitution of India unless the settled parameters for invoking the writ jurisdiction against the appealable orders are satisfied by the assessee. The assessee can very well rely upon the circular of the Department as well as the Division Bench decision of this Court which are binding on the Department Authorities and claim the requisite relief before the Appellate Authority. That does not perse mean that against appealable orders of reassessment, directly a writ petition should be entertained in all cases by this Court under Article 226 of the Constitution of India - writ petition dismissed - alternative remedy available to petitioner.

Summary

Issues:
Challenge against reassessment order under Section 39(1) of Karnataka Value Added Tax, 2003 for assessment year 2009-10. Invocation of writ jurisdiction under Article 226 of the Constitution of India against appealable orders. Compliance with settled parameters for invoking writ jurisdiction. Breach of principles of natural justice in reassessment process.

Analysis:
The judgment deals with a writ petition challenging a reassessment order under Section 39(1) of the Karnataka Value Added Tax, 2003, for the assessment year 2009-10. The petitioner contested the order, citing a Circular issued by the Department and a previous Division Bench decision, arguing that the revised return should have been accepted, granting input tax credit. However, the Court referenced a previous case, emphasizing that writ petitions against reassessment orders cannot be directly filed under Article 226 of the Constitution unless specific parameters for invoking writ jurisdiction against appealable orders are met by the assessee.

The Court highlighted that the impugned reassessment order is appealable before the Deputy Commissioner (Appeals) and the Karnataka Appellate Tribunal, as per the provisions of the Act. It was noted that grounds of attack, including issues of natural justice and turnover computation, can be raised before the appellate authority. The judgment stressed that the restriction on remanding cases back to the Assessing Authority does not justify invoking the extraordinary jurisdiction of the Court under Article 226 against the assessment order itself.

Regarding the breach of principles of natural justice, the Court found that the petitioner was given an opportunity to raise objections before the reassessment order was passed. The judgment underscored that the breach alleged was not severe, as the assessee had the chance to present objections and seek additional time for a detailed reply. Ultimately, the Court dismissed the writ petition, stating that the petitioner could seek relief before the Appellate Authority, emphasizing the availability of an alternative remedy. The judgment clarified that questions of fact must be established before the departmental authorities with supporting evidence for the desired relief to be granted to the assessee.