2018 (10) TMI 518 - HC - VAT and Sales Tax

Maintainability of petition - alternative remedy by way of an appeal - Taxability - Works Contract - Held that - The case involves mixed questions of facts and law and detailed scrutiny of the record is required for ascertaining the exact tax liability of the petitioner Assessee, which exercise cannot be undertaken in the Writ jurisdiction under Article 226 of the Constitution of India - Though while entertaining these writ petitions, a Co-ordinate Bench of this Court had stayed the operation of the impugned Assessment Orders and these petitions are pending for the last about two years, this Court is not inclined to continue the proceedings in the present writ petitions and finally decide the controversy in hand on merits. It is considered appropriate and opportune for the Assessee Company which itself is a Government of India Undertaking to avail the regular remedy before the Appellate forum under Section 62 of the KVAT Act, 2003 provides for the first appeal before the Joint Commissioner of Commercial Taxes (Appeals) and second appeal also lies against it before the Karnataka Appellate Authority under Section 63 of the KVAT Act, 2003 - This Court should be circumspect in entertaining the direct writ petitions against the Assessment Orders and Show Cause Notices issued under the Tax Statutes which involve a complex matrix of facts, figures and legal contentions. The legal contentions, of course can be examined by this Court at an appropriate stage upon the Revision Petitions brought before this Court, but the question of law involved in the matter after the facts are appropriately scrutinized, appreciated, analyzed and discussed in detail by the Appellate Forums. Petitions are dismissed as not maintainable with a liberty to the petitioner Assessee Company to avail the regular remedy of filing the appeals before the concerned Appellate Authority under Section 62 of the Act.

Summary

Issues:
Challenge to Assessment Orders and Show Cause Notices regarding taxability on Works Contract executed by the petitioner Assessee Company.

Analysis:
The petitioner, a Government of India Undertaking, entered into an Agreement with a company for construction projects. The petitioner challenged Assessment Orders and Show Cause Notices by the Commercial Taxes Department, questioning the taxability of Works Contracts executed for the company. The Revenue Department argued that the petitioner had alternative remedies available through appeals. An Assessment Order dated 02/02/2016 raised tax demands and penalties for the Assessment period 2009-2010 under relevant tax laws.

The Assessment Order detailed the petitioner's procurement of goods for a project, emphasizing the incorporation of goods for executing the works contract. The Order highlighted clauses from the contract determining taxable events. The court considered the petitioner's arguments against the tax demand, noting the need for detailed scrutiny to ascertain the tax liability. Despite a previous stay on the Assessment Orders, the court decided not to continue the proceedings in the writ petitions.

The court advised the Assessee to utilize the remedy under the KVAT Act, which provides for appeals and revisions. It emphasized the need for a complete mechanism for aggrieved parties to address tax disputes. The court dismissed the writ petitions, urging the petitioner to follow the regular appeal process. It allowed the Assessee to file appeals against the Assessment Orders within a specified period without limitation objections. The court kept all legal questions open for future consideration.

In conclusion, the court dismissed the writ petitions, directing the petitioner to pursue appeals before the Appellate Authority. It highlighted the importance of utilizing the statutory remedies available under the tax laws for addressing disputes effectively. The court maintained that extraordinary writ jurisdiction should be reserved for exceptional circumstances, emphasizing the need for a comprehensive examination of facts and legal contentions by the Appellate Forums.