2019 (7) TMI 718 - HC - VAT and Sales Tax

Validity of assessment - TNVAT Act, 2006 - purchase from sellers, whose registrations have been cancelled - mismatch of records - HELD THAT - There is a long line of authorities of Hon'ble Supreme Court on this aspect of the matter i.e, exercise of writ jurisdiction notwithstanding alternate remedy. To put these principles in a nutshell, it can be said that rule of alternate remedy is not an absolute rule. In other words, it is not a rule of compulsion, but it is a rule of discretion. Though it is a rule of discretion, Hon'ble Supreme Court in UNITED BANK OF INDIA VERSUS SATYAWATI TONDON AND OTHERS 2010 (7) TMI 829 - SUPREME COURT , has held that, with regard to matters pertaining to taxes, cess etc., i.e., fiscal law in general, the rule of alternate remedy should be applied very strictly or in other words the rule should be applied with utmost rigour. This Court is of the considered opinion that this is a fit case to relegate the writ petitioner to alternate remedy i.e., statutory appeal (under Section 51 of TNVAT Act) to the jurisdictional Appellate Deputy Commissioner. If the writ petitioner chooses to avail alternate remedy, it is open to the writ petitioner to seek condonation of delay subject to the time periods prescribed under Section 51 of TNVAT Act. Besides seeking condonation of delay, it is also open to the writ petitioner to seek exclusion of time spent in the instant writ petition under Section 14 of the Limitation Act. These writ petitions are disposed of relegating the writ petitioner to the statutory appeal remedy in the aforesaid manner.

Summary

Issues:
Assessment under Tamil Nadu Value Added Tax Act, 2006 for two different years - 2014-2015 and 2015-2016.

Analysis:
1. The central theme of the case involves the assessment of a registered dealer under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) for the years 2014-2015 and 2015-2016. The issues revolve around the disallowance of certain purchases, specifically related to purchases from sellers whose registrations were cancelled and a mismatch in the records.

2. The writ petitioner, engaged in the business of dealing in stainless steel and metals, was subject to revisional notices following an inspection of their business premises by the Enforcement Wing officials. The respondent issued revised assessment orders under Section 27 of the TNVAT Act, which were challenged in the writ petitions. The petitioner contended that the principles established in previous judgments by the Hon'ble Supreme Court and the High Court were not followed by the respondent in the assessment process.

3. The Government Advocate representing the respondent argued that the respondent had indeed adhered to the legal principles in dealing with the issues raised by the petitioner. The respondent's position was supported by specific excerpts from the impugned orders, highlighting the steps taken during the assessment process and the opportunity provided for the petitioner to present their objections.

4. The court considered the arguments presented by both parties regarding the errors alleged in the impugned orders. However, the court refrained from expressing an opinion on the merits of the errors highlighted by the petitioner, emphasizing the availability of a statutory appeal remedy under Section 51 of the TNVAT Act. The court discussed the principle of alternate remedy and the discretion involved in invoking writ jurisdiction, particularly in matters concerning fiscal laws.

5. In determining whether to entertain the writ petitions or relegate the petitioner to the statutory appeal remedy, the court referred to established principles regarding exceptions to the rule of alternate remedy. The court noted that the exceptions included lack of jurisdiction, violation of natural justice, and an illusive or ineffective alternate remedy. The court found that the case fell within the purview of the alternate remedy, and therefore, decided to relegate the petitioner to the statutory appeal process before the Appellate Deputy Commissioner.

6. The court highlighted that the petitioner could seek condonation of delay and exclusion of time spent in the writ petitions under relevant provisions of the TNVAT Act and the Limitation Act if they chose to pursue the statutory appeal route. The court concluded by disposing of the writ petitions, directing the petitioner to avail of the statutory appeal remedy and closing the case without imposing any costs.