2019 (8) TMI 1112 - HC - VAT and Sales Tax

Requirement of pre-deposit - alternate remedy - Deemed assessment - statutory appeal under Section 51 of TNVAT Act to the jurisdictional Appellate Deputy Commissioner - Section 22(2) of TNVAT Act - HELD THAT - This Court is of the considered view that it would not be appropriate to delve into those directions given by the said Appellate Authority. Suffice to say that post remand, lone respondent before this Court, namely the Original Authority has now passed a revised Assessment Order. Instant writ petition has been filed assailing the impugned order. This Court is of the considered view that it would be appropriate to relegate the writ petitioner to alternate remedy and hold that it would be appropriate to hold that the writ petitioner can assail the impugned order by way of a statutory appeal before the said Appellate Authority. This Court is informed without disputation or disagreement that statutory appeal is under Section 51 of TNVAT Act. A perusal of Section 51 of TNVAT Act reveals that there is a pre-deposit / pre-condition requirement and that is 25% of the tax liability. From the trajectory of the instant matter, it comes out clearly that writ petitioner has already made the pre-deposit while preferring the first round of statutory appeal before the said Appellate Authority. More importantly, this Court is informed without any disputation or disagreement that besides 25% pre- deposit for preferring the first round of statutory appeal, writ petitioner has paid another 25% pursuant to orders in stay petition before the said Appellate Authority in the first round. This Court deems it appropriate to relegate the writ petitioner to the alternate remedy of statutory appeal before the said Appellate Authority with a rider that 50% of the disputed tax already deposited/ paid by way of pre-deposit and pursuant to stay petition in the earlier round in statutory appeal will suffice and the writ petitioner shall now not be called upon to make further pre-deposit in this regard. If the writ petitioner files a statutory appeal before aforesaid Appellate Authority, as writ petitioner has already made pre-deposit of 25% in the previous round of statutory appeal, writ petitioner shall not be called upon to make 25% pre-deposit again and Appellate Authority shall entertain the appeal without insisting on this pre-deposit. Petition disposed off.

Summary

Issues involved:
1. Interpretation of directions given by Appellate Authority in a statutory appeal under TNVAT Act.
2. Compliance with pre-deposit requirements for filing a statutory appeal.
3. Application of the alternate remedy rule in the context of tax matters.

Analysis:

Issue 1: Interpretation of Appellate Authority's directions
The writ petitioner, a dealer under TNVAT Act, challenged a revised Assessment Order by the respondent. The Appellate Deputy Commissioner remitted the matter back to the Original Authority for a redo of the assessment, providing specific directions. The High Court refrained from delving into the directions, emphasizing that the dispute largely revolved around factual aspects. Consequently, the Court suggested that the writ petitioner should pursue an alternate remedy by filing a statutory appeal before the Appellate Authority to challenge the impugned order.

Issue 2: Compliance with pre-deposit requirements
The Court acknowledged that the statutory appeal under Section 51 of TNVAT Act necessitated a pre-deposit of 25% of the tax liability. It was highlighted that the writ petitioner had already fulfilled this pre-deposit requirement during the initial appeal. Additionally, the petitioner had paid an additional 25% pursuant to orders in a stay petition. The Court ruled that the writ petitioner need not make further pre-deposits, considering the total of 50% already paid, and directed the petitioner to pursue the statutory appeal without insisting on additional pre-deposits.

Issue 3: Application of the alternate remedy rule
In addressing the concept of alternate remedies in tax matters, the Court referenced legal precedents emphasizing the importance of exhausting statutory remedies before seeking relief through writ jurisdiction. Citing cases like Dunlop India and Satyawati Tandon, the Court stressed the need for strict adherence to alternate remedies in matters involving recovery of taxes. The Court reinforced the principle that statutory remedies should be exhausted before resorting to writ petitions, especially in cases related to public dues and financial institutions.

In conclusion, the High Court maintained the impugned order but allowed the writ petitioner to challenge it through a statutory appeal without requiring additional pre-deposits. The Appellate Authority was directed to adjudicate the appeal on its merits and in accordance with the law. Failure to file the statutory appeal within the specified timeframe would render the direction to keep the impugned order in abeyance ineffective. The writ petition was disposed of without costs, and the connected miscellaneous petition was closed.