2019 (8) TMI 1159 - HC - VAT and Sales Tax

Interest on refund - Section 42(5) of TNVAT Act - visible and invisible loss qua the loose fiber/yarn in the course of manufacture - HELD THAT - A perusal of Section 42(5) of TNVAT Act and Rule 11(2) of TNVAT Rules reveals that while 42(5) of TNVAT Act is the substantive law, Rule 11(2) of TNVAT Rules is the procedural aspect of the matter, as Rule 11(2) deals with verification of the relevant forms viz., Form W. Be that as it may, a perusal of the impugned order reveals that there is a clear reference to Rule 11 of TNVAT Rules. Therefore, in the considered view of this Court, it cannot be gainsaid that Rule 11 of TNVAT Rules has not been looked into. Alternate remedy - HELD THAT - The writ petitioner should be able to demonstrate that writ petitioner falls under one or some of the specified exception to the rule of alternate remedy. Some of the exceptions are, authority passing order without jurisdiction i.e., order called in question itself turning on a jurisdictional fact, alternate remedy ineffectual or not efficacious and orders disregarding settled position of law - this is not an exhaustive list of exceptions, but is illustrative to the extent that is necessary to dispose of this case on hand. This Court is convinced that it cannot be gainsaid by writ petitioner that a revision will not lie to the first respondent. It also comes out clearly that first respondent has remanded the matter to the third respondent without expressing any opinion or view on the merits of the matter. Therefore, it is also not a case where the revisional authority has already expressed any opinion. The issue regarding refund is concluded and only with regard to interest on the refund is to be considered. Therefore examination of records and certain other supporting documents, with regard to interest liability if any is imperative for arriving at a conclusion one way or the other. It may not be possible to do such an exercise in a writ petition which is decided on affidavits and counter affidavits. In other words, quantification if any cannot be done in this writ petition. Petition dismissed.

Summary

Issues Involved:
1. Refund and interest on refund under Section 42(5) of TNVAT Act and Rule 11(2) of TNVAT Rules.
2. Jurisdictional authority in passing the impugned orders.
3. Availability and necessity of alternate remedy under Section 54 of TNVAT Act.

Issue-wise Detailed Analysis:

1. Refund and Interest on Refund:
The petitioner, engaged in the manufacture and export of Hosiery garments, sought a refund and interest on the refund under Section 42(5) of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) and Rule 11(2) of the Tamil Nadu Value Added Tax Rules, 2007 (TNVAT Rules) for the assessment years 2012-13, 2013-14, and 2014-15. The petitioner complained of inaction by the respondents, leading to an earlier writ petition (W.P.No.27857 of 2017) which resulted in an order directing the first respondent to consider the petitioner’s representation. The first respondent remanded the matter to the third respondent, who then passed the impugned orders. The court noted that the refund issue had been resolved, and only the interest aspect remained. Section 42(5) of the TNVAT Act provides substantive law on the matter, while Rule 11(2) of the TNVAT Rules deals with procedural aspects, including the verification of Form W. The court found that Rule 11 had been considered in the impugned orders.

2. Jurisdictional Authority:
The petitioner argued that the impugned orders were invalid as they were passed by the third respondent, whereas the earlier court order directed the first respondent to dispose of the petitioner’s representation. The court clarified that the first respondent had considered the representation and afforded a personal hearing before remanding the matter to the third respondent. Thus, the court held that the first ground urged by the petitioner did not carry any weight.

3. Availability and Necessity of Alternate Remedy:
The respondents argued that the petitioner had an alternate remedy by way of a revisional application to the first respondent under Section 54 of the TNVAT Act. The court emphasized the rule of alternate remedy, particularly in fiscal matters, as reiterated by the Supreme Court in the Satyawati Tondon and K.C. Mathew cases. The court noted that the impugned orders were passed post-remand and gave a fresh cause of action, thus the petitioner could not claim that a revision would not lie to the first respondent. The court also highlighted that the matter involved factual determinations and examination of records, which are not suitable for resolution in a writ petition. Consequently, the court directed the petitioner to seek alternate remedy by filing a revision application under Section 54 of the TNVAT Act, with the possibility of seeking condonation of delay and exclusion of time spent in the writ petition as per Section 14 of the Limitation Act.

Conclusion:
The writ petitions were dismissed, with the court preserving the petitioner’s right to avail the alternate remedy by way of revision to the revisional authority (first respondent). The court emphasized the necessity of exhausting statutory remedies before invoking writ jurisdiction, particularly in fiscal matters.