2019 (9) TMI 1153 - HC - VAT and Sales Tax

Maintainability of petition - Alternate remedy of successive appeals - escaped assessment - reopening of assessment - change of opinion - HELD THAT - Undeniably, there are hierarchy of appeals and revision provided under the Act of 2003 in which the order of reassessment passed with reference to Section 25 and 26 can be assailed by the assessee. What has to be however examined is whether the writ petitioners in these matters should be directly entertained by this court treating them under exceptional category so as to deviate from the normal rule of relegating the parties to avail the alternate remedy. It certainly cannot be said to be a case of inherent lack of jurisdiction. Aside of the fact whether or not the re-assessment order could have been legally passed, the appellants cannot be allowed to contend that such orders have been passed dehors the principles of natural justice. Admittedly, show cause notices were served on each of the appellants prior to passing of the impugned reassessment orders. The case of the appellants cannot also said to be fall in any category of exceptions including about breach of any fundamental right where the remedy available in the Act of 2003 under the scheme of the Statute cannot be considered as effective and efficacious, particularly in the face of the fact that similarly situated assessees in many such identical cases, including some of the petitioners, have already approached the appellate authority and first appellate authority and thereafter the Tax Board and almost in all of them, penalty has been waived and number of sales tax revisions, as referred to above, then have been filed by the assessee before this Court, which are still pending. Appeal dismissed.

Issues Involved:
1. Jurisdiction of the reassessment orders.
2. Availability of an efficacious alternative remedy.
3. Applicability of exceptions to the rule of alternative remedy.
4. Interpretation and application of Section 25, 26, 55, and 61 of the Rajasthan Value Added Tax Act, 2003.
5. Impact of the Supreme Court judgment in State of Punjab vs. Nokia India Pvt. Ltd. on the reassessment orders.
6. Validity of reopening assessments based on a subsequent Supreme Court judgment.
7. Principles of natural justice and procedural fairness in issuing reassessment orders.

Detailed Analysis:

1. Jurisdiction of the Reassessment Orders:
The appellants contended that the reassessment orders passed by the Assessing Officer were without jurisdiction. They argued that the conditions for reopening assessments under Section 26 of the Rajasthan Value Added Tax Act, 2003, were not met, as there was no escaped assessment. The court, however, found that the Assessing Officer did not lack inherent jurisdiction and that the reassessment orders were within the scope of the Act.

2. Availability of an Efficacious Alternative Remedy:
The court emphasized the principle that when an efficacious alternative remedy is available, writ petitions should not be entertained. The appellants had the option to appeal to the Deputy Commissioner (Appeals) under Section 82 and subsequently to the Rajasthan Tax Board under Section 83 of the Act. The court held that the hierarchy of appeals provided under the Act constituted an effective and adequate remedy.

3. Applicability of Exceptions to the Rule of Alternative Remedy:
The appellants argued that their cases fell within the exceptions to the rule of alternative remedy, as established by the Supreme Court in various judgments. These exceptions include instances where the statutory authority acts without jurisdiction, in violation of natural justice, or where fundamental rights are infringed. The court, however, found that none of these exceptions applied in the present cases. The reassessment orders were not issued without jurisdiction, and the principles of natural justice were not violated, as show cause notices were duly served.

4. Interpretation and Application of Section 25, 26, 55, and 61 of the Rajasthan Value Added Tax Act, 2003:
The court examined the provisions of the Act concerning reassessment. Section 26 allows reopening of assessments in cases of escaped assessment. The appellants argued that the reassessment was based on a mere change of opinion, which is not permissible. The court noted that the reassessment was prompted by the Supreme Court's judgment in Nokia India Pvt. Ltd., which clarified the tax treatment of mobile phone chargers as separate accessories.

5. Impact of the Supreme Court Judgment in State of Punjab vs. Nokia India Pvt. Ltd.:
The reassessment orders were influenced by the Supreme Court's decision in Nokia India Pvt. Ltd., which held that mobile phone chargers are independent products and should be taxed separately. The appellants contended that a subsequent Supreme Court judgment could not be used to reopen assessments. The court, however, upheld the validity of the reassessment orders, noting that they were consistent with the Supreme Court's interpretation.

6. Validity of Reopening Assessments Based on a Subsequent Supreme Court Judgment:
The appellants argued that reopening assessments based on a subsequent Supreme Court judgment amounted to a change of opinion, which is not a valid ground for reassessment. The court rejected this argument, stating that the reassessment was not merely a change of opinion but was based on a judicial precedent that clarified the tax treatment of certain items.

7. Principles of Natural Justice and Procedural Fairness:
The appellants claimed that the reassessment orders violated principles of natural justice. The court found that the principles of natural justice were not breached, as the appellants were given show cause notices and had the opportunity to respond. The reassessment process was conducted in accordance with the procedural requirements of the Act.

Conclusion:
The court dismissed the appeals, upholding the view that the appellants had an efficacious alternative remedy through the appellate mechanism provided under the Act. The court directed that if appeals are filed within 60 days from the date of the judgment, they should be entertained and decided on merits. The court refrained from examining the merits of the reassessment orders to avoid prejudicing the cases before the appellate authority.

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