2021 (8) TMI 1006 - HC - VAT and Sales Tax

Maintainability of petition - availability of alternative remedy - proper opportunity for hearing provided or not - Input Tax Credit against output tax liability - Works Contract - Section 5(2) r/w Section 19(1) proviso of the Tamil Nadu Value Added Tax Act - HELD THAT - The importance of appellate remedy at no circumstances be undermined. The valuable right of an assessee to redress his grievances in an appeal under statute need not be taken away in a routine manner. If such remedy is taken away, the aggrieved person is deprived of one opportunity of effective adjudication before the Appellate Authority with reference to the disputed facts and perusal of the original documents. Therefore, exhausting the appellate remedy in such circumstances is not only relevant, but valuable both for the assessee as well as to the Revenue. The power of judicial review of the High Court under Article 226 of the Constitution of India is to scrutinize the processes through which a decision is taken by the competent authority by following the procedures as contemplated, but not the decision itself. Therefore, the routine entertainment of a Writ Petition by dispensing with appellate remedy is not preferable and such an exercise would cause injury to the institutional hierarchy and the importance attached to such appellate institutions - The point of delay may be an acceptable ground for the purpose of entertaining a Writ Petition. The practise of filing the Writ Petition without exhausting the statutory remedies are in ascending mode and such Writ Petitions are filed with a view to avoid pre-deposits to be made in statutory appeals and on the ground that the appellate remedies are time consuming. The petitioner is at liberty to prefer an appeal before the Competent Appellate Authority within a period of four weeks from the date of receipt of a copy of this order in a prescribed format and by applying with the provisions of statutory rules - Petition disposed off.

Summary

Issues involved:
Validity of order dated 11.02.2015 rejecting Input Tax Credit claim under TN VAT Act for assessment year 2013-14 - Opportunity for petitioner to present case - Sufficiency of opportunity provided - Appellate remedy availability - Importance of appellate remedy - Judicial review under Article 226 of the Constitution of India - Routine entertainment of Writ Petition without exhausting appellate remedy - Delay as a ground for Writ Petition - Directions for petitioner to prefer appeal before Competent Appellate Authority.

Detailed Analysis:
The petitioner challenged the validity of the order dated 11.02.2015 rejecting their Input Tax Credit claim under the Tamil Nadu Value Added Tax Act for the assessment year 2013-14. The petitioner contended that they were not provided with a full opportunity to present their case, specifically regarding the movement of goods and mode of payment, which were not proven according to the impugned order. The petitioner argued that the order violated principles of natural justice by not allowing them to establish these facts adequately (Para 3).

The High Court acknowledged that issues raised on merits could not be decided in a writ proceeding as they required scrutiny of original documents and evidence. It emphasized the importance of the appellate remedy for adjudicating disputed facts and legal grounds, stating that the Appellate Authority had the power to examine both factual and legal aspects (Para 5).

Regarding the sufficiency of the opportunity provided to the petitioner, the Court noted that while an opportunity was given, the petitioner questioned its adequacy. It clarified that the Appellate Authority was the final fact-finding body competent to review original records and adjudicate issues by allowing all parties an opportunity to present their case (Para 6).

The judgment highlighted the significance of the appellate remedy, stating that it should not be disregarded lightly. It emphasized that the right to appeal was valuable for both the assessee and the Revenue, ensuring effective adjudication and examination of disputed facts and documents (Para 7).

The Court cautioned against routinely entertaining writ petitions without exhausting the appellate remedy, noting that the power of judicial review under Article 226 of the Constitution of India was meant to scrutinize processes, not decisions themselves. It stressed the importance of appellate forums as final fact-finding bodies with expertise in specific fields, whose findings were crucial for judicial review by the High Court (Para 8-9).

Delay was considered an acceptable ground for entertaining a Writ Petition, but the Court encouraged the petitioner to prefer an appeal before the Competent Appellate Authority within four weeks. The Court directed the Competent Appellate Authority to condone any delay in filing the appeal and dispose of it promptly, ensuring the petitioner's rights were upheld (Para 10-11).

Ultimately, the Court disposed of the Writ Petition with directions for the petitioner to pursue the appellate remedy, emphasizing the importance of following statutory rules and procedures for a fair and just resolution (Para 12).