2021 (9) TMI 152 - HC - VAT and Sales Tax

Maintainability of petition - petition dismissed solely on the ground that the assessee should avail the alternate remedy provided under the provisions of the Tamil Nadu Value Added Tax Act, 2006 - ex-patre order - opportunity of hearing provided or not - HELD THAT - The assessment orders as well as the order dated 19.9.2018 rejecting the said representation 28.11.2017 by treating the same as a petition under Section 84 of the Act were the subject matter of challenge in the said writ petitions and at the time of entertaining the said writ petitions, an order of interim stay was granted. The respondent filed a counter affidavit touching upon the merits of the matter. However, the learned Single Judge dismissed the said writ petitions solely on the ground of availability of an alternate remedy and that the Writ Court should not exercise powers under Article 226 of The Constitution of India assailing the orders passed by the Statutory Authorities, which were not appealed against within the maximum period of limitation prescribed before the concerned Appellate Authority. Admittedly, the assessments from the year 2007-08 to 2012- 13 were sought to be reopened and the entire reopening was on account of an inspection conducted by the respondent Assessing Officer on 23.11.2015. Therefore, it cannot be stated that the appellant was deliberately avoiding to submit the documents. But, the Court can perceive the difficulties since the transactions were dated back as early as 2007 and there might have been difficulty in getting the documents and more particularly when the appellant is a Central Government Organization. Hence, the reasonable approach that should have been adopted by the respondent Assessing Officer is to afford an opportunity to the appellant when they submitted their representation dated 28.11.2017 especially when the respondent Assessing Officer thought fit to treat the same as a petition under Section 84 of the Act. Though the assessment orders were passed in the year 2017, they remain as paper orders and no tax was able to be recovered as they were stayed for all these years - the matters are remanded to the respondent for a fresh consideration - petition allowed by way of remand.

Summary

Issues:
Challenge to dismissal of writ petitions solely on the ground of availability of alternate remedy under the Tamil Nadu Value Added Tax Act, 2006.

Analysis:
The appellant, a Central Government Department, challenged orders dismissing writ petitions seeking to reopen assessments for the years 2007-08 to 2012-13. The Assessing Officer issued notices based on defects found during an inspection. Despite extensions, the appellant did not file replies, leading to completion of assessments. The appellant later submitted representations, but they were treated as petitions under Section 84 of the Act and rejected. The Single Judge dismissed the writ petitions citing availability of alternate remedy, emphasizing the need to exhaust statutory appeal mechanisms.

A Division Bench, considering legal principles, clarified that the High Court's jurisdiction under Article 226 of the Constitution is not absolutely barred by the availability of an alternate remedy. The Court highlighted parameters for High Court intervention, such as unfairness, unreasonableness, perversity, lack of jurisdiction, or violation of natural justice by the Statutory Authority. Referring to a Supreme Court decision, the Bench emphasized the need for courts to uphold the rule of law while exercising jurisdiction under Article 226.

The Court found that the Assessing Officer's actions lacked a reasonable approach in affording the appellant an opportunity to present submissions, especially given the challenges faced by a Central Government Organization in producing documents dating back to 2007. The Court noted that assessments remained on paper without tax recovery due to stays. Consequently, the Court set aside the impugned orders, remanded the matters to the respondent for fresh consideration, and directed a personal hearing with clear notice, granting liberty to the appellant to submit additional representations if needed.

In conclusion, the writ appeals were allowed, impugned orders were set aside, and assessments for the years 2007-08 to 2012-13 were remanded for fresh consideration. The Court emphasized the importance of a fair hearing and adherence to legal principles in tax assessments, ensuring the matter is resolved on merits and in accordance with the law within a specified timeframe.