2021 (9) TMI 1185 - HC - VAT and Sales Tax

Violation of principles of natural justice - petitioner is provided with an opportunity either to file material evidence or to pay the compounding fee or not - HELD THAT - The allegation of mala fides raised against an Authority must be impleaded as a party respondent in the writ proceedings in his personal capacity. In the absence of any one of these grounds, no writ can be entertained as against the show cause notice - the violation of principles of natural justice has been raised in almost all the writ petitions. Even in such cases, where the jurisdiction point is raised, it is to be stated in the objections and the Authority Competent is bound to consider such objections. If an order is passed and the Assessee is not satisfied, then they are bound to prefer an appeal as contemplated under the Act. Entertaining a writ petition against the show cause notice is not preferable and the disputed facts between the parties cannot be adjudicated in the writ proceedings by the High Court under Article 226 of the Constitution of India. All such facts are to be adjudicated with reference to the documents and evidences made available and therefore, the contentions raised on merits cannot be considered at all. The petitioner is at liberty to submit any material evidence of appeal or submit explanations to the notice, enabling the Authorities to consider the same - the High Court cannot adjudicate such disputed facts in the writ proceedings - Petition dismissed.

Summary

Issues:
Challenge to notice issued by State Tax Officer regarding compounding fee under Tamil Nadu Value Added Tax Act, 2006.

Analysis:
The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, 2006 and the Central Sales Tax Act, 1956, challenged a notice issued by the State Tax Officer regarding a compounding fee. The petitioner, engaged in works contract business, disputed the facts and merits of the case in the writ petition. The impugned notice required the petitioner to pay a compounding fee based on proceedings of the Deputy Commercial Tax Officer. The notice provided the petitioner with an opportunity to either submit material evidence or pay the fee within 15 days. The High Court emphasized that it cannot adjudicate disputed facts raised by the petitioner at this stage.

The High Court clarified that a writ against a show cause notice should only be entertained if issued by an incompetent authority or in violation of any provisions of the Act, or if mala fides are alleged. Allegations of violation of natural justice should be raised in objections, and the competent authority must consider such objections. The court stated that disputed facts between parties cannot be adjudicated in writ proceedings under Article 226 of the Constitution of India. The petitioner was given liberty to submit material evidence or explanations for the authorities to consider.

In conclusion, the High Court dismissed the writ petition, emphasizing that disputed facts cannot be adjudicated in writ proceedings. The court highlighted that all facts must be adjudicated based on available documents and evidence, and contentions on merits cannot be considered in such proceedings. The judgment concluded with a dismissal of the writ petition and no order as to costs, along with the dismissal of the connected miscellaneous petition.