2021 (10) TMI 62 - HC - VAT and Sales Tax

Maintainability of petition - availability of alternative remedy of appeal - Seeking restraint on Respondent Authorities from taking any action or proceedings against the petitioner - levy of service tax on end-to-end ATM management service provided by the Petitioner to banks in the State of U.P. - seeking adjustment of Service Tax collected by Union of India, i.e. Respondent no. 4 - HELD THAT - The petitioner has challenged the assessment order passed under the 'Act 2008' against which admittedly a statutory remedy of appeal is available to the petitioner. The petitioner itself had raised the issue of applicability of VAT by filing application under Section 59 of the 'Act 2008' and vide order dated 14.12.2015 the petitioner has been held liable for VAT. Admittedly the said order has been challenged before the learned Commercial Tax Tribunal Lucknow vide appeal no. 2 of 2021 as such considering the order passed under Section 59 of the 'Act 2008' and the assessment order now passed there cannot by any occasion for this Court to entertain the instant petition. When the facts of the present case are tested on the touchstone of the law laid down by the Hon'ble Apex Court in the case of THE ASSISTANT COMMISSIONER OF STATE TAX AND OTHERS VERSUS M/S COMMERCIAL STEEL LIMITED 2021 (9) TMI 480 - SUPREME COURT it clearly emerges that the petitioner has failed to make out a case so as to persuade us to entertain the present writ petition keeping in view the exceptional circumstance which has been carved out by the Hon'ble Apex Court for entertaining a petition under Article 226 of the Constitution of India despite availability of statutory remedy. Petition dismissed.

Summary

Issues:
Challenge to assessment order under the Uttar Pradesh Value Added Tax Act, 2008, availability of statutory remedy of appeal, applicability of VAT or service tax, maintainability of writ petition under Article 226 of the Constitution of India.

Analysis:
The petitioner filed a writ petition seeking to quash an order passed by respondent no. 3, restrain authorities from taking action based on the order, declare liability for service tax on ATM management services, and seek adjustment of service tax collected. The respondent argued that the petitioner should appeal under Section 55 of the Act 2008. The petitioner contended that the issue of VAT or service tax liability is a question of law beyond the scope of the appellate authority. The respondent cited a recent Apex Court judgment to support the view that a writ petition can only be entertained in exceptional circumstances. The respondent highlighted that the petitioner previously applied under Section 59 of Act 2008 and was held liable for VAT.

The Court noted that the petitioner challenged the assessment order under the Act 2008, and a statutory appeal remedy was available. The petitioner's previous application under Section 59 resulted in a VAT liability determination, which was being challenged before the Commercial Tax Tribunal. The Court found no grounds to entertain the writ petition, considering the previous VAT liability determination and ongoing appeal. The Court referred to judgments regarding the competence of the state to levy taxes and emphasized that the petitioner cannot challenge the assessment after previously accepting VAT liability.

The Court discussed the exceptions for entertaining a writ petition despite the existence of a statutory remedy, as outlined in a recent Apex Court judgment. It was concluded that the petitioner failed to establish exceptional circumstances warranting the writ petition's consideration. The Court dismissed the writ petition, allowing the petitioner to pursue available remedies against the assessment order. The judgment highlighted the importance of adhering to statutory remedies and established legal principles in tax matters.

This detailed analysis of the judgment provides insights into the legal reasoning behind the dismissal of the writ petition and emphasizes the significance of following statutory procedures and legal principles in tax-related disputes.