2022 (6) TMI 701 - HC - VAT and Sales Tax

Maintainability of petition - availability of alternative remedy of appeal - Validity of assessment order - works contract - transfer of the property took place on the ONGC platform - part of the State of Maharashtra or not - movement of goods from the State of Maharashtra to Mumbai High - inter-state sale or local sale - case of petitioner is that the transfer of the property in goods imported in execution of the work contract is outside the State of Maharashtra and thus the State of Maharashtra has no jurisdiction to levy tax - concept of a separate delivery of such goods in such a contract - HELD THAT - It is not in dispute that the petitioner has filed this writ petition under Article 226 of the Constitution of India impugning the order of assessment passed by the assessing officer on 30th December, 2015 under section 23(4) of MVAT Act. Under section 26 of the MVAT Act, the remedy of filing an appeal against the assessment order passed by the assessing officer under section 23(4) of MVAT Act is available. The Supreme Court in case of COMMISSIONER OF INCOME TAX OTHERS VERSUS CHHABIL DASS AGARWAL 2013 (8) TMI 458 - SUPREME COURT while dealing with the order of assessment passed under section 148 of the Income Tax Act, 1961, held that it is settled law that non-entertainment of petitions under writ jurisdiction of High Court when an efficacious alternative remedy is available is a rule self-imposed limitation. It is essentially the rule of policy, convenience and discretion rather than the rule of law. High Court must not interfere if there is an adequate efficacious alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under Article 226. If this Court entertains this petition impugning the assessment order without directing the petitioner to avail alternative remedy available under section 26 of the MVAT Act and if the petition is rejected on its own merits, the petitioner in that event would not be able to subsequently avail of alternative remedy by way of an appeal under section 26 of the MVAT Act which would be prejudicial to the interest of the petitioner. On this ground also we are not inclined to entertain this writ petition impugning the assessment order directly in this writ petition. The petitioner has not made out any exceptional circumstances to entertain the petition for entertaining the writ petition without availing alternative efficacious remedy available to the petitioner. The writ petition is dismissed as not maintainable on the ground of alternative efficacious remedy under section 26 of the Maharashtra Value Added Tax Act, 2002 not availed by the petitioner.

Summary

Issues Involved:
1. Maintainability of the writ petition under Article 226 of the Constitution of India.
2. Jurisdiction of the State of Maharashtra to levy tax on the works contract executed on the ONGC platform at Bombay High.
3. Classification of contracts and their tax implications under the Maharashtra Value Added Tax Act, 2002 (MVAT Act).

Detailed Analysis:

1. Maintainability of the Writ Petition:
The court addressed the issue of whether the writ petition was maintainable given the availability of an alternative efficacious remedy under Section 26 of the MVAT Act. The petitioner had filed the writ petition under Article 226 of the Constitution of India, challenging the assessment order passed by the assessing officer. The court cited the Supreme Court's judgment in *Commissioner of Income Tax & Ors. vs. Chhabil Dass Agarwal* which held that the non-entertainment of petitions under writ jurisdiction when an efficacious alternative remedy is available is a rule of policy, convenience, and discretion rather than a rule of law. The court emphasized that the petitioner had not availed the alternative remedy of appeal prescribed under Section 26 of the MVAT Act and had directly impugned the assessment order in the writ petition. Therefore, the writ petition was dismissed as not maintainable on the ground of the petitioner not having availed of the alternative efficacious remedy.

2. Jurisdiction of the State of Maharashtra:
The petitioner contended that the ONGC platform is located in the exclusive economic zone, outside the State of Maharashtra, and thus the State had no jurisdiction to levy tax on the goods involved in the execution of the works contract. The court noted that the assessment order passed by the Assessing Officer held that the work contract was executed between the ONGC and the petitioner, both registered under the MVAT Act, and that the movement of goods from the State of Maharashtra to Bombay High did not constitute an inter-state sale or export. The court did not delve into the merits of this argument due to the dismissal of the writ petition on the grounds of maintainability.

3. Classification of Contracts:
The petitioner argued that the contracts with ONGC included (i) operation and maintenance of chlorinator, (ii) charter hire of MSV support vehicles, and (iii) works contracts involving activities forming part of the agreement. The Assessing Officer had not classified the contracts for operation and maintenance of chlorinator and charter hire of vessels as works contracts. The petitioner contended that the transfer of property in goods involved in the execution of the works contract took place at the point of incorporation, which was outside the State of Maharashtra. The court noted that these factual disputes and additional submissions were not part of the record before the Assessing Officer and should be adjudicated by the Appellate Authority. The court emphasized that it cannot entertain or adjudicate upon such issues based on additional facts raised across the bar, not forming part of the submissions advanced before the Assessing Officer.

Conclusion:
The writ petition was dismissed as not maintainable on the ground of the petitioner not having availed the alternative efficacious remedy under Section 26 of the MVAT Act. The court did not address the merits of the petitioner's arguments regarding the jurisdiction of the State of Maharashtra and the classification of contracts due to the dismissal on the grounds of maintainability. The court also noted that the issues regarding the validity of Section 26 of the MVAT Act are being dealt with by a Full Bench in a separate case and thus were not addressed in this judgment.