2024 (11) TMI 198 - HC - VAT / Sales Tax

Maintainability of petiiton - availability of alternative remedy - Rejection of appeal filed by the present petitioners - non-attendance of appellant before the Authority either in person or through an agent - Section 26 (5) (a) of the Maharashtra Value Added Tax Act - HELD THAT - The plea of availability of an alternate remedy, cannot be construed as a Bar for exercising the powers under Article 226 of the Constitution of India. More so, in the instant case, when the challenge is, to the passing of the impugned order by the Appellate Authority in contradistinction to the mandate as provided in Section 26 (5) (a) of the Maharashtra Value Added Tax Act. The plea therefore, is being turned down. It is a settled position of law, that between a Statute and a Rule, it is the Statute, which has primacy and therefore, prevails upon the Rule. In that view of the matter, while deciding the appeal, the Authority will have to be governed by the mandate of Section 26 (1) (a) of the Maharashtra Value Added Tax Act and decide the appeal in the manner as indicated therein, the Rule being subservient to it. The position in this regard has been considered in BALAJI STEEL RE-ROLLING MILLS VERSUS COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS 2014 (11) TMI 531 - SUPREME COURT in which considering similar provisions as contained in the Central Excise Act and Rule 20 of the Rules framed thereunder, which provided for dismissal of an appeal on account of the absence of the petitioner, it has been held that the substantive provisions of the Act would prevail and would be the manner in which the appeal has to be decided. In that view of the matter, the impugned order is hereby quashed and set aside and the matter is remitted back to the respondent No. 2 for decision afresh - petition allowed by way of remand.

Summary

Issues:
1. Validity of the order dated 22/10/2019 passed by the Joint Commissioner of Sales Tax.
2. Interpretation of Rule 36(2) of the Maharashtra Value Added Tax Rules, 2005 in conjunction with Section 26(5)(a) of the Maharashtra Value Added Tax Act.
3. Delay in filing the present petition and its impact on statutory mandate.
4. Availability of an alternate remedy under Section 26(1)(c) of the Maharashtra Value Added Tax Act.
5. Primacy of Statute over Rule in decision-making by the Appellate Authority.

Analysis:
1. The petitioners challenged the order passed by the Joint Commissioner of Sales Tax, which confirmed the assessment order due to non-attendance of the petitioners. The counsel for the petitioners argued that the Statute, specifically Section 26(5)(a) of the Maharashtra Value Added Tax Act, should take precedence over Rule 36(2) of the Rules, which mandates dismissal of an appeal for non-attendance. The counsel contended that the Appellate Authority should have decided the appeal on its merits as per the statutory provision.

2. The delay in filing the present petition was attributed to the non-communication of the impugned order to the petitioners within the stipulated time frame. The petitioners expressed readiness to pay costs to demonstrate their bona fides regarding the delay. The respondents, represented by the learned AGP, argued that the provision in Rule 36(2) empowers the Appellate Authority to dismiss appeals for non-attendance, and further appeal options under Section 26(1)(c) were available to the petitioners.

3. The Court addressed the issue of availability of an alternate remedy under Section 26(1)(c) of the Act and clarified that this should not bar the exercise of powers under Article 226 of the Constitution of India. The Court emphasized that the challenge was against the improper order of the Appellate Authority, contrary to the mandate of Section 26(5)(a) of the Act, thus rejecting the plea based on alternate remedies.

4. The judgment highlighted the primacy of the Statute over Rules in decision-making by the Appellate Authority. Citing the case of Balaji Steel Re-rolling Mills v. Commissioner of Central Excise and Customs, the Court emphasized that substantive provisions of the Act should prevail over procedural rules, ensuring that the appeal is decided in accordance with the statutory mandate.

5. Consequently, the impugned order was quashed and set aside, remitting the matter back to the Appellate Authority for a fresh decision in line with Section 26(5)(a) of the Act. The petitioners were directed to appear before the Authority without further notice, and the appeal was to be decided within 30 days. The judgment allowed the petition, subject to the condition of payment of costs by the petitioners.