2025 (1) TMI 666 - HC - VAT / Sales Tax

Rejection of petitioner's claim of ITC by invoking Section 19(5)(c) of the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT - It was thus submitted that the impugned order insofar as it invokes Section 19(5)(c) of the Act, cannot be sustained. - Following the precedents, the submission of the petitioner accepted. The learned counsel for the petitioner would request that the right of the department to reconsider subsequent to the order of the Hon'ble Supreme Court may be preserved. In view thereof, the impugned order is set aside and the right of the Department to revisit/ reconsider the issue invoking Section 19(5)(c) of the Act, subsequent to the order of the Hon'ble Supreme Court stands preserved. The writ petition stands disposed of.

1. ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

Whether the impugned order rejecting the petitioner's claim of Input Tax Credit (ITC) under Section 19(5)(c) of the Tamil Nadu Value Added Tax Act, 2006, is sustainable.
The extent of the High Court's jurisdiction under Article 226 of the Constitution of India in entertaining writ petitions when an alternative remedy is available.
The applicability and interpretation of the legal principles established in previous judgments, particularly concerning the limitation and laches in filing writ petitions.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Sustainability of the Impugned Order under Section 19(5)(c) of the Act

Relevant Legal Framework and Precedents: The Tamil Nadu Value Added Tax Act, 2006, particularly Section 19(5)(c), governs the claim of ITC. The court referenced prior decisions, including the judgment in the case of Commercial Taxes Department vs. M/s. Everest Industries Limited.
Court's Interpretation and Reasoning: The court noted that similar issues had been considered in previous cases, and the current issue aligns with those precedents. The court emphasized consistency with the earlier decisions of the Division Bench.
Key Evidence and Findings: The court observed that the appellate authority's order of remand had not been adequately addressed in the impugned order, which led to the rejection of the ITC claim.
Application of Law to Facts: The court applied the legal principles from previous judgments, emphasizing that the impugned order should be reconsidered in light of the pending Supreme Court decision.
Treatment of Competing Arguments: The petitioner argued for setting aside the impugned order, while the respondent sought to preserve the right to revisit the issue post the Supreme Court's decision.
Conclusions: The impugned order was set aside, with the right of the Department to revisit the issue preserved, pending the Supreme Court's decision.

Issue 2: Jurisdiction of the High Court under Article 226

Relevant Legal Framework and Precedents: Article 226 of the Constitution of India provides the High Court with the power to issue directions, orders, or writs. The court referenced the Supreme Court's observations in cases like Baburam Prakash Chandra Maheshwari and Thansingh Nathmal.
Court's Interpretation and Reasoning: The court reiterated that while the High Court has wide powers under Article 226, it should exercise self-imposed restraint, especially when an alternative remedy is available.
Key Evidence and Findings: The court highlighted the parameters within which jurisdiction under Article 226 should be exercised, such as unfairness, unreasonableness, and violation of natural justice.
Application of Law to Facts: The court applied these parameters to determine that the writ petition could be entertained despite the availability of alternative remedies.
Treatment of Competing Arguments: The court balanced the arguments regarding the availability of alternative remedies and the need for judicial intervention in cases of statutory violations.
Conclusions: The court held that the writ petition was maintainable, setting aside the previous observation that there was an absolute bar for entertaining such petitions.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "The High Court may accede to such a challenge and can also non-suit the petitioner on the ground that alternative efficacious remedy is available and that be invoked by the writ petitioner."
Core Principles Established: The court reaffirmed the principle that the High Court's jurisdiction under Article 226 is not barred by the availability of alternative remedies but should be exercised with restraint.
Final Determinations on Each Issue: The impugned order was set aside, with the Department's right to reconsider preserved. The writ petition was deemed maintainable under Article 226, with no absolute bar on its entertainment.

The judgment underscores the balance between judicial intervention and adherence to statutory remedies, emphasizing the High Court's role in ensuring fairness and legality in administrative actions.

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