2015 (3) TMI 961 - HC - VAT and Sales Tax

Levy of tax liability - Imposition of penalty - non-production of declaration in Form IX-C on the date of assessment - Suppression and misrepresentation of facts - Maintainability of appeal - Availability of alternate remedy - Held that - It has been repeatedly held by the Supreme Court and by this Court that the same does not absolutely bar the exercise of jurisdiction under Article 226 of the Constitution of India. It is true that under Section 79 of the Value Added Tax Act, 2005, even an order passed under the Bihar Finance Act, 1981, which has been repealed by Section 94 of the subsequent Act, would be appealable but the appeal can be heard only on the satisfaction that a substantial question of law is involved in the case. In the present matter, the issue is not related to the merit of the matter rather it relates to non-consideration of the basic point either by the Appellate Authority or by the Revisional Authority for whatever reason, which is whether in view of the fact that the declaration in Form IX-C had been issued by the Indian Oil Corporation to the petitioner after the assessment order was passed, there can be any liability to pay tax by the petitioner. It is not the purpose of any of the taxing statutes to saddle a person with tax beyond what is provided by the same. It is evident that if Form IX-C had been produced by the petitioner before the Assessing Authority, there was no question of levy of any tax or penalty upon the same. As the authorities of the Indian OIL Corporation had failed to issue the said Form IX-C to the petitioner which is dated 25.3.2004 and had reached the petitioner after the order dated 26.3.2004 was passed by the Commercial Tax Officer and even thereafter the same had required correction of mistake as it did not contain the signature of the authorized officer of the Indian OIL Corporation. In such circumstances, it is not the petitioner who can be blamed rather Form IX-C was delivered to the petitioner after passing of the assessment order and the Appellate Authority and the Revisional should have considered that aspect of the matter and not taken such harsh view as has been taken in the present matter. - existence of statutory alternative remedy does not always bar the exercise of power by this Court under Article 226 of the Constitution of India and in the given facts, it is a fit case for quashing and setting aside the order dated 17.7.2014, 24.2.2006 and 26.3.2004 passed by the Commercial Tax Tribunal, Joint Commissioner of Commercial Taxes (Appeal) and the Commercial Tax Officer respectively and remanding the matter before the Commercial Tax Officer, Sitamarhi for fresh order in accordance with law - Matter remnaded back - Decided in favour of assessee.

Summary

Issues:
1. Quashing of orders by Commercial Taxes Tribunal, Joint Commissioner of Commercial Taxes (Appeal), and Commercial Tax Officer.
2. Non-production of declaration in Form IX-C by the petitioner.
3. Failure to consider relevant facts by the Tribunal.
4. Applicability of statutory alternative remedy under Section 79 of the Bihar Value Added Tax Act, 2005.
5. Jurisdiction under Article 226 of the Constitution of India.
6. Liability to pay tax and penalty by the petitioner.

Analysis:

1. The petitioner sought quashing of orders passed by the Commercial Taxes Tribunal, Joint Commissioner of Commercial Taxes (Appeal), and Commercial Tax Officer. The petitioner, a wholesale dealer, contended that it had no further tax liability under the Bihar FINANCE Act, 1981, as the goods had already been taxed at the first point of sale by the Indian Oil Corporation. The petitioner faced challenges in obtaining Form IX-C from the Oil Company, leading to an enhanced tax assessment and penalty. The Tribunal rejected the revision application, alleging the petitioner's failure to present correct facts. The High Court held that the Tribunal erred in dismissing the revision without considering crucial aspects and ordered a fresh assessment by the Commercial Tax Officer.

2. The key issue revolved around the non-production of declaration in Form IX-C by the petitioner at the time of assessment. The petitioner argued that the delayed receipt of Form IX-C, post-assessment, absolved them of tax liability. The High Court acknowledged the petitioner's efforts to obtain the form and criticized the authorities for not considering this significant factor before imposing tax and penalty. The Court emphasized that the petitioner's inability to submit Form IX-C before assessment was not a deliberate act of suppression.

3. The Tribunal's failure to consider essential facts, such as the delayed receipt of Form IX-C and the deposit of 20% appeal amount, was highlighted. The petitioner contended that all necessary documents were submitted to the counsel, and the appeal dismissal was unjustified. The High Court agreed that the Tribunal overlooked critical details and unjustly accused the petitioner of withholding information. The Court emphasized the importance of a thorough review of all relevant facts before passing judgments.

4. The statutory alternative remedy under Section 79 of the Bihar Value Added Tax Act, 2005 was debated. While the State argued that the writ application was not maintainable due to the availability of an appeal process, the High Court clarified that statutory remedies do not always preclude the exercise of Article 226 jurisdiction. The Court emphasized that the issue at hand did not involve a substantial question of law but rather the oversight of crucial facts by the authorities, warranting intervention under Article 226.

5. The Court affirmed its jurisdiction under Article 226 of the Constitution of India to ensure justice in cases where essential facts were overlooked. The High Court stressed that the purpose of taxation statutes is not to burden individuals beyond the prescribed limits. In this case, the delayed issuance of Form IX-C by the Indian Oil Corporation played a pivotal role in determining the petitioner's tax liability, which the authorities failed to consider adequately.

6. Lastly, the Court addressed the petitioner's liability to pay tax and penalty. The High Court recognized the petitioner's efforts to comply with tax requirements and faulted the delayed issuance of Form IX-C for the confusion. While ordering the quashing of previous orders and a fresh assessment, the Court imposed a cost on the petitioner for negligence in pursuing the appeal.