2016 (12) TMI 425 - HC - VAT and Sales Tax

Principles of natural justice - Section 39(1) of the KVAT Act, 2003 - maintainability of appeal - effective alternative remedy available to the petitioner under Section 62 of the KVAT Act, 2003 - Held that - The narrow parameters for invoking writ jurisdiction under Article 226 of the Constitution of India, notwithstanding the appeal remedy available to the petitioner have to be very strictly construed. The contingencies like, question of validity and vires of the relevant statute or Rules or Notifications is involved, whether the assessee concerned has been saddled with the financial liability without any sort of opportunity of hearing given to him, is not to be lightly invoked in all such cases merely on the basis of the allegations and averments made in the writ petitions. The contentions raised before this Court in the present case, could all have been raised before the Appellate Authorities without any doubt. For the reasons best known to the petitioner- assessee, the petitioner-assessee ignored and bypassed these remedies. The writ jurisdiction in such circumstances cannot be allowed even to overcome the lapse of the limitation for the petitioner-assessee at this belated stage. Petition not maintainable and is dismissed.

Issues Involved:
1. Compliance with principles of natural justice by the Assessing Authority.
2. Maintainability of the writ petitions in the presence of an alternative remedy.
3. The propriety of the Assessing Authority's actions in relation to the assessment order and rectification application.

Detailed Analysis:

1. Compliance with Principles of Natural Justice:
The petitioner-assessee contended that the respondent-Assessing Authority breached the principles of natural justice by not providing a specific proposition notice while applying the G.P. rate and making additions in the assessment order. It was also argued that the details furnished by the petitioner were not considered, and certain audit reports were relied upon without confronting the petitioner.

The Court, however, found these contentions to be misconceived. It clarified that the principles of natural justice require the assessee to be notified and given a reasonable opportunity to be heard before any adverse order is passed. The Court observed that the petitioner had been given notice and had participated in the assessment proceedings, thus fulfilling the requirements of natural justice. The Court emphasized that the alleged breaches were more about the petitioner’s failure to fully cooperate during the assessment proceedings rather than any procedural lapses by the Assessing Authority.

2. Maintainability of the Writ Petitions:
The Court held that the writ petitions were not maintainable due to the availability of an effective alternative remedy under Section 62 of the KVAT Act, 2003. The petitioner had the option to file a regular appeal against the assessment order but chose to file a rectification application instead, which was later rejected. The Court noted that the filing of a rectification application does not bar the petitioner from simultaneously availing the regular appellate remedy.

The Court reiterated that the extraordinary writ jurisdiction under Article 226 of the Constitution of India cannot be invoked to examine minute details or factual aspects of the assessment order, which are better suited for the fact-finding appellate forums provided under the KVAT Act. The Court stressed that the petitioner should have raised his grievances before the appropriate appellate authorities rather than bypassing them and approaching the High Court directly.

3. Propriety of the Assessing Authority's Actions:
The petitioner argued that the Assessing Authority did not judiciously apply its mind to the details and documents provided, and that certain materials like the audit report were not specifically notified to the petitioner. The Court found these contentions to require a deep enquiry into factual allegations, which is beyond the scope of writ jurisdiction.

The Court observed that the Assessing Authority is not required to give everything in writing in advance by way of a proposition notice and that the petitioner is expected to cooperate and explain all points during the assessment proceedings. The Court also noted that the petitioner had participated in the assessment proceedings and had been given notice, thus the claim of breach of natural justice was unfounded.

Conclusion:
The Court concluded that the present writ petitions did not deserve to be entertained on merits due to the availability of an alternative remedy and the lack of any substantial breach of natural justice by the Assessing Authority. The Court dismissed the writ petitions, cautioning that if similar cases flood the court in the future, it may reconsider its leniency in favor of the Revenue.

Additional Observations:
The Court referenced a recent Supreme Court judgment emphasizing that the principles of natural justice are not codified rules and their application depends on the nature of the jurisdiction and the specific facts of each case. The Court also highlighted the inefficiencies in the judicial system caused by unproductive and repetitive motions, stressing the need for effective case-flow management techniques.

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