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2017 (10) TMI 642 - HC - VAT and Sales TaxRefund of wrong reversal of input tax credit - Rate of VAT - inter-state sale - Natural Gases - Appellant purchases Natural Gases from Oil and Natural Gas Commission (ONGC) and would re-sell the same to various customers - rate of tax 4% or 12.5%? - C-Form - According to the appellant, rejection of refund is in violation of Article 265 of the Constitution, which mandates that no tax shall be levied or collected, except by authority of law - Section 41 of the TNVAT Act, 2006, as amended with effect from April 1, 2012 - Held that - The learned Single Judge while disposing of the Writ Petition has directed the appellant to avail the Appeal remedy and to prefer an Appeal as against the impugned order dated 26.06.2015 passed by the Commercial Tax Officer within a period of 30 days. The learned Single Judge, while disposing of the Writ Petition, has also taken into consideration the submission made by the respondent counsel with regard to the reference made under Section 27 of TNVAT Act, and came to the conclusion that when there is an alternative remedy available, bypassing the same, the Writ Petition filed by the petitioner cannot be entertained. Despite there being an alternative remedy, Writ remedy under Article 226 of the Constitution can be invoked only under such circumstances when principles of natural Justice is violated on the face of the record. In the present case, the appellant has to avail the appeal remedy under the statute, which cannot be given a go-by, by invoking the Writ Jurisdiction directly. Therefore, no interference is warranted against the order passed by the learned Single Judge. Appeal dismissed - decided against appellant.
Issues Involved:
1. Incorrect VAT Rate Applied 2. Reversal of Input Tax Credit (ITC) 3. Filing of Revised Returns 4. Entitlement to Refund 5. Application of Section 41 of the TNVAT Act, 2006 6. Availability of Alternative Remedy Analysis of Judgment: 1. Incorrect VAT Rate Applied: The appellant, a Central Public Sector Undertaking, was erroneously charged VAT at 12.5% by ONGC instead of the correct rate of 4% for Natural Gases. This error led the appellant to also charge 12.5% VAT on their local sales, except for sales to TNEB, where 4% was charged as per the Government Order. 2. Reversal of Input Tax Credit (ITC): The appellant incorrectly reversed ITC at 12.5% on their Inter-State sales, amounting to ?1,52,01,304/-, under the mistaken belief that they could not avail any ITC for Inter-State sales. This was later realized to be incorrect after a clarification from the Commissioner of Commercial Taxes, Tamil Nadu. 3. Filing of Revised Returns: The appellant filed revised returns for January-March 2007 on 15.11.2011, seeking to carry forward the excess ITC of ?1,52,01,304/-. However, the respondent rejected this on the grounds that the revised returns were filed after nearly five years, whereas Rule 7(9) of TNVAT Rules 2007 mandates filing within six months from the due date. The appellant argued that this rule, inserted from 6th May 2010, should apply prospectively and not to the assessment year 2006-2007. 4. Entitlement to Refund: The appellant sought a refund of ?1,52,01,304/- which was wrongly reversed. The Sales Tax Appellate Tribunal had allowed the appellant's appeal and ordered the refund, but the respondent did not comply, citing various reasons including the application of Section 41 of the TNVAT Act, 2006. 5. Application of Section 41 of the TNVAT Act, 2006: The respondent argued that Section 41, which deals with the forfeiture of tax collected, applied to the appellant's case. The appellant contended that this section had no application to their situation and that the rejection of the refund was in violation of Article 265 of the Constitution, which mandates that no tax shall be levied or collected except by authority of law. 6. Availability of Alternative Remedy: The learned Single Judge dismissed the writ petition, directing the appellant to avail the alternative remedy of appeal. The appellant argued that the Tribunal's order had attained finality and should have been complied with by the respondent. The court emphasized that the appellant should have pursued the appeal remedy under the statute before approaching the High Court under Article 226 of the Constitution. Conclusion: The High Court dismissed the writ appeal, confirming the order of the learned Single Judge, and reiterated that the appellant must exhaust the available statutory remedies before seeking judicial intervention. The court highlighted the importance of following the procedural rules and the self-imposed restraint on exercising writ jurisdiction when alternative remedies are available.
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