2019 (7) TMI 720 - HC - VAT and Sales Tax

Tax Deducted at Source - It is the case of the learned counsel for writ petitioner that the work done by the writ petitioner for Chennai Corporation is in the nature of civil works - Section 13 of TNVAT Act - Alternative remedy - HELD THAT - The rule of alternate remedy or the rule pertaining to exercise of writ jurisdiction under Article 226 notwithstanding alternate remedy, is not an absolute rule, but is a rule of discretion. Though it is not a rule of compulsion and it is a rule of discretion, this Court deems it appropriate to refer to two judgments of Hon'ble Supreme Court viz., UNITED BANK OF INDIA VERSUS SATYAWATI TONDON AND OTHERS 2010 (7) TMI 829 - SUPREME COURT and AUTHORIZED OFFICER, STATE BANK OF TRAVANCORE AND ANOTHER VERSUS MATHEW K.C. 2018 (2) TMI 25 - SUPREME COURT - To be noted, Satyawati Tondon principle was reiterated in latter of the two i.e., K.C.Mathew. In Satyawati Tondon case and K.C.Mathew regarding rule of alternate remedy, the principle that such a rule, though a rule of discretion and not a rule of compulsion, should be exercised with greater rigour in fiscal law statutes has been laid down. This Court is convinced that this is a fit case of relegation to alternate remedy of an appeal to the jurisdictional Deputy Commissioner under Section 51 of TNVAT Act.

Issues Involved:
1. Core issue of Tax Deducted at Source (TDS) compliance under Section 13 of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act).
2. Failure to respond to pre-assessment notices.
3. Availability and appropriateness of alternate remedy through appeal under Section 51 of TNVAT Act.

Issue-wise Detailed Analysis:

1. Core Issue of TDS Compliance Under Section 13 of TNVAT Act:
The primary issue in all four writ petitions revolves around the compliance with TDS provisions as stipulated under Section 13 of the TNVAT Act. The petitioner, engaged in civil contract work for Chennai Corporation, was alleged to have failed to produce adequate documents for the assessment years in question (2012-2013, 2013-2014, 2014-2015, and 2015-2016). Consequently, the Assessing Officer issued assessment orders based on the perceived non-compliance.

2. Failure to Respond to Pre-assessment Notices:
For W.P.No.3219 of 2019 (Assessment Year 2012-2013), the petitioner did not respond to a pre-assessment notice dated 09.01.2018, which called for objections and supporting documents. The assessment order was thus passed, leading to the attachment of the petitioner’s bank account. Similarly, for the other three writ petitions, the petitioner did not respond to pre-assessment notices, resulting in the issuance of assessment orders and subsequent bank account attachments.

3. Availability and Appropriateness of Alternate Remedy:
The court highlighted the availability of an effective and efficacious alternate remedy through an appeal to the jurisdictional Appellate Deputy Commissioner under Section 51 of TNVAT Act. The court emphasized that the rule of alternate remedy is a rule of discretion, particularly stringent in fiscal matters involving taxes, as elucidated in the Supreme Court judgments in Satyawati Tondon and K.C. Mathew cases. The court noted that the petitioner did not utilize this remedy and did not respond to pre-assessment notices, which could have addressed the compliance issues.

Conclusion and Orders:
The court decided not to interfere with the impugned assessment orders, advising the petitioner to pursue the alternate remedy of appeal under Section 51 of TNVAT Act. The court allowed the petitioner to file additional documents before the appellate authority to demonstrate compliance with the obligations under the TNVAT Rules. The court also directed the return of original impugned orders to the petitioner’s counsel to facilitate the appeal process. All four writ petitions were disposed of with these observations, and no costs were imposed.

← Previous Next →