2021 (3) TMI 131 - HC - VAT / Sales Tax

Maintainability of petition - availability of alternate remedy of appeal - allegation is that the writ petition was filed beyond the maximum time limit stipulated under the VAT Act for filing the appeal - HELD THAT - An identical issue was considered in MAHINDRA MAHINDRA LTD. VERSUS THE JOINT COMMISSIONER (CT) APPEALS, THE DEPUTY COMMISSIONER (CT) - II, LARGE TAX PAYERS UNIT, CHENNAI-8 2021 (3) TMI 82 - MADRAS HIGH COURT wherein we dealt with the issue as to whether the decision of the Hon'ble Supreme Court in the case of ASSISTANT COMMISSIONER (CT) LTU, KAKINADA ORS. VERSUS M/S. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED 2020 (5) TMI 149 - SUPREME COURT , which was relied upon by the learned Single Judge, laid down the proposition that there has been absolute bar for entertaining a writ petition, which had been filed beyond the statutory period of limitation prescribed under the Act for preferring a statutory appeal before the Appellate Authority. In the light of the above decision wherein it is held that there is no absolute bar for entertaining a writ petition, the decision of the learned Single Judge in holding as if there is a blanket ban for entertaining a writ petition cannot be countenanced. Hence, the impugned order is interfered with. Revision of assessment, which was initially completed by issuance of a notice under Section 27 of the VAT Act - HELD THAT - Our attention is drawn to a certificate issued by the Chartered Accountant dated 16.2.2017 - No doubt, the said certificate dated 16.2.2017 is much after the assessment order dated 15.9.2016. Nevertheless, had an opportunity been granted to the appellant to produce the books of accounts and other records, in all probabilities, the dispute would have been resolved. Thus, considering the peculiar facts and circumstances of the case, we are of the considered view that one more opportunity can be granted to the appellant to go before the Assessing Officer and place all records so as to enable the Assessing Officer to complete the assessment in accordance with law after taking note of the relevant factors. The matter is remanded to the Assessing Officer for a fresh consideration - Appeal allowed by way of remand.

Issues:
1. Availability of alternate remedy under VAT Act for filing appeal
2. Interpretation of Supreme Court decision regarding writ petitions filed beyond statutory period
3. Assessment defects and actions taken by Assessing Officer

Issue 1: Availability of alternate remedy under VAT Act for filing appeal

The High Court considered the case of a registered dealer challenging an assessment order under the VAT Act for the year 2012-13. The learned Single Judge rejected the writ petition, citing the availability of an alternate remedy under the VAT Act and the petition being filed beyond the statutory time limit. The High Court, in a previous case, examined whether a writ petition could be entertained beyond the limitation period for filing a statutory appeal. The Supreme Court's decision emphasized that the High Court should not entertain a writ petition if an effective alternative remedy is available, unless there are exceptional circumstances like violation of natural justice. The High Court clarified that there are specific parameters under which the Court can exercise its jurisdiction under Article 226 of the Constitution, such as unfairness, unreasonableness, perversity in the action of the Statutory Authority, lack of jurisdiction, or violation of natural justice. The Court also highlighted a previous Supreme Court decision stating that the High Court's jurisdiction should not be restricted by statutory provisions, but exercised in line with legislative intent. Therefore, the High Court held that there was no absolute bar for entertaining a writ petition beyond the statutory period, and the Single Judge's observation was incorrect.

Issue 2: Interpretation of Supreme Court decision regarding writ petitions filed beyond statutory period

The High Court analyzed the Supreme Court's decision on the limitations of entertaining writ petitions under Article 226 of the Constitution. The Supreme Court emphasized that while the High Court has wide powers under Article 226, it should exercise self-imposed restraint and not entertain writ petitions if an effective alternative remedy is available. The Court should not disregard statutory time limits for redressal of grievances. The High Court should only intervene if there is unfairness, unreasonableness, lack of jurisdiction, or violation of natural justice by the Statutory Authority. The High Court referred to a landmark Supreme Court decision that highlighted the need to exercise jurisdiction under Article 226 to uphold the rule of law, not undermine it. Based on these principles, the High Court concluded that the Single Judge's view of a blanket ban on entertaining writ petitions beyond the statutory period was incorrect.

Issue 3: Assessment defects and actions taken by Assessing Officer

The Assessing Officer proposed to revise the assessment for the appellant based on nine defects, including discrepancies in turnover, tax reversals, and failure to produce evidence. The appellant responded to the defects, and the Assessing Officer dropped some proposals after being satisfied with the explanations. However, for certain defects, the proposals were confirmed as the appellant failed to provide evidence. The High Court noted a certificate issued by a Chartered Accountant after the assessment order, which clarified a discrepancy related to a capital asset. The Court opined that had the appellant been given an opportunity to present records, the dispute could have been resolved. Consequently, the High Court allowed the writ appeal, set aside the impugned order, and remanded the matter to the Assessing Officer for fresh consideration. The appellant was granted an opportunity to submit relevant records, and the Assessing Officer was directed to pass a reasoned order on merits and in accordance with the law.

This detailed analysis of the judgment covers the issues related to the availability of alternate remedies, interpretation of Supreme Court decisions, and the assessment defects in a comprehensive manner.

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