2021 (3) TMI 607 - HC - VAT and Sales Tax

Violation of principles of natural justice - Refund of VAT paid on goods sold - plea of the petitioner is that since the order impugned has been passed in violation of the principles of natural justice and, therefore, availability of alternative remedy may not be a bar for the exercise of writ jurisdiction to review the impugned order - HELD THAT - The impugned order, as is apparent from its bare reading, is speaking one and spells out reasons for the decision. The reasons may be good or bad but the same can only be made subject matter of challenge in an appeal before the appellate authority under Section 72 of the Act. This Court not being a Court of appeal may not be in a position to appreciate the factual aspect of the matter. The appellate authority appointed by the Government for hearing appeals under Section 72 of the Act would be in a better position to appreciate both questions of fact and law. It is well settled that once statutory mechanism is provided for resolution of dispute, the party aggrieved must availed of the statutory remedy provided under the Statute and should not rush to the High Court invoking its extra ordinary writ jurisdiction. This petition cannot be entertained - the petitioner is relegated to remedy of appeal provided under the Act. Should the petitioner approach the appellate authority by way of appeal against the impugned order, the appellate authority shall consider the condonation of delay, if any, liberally having regard to the post Covid-19 situation - petition dismissed.

Issues:
1. Rejection of refund application on grounds of delay and failure to claim deductions.
2. Violation of principles of natural justice in the impugned order.
3. Maintainability of writ petition due to the availability of statutory remedy.
4. Consideration of delay and other reasons for rejection of VAT refund claim.
5. Applicability of extraordinary writ jurisdiction in cases of natural justice violation.
6. Statutory remedy under Section 72 of the Jammu & Kashmir Value Added Tax Act, 2005.
7. Judicial precedent on the availability of statutory remedy before resorting to writ jurisdiction.

Issue 1: Rejection of Refund Application:
The petitioner's refund application for VAT paid on goods sold during a specific period was rejected by the respondent due to various reasons, including a significant delay in applying for the refund, failure to claim deductions, and not determining excess tax in the return. The rejection was based on both procedural and substantive grounds.

Issue 2: Violation of Principles of Natural Justice:
The petitioner challenged the impugned order on the grounds of violating natural justice principles. However, the court found that the order, although challengeable, should be addressed through the statutory remedy available under the Jammu & Kashmir Value Added Tax Act, 2005.

Issue 3: Maintainability of Writ Petition:
The respondent contended that the writ petition was not maintainable due to the availability of an efficacious statutory remedy under the Act. The court concurred, stating that the statutory remedy should be pursued before resorting to extraordinary writ jurisdiction.

Issue 4: Consideration of Delay and Reasons for Rejection:
The court analyzed the delay in filing the return and the reasons for rejecting the VAT refund claim. The petitioner's failure to claim deductions for sales returns and other allied reasons contributed to the rejection of the refund application.

Issue 5: Extraordinary Writ Jurisdiction:
While the petitioner argued that the violation of natural justice warranted the exercise of writ jurisdiction, the court emphasized the need to exhaust the statutory remedy provided under the Act before seeking extraordinary relief.

Issue 6: Statutory Remedy under Section 72:
Section 72 of the Act provides a statutory remedy for dealers or assesses to appeal orders passed by the assessing authority. The court highlighted the importance of availing this statutory remedy before approaching the High Court for relief.

Issue 7: Judicial Precedent on Statutory Remedy:
Citing judicial precedent, the court emphasized that writ petitions should not be entertained when a statutory remedy is available unless exceptional circumstances are demonstrated. The court referred to previous cases to support the principle of exhausting statutory remedies before seeking relief through writ jurisdiction.

In conclusion, the court declined to entertain the petition and directed the petitioner to pursue the remedy of appeal provided under the Act. The court also advised the appellate authority to consider any delay liberally, especially in light of the post-Covid-19 situation.

← Previous Next →