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2022 (12) TMI 1328 - HC - VAT and Sales TaxJurisdiction - time limitation - whether the contention of petitioner that as second respondent has already exercised the suo motu powers of revision under Section 32(2) of the VAT Act, exercise of such powers again by the first respondent, is permissible under law? - HELD THAT - A plain reading of Section 32(1) of the VAT Act shows that the Commissioner may suo moto call for and examine the record of any order passed or proceeding recorded by any authority, officer or person subordinate to him under the provisions of the Act, including sub-section (2), if such order or proceeding is prejudicial to the interests of the revenue. Further, a reading of same also shows that in Section 32(2) of the VAT Act, the powers of revision are also conferred on Additional Commissioner, Joint Commissioner, Deputy Commissioner and Assistant Commissioner in case of orders passed or proceedings recorded by the authorities, officers or persons subordinate to them. The powers under Section 32(2) are to be exercised by the subordinates to the Commissioner. The exercise of powers under Section 32(2) are no other than the revisional powers akin to the powers conferred on the Commissioner. There is no denial of the fact that the authorities under the VAT Act are vested with the powers to make assessment etc. Whether the VAT dealer transferred the right to use the vehicles of him to the oil company or not is a question of fact and if the petitioner has suffered with any adverse findings in the impugned order, he ought to have challenged these factual aspects by filing an Appeal before the appellate authority but not by way of this Writ Petition under Article 226 of Constitution of India. Apart from that, the first respondent in the impugned order opined that the self serving certificate issued by the Oil Company, as regards collection of service tax cannot be taken as a valid document, when the same is disputed by the respondents. Hence, the petitioner cannot rely upon the above to support his contention. In RASHTRIYA ISPAT NIGAM LTD. VERSUS COMMERCIAL TAX OFFICER, COMPANY CIRCLE, VISAKHAPATNAM 1989 (12) TMI 325 - ANDHRA PRADESH HIGH COURT , it was held that the agreement has to be read as a whole in order to determine the nature of the transaction to ascertain the effective control of the machinery was in the use of the contractor or that of the company. The proper remedy for the petitioner would be to avail the remedy of Appeal in terms of Section 33 of the VAT Act. The material on record shows that the petitioner did not file the Appeal on the ground that filing of Appeal would make him to deposit 25% of the disputed tax. This cannot be a ground to file a Writ Petition under Article 226 of the Constitution, before this Court. The Hon'ble Apex Court in SETH CHAND RATAN VERSUS PANDIT DURGA PRASAD (D) BY LRS. ORS. 2003 (3) TMI 703 - SUPREME COURT , while dealing with scope of Article 226 of the Constitution of India held that when a right or liability is created by a statue, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before seeking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is no doubt a rule of policy, convenience and discretion and the Court may in exceptional cases issue a discretionary writ of certiorari, where there is complete lack of jurisdiction for the officer or authority or Tribunal to take the action or there has been a contravention of fundamental rights or there has been a violation of principles of natural justice or where the Tribunal acted under a provision of law, which are ultra vires. Then notwithstanding the existence of an alternative remedy, the High Court can exercise its jurisdiction to grant relief. Petition dismissed.
Issues Involved:
1. Jurisdiction of the first respondent to pass the impugned order. 2. Bar of limitation on the impugned order. 3. Validity of the impugned order under the VAT Act. 4. Transfer of right to use goods and applicability of VAT. 5. Availability of alternative remedies. Issue-wise Detailed Analysis: 1. Jurisdiction of the first respondent to pass the impugned order: The petitioner contended that the first respondent, Joint Commissioner (CT), Legal, had no power under Section 32 of the VAT Act to pass the impugned order as the second respondent had already exercised suo motu revision powers under the same provision. The court analyzed Section 32 of the VAT Act, which allows the Commissioner and other prescribed authorities to revise orders passed by subordinates. The court found that the Commissioner and subordinates, including the Joint Commissioner, have the authority to revise orders under Section 32(1) and (2). Therefore, the first respondent's action to revise the order of the second respondent was within jurisdiction. The court concluded that the contention of the petitioner regarding the lack of jurisdiction was untenable. 2. Bar of limitation on the impugned order: The petitioner argued that the impugned order was barred by limitation, citing the judgment in Agarwal Industries Limited. The court noted that the original assessment order was passed on 19.02.2016, and the impugned order was issued on 13.02.2020, within the four-year limitation period prescribed under Section 32(3) of the VAT Act. The court rejected the petitioner's argument that the impugned order amounted to a fresh assessment barred by limitation, as the order was a revision of the second respondent's order within the permissible period. 3. Validity of the impugned order under the VAT Act: The petitioner contended that the impugned order was contrary to law and not sustainable, relying on various judgments. The court examined the applicability of Section 4(8) of the VAT Act, which deals with the transfer of the right to use goods. The court found that the determination of whether there was a transfer of the right to use the vehicles was a factual question. The petitioner failed to provide the necessary agreements to substantiate their claims during the proceedings. The court held that the petitioner should have challenged the factual findings through an appeal rather than a writ petition. 4. Transfer of right to use goods and applicability of VAT: The petitioner argued that the payment of service tax on the consideration received should exempt them from VAT. The court referred to the impugned order, which stated that the self-serving certificate issued by the Oil Company regarding service tax payment was not a valid document. The court emphasized that the determination of whether there was a transfer of the right to use goods required examining the agreements, which the petitioner failed to provide. The court held that the proper forum to address these factual disputes was an appellate authority. 5. Availability of alternative remedies: The court noted that the petitioner had an alternative remedy of appeal under Section 33 of the VAT Act. The petitioner argued that filing an appeal would require depositing 25% of the disputed tax, which was not a valid ground for bypassing the statutory remedy. The court cited the Supreme Court's ruling in Chand Ratan v. Durga Prasad, which emphasized the necessity of exhausting statutory remedies before seeking a discretionary writ under Article 226 of the Constitution. The court found no exceptional circumstances to justify bypassing the alternative remedy and dismissed the writ petition. Conclusion: The court dismissed the writ petition, finding no merit in the petitioner's arguments. The impugned order was within jurisdiction, not barred by limitation, and the petitioner had an alternative remedy of appeal to address the factual disputes.
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