2023 (1) TMI 874 - HC - VAT and Sales Tax

Maintainability of petition - availability of alternative remedy of appeal - exercise of extraordinary and discretionary jurisdiction of this Court under Article 226 of the Constitution of India, when there this alternative remedy available - Whether the material used in the project was received by the MRPL at its site in Mangaluru or by the assessee whilst the goods were in transit? - Seeking cross-examination of Transport Companies who had transported the goods from various places to Mangaluru - HELD THAT - The Hon'ble Single Judge has taken note of one of the Assessment Orders and held that entertaining the writ petitions prematurely would cause serious prejudice not only to the assessee but also to the Revenue, who will loose their chance to argue before the two appellate forums provided in the Act and accordingly relegated the assessee to the Appellate Authority. The matter requires appreciation of evidence with regard to facts of the case and that can be done before the Appellate Authority. It is settled that ordinarily writ petition shall not be entertained, where there exist an alternative and efficacious remedy - this is not a fit case to exercise the extraordinary and discretionary jurisdiction of this Court under Article 226 of the Constitution of India. Appeal dismissed.

Summary

Issues Involved:
1. Disallowance of transit sales claim by Assessing Officer.
2. Interpretation of inter-State sales in the context of project materials procurement.
3. Applicability of alternative remedy in tax matters.

Analysis:
1. The case involved a dispute regarding the disallowance of transit sales claim by the Assessing Officer (AO) for an assessee engaged in construction and project engineering services. The AO re-computed the turnover, leading to a significant reduction, which was challenged by the assessee in writ petitions. The High Court had earlier directed the AO to reconsider the matter, and upon the subsequent order, the assessee filed a reply reiterating the transaction details (Para 4).

2. The main issue revolved around whether the goods procured by the assessee for a project were received by the project site or the contractor while in transit. The AO's decision was based on the interpretation of the contract clauses and concluded that the goods were purchased in the course of inter-State sales. The High Court emphasized the need for a thorough examination of facts, particularly related to the delivery of materials, which should be addressed before the Appellate Authority (Paras 10, 11).

3. The High Court highlighted the importance of exhausting alternative remedies in tax matters, stating that writ petitions should not be entertained when such remedies are available. It referenced a previous case to support this principle and emphasized the need for the assessee to respond to show cause notices and engage with the assessment orders through the appropriate channels (Paras 12, 13, 14).

4. The arguments presented by the Senior Advocate for the assessee focused on the nature of the services provided and the delivery of materials to the project site, claiming the sales to be inter-State. The State's representative supported the AO's decision, emphasizing the need for factual appreciation and the availability of appeal as the suitable remedy. The High Court concurred with the Single Judge's decision to dismiss the writ petitions, citing the discretion exercised by another High Court in a similar case and the unsuitability of the current case for extraordinary writ jurisdiction (Paras 6, 8, 15, 16).