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TMI Blog2016 (5) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner. Since the petitioner has miserably failed to prove the same, the respondent has passed the impugned order. Also the petitioner without availing the statutory remedy of appeal, has filed this writ petition, which is not maintainable in the absence of any violation of principles of natural justice or where the order under challenge is wholly without jurisdiction or the vires of the statute, is under challenge. Validity of impugned order - passed in violation of principles of natural justice - denied the opportunity of being heard to the petitioner - Held that:- on perusal of the averments, the contention of the learned Counsel for the petitioner that no opportunity of personal hearing was given to the petitioner cannot be accepted and in the well-considered opinion of this Court that the impugned order was not passed in violation of principles of natural justice. Further, when the alternative statutory remedy is available, the writ petition cannot be entertained, except for the enforcement of any of the fundamental rights or where there has been a violation of the principles of natural justice or where the order under challenge is wholly without jurisdiction or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014 for the reason that the sellers have not reported their sales to the petitioner and have also not produced the documents as per Section 19(13) of the TNVAT Act. Further, huge quantum of suppression of transactions were unearthed, claiming bill trading transactions. 2.3. The petitioner objected to the allegations of the inspecting officials and refused to sign in the statement, dated 25.8.2014 prepared by them and therefore, it was sent by post to the petitioner, who filed their objections. 2.4. However, according to the petitioner, without conducting an enquiry as contemplated under Section 27 of the TNVAT Act, the respondent had straight away issued notices, dated 20.02.2015 for the assessment years 2012-2013 and 2013-2014 to the petitioner based on the proposals received from the inspecting officials and thereby, proposed to reverse the ITC of ₹ 74,14,788/- and ₹ 32,84,468/- respectively. 2.5. In the objections, dated 12.05.2015, the petitioner requested the respondent to provide the details of the dealers whose Registration Certificates have been cancelled and also brought to the attention of the respondent that at the time of their purchases, the regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aram, learned Additional Government Pleader appearing for the respondent. 4. The learned Counsel for the petitioner has contended that the respondent is wrong in passing the impugned orders without verifying the books of accounts of the petitioner and also without conducting an enquiry as contemplated under Section 27(2) of the TNVAT Act. 5. Further, he contended that without providing the details and documents requested by the petitioner in their objections, dated 12.05.2015 and 22.06.2015 and also in the written submissions, dated 14.09.2015, the respondent ought not to have passed the impugned orders. 6. He also submitted that without conducting an enquiry as contemplated under Section 81 of the TNVAT Act and without calling for the details from the selling dealers as per Section 85 of the TNVAT Act, the impugned orders came to be passed. Further, the respondent went wrong in passing the impugned orders reversing the ITC invoking Section 19(13) of the TNVAT Act, without providing the details of the enquiry, which revealed that the earlier sellers were only bill traders. 7. He, therefore, argued that the respondent erred in reversing the ITC for the alleged reason tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned orders of the respondent. 14. Since the fate of these writ petition lies on the fate of the impugned orders, dated 30.11.2015 and 15.12.2015, it is imminent for this Court to decide the legality of the same. 15. A careful perusal of the impugned orders reveals the following defects: a. Invoice Mis-match b. Purchases effected from Registration Certificate cancelled Dealers c. Cross Verification revealed huge evasion of tax. d. Purchase Omission e. Bill trading, without payment of tax. 16. In respect of Defect No.1, the respondent has found that the dealers have effected purchases from the dealers who have not filed the returns or reflected the sales in their returns and therefore, the ITC availed by the dealers under Section 27(2) of the TNVAT Act 2006 was reversed and penalty was levied as per Section 27(4) of the TNVAT Act, 2006. 17. As far as Defect No.2 is concerned, the respondent has found that the purchase bills were not supported by the transport documents to prove the actual transaction of goods and also no expenditure was incurred towards loading and unloading of materials to substantiate the claim of ITC on purchases and there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prove the burden of proof for the claim of ITC under Section 17(2) of the TNVAT Act, 2006. Further, the ITC availed by any registered dealer shall be only provisional and the assessing authority is empowered to revoke the same if it appears to be incorrect, incomplete or otherwise not in order, as per Section 19(16) of the Act. In these circumstances, the ITC availed by the dealers is reversed as per Section 27(2) of the Act. 21. Similarly, the respondent has dealt with Defect No.2 and come to the conclusion that the contentions of the dealers are not acceptable for the reason that the ITC availed by the dealer is only provisional and the assessing officer is empowered to revoke the same if it appears to the assessing authority to be incorrect, incomplete or otherwise not in order as per Section 19(16) of the Act. Further, as per Section 19(15), where, a registered dealer without entering into a transaction of sale, issues an invoice, bill or cash memorandum to another registered dealer with the intention to defraud the Government revenue, the assessing authority, after giving reasonable opportunity of being heard, shall deny the benefit of ITC to such registered dealer who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to claim ITC by producing the purchase bills depicting sufferance of tax at earlier stage. 25. It is seen that the petitioner i.e., purchaser has failed to furnish the evidences of actual transaction of goods in respect of the transactions, they entered into. Accordingly, the provisions of Section 19(15) of the TNVAT Act have been invoked in reversing the illegal claim of ITC. 26. With regard to Defect No.3, the respondent arrived at the conclusion that the burden of proving the genuineness of transaction lies on the petitioner as per Section 17(2) of the TNVAT Act, 2006. Since, the petitioner's vendors have issued only bills and invoices and not really transacted the goods and also some of the dealers have not filed the returns and filed the returns incorrect/incomplete, there was difference in the claim of Input Tax Credit claimed by the dealers and the liability of tax is ₹ 31,09,880/-. Further, the reasons for reversal of Input Tax Credit have already stated supra in the defects No.1 and 2.The dealers are one and same involved in the defect No.1 and 2 and therefore, the respondent concluded that the claim of ITC is liable to be reversed for wrong availment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two only) for the entire sales turnover of ₹ 109,24,15,035 (Rupees One Hundred Nine Crores, Twenty Four Lakhs Fifteen thousand and Thirty Five only) and adjusting ITC of ₹ 5.91 Crores for the year 2012-13 and the dealers have evaded payment of output tax in this State by procuring local bills from Bill Traders/Cancelled Dealers/Stopped Business dealers and availed/adjusted the ITC against their local sales effected for ₹ 109.24 Crores. 31. Therefore, the entire ITC of ₹ 5,90,74,095/- (Rupees Five Crores Ninety Lakhs Seventy Four thousand and Ninety Five only) has been reversed under Section 27(2) of the TNVAT Act, 2006. 32. In respect of Defect No.4, the respondent has concluded that with regard to sales suppression of inter-state purchase of ₹ 9,59,56,584 and proposing to higher rate of tax at 14.5% of ₹ 1,38,55,705, the contentions of the dealers are that they have properly accounted for in their books of accounts regarding the purchases effected from inter-state of ₹ 3,44,04,087/- and was also reflected in the Ledger account and also in the Profit and Loss Account for the year 2012-2013 and requested not to levy the tax and to dro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced by the petitioner to prove the contrary either before the authorities or even before this Court, there is no scope for interference by this Court. (ii) The State of Tamil Nadu rep. by The Deputy Commissioner (CT), Chennai (North) Division v. Tvl. Gupta Iron and Steel Company [Tax Case (Revision) Nos.1361 and 1362 of 2006, decided on 19.01.2012], wherein the Division Bench of this Court has held thus: 6. .....The assessing authority also factually found that the registration certificates of the dealers in question were cancelled much prior to the purchases effected. Hence, the assessing authority re-determined the total and taxable turnover of the assessee on the ground that no material evidence was produced by the assessee to claim exemption as second sales. This being a factual finding, the first appellate authority has rightly appreciated the issue and also concurred with the finding of the assessing authority in holding that the dealers in question did not have the valid registration on the date when the purchases were made by the assessee. ... 7. It is the contention of the learned counsel for the respondent-assessee that once the invoices were produced by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace of purchase to the place of the petitioner. Since the petitioner has miserably failed to prove the same, the respondent has passed the impugned order. 37. However, the learned Counsel for the petitioner has placed reliance upon the judgments of this Court, cited supra, to contend that the retrospective cancellation of the dealers would not affect the purchases made from such dealers by the petitioner and that the bills issued by them cannot be held to be bogus bills, however, in the considered opinion of this Court, those decisions would not lend any support to the case of the petitioner. 38. In this connection, it would be more relevant to reproduce the conclusion of the respondent in respect of the Defect No.1, which reads as under: From the above facts, it is well established that the above dealers are in the habit of issuing the invoices to the dealers/beneficiaries and there was no actual movement of goods. Further, some of the dealers have filed returns and some of the dealers have not filed the returns, but in all the cases, there is no proof for movement of goods. Therefore, it is the duty of the dealer to prove this burden of proof under Section 17(2) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent. Since the respondent had refused to receive the same, it was sent through the registered post on 23.6.2015 to the respondent. 43. Whereas the respondent, in the impugned order, has stated as under: The objections raised by the dealer in their letter, dated 12.5.2015 have been considered carefully with regard to the contentions raised in the notice, dated 20.2.2015. The dealers have requested for personal hearing in their objections dated 12.5.2015, hence, the dealers were requested to appear in person on 10.6.2015 at 11.30 a.m., along with books of accounts and other connected papers vide this office notice dated 15.5.2015 for check of accounts and also furnishing of the details as requested by them. The dealers did not turn up for personal hearing. A second opportunity of personal hearing and production of all details such as books of accounts, Balance Sheet etc., was also given to the dealers vide this office notice dated 22.6.2015 with a request to appear in person on 2.7.2015 at 11.30 a.m. The notice was received by the dealers on 23.6.2015 and they did not turn up for personal hearing before the undersigned on 2.7.2015. Instead, the dealers have again, in thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decisions of the apex Court to have clarity on the point that under what circumstances, a writ petition can be entertained, especially, when the alternative efficacious remedy is available. 48. In Union of India and others vs. Major General Shri Kant Sharma and another reported in (2015) 6 Supreme Court 773, while speaking on behalf of the Division Bench of the Apex Court, the Hon'ble Mr.Justice Sudhansu Jyoti Mukhopadhaya, after referring to the following decisions, has observed as under: 28. In Kanaiyalal Lalchand and Sachdev and others vs. State of Maharasthra and others, (2011) 2 SCC 782, this Court considered the question of maintainability of the writ petition while an alternative remedy is available. This Court upheld the decision of the Bombay High Court dismissing the writ petition filed by the appellants therein on the ground of existence of an efficacious alternative remedy under Section 17 of SARFASI Act and held: 23. In our opinion, therefore, the High Court rightly dismissed the petition on the ground that an efficacious remedy was available to the appellants under Section 17 of the Act. It is well settled that ordinarily relief under Articles 226/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable to cases of the second class. The form given by the statute must be adopted and adhered to. The rule laid down in this passage was approved by the House of Lords in Neville v. London Express Newspapers Ltd. and has been reaffirmed by the Privy Council in Attorney General of Trinidad and Tobago v. Gordon Grant and Co. Ltd. and Secy. Of State v. Mask and Co. It has also been held to be equally applicable to enforcement of rights, and has been followed by this Court throughout. The High Court was therefore justified in dismissing the writ petitions in limine. 14. In Mafatlal Industries Ltd. v. Union of India B.P. Jeevan Reddy, J. (speaking for the majority of the larger Bench) observed: (SCC p. 607, para 77) 77. So far as the jurisdiction of the High Court under Article 226 or for that matter, the jurisdiction of this Court under Article 32 is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny angle, the High Court's judgment is indefensible and is set aside. 50.2. A Constitution Bench of the Supreme Court in G.Veerappa Pillai v. Raman and Raman Ltd., reported in AIR 1952 SC 192 held that as the Motor Vehicles Act is a self contained code and itself provides for a forum for appeal/revision, the writ jurisdiction should not be invoked in matters relating to its provisions. A similar view was taken in Assistant Collector of Central Excise, Chandan Nagar v. Dunlop India Limited, reported in 1985 (19) E.L.T. 22 (SC) = AIR 1985 SC 330. 50.3. In Assistant Collector of Central Excise, Chandan Nagar v. Dunlop India Limited reported in 1985 (19) E.L.T. 22 (SC) = AIR 1985 SC 330, the Honourable Supreme Court observed thus: In Titaghur Paper Mills Co. Ltd. v. State of Orissa - AIR 1983 SC 603 A.P.Sen, E.S.Venkataramiah and R.B.Misra, JJ. held that where the statute itself provided the petitioners with an efficacious alternative remedy by way of an appeal to the Prescribed Authority, a second appeal to the Tribunal and thereafter to have the case stated to the High Court, it was not for the High Court to exercise its extraordinary jurisdiction under Article 226 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 226 of the Constitution unless there are good grounds to do otherwise. 50.7. In A. Venkatasubbiah Naidu v. S.Chellappan reported in (2000) 7 SCC 695 (vide para 22), the Honourable Supreme Court deprecated the practice of exercising the writ jurisdiction when an efficacious alternative remedy is available. 50.8. In W.P.No.981 of 2003 (Tax) (M/s.Khandelwal Soya Industries Ltd. v. State of U.P. and others) decided on 27.8.2003 a Division Bench of the Allahabad High Court dismissed a writ petition challenging the provisional assessment orders under the U.P.Trade Tax Act on the ground of alternative remedy under Section 9 of that Act. Against the aforesaid judgment, Special Leave Petition was filed before the Supreme Court which has been dismissed. 50.9. Same is the view taken by different Division Benches of this Court in W.A.No.1555 to 1557 of 2007 dated 10.12.2007; W.A.Nos.749 750 of 2006 dated 22.6.2006 and W.A.Nos.590 591 of 2008 dated 11.6.2008. In W.A.No.590 591 of 2008 the First Bench of this Court by order dated 11.6.2008 held as follows: 2. These writ appeals have been filed challenging an order passed by the learned single Judge, dated 17.9.2007. Subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill not be entertained if an effective remedy is available to the aggrieved person. 52. Further, if effective and adequate opportunity was given to the dealers before passing the final assessment orders and principles of natural justice are not violated, the dealers can very well put to challenge the assessment orders of the authority concerned only before the appellate authority. 53. It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. 54. It is also settled law that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. 55. Further, in this case, the respondent claimed that there is a huge evasion of tax to the tune of several Crores of Rupees. For the transaction of ₹ 109 Crores, the petitioner paid the tax of ₹ 55,402/- (Rupees Fifty Five Thousand Four Hundred and Two only) onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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