ABB India Ltd. Vs The Deputy Commissioner of Commercial Taxes

@JUDGMENTTAG-ORDER

Aravind Kumar, J.@mdashPetitioner is seeking for quashing of reassessment order 20.02.2015 and consequential demand notice dated 20.02.2015 (Annexure - ''G'') issued by respondent.

2. I have heard the arguments of Sri. T. Suryanarayana, learned counsel appearing for petitioner and Sri. Vedamurthy, learned HCGP for respondent, who has been put on advance notice.

3. Petitioner is a dealer registered under the provisions of Karnataka Value Added Tax Act, 2003 (for short ''KVAT Act") and Central Sales Tax Act, 1956 (for short ''CST Act'') and is questioning the legality and validity of the order dated 20.02.2015 (Annexure-G) passed by the respondent under Section 9(2) of the CST Act read with Section 39(1) of the KVAT Act.

4. Grievance of the petitioner in these writ petitions is that for the tax period April 2013 to March, 2014 petitioner had claimed concessional rate of tax or exemption, as the case may be on inter-State sales of goods effected by it on the basis that it would collect and file statutory forms in respect of those sales and same could not be produced since collection of statutory forms from various dealers located in different States across the country was a time consuming process and as such, petitioner made a request for grant of six months time which came to be turned down and a mere 9 days was granted after the auditing of the petitioner''s books of accounts and also directing the petitioner to produce the statutory forms within 7 days and same could not be produced as it was not possible to collect and submit the statutory forms within 7 days only and as such, petitioner re-iterated its request for 6 months time to submit the balance statutory forms. It is contended that respondent without heeding to the request of the petitioner has confirmed the demand by impugned re-assessment order dated 20.02.2015 (Annexure-G) by confirming the levy of incremental tax on account of non filing of statutory forms and also held that goods purchased from foreign vendors and used in the execution of works contract for BMRCL are taxable under the KVAT Act indicating thereunder that separate order under the KVAT Act would be passed. Hence, it is contended that impugned order has been passed in violation of principles of natural justice.

5. Sri. T. Suryanarayana, learned counsel appearing for petitioner in reply would reiterate the contentions raised in the writ petitions and contend that availability of an alternate remedy, is not inviolable rule for this Court to examine the correctness of impugned order and this Court in exercise of jurisdiction under Article 226 of Constitution of India can set aside an order which is in violation of principles of natural justice. In support of his submission, he has relied upon judgment of this Court in the case of Bangalore Turf Club Limited v. Union of India and Ors. passed in W.P. Nos. 6565-6568/2013 and 6651-6652/2013 c/w 18696-18697/2013 and 6674/2013, dated 26.09.2014.

6. Per contra, learned HCGP would support the impugned order and would contend that present writ petition is liable to be dismissed on the ground of petitioner not having availed alternate remedy of appeal available under the Act and as such prays for dismissal of these petitions.

7. Having heard the learned Advocates appearing for parties and on perusal of records, it would indicate that impugned order has been passed by respondent under Section 9(2) of the Central Sales Tax Act, 1956, read with Section 39(1) of the Karnataka Value Added Tax Act, 2003, for the period April'' 2013 to March'' 2014 vide Annexure-G. Undisputedly, said order is appealable under Section 62 of Karnataka Value Added Tax Act, 2003.

8. Perusal of impugned order would indicate that petitioner was afforded opportunity and in fact, verification of the books of accounts was conducted with reference to the returns filed in Form VAT- 100 relating to the period April, 2013 to March, 2014 and at the time of such audit, the officials of the petitioner were very much present. Proposition notice was issued on 31.01.2015 and it was duly served on the petitioner - company on 02.02.2015 on receipt of said notice, petitioner filed an application before the respondent on 03.02.2015 requesting for grant of additional time which was not accepted and in the interest of justice, 7 days time was given to the petitioner to file balance statutory forms/certificates and to upload into the departmental portal. Accordingly, endorsement dated 04.02.2015 (Annexure-F) came to be issued by the respondent to the petitioner. However, petitioner did not file any further reply and as such, the respondent authority after verifying the statutory forms uploaded into the departmental portal as on 19.02.2015 has examined the same and proceeded to pass the impugned order. Thus, it would indicate that petitioner was afforded all opportunity to file its reply. There is no violation of principles of natural justice.

9. Hon''ble Apex Court in the case of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and Others, while examining the maintainability of writ petition against a show cause notice, has held that availability of alternate remedy would not operate as a bar to invoke extraordinary jurisdiction atleast in three contingencies namely, where petitioner seeks to enforce fundamental rights; or where there is violation of principles of natural justice; or where action of respondent or authorities being without jurisdiction or vires of an Act, is under challenge.

10. It has been held by Hon''ble Apex Court in the above referred judgment as under:

"14. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for "any other purpose".

15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in atleast three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field."

11. In the case of State of H.P. and Others Vs. Gujarat Ambuja Cement Ltd. and Another, , Hon''ble Apex Court has held as under:

"17. Stand of the respondents on the other issues was to the effect that the submissions of the appellants do not carry any weight and have been made overlooking the factual and legal position. The submissions completely overlook the essence of the notifications and are based on misreading them.

18. We shall first deal with the plea regarding alternative remedy as raised by the appellant-State. Except for a period when article 226 was amended by the Constitution (42nd Amendment) Act, 1976, the power relating to alternative remedy has been considered to be a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy it is within the jurisdiction of Constitution. At the same time, it cannot be lost sight of that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere if there is an adequate efficacious alternative remedy. If somebody approaches the High Court should ensure that he has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction.

19. Constitution Benches of this Court in K.S. Rashid and Son Vs. The Income Tax Investigation Commission etc., Sangram Singh Vs. Election Tribunal, Kotah, Bhurey Lal Baya, , Union of India (UOI) Vs. T.R. Varma, , The State of Uttar Pradesh Vs. Mohammad Nooh, and K.S. Venkataraman and Co. Vs. State of Madras, , held that article 226 of the Constitution confers on all the High Courts a very wide power in the matter of issuing writs. However, the remedy of writ is an absolutely discretionary remedy and the High Court has always the discretion to refuse to grant any writ if it is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere. The Court, in extraordinary circumstances, may exercise the power of it comes to the conclusion that there has been a breach of principles of natural justice or procedure required for decision has not been adopted.

20. Another Constitution Bench of this Court in State of Madhya Pradesh Vs. Bhailal Bhai and Others, , held that the remedy provided in a writ jurisdiction is not intended to supersede completely the modes of obtaining relief by an action in a civil court or to deny defence legitimately open in such actions. The power to give relief under Article 226 of the Constitution is a discretionary power. Similar view has been reiterated xxx in GKN Driveshafts (India) Ltd. Vs. Income Tax Officer and Others, .

21. In Harbanslal Sahnia and Another Vs. Indian Oil Corpn. Ltd. and Others, , this Court held that the rule of exclusion of writ jurisdiction by availability of alternative remedy is a rule of discretion and not one of compulsion and the court must consider the pros and cons of the case and then may interfere if it comes to the conclusion that the petitioner seeks enforcement of any of the fundamental rights; where there is failure of principles of natural justice or where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged.

22. In Veerappa Pillai Vs. Raman and Raman Ltd. and Others, ; xxx Punjab National Bank Vs. O.C. Krishnan and Others, , this Court held that where hierarchy of appeals is provided by the statute, party must exhaust the statutory remedies before resorting to writ jurisdiction."

12. Keeping the above principles laid down by the Hon''ble Apex Court in mind, when facts on hand are examined, it would clearly indicate that petitioner is assailing the impugned order under one of the exceptions carved out in Whirlpool Corporation''s case namely, violation of principles of natural justice on account of opportunity of hearing not having been extended to the petitioner. In this background, when impugned order is perused, it would not detain this Court too long to brush aside the contention raised by Sri. T. Suryanarayana, learned counsel appearing for petitioner, for simple reason that in the instant case opportunity was extended as could be seen from notice dated 31.01.2015 (Annexure-D) and endorsement dated 04.02.2015 (Annexure-F). In fact, petitioner sought for further time through its application/request letter dated 03.02.2015 (Annexure-E) which would clearly indicate that petitioner had notice of the proceedings. In that view of the matter, it cannot be construed that no opportunity was extended to petitioner or there has been violation of principles of natural justice. Endorsement dated 04.02.2015 (Annexure-F), would clearly indicate that opportunity of hearing had been extended to the petitioner and petitioner did not appear before the respondent - authority. In that view of the matter, contention raised with regard to there being violation of principles of natural justice cannot be accepted and it stands rejected.

13. For the reasons aforestated, writ petitions are liable to be dismissed by reserving liberty to the petitioner to challenge impugned order dated 20.02.2015 (Annexure-G) before first appellate authority and in the event of such appeal being filed by the petitioner within four (4) weeks from today, first appellate authority is directed to dispose of said appeal within a period of four (4) weeks from the date of filing of such appeal. It is also made clear that petitioner shall deposit 30% of the demand raised under the impugned orders along with the appeal and appellate authority shall not insist on deposit of remaining 70% of the amount but shall proceed to adjudicate the appeal on merits and in accordance with law.

With these observations, writ petitions stand disposed of.