Tax liability on exported iron scrap and exhaustion of statutory appeal remedies in writ proceedings

A dealer's liability to tax was treated as arising on disputed facts where no counter-affidavit was filed to rebut the revenue's assertion. Tax on purchase of iron scrap exported outside Haryana was regarded as lawful under section 4-B, which was read with the position that the exporting dealer's taxable quantum under section 4(5)(a) was nil, making the purchase transaction exigible in the manner contemplated by the Act. The writ petition was also treated as unsuitable because the statutory appellate remedy had not been exhausted, reflecting the rule that writ jurisdiction is ordinarily not used to bypass an effective alternative remedy in tax matters.

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Issues: (i) whether the petitioner was a dealer liable to tax under the Act; (ii) whether the levy and collection of tax on the purchase of iron scrap exported outside Haryana under section 4-B of the Act was lawful; (iii) whether the writ petition was maintainable in view of the statutory appellate remedy.

Issue (i): whether the petitioner was a dealer liable to tax under the Act.

Analysis: The question whether the petitioner answered the statutory definition of dealer involved disputed facts. The respondents asserted that the petitioner was a dealer liable to tax on purchases from an unregistered dealer, and no counter-affidavit was filed to controvert that assertion. The Court therefore declined to treat the petitioner as outside the statutory net in writ proceedings.

Conclusion: The petitioner was treated as a dealer liable to tax.

Issue (ii): whether the levy and collection of tax on the purchase of iron scrap exported outside Haryana under section 4-B of the Act was lawful.

Analysis: Section 4-B, as amended, authorized levy and collection of tax where goods were exported from the State before leaving Haryana. The Court also relied on the position that the taxable quantum in relation to an exporting dealer was nil under section 4(5)(a), with the result that tax was exigible on the purchase transaction in the manner contemplated by the Act. The Court further accepted the respondents' case that the collection made at the barrier was in accordance with the assessment process on the spot.

Conclusion: The levy and collection of tax were held to be legal.

Issue (iii): whether the writ petition was maintainable in view of the statutory appellate remedy.

Analysis: The Act provided an appellate structure, but the petitioner did not avail of the remedy. The Court applied the settled principle that writ jurisdiction is ordinarily not exercised to bypass an effective statutory remedy, especially where no substantial injustice is shown.

Conclusion: The writ petition was held to be not maintainable on that ground.

Final Conclusion: The challenge to the tax demand failed, and the Court declined to exercise extraordinary jurisdiction in favour of the petitioner.

Ratio Decidendi: A writ court will ordinarily not interfere with a tax assessment or collection where disputed factual issues remain and an effective statutory appellate remedy has not been exhausted.

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