1983 (2) TMI 278 - HC - VAT and Sales Tax

Court dismisses petition to quash Sales Tax order on galvanized iron sheets, ruling against refund & extraordinary powers.

The High Court dismissed the petition seeking to quash the Commissioner of Sales Tax's order and refund tax collected on galvanized iron sheets. The Court ... Revisional jurisdiction suo motu - Extraordinary jurisdiction under Article 226 - Discretion of revising authority to decide fitness for suo motu exercise - Refund of tax paid under mistake of law - Availability of civil remedy by suit where assessment completedRevisional jurisdiction suo motu - Extraordinary jurisdiction under Article 226 - Discretion of revising authority to decide fitness for suo motu exercise - Petition under Article 226 cannot be used to compel the Commissioner to exercise suo motu revisional powers under section 39(1) where the Commissioner has considered the application and declined to exercise those powers for lack of suitable reasons. - HELD THAT: - The Court acknowledged that an aggrieved party may bring errors to the notice of a revisional authority and request exercise of suo motu powers. However, the power to exercise revision suo motu is discretionary and the revising authority may decline to act if it finds no suitable reason. Where the Commissioner examined the application and declined to invoke section 39(1) on the ground that the case was not fit for suo motu revision, the High Court will not, by exercise of extraordinary writ jurisdiction under Article 226, substitute its view for the Commissioner's discretionary assessment of fitness for revision. The precedents relied upon confirm the availability of petitioning the revising authority but do not deprive that authority of discretion to refuse suo motu revision.Writ petition dismissed insofar as it sought quashing of the Commissioner's refusal to exercise suo motu revisional jurisdiction and direction to restore revision proceedings.Refund of tax paid under mistake of law - Availability of civil remedy by suit where assessment completed - Assessments based on returns - A direction in writ proceedings under Article 226 to refund tax paid pursuant to completed assessments was declined where the petitioner conceded that a suit for refund is available and the assessments were completed long ago. - HELD THAT: - The petitioner sought refund of tax allegedly collected without authority of law. The petitioner conceded that a remedy by civil suit is available. Given that the assessments were voluntarily filed and completed long prior, and that a suit is an appropriate and adequate remedy for recovery, the High Court declined to entertain the alternative relief for refund by means of extraordinary writ jurisdiction. The Court treated the availability of the ordinary remedy and the antiquity of the assessments as decisive against granting relief by way of Article 226.Prayer for a direction to refund the tax was refused; petitioner to pursue remedy by suit if so advised.Final Conclusion: The writ petition was dismissed summarily: the Court will not compel the Commissioner to exercise suo motu revisional powers where he has declined to do so for lack of suitable reason, nor will it order refund of tax in a writ petition when a suit for refund is the appropriate remedy and assessments were completed long ago. Issues:1. Quashing of order passed by Commissioner of Sales Tax2. Refund of tax levied and collected under mistake of lawAnalysis:1. The petitioner sought to quash the order passed by the Commissioner of Sales Tax, M.P., Indore, refusing to exercise jurisdiction under section 39(1) of the M.P. General Sales Tax Act. The petitioner, engaged in the sale and purchase of iron and steel goods, was assessed to sales tax for several years based on filed returns. Following a court decision declaring galvanized iron sheets as declared goods taxed at a concessional rate, the petitioner applied for revision and refund of tax collected on these items. However, the Commissioner rejected the application citing lack of suitable reasons for exercising revisional powers. The High Court held that while the petitioner could request revision, the Commissioner's decision not to exercise powers was based on the absence of suitable reasons, not a denial of the right to apply. Hence, the Court dismissed the petition, stating it was not a fit case for invoking extraordinary powers under Article 226 of the Constitution.2. The petitioner also sought a direction for refund of tax collected under mistake of law. The Court noted that the petitioner had the option to file a suit for such a remedy. Considering that the assessments were completed long ago based on voluntarily filed returns, the Court deemed it inappropriate to order a refund in a petition under Article 226 of the Constitution. Therefore, the Court summarily dismissed the petition without notice, indicating that a suit was the appropriate remedy for seeking a refund of the tax paid.