1987 (4) TMI 456 - HC - VAT and Sales Tax

Writ Petition Challenging Tax Assessment Order Dismissed for Lack of Jurisdiction

Commercial Tax Officer Versus Mangilal Rungta

The High Court held that the writ petition challenging the assessment order by the Commercial Tax Officer, Andhra Pradesh, was not maintainable in ... - Issues Involved:1. Jurisdiction of the High Court to entertain the writ petition.2. Availability of alternative remedies under the Andhra Pradesh General Sales Tax Act.3. Nature of the sale transaction and its tax implications.4. Validity of the assessment order passed by the Commercial Tax Officer, Andhra Pradesh.Issue-wise Detailed Analysis:1. Jurisdiction of the High Court to entertain the writ petition:The primary issue was whether the Calcutta High Court had jurisdiction to entertain the writ petition challenging the assessment order issued by the Commercial Tax Officer, Andhra Pradesh. The court noted that merely serving a notice in Calcutta did not constitute an integral part of the cause of action sufficient to invest the Calcutta High Court with jurisdiction. The court relied on the precedent set by the Supreme Court in the case of *State of Rajasthan v. Swaika Properties* AIR 1985 SC 1289, which held that the cause of action is a bundle of facts that gives the plaintiff a right to relief against the defendant, and mere service of notice does not suffice to confer jurisdiction.2. Availability of alternative remedies under the Andhra Pradesh General Sales Tax Act:The respondents contended that the writ petitioners had not exhausted the alternative remedies available under the Andhra Pradesh General Sales Tax Act, specifically under sections 14 (assessment), 19 (appeals), and 20 (revision). The court emphasized the principle laid down in *Titaghur Paper Mills Co. Ltd. v. State of Orissa* [1983] 53 STC 315 (SC); AIR 1983 SC 603, which states that when a statute provides a complete machinery to challenge an order of assessment, the remedy prescribed by the statute must be availed of before approaching the High Court under Article 226 of the Constitution of India.3. Nature of the sale transaction and its tax implications:The writ petitioners argued that the sales in question took place in the course of export and were therefore not amenable to tax under Article 286 of the Constitution of India and Section 5 of the Central Sales Tax Act. They further contended that the sales were inter-State sales and should be taxed under the Central Sales Tax Act, not under the Andhra Pradesh General Sales Tax Act. The respondents countered that the sales took place within Andhra Pradesh and were therefore taxable under the Andhra Pradesh General Sales Tax Act. The court referred to the Supreme Court's decision in *Coffee Board v. Joint Commercial Tax Officer, Madras* [1970] 25 STC 528 and *Madras Marine and Co. v. State of Madras* [1986] 63 STC 169 (SC) to distinguish the nature of the sales and upheld the assessment order.4. Validity of the assessment order passed by the Commercial Tax Officer, Andhra Pradesh:The court examined whether the assessment order was valid and whether the Commercial Tax Officer had jurisdiction to issue it. The court found that the sales took place at Vizagapatnam within Andhra Pradesh, and therefore, the Commercial Tax Officer had jurisdiction to impose the tax. The court also noted that the sale to the MMTC by the petitioner was separate and independent from the bargain with the foreign buyer, and thus, the sale could not be considered as one in the course of export.Conclusion:The appeal was allowed on the grounds that the writ petition was not maintainable in the Calcutta High Court due to the availability of alternative remedies and the lack of jurisdiction. The court did not delve into the merits of the case, leaving all points open for consideration by the appropriate forum.