Transaction-wise sales tax assessment required where liability turns on actual facts and situs of sale, not broad assumptions.

Writ petitions were held maintainable despite an alternative statutory remedy because the impugned demand showed an apparent legal infirmity and the circumstances made relegation to appeal inappropriate. The assessment and penalty orders were set aside because the authority relied on broad assumptions rather than examining each sale transaction separately or properly enquiring into the situs of sale. The governing principle was that sales tax liability must be determined transaction by transaction on actual facts, including booking, payment, and delivery evidence. Penalty proceedings could not survive without a proper factual foundation. The matter was remanded for fresh determination on an individual transaction basis.

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Issues: (i) Whether the writ petitions were liable to be rejected on the ground of alternative statutory remedy. (ii) Whether the assessment and penalty-related orders could stand when the authority proceeded on general assumptions without examining each sale transaction separately and without proper enquiry into the situs of sale.

Issue (i): Whether the writ petitions were liable to be rejected on the ground of alternative statutory remedy.

Analysis: The objection based on alternative remedy was not accepted. The petitions had remained pending for several years after admission, the impugned demand suffered from an apparent legal infirmity, and the same officer had performed the administrative enquiry and thereafter acted in a quasi-judicial capacity. In these circumstances, relegating the petitioners to the statutory appeal would have been inappropriate.

Conclusion: The preliminary objection based on alternative remedy was rejected, and the writ petitions were held maintainable.

Issue (ii): Whether the assessment and penalty-related orders could stand when the authority proceeded on general assumptions without examining each sale transaction separately and without proper enquiry into the situs of sale.

Analysis: The assessment was found vitiated because the authority did not examine each transaction independently and proceeded on broad assumptions of tax evasion. The material on record indicated that bookings, payments, and deliveries were connected with Gurgaon, and the authority had not properly enquired from the manufacturer or tested the individual sale documents. The governing principle was that tax liability had to be determined transaction-wise, with the situs of sale ascertained on the basis of the actual facts of each sale. The penalty proceedings under section 56 also could not survive in the absence of a proper factual foundation.

Conclusion: The impugned assessment and penalty orders were quashed, and the matters were remanded for fresh determination transaction by transaction.

Final Conclusion: The petitions succeeded in part: the authority's orders were set aside, but the tax liability itself was left open for fresh adjudication on proper enquiry into each individual sale.

Ratio Decidendi: In sales tax matters, the authority must determine liability by examining each transaction separately on its actual facts, and a writ petition may still be entertained despite an alternative remedy where the impugned action is patently infirm and the circumstances make statutory appeal inappropriate.

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