Alternative statutory remedy and input-tax credit rules upheld where goods are lost, destroyed, or unavailable for sale.

Availability of an appellate remedy was treated as an adequate alternative to writ jurisdiction, and the presence of a pre-deposit requirement did not by itself make that remedy ineffective; no exceptional circumstance justified bypassing the statutory forum, so the writ petition was not entertained. On input-tax credit, the VAT scheme was read as allowing credit only where purchased goods remain within the taxable chain and give rise to output-tax liability. Rule 21(1) and (2) of the Punjab VAT Rules, which deny credit when goods are lost, destroyed, damaged or otherwise unavailable for sale, were found consistent with the Act and the challenge to their vires failed.

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Issues: (i) Whether the writ petition should be entertained despite the availability of an alternative appellate remedy; (ii) whether rule 21(1) and (2) of the Punjab Value Added Tax Rules, 2005, which deny input-tax credit where goods are lost, destroyed or damaged, are ultra vires the Punjab Value Added Tax Act, 2005 in relation to evaporated petroleum products.

Issue (i): Whether the writ petition should be entertained despite the availability of an alternative appellate remedy.

Analysis: The availability of an appeal was an adequate remedy. The requirement of pre-deposit did not, by itself, establish that the remedy was ineffective or justify bypassing the statutory forum. No exceptional circumstance was shown to warrant exercise of writ jurisdiction at the threshold.

Conclusion: The writ petition was not entertained on the ground of alternative remedy.

Issue (ii): Whether rule 21(1) and (2) of the Punjab Value Added Tax Rules, 2005, which deny input-tax credit where goods are lost, destroyed or damaged, are ultra vires the Punjab Value Added Tax Act, 2005 in relation to evaporated petroleum products.

Analysis: The VAT scheme allows input-tax credit only in relation to goods that are available for sale or otherwise attract output tax in the statutory chain of taxation. The Act contemplates net tax on taxable turnover and permits input-tax credit subject to the Act and the Rules. Where purchased goods are not available for sale and no output-tax liability arises in respect of them, deduction of input tax cannot be claimed. Rule 21, which makes input-tax credit inadmissible when goods are lost, destroyed or damaged, was held to be consistent with the statutory scheme and not contrary to the Act.

Conclusion: Rule 21(1) and (2) were upheld and the challenge to their vires failed.

Final Conclusion: The petition was rejected, and the petitioner was left to pursue the statutory remedy in accordance with law.

Ratio Decidendi: Input-tax credit under the VAT regime is available only where the purchased goods remain within the taxable chain and give rise to output-tax liability; a rule denying credit for goods lost, destroyed, damaged or otherwise unavailable for sale is valid if it aligns with the Act's scheme.

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