2009 (4) TMI 852 - HC - VAT and Sales Tax

Writ petition dismissed, pursue statutory appeal, alternative remedy emphasized.

National Aluminium Company Ltd. Versus Commissioner of Sales Tax, Orissa and others

The court dismissed the writ petition challenging the disallowance of deduction claimed by the petitioner based on a declaration form, directing the ... Deduction claimed on the basis of declaration form No. 1D(96) disallowed - Held that:- In case M/s. REPL had availed of the benefit of eligibility certificate exhausting the maximum limit during a particular period as to whether further benefit could have been taken by it after making misrepresentation, it is settled legal proposition that misrepresentation/fraud vitiates every action/order whether the assessment orders made in favour of M/s. REPL which might have attained finality could have any sanctity. All these questions are admittedly questions of fact. Such factually disputed questions cannot be adjudicated by this court in exercise of writ jurisdiction. W.P. dismissed. Issues Involved:1. Disallowance of deduction claimed by the petitioner based on declaration form No. 1D(96) issued by REPL.2. Eligibility of REPL for sales tax exemption for the year 2002-03 under the Industrial Policy Resolution (IPR) 1996.3. Whether REPL had exceeded the maximum limit of tax exemption prior to the year 2002-03.4. The validity of the eligibility certificate granted to REPL for a period of eight years.5. The appropriateness of the writ petition given the availability of an alternative remedy by way of appeal.Issue-wise Detailed Analysis:1. Disallowance of Deduction Claimed by the Petitioner:The petitioner-company challenged the assessment order which disallowed the deduction claimed based on declaration form No. 1D(96) issued by REPL. The assessing officer added Rs. 31,58,39,028.51 to the taxable turnover and levied tax and surcharge, resulting in an extra tax demand of Rs. 1,38,96,917. The officer rejected the forms on the ground that REPL had exceeded the maximum limit of tax exemption prior to the year 2002-03.2. Eligibility of REPL for Sales Tax Exemption for the Year 2002-03:The petitioner argued that REPL was entitled to sales tax exemption under the IPR 1996 and had been issued an eligibility certificate for eight years as a priority industry. This certificate was amended to extend the exemption period by two additional years without a maximum limit. The Sales Tax Officers had clarified that there was no maximum limit for priority industries, based on a notification by the Finance Department.3. Whether REPL Had Exceeded the Maximum Limit of Tax Exemption:The Revenue contended that REPL had exceeded the tax exemption limit during the year 1998-99, making it ineligible for further exemption in 2002-03. The petitioner argued that it was impractical for the selling dealer to verify whether REPL had exceeded the tax exemption limit, as the dealer's duty was limited to verifying the registration certificate and the declaration form.4. Validity of the Eligibility Certificate Granted to REPL:The Revenue questioned the validity of the eligibility certificate, arguing that REPL, located in Zone-B, was initially entitled to a six-year exemption period, not eight years. The extension of the exemption period by two additional years was considered premature. The Revenue also argued that the exemption on purchases was conditional upon the limit prescribed in the eligibility certificate, which REPL had exceeded.5. Appropriateness of the Writ Petition:The Revenue argued that the petitioner should have pursued an alternative remedy by way of appeal rather than invoking the writ jurisdiction of the court. The court agreed, noting that the disputed factual questions could not be adjudicated in a writ petition.Conclusion:The court dismissed the writ petition, allowing the petitioner to file a statutory appeal against the assessment order within four weeks, along with a petition for condonation of delay. The appellate authority was directed to consider all factual and legal issues raised by the parties, giving opportunities for hearing. The interim order dated March 18, 2004, was extended for a further period of four weeks.Separate Judgment:DR. B.S. CHAUHAN C.J. concurred with the judgment.