Statutory appeal and transit pass compliance in VAT disputes can defeat writ relief and sustain demand orders.

Where an effective statutory appeal was available and had in substance been invoked, writ jurisdiction under Article 226 was held ordinarily unavailable, and the grievance of natural justice could be pursued before the appellate forum. The petitioners' writ petitions were therefore not maintainable. On merits, the transit pass under the Andhra Pradesh VAT regime was found non-compliant because the exit check-post officer had not signed it and the prescribed formalities were not satisfied. As due surrender and statutory compliance were not established, the petitioners failed to dislodge the assessment-cum-demand notices, and the challenge failed on merits as well.

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Issues: (i) Whether the writ petitions were maintainable in view of the petitioners having invoked the statutory appellate remedy and raised a grievance of violation of natural justice. (ii) Whether the petitioners established compliance with the transit pass requirements under the value added tax regime so as to displace the demand orders.

Issue (i): Whether the writ petitions were maintainable in view of the petitioners having invoked the statutory appellate remedy and raised a grievance of violation of natural justice.

Analysis: The statutory scheme provided an appeal under Section 31(1) of the Andhra Pradesh Value Added Tax Act, 2005, to be filed in the prescribed form under Rule 38(2)(a) of the Andhra Pradesh Value Added Tax Rules, 2005. The petitioners had in substance approached the appellate authority, and the authority had treated the filing as an appeal and returned it for rectification. In tax matters, a grievance based on breach of natural justice can also be urged before the appellate forum, and the existence of that remedy ordinarily bars recourse to writ jurisdiction under Article 226 of the Constitution of India.

Conclusion: The writ petitions were not maintainable.

Issue (ii): Whether the petitioners established compliance with the transit pass requirements under the value added tax regime so as to displace the demand orders.

Analysis: Section 47 of the Andhra Pradesh Value Added Tax Act, 2005, read with Rule 58(5) of the Andhra Pradesh Value Added Tax Rules, 2005, required the officer at the exit check-post to verify the goods, affix the seal on the transit pass, and sign it before permitting the vehicle to pass. The transit pass relied upon by the petitioners did not bear the signature of the officer in-charge of the exit check-post and did not satisfy the formal requirements reflected in the prescribed forms. The record therefore did not establish due surrender of the transit pass or proper compliance with the statutory procedure.

Conclusion: The petitioners failed to dislodge the demand orders on merits.

Final Conclusion: The challenge to the assessment-cum-demand notices failed both on maintainability and on merits, and the writ petitions were dismissed with costs.

Ratio Decidendi: In tax matters, where an effective statutory appeal is available and has in substance been invoked, writ jurisdiction should not ordinarily be exercised, and strict compliance with transit-pass formalities under the governing tax regime is necessary to negate a presumed local sale.

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