Writ jurisdiction and tax reassessment: disputed sale character and a new exemption claim must be pursued through appeal

A writ challenge to reassessment is ordinarily not entertained where the dispute turns on mixed and disputed facts, such as whether transactions are inter-State or intra-State sales, and the taxing statute provides an effective appellate remedy. The factual questions, including delivery, transport endorsements and receipt of goods, must be examined by the appellate fact-finding authority rather than in writ jurisdiction. The document also states that an assessee cannot replace a return-based exemption claim with a wholly different exemption claim in reassessment proceedings without filing a revised return or otherwise following the procedure prescribed by the taxing statute. The proper course is to raise such objections before the appellate authority.

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Issues: (i) Whether the writ petition should be entertained to challenge the reassessment when the controversy turned on disputed questions of fact and a statutory appeal was available. (ii) Whether the assessee could shift from its return-based claim under section 6(2) of the Central Sales Tax Act, 1956 to an alternative claim for exemption under the notification without filing a revised return.

Issue (i): The controversy whether the disputed transactions were inter-State sales or intra-State sales depended on factual matters such as the manner of delivery, endorsements on transport documents, receipt of goods, and the role of the dealer and the contractee agencies. Those matters had already been examined by the Assessing Officer. The factual dispute went to the root of the tax liability and required adjudication by the appellate fact-finding authority rather than in writ proceedings. The availability of the statutory appellate remedy also weighed against interference under writ jurisdiction.

Conclusion: The writ court declined to interfere on this issue and held that the assessee should pursue the statutory appeal.

Issue (ii): The assessee had claimed exemption in its returns under section 6(2) of the Central Sales Tax Act, 1956 and had not filed any revised return raising the alternative claim under Notification No. 629/2008 dated 23.12.2008. Under the statutory scheme, a claim in the return can be altered only in the manner provided by the Act, and the assessee cannot, in reassessment proceedings, introduce a wholly different basis of exemption contrary to the original return without following the prescribed procedure. The court also noticed that reassessment under section 43 of the Orissa Value Added Tax Act, 2004 is meant to assess escaped turnover and does not permit unrestricted change of stand.

Conclusion: The alternative exemption claim could not be straightaway entertained in writ proceedings, and the assessee was left to raise all such contentions in appeal.

Final Conclusion: The assessment order was not disturbed in writ jurisdiction, and the assessee was directed to work out its remedies before the appellate authority.

Ratio Decidendi: Where the tax dispute turns on disputed facts requiring appreciation of evidence, and the statute provides an effective appellate remedy, the writ court should not substitute itself for the fact-finding authority; further, a fresh or inconsistent exemption claim cannot be introduced contrary to the return except in the manner prescribed by the taxing statute.

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