2013 (11) TMI 873 - HC - VAT and Sales Tax

Court dismisses petition for writ of certiorari under Punjab VAT Act, directs petitioner to pursue appeal.

The court dismissed the petition seeking a writ of certiorari to quash show cause notices, assessment order, and tax demand notice under the Punjab Value ... Applicability of Section 62 - Alternate remedy available to plaintiff - petitioner prays for issuance of a writ of certiorari quashing show cause notices - Held that:- the petitioner has an alternative remedy of filing an appeal, under the VAT Act. The petitioner's pleas, in essence, are that the impugned order is erroneous on facts, and in law. A due consideration of the arguments reveals that the impugned order may, at best, disclose an erroneous exercise of jurisdiction but does not disclose an assumption of jurisdiction where there is none. Where a statute confers an alternative remedy, power under Article 226 of the Constitution may be exercised if the impugned order discloses an assumption of jurisdiction, where there is none. Where, however, the impugned order, prima facie, discloses an erroneous exercise of jurisdiction, the party aggrieved would be required to approach the appellate forum. The petitioner's case pertains to an erroneous exercise of jurisdiction, namely, exigibility to sales tax of `slump sale', applicability of the Full Bench judgment of the Andhra Pradesh High Court in Coromandal Fertilisers Limited versus State of AP and others [1998 (10) TMI 525 - ANDHRA PRADESH HIGH COURT] and legality of the penalty and, therefore, can be validly urged before the appellate forum. The petitioner has approached this Court, as a precondition to the filing of an appeal is the requirement to pre-deposit a part of amount claimed by the revenue. We are not inclined, to entertain the appeal merely because the petitioner is statutorily required to pre-deposit tax and penalty - Decided against assessee. Issues:Prayer for writ of certiorari to quash show cause notices, assessment order, and tax demand notice under Punjab Value Added Tax Act, 2005.Analysis:The petitioner sought a writ of certiorari to quash show cause notices, assessment order, and tax demand notice under the Punjab Value Added Tax Act, 2005. The petitioner argued that despite the availability of an alternative remedy of appeal, this court should examine the impugned order due to grave errors of jurisdiction by the Assessing Officer. The petitioner contended that a comprehensive Business Transfer Agreement had been executed, involving a 'slump sale' as per the Income Tax Act, which was not a sale under the VAT Act. The petitioner cited a Full Bench judgment of the Andhra Pradesh High Court and other judgments supporting their position, which were allegedly ignored by the Assessing Officer. The petitioner requested the court to waive the pre-deposit condition for the penalty if an appeal was required.Upon hearing the arguments and reviewing the documents, the court acknowledged that the petitioner had the option to appeal under the VAT Act. The court noted that the impugned order indicated an erroneous exercise of jurisdiction rather than an assumption of jurisdiction where none existed. It was clarified that when a statute provides an alternative remedy, Article 226 of the Constitution can be invoked only if there is an assumption of jurisdiction where none exists. In cases of erroneous exercise of jurisdiction, the aggrieved party must approach the appellate forum. The issues raised by the petitioner, such as the applicability of the Full Bench judgment and the legality of the penalty, were deemed suitable for the appellate forum. The court declined to entertain the appeal based solely on the statutory requirement of pre-deposit for tax and penalty. Consequently, the petition was dismissed, directing the petitioner to pursue the alternative remedy of filing an appeal under the VAT Act. Any time spent on the writ petition might be considered sympathetically if the appeal faced limitations.