Division Bench upholds tax law validity, stresses exhausting remedies before constitutional challenges

The Division Bench dismissed the petition challenging the constitutional validity of Section 6A of the Central Sales Tax Act, 1956, emphasizing the need to exhaust departmental remedies before raising constitutional challenges. The petitioner was directed to seek relief through an appeal against the assessment order, with the Court refraining from expressing an opinion on the case's merits. The petitioner was granted liberty to apply for a stay of demand and ensured no coercive steps were taken for one month to facilitate the appeal process. The Court reiterated the importance of addressing constitutional issues only when necessary.

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Issues:
Challenge to constitutional validity of Section 6A of the Central Sales Tax Act, 1956 regarding stock transfers between branch and head office, refusal of Maharashtra VAT authorities to issue Form F, assessment order for the year 2009-10, petition under Article 226 seeking reliefs, earlier writ proceeding, judgment of Division Bench, applicability of Supreme Court decisions in Ambika Steel Ltd. and Ashok Leyland Ltd., request for writ of certiorari to quash assessment order, petitioner seeking direction to move Assessing Authority afresh, constitutional validity challenge not entertained in departmental appeal, necessity of departmental remedies before constitutional challenge, discretion to entertain petition, reiteration of not expressing opinion on merits, direction for petitioner to seek remedy through appeal, liberty to apply for stay of demand, directive for no coercive steps for one month, disposal of petition.

Analysis:
The petitioner challenged the constitutional validity of Section 6A of the Central Sales Tax Act, 1956, concerning stock transfers between branch and head office, due to refusal by Maharashtra VAT authorities to issue Form F, in relation to an assessment order for the year 2009-10. The petitioner sought various reliefs under Article 226, including a writ of certiorari to quash the assessment order based on the refusal of Form F. An earlier writ proceeding was initiated, which the Division Bench deemed premature, allowing the petitioner to raise submissions before the Assessing Officer. Reference was made to the Supreme Court decisions in Ambika Steel Ltd. and Ashok Leyland Ltd. regarding the deeming fiction of Section 6A.

The Division Bench emphasized the necessity of exhausting departmental remedies before challenging the constitutional validity of a provision like Section 6A in a writ petition. The petitioner's request for a direction to move the Assessing Authority afresh was not entertained at this stage, as the constitutional challenge should be addressed after departmental remedies are exhausted. The Court reiterated the importance of addressing constitutional issues only when necessary and directed the petitioner to seek remedy through an appeal against the assessment order.

While refraining from expressing an opinion on the merits of the case, the Court disposed of the petition, granting the petitioner liberty to apply for a stay of demand pending appeal. Additionally, the Court directed that no coercive steps be taken against the petitioner for one month to facilitate the appeal process. The petitioner was advised to seek relief through the Appellate Authority and clarified that the constitutional issue could be addressed subsequently if required.

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