2015 (8) TMI 1477 - HC - VAT and Sales Tax

Court Upholds KVAT Goods Classification, Emphasizes Statutory Remedies

Cochin Sanitary Stores Versus Intelligence Officer, Commercial Tax Officer (Recovery), And Assistant Commissioner,

The court upheld the authorities' classification of goods under the KVAT Act, emphasizing it as a mixed question of fact and law. It dismissed the writ ... Imposition of penalty - mis-classification of goods - Yash Hose Tap and Onida Washing Machine Tap - Scope of enquiry - HELD THAT:- The scope for enquiry in this appeal is confined to the question whether the view taken by the learned Single Judge relegating the appellant to pursue the statutory remedies is legal or not. Admittedly, the statutory remedies are available to the appellant against the orders impugned in the writ petition. Law is settled that when an alternative statutory remedy is available except in exceptional cases involving challenge against the statutory provisions or violation of principles of natural justice or when any action is challenged on the ground of want of jurisdiction, such writ petition filed without exhausting such remedies will not be entertained. In so far as this case is concerned, we are not satisfied that any of these exceptional situations have been made out by the appellant. The issue involved is regarding the classification of the products in question. Such an issue is not a pure question of law but is a mixed question of fact and law. Such a dispute, should be resolved by the statutory fact finding authorities. Appeal dismissed. Issues:1. Classification of goods under the KVAT Act.2. Legality of imposing penalties for mis-classification.3. Judicial review of statutory remedies.Analysis:Issue 1: Classification of goods under the KVAT ActThe appellant, a dealer under the KVAT Act, challenged penalty orders issued for misclassification of goods. The appellant contended that the products were articles of brass covered by Entry 3(2) of Schedule III, contrary to the authorities' classification under Entry 101 of SRO 82/2006. The Government Pleader argued in favor of the authorities' classification. The court emphasized that the classification issue is a mixed question of fact and law, to be resolved by the statutory fact-finding authorities.Issue 2: Legality of imposing penalties for mis-classificationThe appellant filed a writ petition challenging penalty orders, which was dismissed, directing the appellant to pursue statutory remedies. The court noted that when alternative statutory remedies are available, a writ petition should not be entertained unless exceptional circumstances exist. In this case, no exceptional situations were found, and the court upheld the decision to relegate the appellant to pursue statutory remedies.Issue 3: Judicial review of statutory remediesThe court concluded that the learned Single Judge did not act illegally in directing the appellant to exhaust statutory remedies. However, considering the pending proceedings, the court allowed the appellant to file a revision against the impugned orders within two weeks for the revisional authority to review on merits, despite the expiration of the time limit for filing a revision. The court dismissed the writ appeal but provided this opportunity for the appellant.In summary, the judgment addressed the classification of goods under the KVAT Act, the legality of imposing penalties for misclassification, and the judicial review of statutory remedies, emphasizing the importance of exhausting statutory remedies before seeking judicial intervention unless exceptional circumstances exist.