2019 (2) TMI 1547 - HC - VAT and Sales Tax

Petitioner's Misclassification Issue Barred by Res Judicata, Can Pursue Appellate Remedies

M/s. EASTERN GRANITE METAL WORKS Versus THE COMMERCIAL TAX OFFICER, THRISSUR, THE STATE TAX OFFICER, THRISSUR, THE ASSISTANT COMMISSIONER (INT.) SG AND ST DEPARTMENT, THRISSUR AND THE ASSISTANT COMMISSIONER, THRISSUR

The court found that the petitioner's misclassification issue was barred by constructive res judicata as authorities had provided ample opportunities for ... Imposition of penalty - classification of goods - principles of natural justice - Held that:- It goes without saying that the issue of misclassification belongs to the realm of merits. About the violation of natural justice, indeed the petitioner approached this court earlier and invited the judgment dated 16.01.2017 in WP(C) No. 1395/2017. The petitioner did raise-thus I must conclude in the absence of any contradiction from the petitioner-that the authorities should revisit the site for measuring the machinery once again. This Court has, however, felt it sufficient for the authorities to give one more opportunity to the petitioner to put forward its defense. The authorities, as seen from Ext.P11, did put the petitioner on notice twice, received its defense and then ruled on it eventually. Because of this Court's disinclination in the earlier writ petition to grant what the petitioner then sought-and now reiterates-seeks, the issue stands barred by constructive resjudicata. The petitioner may exhaust, if advised, the statutory appellate remedy available for it - Petition disposed off. Issues:1. Misclassification2. Violation of principles of natural justiceAnalysis:Misclassification:The petitioner, a firm involved in granite metal works, challenged penalty proceedings alleging a misclassification issue. The petitioner sought a revisit to the site to measure the machinery once again. The court, in a previous judgment, directed the authorities to provide an opportunity for a hearing before deciding on the penalty proceedings. The authorities complied with this direction, putting the petitioner on notice twice and receiving its defense before passing the Ext.P11 order. The petitioner argued that the authorities should have revisited the site to measure the machinery, but the court found that the authorities had followed the previous judgment and provided the petitioner with ample opportunities to present its defense. The court concluded that the issue of misclassification was barred by constructive res judicata, and the petitioner could pursue statutory appellate remedies if desired.Violation of Principles of Natural Justice:The petitioner also contended that Ext.P11 violated the principles of natural justice as the authorities did not revisit the site despite requests. The petitioner's counsel argued that if given the opportunity, the petitioner could prove the nature of the machinery installed at the site. However, the Government Pleader asserted that the authorities had followed the procedures correctly, providing the petitioner with sufficient opportunities as directed by the court in the previous judgment. The court noted that the petitioner had never been denied any opportunity of hearing, and Ext.P11 demonstrated compliance with the earlier judgment. The court held that the petitioner could pursue the statutory appellate remedy available and instructed the petitioner to file the appeal within one month while deferring coercive steps until then.In conclusion, the court disposed of the writ petition, emphasizing that any observations in the judgment would not affect the petitioner's right to appeal the issue before the appropriate appellate authority.