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Issues: (i) Whether writ jurisdiction under Article 226 of the Constitution of India could be exercised despite the availability of an alternate statutory remedy in a taxation matter; (ii) whether the levy based on abnormally low reporting of purchases and the connected reassessment could be sustained; and (iii) whether the connected issues relating to check post movement, short payment of tax, stock difference and mismatch required interference or remand.
Issue (i): Whether writ jurisdiction under Article 226 of the Constitution of India could be exercised despite the availability of an alternate statutory remedy in a taxation matter.
Analysis: The rule of self-restraint ordinarily requires the Court to decline writ interference when an efficacious statutory appeal exists, particularly in tax matters. That rule admits of exceptions, including violation of natural justice and total lack of jurisdiction. On the facts, the dealer was not given adequate opportunity and the materials placed before the assessing authority were not properly considered.
Conclusion: Writ interference was justified and the dealer was not bound to be relegated to the alternate remedy in the facts of the case.
Issue (ii): Whether the levy based on abnormally low reporting of purchases and the connected reassessment could be sustained.
Analysis: The reassessment was founded on a supposed suppression of purchases, though the notices did not propose levy of purchase tax under Section 12 of the Tamil Nadu Value Added Tax Act, 2006. The Court held that reassessment cannot rest on surmises and conjectures and must be supported by foundational facts. The assessing authority could not improve upon the original proposal by treating the matter as one for purchase tax, and the levy on the alleged ground of abnormally low purchases lacked basis.
Conclusion: The levy founded on abnormally low purchases could not be sustained and was set aside for the relevant assessment years.
Issue (iii): Whether the connected issues relating to check post movement, short payment of tax, stock difference and mismatch required interference or remand.
Analysis: For the check post movement issue, further opportunity to produce records was considered necessary and the assessment had to be redone. The short payment and stock difference issues were also to be reconsidered after hearing the dealer. The mismatch issue was to be handled departmentally, with notice to the dealer if further details were required.
Conclusion: The connected issues were not finally affirmed; the relevant matters were remanded or left for departmental reconciliation as directed.
Final Conclusion: The judgment grants partial relief to the dealer by setting aside the impugned levy on the principal purchase-related ground while sending the remaining disputed issues back for fresh consideration or departmental verification.
Ratio Decidendi: In tax reassessment, writ jurisdiction may be exercised despite an alternate remedy where natural justice is violated, and a levy cannot be sustained when it is founded on conjecture rather than the original notice and supported foundational facts.
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