2021 (7) TMI 603 - HC - VAT and Sales Tax

Court emphasizes appellate remedies over writ petitions for tax assessment disputes involving amalgamations. Uphold institutional hierarchy.

The court addressed the challenge to final assessment orders for the years 2001-02 and 2002-03 following an amalgamation involving M/s.Rukma Industries ... Maintainability of petition - entertaining a Writ Petition before exhausting the appellate remedy - requirement of filing an appeal for effective adjudication - validity of original assessment orders - HELD THAT:- The power of judicial review of the High Court under Article 226 of the Constitution of India is to scrutinize the processes through which a decision is taken by the competent authority by following the procedures as contemplated, but not the decision itself. Therefore, the routine entertainment of a Writ Petition by dispensing with appellate remedy is not preferable and such an exercise would cause injury to the institutional hierarchy and the importance attached to such appellate institutions. The appellate institutions provided under the statute at no circumstances be undermined by the higher Courts. The appellate forums are the final fact finding authorities and more so, possessing expertise in a particular field. The point of delay may be an acceptable ground for the purpose of entertaining a Writ Petition. The practise of filing the Writ Petition without exhausting the statutory remedies are in ascending mode and such Writ Petitions are filed with a view to avoid pre-deposits to be made in statutory appeals and on the ground that the appellate remedies are time consuming - the petitioner is at liberty to prefer an appeal before the respondent, within a period of four weeks from the date of receipt of a copy of this order, in the prescribed format and complying with the provisions of the Acts and rules. The Writ Petitions stand disposed of. Issues:Challenging final orders on assessment for years 2001-02 and 2002-03 due to amalgamation; Lack of representation for the petitioner; Issuance of impugned orders in the name of a non-existent entity; Entitlement to prefer an appeal before exhausting appellate remedy; Importance of appellate authorities in fact-finding; Judicial review under Article 226 of the Constitution of India; Need for caution in dispensing with appellate remedy; Avoiding injury to institutional hierarchy; Significance of appellate forums in decision-making; Acceptable grounds for entertaining a Writ Petition; Increasing trend of bypassing statutory remedies; Liberty granted to petitioner to file an appeal within four weeks.The judgment pertains to challenging final assessment orders for the years 2001-02 and 2002-03 following an amalgamation. The petitioner, M/s.Rukma Industries Limited, was amalgamated with another entity as per a court order, rendering it non-existent. Despite this, the 1st respondent issued notices and orders in the name of the defunct entity. The court emphasized that such disputes are appealable under the law and must be adjudicated through the appellate process, rather than in a Writ proceeding under Article 226 of the Constitution of India. It highlighted the importance of verifying facts and records before making a decision.The judgment underscored that preferring an appeal is the norm, and resorting to a Writ Petition before exhausting the appellate remedy is an exception. It cautioned against bypassing the appellate process unless there is an urgent need to prevent gross injustice. The court emphasized that the statutory appellate authorities serve as final fact-finding bodies, and their findings are crucial for judicial review under Article 226. It stressed that the High Court's role is to scrutinize the decision-making process, not the decision itself, to uphold the institutional hierarchy and the significance of appellate forums.The court clarified that the power of judicial review under Article 226 is to ensure procedural compliance, not to reexamine facts. It discouraged routine entertainment of Writ Petitions without exhausting the appellate route, as it could undermine the expertise and fact-finding capabilities of the appellate bodies. The judgment highlighted the value of fact-finding by appellate forums for delivering complete justice and cautioned against drawing conclusions based solely on affidavits.Regarding the increasing trend of filing Writ Petitions to avoid statutory remedies, the court emphasized the importance of adhering to the prescribed procedures. It granted the petitioner liberty to file an appeal within four weeks, subject to complying with legal requirements. The judgment concluded by disposing of the Writ Petitions without costs, emphasizing the need to uphold the appellate process for effective adjudication.