2021 (9) TMI 365 - HC - VAT and Sales Tax

High Court Stresses Exhausting Appellate Remedies in Tax Matters

The High Court emphasized the importance of exhausting appellate remedies before resorting to writ petitions in tax assessment matters. The Court directed ... Maintainability of petition - availability of alternative remedy of appeal - deviation of proposal on revision of accounts - HELD THAT:- The deviation was made pursuant to the inspection conducted by the Enforcement Wing of the Commercial Taxes Department, in the business premises of the petitioner. This being the factum, this Court is of the considered opinion that the order impugned dated 21.04.2011, which is appealable is to be taken by way of an appeal by the petitioner before competent appellate authority. Admittedly, the petitioner has not preferred an appeal and has chosen to file the present Writ Petition. Preferring an appeal is the rule. Entertaining a Writ Petition before exhausting the appellate remedy is an exception. Undoubtedly, writ proceedings may be entertained before exhausting the appellate remedy. However, it is to be ensured that there is an imminent threat or gross injustice warranting urgent relief to be granted. Mere violation of principles of natural justice is insufficient to entertain a writ proceedings under Article 226 of the Constitution of India, as every Writ Petition is filed based on one or the other ground stating that the principles of natural justice is violated or statutory requirements are not complied with or there is an illegality or otherwise - 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 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 to the appellate authority under the provisions of the Act, in the prescribed format and by complying with the provisions, within a period of four weeks from the date of receipt of a copy of this order - Petition disposed off. Issues:Challenge to revised proceedings of Commercial Tax Officer for deviation of proposal in the matter of assessment for the year 2009-10.Analysis:The petitioner, a dealer in cement, pesticides, seeds, and fertilizers, challenged the revision of accounts for the Assessment Years 2007-08, 2008-09, and 2009-10 under the TNVAT Act and CST Act. The petitioner contended that once the Assessment Year is over, the Assessing Officer must accept the returns and pass an order on a self-assessment basis. Original assessment orders were passed for the respective years. Subsequently, the authorities proposed to revise the accounts based on a deviation proposal, which the petitioner objected to. The impugned order rejecting the deviation proposal was challenged in the writ petition.The High Court noted that the impugned order was based on a report by the Enforcement Wing of the Commercial Taxes Department, which necessitated verification of original records. The Court emphasized that discrepancies or errors should be addressed through the appellate process, as the appellate authority is the final fact-finding body. The Court highlighted the importance of appellate authorities in determining issues based on evidence and documents, which is crucial for judicial review under Article 226 of the Constitution.The Court clarified that preferring an appeal is the standard procedure, and entertaining a writ petition before exhausting the appellate remedy is an exception reserved for cases of imminent threat or gross injustice. Mere violation of natural justice principles is not sufficient to bypass the appellate process. The Court emphasized that appellate forums are final fact-finding bodies with expertise in specific fields, and their findings are valuable for judicial review. Filing a writ petition without exhausting statutory remedies, especially to avoid pre-deposits or due to delays in the appellate process, was discouraged.In conclusion, the Court directed the petitioner to avail the appellate remedy within four weeks and submit all relevant documents and objections to the appellate authority. The appellate authority was instructed to condone any delays and decide the matter on merits and in accordance with the law. The writ petition was disposed of with no costs, and the connected Miscellaneous Petition was closed.