Writ jurisdiction and sales tax reassessment: alternative remedy did not bar review, and purchaser need not prove seller paid tax.

Writ jurisdiction under Article 226 was held available despite a statutory appeal and delay where the challenge alleged jurisdictional error, unfairness, violation of natural justice, and non-consideration of relevant documents; the alternative remedy objection was rejected. The revision of sales tax assessment was also unsustainable because the assessing authority failed to properly verify the seller's registration renewal, bills, and payment records before treating the purchases as first sales. The court recognised that a purchasing dealer need not prove actual payment of tax by the seller if the taxable sale and supporting transaction materials are established, so the reassessment was set aside.

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Issues: (i) Whether the writ petition challenging the assessment order was maintainable despite the availability of a statutory appeal and the delay in invoking that remedy; (ii) Whether the revision of assessment treating the purchases as first sales and fastening tax liability on the assessee was legally sustainable.

Issue (i): Whether the writ petition challenging the assessment order was maintainable despite the availability of a statutory appeal and the delay in invoking that remedy.

Analysis: The appellate remedy under Section 31(1) of the Tamil Nadu General Sales Tax Act, 1959 is ordinarily relevant, but it does not create an absolute bar to the exercise of jurisdiction under Article 226 of the Constitution of India. The challenge before the writ court was founded on lack of jurisdiction, unfairness in the action of the assessing authority, violation of principles of natural justice, and non-consideration of relevant documents. Those grounds fall within the recognised parameters on which writ jurisdiction may be exercised notwithstanding the existence of an alternative remedy.

Conclusion: The writ petition was maintainable and the objection based on alternative remedy and limitation was rejected.

Issue (ii): Whether the revision of assessment treating the purchases as first sales and fastening tax liability on the assessee was legally sustainable.

Analysis: The assessee produced the renewal of the seller's registration certificate, bills, and payment particulars, but the assessing authority did not undertake a proper enquiry into those materials or support the adverse finding with independent verification. The legal position recognised in the judgment is that a purchasing dealer is not required to prove that the seller actually paid tax; it is sufficient to show that the transaction was a taxable sale and that the tax was payable by the seller. In the absence of a proper factual foundation to treat the seller as non-existent or the documents as unreliable, the revision of assessment could not stand.

Conclusion: The assessment revision was unsustainable and was set aside in favour of the assessee.

Final Conclusion: The assessee succeeded on both maintainability and merits, and the reassessment order was invalidated.

Ratio Decidendi: Writ jurisdiction under Article 226 of the Constitution of India is not barred merely because a statutory appeal exists or is time-barred where the challenge discloses jurisdictional error, unfairness, or violation of natural justice, and in sales tax matters a purchasing dealer is not bound to prove actual payment of tax by the selling dealer if the taxable sale and supporting transactional materials are established.

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