2021 (9) TMI 1152 - HC - VAT and Sales Tax

Challenging tax order dismissed for not exhausting remedies. Follow appeal process.

Sony Sales Corporation Versus The State of Maharashtra & Anr.

The writ petition challenging the Sales Tax Officer's order under the MVAT Act was dismissed by the High Court for not exhausting statutory remedies. The ... Rectification of mistake - petition not instituted, at least within the stipulated period for preferring an appeal - law of time limitation - HELD THAT:- The time period for filing an appeal is 60 days. Without carrying the orders aforesaid dated May 16, 2019 and October 30, 2019 in an appeal under Section 26 of the MVAT Act within the stipulated time, the writ jurisdiction of this Court has been invoked. There is no reason or explanation as to why the writ petition was not instituted, at least within the stipulated period for preferring an appeal. Although the law of limitation is not applicable to writ proceedings, delay and laches are factors that the Court ought to bear in mind while entertaining a writ petition. Certainly, a litigant cannot knock the doors of the High Court at leisure after lapse of the time period for preferring an appeal. In such a case, the Court may refuse to exercise its discretionary power. Insofar as taxing statutes are concerned, interference by a writ court should be few and far between. It cannot be disputed that the MVAT Act was introduced with the object of consolidating and amending the law relating to the levy and collection of tax on the sale and purchase of certain goods in the State of Maharashtra. A complete machinery is envisaged for the purposes of levy of tax and its collection, which is in the nature of a liability for the assessee, as well as providing avenues to seek relief in respect of improper or erroneous orders made by the authorities vested with power to levy and collect tax, which is in the nature of a right of the assessee. The MVAT requires the relevant authority, at or about the time an adjudication is in progress, to ascertain facts and apply the law that are applicable to a particular situation, to return findings on each and every point that would arise in course of the proceedings and to end his order by recording his conclusions. Invocation of the High Court’s power to issue high prerogative writs under Article 226 of the Constitution in matters relating to levy and collection of tax, in view of such fora made available by the statute, ought not to be permitted as a matter of course or else the will of the people expressed by the legislature in the relevant enactment would be rendered nugatory. It is only in very exceptional cases when a party complains of infringement of fundamental rights, or where facts are not disputed and such party establishes assumption of jurisdiction by an authority without being possessed thereof, or the complaint of violation of natural justice is so pronounced and gross, that a writ court in the judicious exercise of its discretion may choose to interfere. Petition dismissed. Issues Involved:1. Challenge to the Sales Tax Officer's order dated May 16, 2019, under Section 23(5) of the Maharashtra Value Added Tax Act, 2002 (MVAT Act).2. Rejection of the rectification application under Section 24 of the MVAT Act by an order dated October 30, 2019.3. Maintainability of the writ petition without exhausting alternative statutory remedies.4. Requirement of pre-deposit for filing an appeal under Section 26 of the MVAT Act.Issue-wise Detailed Analysis:1. Challenge to the Sales Tax Officer's Order Dated May 16, 2019:The petitioner challenged the Sales Tax Officer's order dated May 16, 2019, under Section 23(5) of the MVAT Act. The petitioner also applied for rectification under Section 24 of the MVAT Act, which was rejected by an order dated October 30, 2019. However, the latter order was not part of the records and was not challenged in the writ petition. Given the Supreme Court's decision in Hindustan Petroleum Corporation Ltd. Vs. Sunita Mehra, the court was not inclined to entertain the writ petition.2. Rejection of the Rectification Application:The rectification application under Section 24 of the MVAT Act was rejected by the Sales Tax Officer on October 30, 2019. This order was not included in the writ petition, and there was no challenge to it. The court emphasized that both the original and rectification orders were not part of the records, which further weakened the petitioner's case.3. Maintainability of the Writ Petition:The court highlighted that an aggrieved assessee could challenge the Sales Tax Officer's order in an appeal under Section 26 of the MVAT Act within 60 days. The petitioner did not file an appeal within the stipulated time and instead invoked the writ jurisdiction of the High Court. The court referred to the Supreme Court's decision in A.V. Venkateswaran, Collector of Customs, Bombay vs. Ramchand Sobhraj Wadhwani and Another, which emphasized that a petitioner must exhaust statutory remedies before invoking the High Court's jurisdiction under Article 226 of the Constitution. The court also noted that delay and laches are factors to consider while entertaining a writ petition.Moreover, the court referenced Section 26 of the MVAT Act, which provides for a first and second appeal to the Maharashtra Sales Tax Tribunal and further appeal to the High Court. The Supreme Court's decision in Thansingh Nathmal vs. Superintendent of Taxes was cited, stating that the High Court should not entertain a petition under Article 226 if statutory remedies are available.The petitioner relied on the Supreme Court's decision in Aircel Ltd. vs. Commercial Tax Officer to argue that a writ petition is maintainable despite the availability of an alternative remedy. However, the court noted that none of the exceptions for invoking writ jurisdiction were satisfied in this case. The court also referenced several other Supreme Court decisions, including Sales Tax Officer vs. Shiv Ratan G. Mohatta, Bhopal Sugar Industries Ltd. vs. D.P. Dube, Sales Tax Officer, Titaghur Paper Mills Co. Ltd. vs. State of Orissa, and CIT vs. Chhabil Dass Agarwal, which reinforced the principle that a writ petition should not be entertained if an effective alternative remedy is available.4. Requirement of Pre-deposit for Filing an Appeal:The petitioner argued that they should not be required to pre-deposit 10% of the disputed tax for filing an appeal under Section 26(6B)(b) of the MVAT Act, referring to the Division Bench decision in M/s. Anshul Impex Private Ltd. vs. State of Maharashtra & Ors. However, the court noted that the decision in M/s. Anshul Impex was not concurred with by a subsequent Division Bench, and the matter was pending before a larger bench.Conclusion:The writ petition was dismissed without costs. The court allowed the petitioner to present a proper appeal under Section 26 of the MVAT Act before the appropriate appellate authority and apply for condonation of delay under Section 81 of the MVAT Act. All contentions on merits were left open.