2022 (9) TMI 896 - SC - VAT / Sales Tax

Article 226 writ should be dismissed when statutory MVAT/CST appeals/revision available and serious factual disputes exist

HC erred in entertaining a writ under Art.226 challenging an assessment order and notice of demand where statutory remedies of appeal/revision were ... Jurisdiction of HC to entertain the writ petition bypassing the statutory remedy of appeal - Validity of assessment order - belated notice of demand - AO called upon the assessee to produce relevant documents and also to show cause as to why it should not be assessed under the relevant provisions of Section 23 of the MVAT Act - HELD THAT:- It is required to be noted that against the assessment order passed by the Assessing Officer under the provisions of the MVAT Act and CST Act, the assessee straightway preferred writ petition under Article 226 of the Constitution of India. It is not in dispute that the statutes provide for the right of appeal against the assessment order passed by the Assessing Officer and against the order passed by the first appellate authority, an appeal/revision before the Tribunal. In that view of the matter, the High Court ought not to have entertained the writ petition under Article 226 of the Constitution of India challenging the assessment order in view of the availability of statutory remedy under the Act. There are serious disputes on facts as to whether the assessment order was passed on 20.03.2020 or 14.07.2020 - No valid reasons have been shown by the assessee to by-pass the statutory remedy of appeal. This Court has consistently taken the view that when there is an alternate remedy available, judicial prudence demands that the court refrains from exercising its jurisdiction under constitutional provisions. The High Court has seriously erred in entertaining the writ petition against the assessment order - the High Court ought to have relegated the writ petitioner – assessee to avail the statutory remedy of appeal and thereafter to avail other remedies provided under the statute - The writ petition filed before the High Court challenging the assessment order and consequential notice of demand of tax is hereby dismissed. Issues Involved:1. Whether the High Court was justified in entertaining the writ petition under Article 226 of the Constitution of India against the assessment order passed by the Assessing Officer under the MVAT Act and CST Act.2. Whether the assessment order was passed within the period of limitation.3. Whether the assessee should have availed the statutory remedy of appeal before approaching the High Court.Issue-wise Detailed Analysis:1. Justification of High Court entertaining the writ petition under Article 226:The Supreme Court held that the High Court erred in entertaining the writ petition under Article 226 of the Constitution of India against the assessment order, bypassing the statutory remedies available under the MVAT Act and CST Act. The Court emphasized that statutory remedies should not be bypassed unless there are extraordinary circumstances. The Court cited several precedents, including *Titaghur Paper Mills Co. Ltd. v. State of Orissa* and *Punjab National Bank v. O.C. Krishnan*, to support the principle that where an alternative statutory remedy is available, judicial prudence demands that the court refrains from exercising its jurisdiction under constitutional provisions. The Court concluded that the High Court should have relegated the assessee to the statutory remedy of appeal.2. Period of Limitation for Assessment Order:The respondent contended that the assessment order was not passed on 20.03.2020 but was passed subsequently, i.e., beyond 31.03.2020, and thus was beyond the period of limitation prescribed under the Act. The High Court had observed that the assessment order must have been passed beyond the limitation period. However, the Supreme Court did not delve into the merits of this contention, as it focused on the procedural aspect of whether the High Court should have entertained the writ petition in the first place.3. Necessity of Availing Statutory Remedy of Appeal:The Supreme Court underscored that the assessee had a statutory alternative remedy available by way of appeal before the first appellate authority, which ought to have been pursued. The Court noted that there were serious disputed facts regarding the date of the assessment order, which should have been addressed through the statutory appeal mechanism. The Court reiterated that bypassing the statutory remedy without valid reasons is not justified. The Court referred to its decision in *Raj Kumar Shivhare v. Directorate of Enforcement*, emphasizing that when a statutory forum is created for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.Conclusion:The Supreme Court quashed and set aside the impugned judgment and order passed by the High Court. It directed the respondent-assessee to avail the statutory remedy of appeal within four weeks, with the appellate authority to decide the appeal on its merits without raising any question of limitation, subject to fulfilling other statutory conditions. The Court clarified that it had not expressed any opinion on the merits of the case, leaving it to the appellate authority to consider the appeal independently. The appeal was allowed with no order as to costs.