2022 (12) TMI 1328 - HC - VAT and Sales Tax

Court dismisses writ petition, upholds VAT Act jurisdiction. Exhaust remedies before seeking Article 226 relief.

M/s. Chowdary Brothers, Versus The Joint Commissioner (CT), Legal, Commissioner of Commercial Taxes, Vijayawada, The Joint Commissioner (ST), Nellore, The Deputy Commercial Tax Officer, The Commercial Tax Officer, The State of Andhra Pradesh,

M/s. Chowdary Brothers, Versus The Joint Commissioner (CT), Legal, Commissioner of Commercial Taxes, Vijayawada, The Joint Commissioner (ST), Nellore, The ... Issues Involved:1. Jurisdiction of the first respondent to pass the impugned order.2. Bar of limitation on the impugned order.3. Validity of the impugned order under the VAT Act.4. Transfer of right to use goods and applicability of VAT.5. Availability of alternative remedies.Issue-wise Detailed Analysis:1. Jurisdiction of the first respondent to pass the impugned order:The petitioner contended that the first respondent, Joint Commissioner (CT), Legal, had no power under Section 32 of the VAT Act to pass the impugned order as the second respondent had already exercised suo motu revision powers under the same provision. The court analyzed Section 32 of the VAT Act, which allows the Commissioner and other prescribed authorities to revise orders passed by subordinates. The court found that the Commissioner and subordinates, including the Joint Commissioner, have the authority to revise orders under Section 32(1) and (2). Therefore, the first respondent's action to revise the order of the second respondent was within jurisdiction. The court concluded that the contention of the petitioner regarding the lack of jurisdiction was untenable.2. Bar of limitation on the impugned order:The petitioner argued that the impugned order was barred by limitation, citing the judgment in Agarwal Industries Limited. The court noted that the original assessment order was passed on 19.02.2016, and the impugned order was issued on 13.02.2020, within the four-year limitation period prescribed under Section 32(3) of the VAT Act. The court rejected the petitioner's argument that the impugned order amounted to a fresh assessment barred by limitation, as the order was a revision of the second respondent's order within the permissible period.3. Validity of the impugned order under the VAT Act:The petitioner contended that the impugned order was contrary to law and not sustainable, relying on various judgments. The court examined the applicability of Section 4(8) of the VAT Act, which deals with the transfer of the right to use goods. The court found that the determination of whether there was a transfer of the right to use the vehicles was a factual question. The petitioner failed to provide the necessary agreements to substantiate their claims during the proceedings. The court held that the petitioner should have challenged the factual findings through an appeal rather than a writ petition.4. Transfer of right to use goods and applicability of VAT:The petitioner argued that the payment of service tax on the consideration received should exempt them from VAT. The court referred to the impugned order, which stated that the self-serving certificate issued by the Oil Company regarding service tax payment was not a valid document. The court emphasized that the determination of whether there was a transfer of the right to use goods required examining the agreements, which the petitioner failed to provide. The court held that the proper forum to address these factual disputes was an appellate authority.5. Availability of alternative remedies:The court noted that the petitioner had an alternative remedy of appeal under Section 33 of the VAT Act. The petitioner argued that filing an appeal would require depositing 25% of the disputed tax, which was not a valid ground for bypassing the statutory remedy. The court cited the Supreme Court's ruling in Chand Ratan v. Durga Prasad, which emphasized the necessity of exhausting statutory remedies before seeking a discretionary writ under Article 226 of the Constitution. The court found no exceptional circumstances to justify bypassing the alternative remedy and dismissed the writ petition.Conclusion:The court dismissed the writ petition, finding no merit in the petitioner's arguments. The impugned order was within jurisdiction, not barred by limitation, and the petitioner had an alternative remedy of appeal to address the factual disputes.