2024 (1) TMI 176 - HC - VAT and Sales Tax

Writ petition dismissed as VAT notices sent by registered post under Rule 64 satisfy natural justice requirements

M/s. K. Heeraman Naik Versus Commercial Tax Officer

The AP HC dismissed a writ petition challenging an assessment order and penalty levy. The petitioner argued the order violated natural justice principles ... Maintainability of petition - availability of statutory alternative remedy - Validity of assessment order - levy of penalty - specific stand of the respondents is that the order is passed in consonance with the principles of natural justice of following statutory provisions by serving the notices to which the dealer did not respond - HELD THAT:- It is evident from Rule 64 of the Andhra Pradesh Value Added Tax Rules, 2005, that a notice required or authorized under the Act or the Rules to be served shall be considered as sufficiently served, if it is sent by registered post to such place of residence, office or business or to the person’s usual or last known address in the State. Clause (c) of Rule 64 (1) provides for sending the notice through E-mail. In view of Rule 64, and Para 5 of the counter affidavit which shows sending of the notices by Post or/and E-mail, it shall be considered in law that the dealer was sufficiently served. Anything to the contrary has not been brought on record - under sub- section (1), “shall be considered as sufficiently served” is not dependent upon the certificate of service under sub-section (2). Besides, the averments of Para 5 of the counter affidavit having not been controverted on oath, the question of proof by certificate of service in evidence, does not arise in the present case - there are no force in the submission of the learned counsel for the petitioner that the orders impugned have been passed in violation of the principles of natural justice for the argument of no service of the notices before passing the impugned orders. The petitioner has the statutory alternative remedy. Without prejudice to that right, but subject to the due process of law and the law of limitation, the petitioner is at liberty to avail statutory remedy, on such grounds as may be open, other than the one dealt with in this judgment, if so advised, this writ petition is dismissed. Petition dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether the writ petition under Article 226 is maintainable when a statutory alternative remedy of appeal is available under the APVAT Act. 2. Whether the impugned assessment and penalty orders suffered from violation of principles of natural justice on the ground of non-service of show-cause notices and personal hearing notices. 3. Whether service by registered post and by e-mail to the e-mail ID furnished by the dealer, as provided under Rule 64(1) of the APVAT Rules, 2005 (including Clause (c) added by G.O.Ms.No.437), constitutes valid service such that proceedings comply with statutory procedure and principles of natural justice. 4. The evidentiary role of the certificate of service under Rule 64(2) where averments of service in the respondent's counter-affidavit remain uncontroverted. 5. Relief to be granted when statutory remedy is available but the writ petitioner raises objections to service and natural justice. ISSUE-WISE DETAILED ANALYSIS Issue 1: Maintainability of writ when statutory appeal remedy exists Legal framework: The Constitution empowers High Courts to issue writs under Article 226, but judicial practice recognizes that where an equally efficacious statutory remedy (here, appeal under the APVAT Act) exists, writ jurisdiction is generally declined. Precedent Treatment: No external precedents were invoked or considered in the judgment; the Court applied the settled principle that availability of an efficacious alternative statutory remedy is a factor against entertaining a writ. Interpretation and reasoning: The Court accepted the respondents' preliminary objection that an appeal remedy exists and that the petitioner did not raise any prima facie ground (other than service) sufficient to oust the alternative remedy rule. Ratio vs. Obiter: Ratio - where a statutory appeal is available and no exceptional circumstances are shown, writ jurisdiction should not be exercised. Conclusion: Writ petition is not entertained on the merits because the statutory appeal remedy is available; petitioner is left to pursue that remedy subject to limitation and other legal conditions (see final disposal paragraph). Issue 2 & 3 (grouped): Compliance with principles of natural justice - sufficiency of service under Rule 64(1) (registered post and e-mail) Legal framework: Rule 64(1) of the APVAT Rules, 2005 prescribes modes by which notices and documents 'shall be considered as sufficiently served': (a) personal service, leaving at usual/last known place, or sending by registered post; (b) analogous provisions for other entities; and (c) sending by e-mail to the e-mail ID furnished by the dealer (inserted by Government Order). Precedent Treatment: The Court did not refer to or distinguish any case law; it applied the text of Rule 64 directly to the facts. Interpretation and reasoning: The respondents' uncontroverted counter-affidavit (Para 5) sets out a detailed table evidencing service by registered post and by e-mail to the dealer's furnished e-mail ID for the summons, show-cause notices, personal hearing notices, assessment order and penalty order. The Court found these modes fall squarely within Rule 64(1)(a)(iii) and Rule 64(1)(c). Given that notices were sent by the modes prescribed by the Rule and no contrary material was placed on record, the Court concluded there was sufficient service in law and no breach of procedural fairness in that respect. Ratio vs. Obiter: Ratio - service effected by registered post and by e-mail to the dealer's furnished e-mail ID, as aggregated in an uncontroverted counter-affidavit, satisfies Rule 64(1) and negates the submission of violation of principles of natural justice based on non-service; Obiter - implicit affirmation that multiple modes of service (post plus e-mail) reinforce sufficiency, where consistent with departmental records. Conclusion: There was no violation of the principles of natural justice on the ground of non-service; the impugned orders were lawfully passed after giving statutory notices in the modes prescribed by Rule 64(1). Issue 4: Evidentiary value of certificate of service under Rule 64(2) where respondent's averment remains uncontroverted Legal framework: Rule 64(2) provides that the certificate of service signed by the person serving the notice shall be evidence of the facts stated therein. Precedent Treatment: The Court treated the Rule textually and did not rely upon external authorities. Interpretation and reasoning: The petitioner contended absence of a certificate of service. The Court held that sufficiency of service under sub-rule (1) is not made dependent on the certificate under sub-rule (2). Moreover, because Para 5 of the counter-affidavit (detailing service) remained uncontroverted, there was no requirement in the case to deploy the certificate as primary proof; the unchallenged averment itself sufficed. Ratio vs. Obiter: Ratio - the absence of a formal certificate under Rule 64(2) does not invalidate service that otherwise complies with Rule 64(1), particularly where the respondent's affidavit evidence of service is uncontroverted. Conclusion: The contention based on absence of certificate of service fails; the Court accepts uncontroverted departmental averments as adequate proof of valid service under Rule 64. Issue 5: Relief and course of action where statutory remedy exists but petitioner challenges service/natural justice Legal framework: Principles permitting dismissal of writ where statutory remedy is available, while preserving petitioner's right to pursue such remedy subject to law and limitation; courts may decline relief without adjudicating all possible grounds. Precedent Treatment: No case law cited; Court applied established discretionary practice. Interpretation and reasoning: Having found service valid and no breach of natural justice on that ground, and given the availability of appeal, the Court dismissed the writ petition while expressly leaving open the petitioner's right to avail the statutory remedy on grounds other than those addressed in the judgment. Ratio vs. Obiter: Ratio - dismissal of writ without prejudice to statutory remedy is appropriate where alternative remedy exists and the specific challenge (service/natural justice) is answered against petitioner; Obiter - confirmation that other grounds (not considered) may be raised in the statutory appeal subject to limitation. Conclusion: Writ petition dismissed; petitioner is at liberty to pursue the statutory appeal subject to limitation and due process; no costs awarded.