2024 (3) TMI 1385 - HC - VAT / Sales Tax

Petition challenging show cause notice for unauthorized tax collection dismissed, petitioner can pursue remedies after final order

M/s. Laxmi Cement (A Division of JK Corp Ltd.) Versus The Assistant Commissioner, Commercial Taxes Department, Anti Evasion Circle, Pali.

The Rajasthan HC dismissed a petition challenging a show cause notice for penalty levy regarding unauthorized tax collection. The petitioner contested the ... Challenge to impugned notice - levy of penalty - unauthorized collection of tax - HELD THAT:- As per the details furnished by the petitioner and by taking out the figures of tax effect in regard to credit notes issued during the years in question regarding the sales return as well as credit notes given on account of trade discount, the respondent issued the impugned show cause notice to the petitioner. This Court further observes that the impugned show cause notice was communicated to the petitioner and the reply thereto was also submitted by the petitioner, but as yet, no final order in the matter has been passed by the respondent on count of the fact that the interim order dated 22.04.1998 passed by this Hon’ble Court is operating in this case - This Court also observes that as per the settled proposition of law, normally, the writ Court should not interfere at the stage of issuance of show cause notice by the authorities concerned, as in such cases, the parties concerned get ample opportunity to put forth their legal issues before the authorities concerned. This Court disposes of the present petition, with liberty to the petitioner to avail the remedy as available to it under the law and to raise all the legal issues as raised herein and other issues, if any, before the appropriate forum, strictly in accordance with law, after passing of the final order by the respondent in the matter. Issues:Claim for reliefs under original application, Impugned notice dated 26.2.98 issued by Assistant Commissioner, Commercial Taxes Department, Anti Evasion, Pali, Applicability of Sections 28, 63 & 65 of the Rajasthan Sales Tax Act, 1994, Maintainability of the petition without exhausting alternative remedies, Justification of impugned notice, Legal issues raised by the parties, Interference of writ court at the stage of issuance of show cause notice.Analysis:The petitioner, a public limited company engaged in manufacturing and selling Portland cement, sought various reliefs through an original application, challenging the impugned notice dated 26.2.98 issued by the Assistant Commissioner, Commercial Taxes Department, Anti Evasion, Pali. The notice alleged that the petitioner refunded tax amounts to its dealers and called for an explanation regarding potential tax evasion. The petitioner contended that the provisions cited in the notice were not applicable to the case, as there was no tax avoidance or unauthorized collection involved. The petitioner argued that the issuance of credit notes to dealers for discounts did not violate any laws. The petitioner also emphasized that all relevant details were provided to the respondent, and there was no concealment of information. The petitioner supported its arguments by citing various judgments passed by the Hon'ble Apex Court.On the other hand, the respondent argued against the maintainability of the petition, asserting that the petitioner should have availed the alternative remedies provided under the law before approaching the court directly. The respondent justified the impugned notice, stating that it was issued after providing a proper opportunity of hearing to the petitioner. The respondent contended that the writ jurisdiction should not be invoked based on a show cause notice and relied on legal precedents to support this stance.After hearing arguments from both parties and examining the case record along with the judgments cited, the Court observed that the petitioner had not yet received a final order from the respondent due to an interim order passed by the Court. The Court noted that generally, a writ court should not interfere at the stage of a show cause notice issuance, as parties have the opportunity to present their legal issues before the concerned authorities. Consequently, the Court disposed of the petition, granting the petitioner liberty to pursue available remedies under the law and raise all legal issues before the appropriate forum after the final order by the respondent. All pending applications were also disposed of accordingly.