2022 (7) TMI 1598 - HC - VAT / Sales Tax

Petition not maintainable where statutory appeal under s.27 MVAT Act available; partial pre-deposit allowed; six-week cure

Kellogg Company Versus The State of Maharashtra and Ors.

Kellogg Company Versus The State of Maharashtra and Ors. - 2022:BHC - OS:6025 - DB ISSUES PRESENTED AND CONSIDERED 1. Whether writ petitions challenging tax assessments are maintainable in the High Court when an alternative statutory appellate remedy under Section 27 of the MVAT Act exists and has been addressed by a co-ordinate Bench. 2. Whether, in view of a pending Special Leave Petition in the Supreme Court against the co-ordinate Bench's ruling on maintainability and constitutional issues (including Article 286), petitioners may be permitted to prefer an appeal directly to the Tribunal instead of being relegated to the first appellate authority, and on what terms. 3. Whether limitation will bar such an appeal to the Tribunal if filed within a court-specified period, and what pre-deposit conditions must be satisfied for the Tribunal to entertain the appeal. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Maintainability of writ petitions in face of statutory appellate remedy (Section 27 MVAT Act) Legal framework: The MVAT Act provides a statutory appellate mechanism (Section 27) for challenging assessment orders; constitutional challenges invoking Article 286 may also be raised. Principles of judicial restraint require consideration of availability of efficacious alternative remedies before entertaining writ jurisdiction. Precedent treatment: The Court adheres to a prior decision of a co-ordinate Bench that addressed the question of maintainability and directed that petitioners ought to approach the first appellate authority under the MVAT Act. Interpretation and reasoning: The Court recognizes itself as bound by the prior co-ordinate Bench's findings on maintainability. Given this binding precedent, the High Court will not ordinarily entertain writ petitions where a statutory appellate remedy exists and has been endorsed by the co-ordinate Bench. Ratio vs. Obiter: Ratio - where a co-ordinate Bench has determined that statutory appellate remedy is available and should be pursued, subsequent benches are bound by that determination on the question of maintainability. Conclusion: The writ petitions are disposed in accordance with the co-ordinate Bench's finding that petitioners should pursue the statutory appellate remedy, subject to the exceptions and directions addressed in the subsequent issues. Issue 2 - Permitting direct appeal to the Tribunal in the peculiar circumstances and interplay with pending Supreme Court notice Legal framework: Appellate jurisdiction of the Tribunal (as distinct from first appellate authority) and the pre-deposit regime applicable to appeals; constitutional questions (Article 286) may raise broader issues that could justify deviation from the ordinary rule of relegation to first appellate forum in exceptional circumstances. Precedent treatment: The co-ordinate Bench's earlier judgment (addressing the same issue) allowed, in the peculiar facts, the petitioner a direct appeal to the Tribunal to enable correction of any infirmity in the impugned order, including in light of earlier judicial decisions; that approach is followed. Interpretation and reasoning: The Court accepts that where a writ petition has been pending for a long time and a significant constitutional issue is raised, equitable considerations may support permitting a direct appeal to the Tribunal rather than forcing a fresh first-appellate step which could further delay adjudication. The pendency and the nature of the constitutional question (Article 286) justify this limited departure from the general rule. Ratio vs. Obiter: Ratio - in exceptional facts involving prolonged pendency and serious constitutional issues, a petitioner may be permitted to prefer an appeal directly to the Tribunal rather than being relegated to the first appellate authority; Obiter - this is a limited exception and not a general rule for all cases. Conclusion: Petitioners are permitted, as a matter of judicial discretion in the peculiar facts, to prefer an appeal directly to the Tribunal if they so choose, to enable substantive consideration of the impugned orders including any constitutional point. Issue 3 - Pre-deposit requirement, limitation, time frame for filing appeal to Tribunal Legal framework: Statutory pre-deposit for prosecution of appeals; limitations law; procedural safeguards governing admission of appeals by Tribunal (including requisite pre-deposit and acknowledgment thereof). Precedent treatment: The co-ordinate Bench's directions required that any appeal to the Tribunal shall be entertained only if the requisite pre-deposit is made; where a petitioner has already made a pre-deposit for approaching the first appellate authority, that amount may be treated as constituting half of the pre-deposit for the Tribunal, with the balance to be deposited and an acknowledgment filed. Interpretation and reasoning: The Court reiterates that the Tribunal will not entertain an appeal unless the statutory pre-deposit is complied with. Practical flexibility is afforded by recognizing earlier pre-deposits made towards first appellate proceedings as constituting part of the Tribunal's pre-deposit, subject to balance payment and documentary acknowledgment. Additionally, to avoid prejudice from delay, the Court permits an extended window (eight weeks from upload of the order) within which petitioners may file the appeal; if filed within that period, limitation shall not operate as a bar to entertaining and trying the appeal on merits. Ratio vs. Obiter: Ratio - the Tribunal's jurisdiction to entertain an appeal is contingent upon compliance with the pre-deposit requirement; where a part pre-deposit has already been made for first appeal, it may be credited towards the Tribunal pre-deposit subject to making the balance and filing acknowledgment; limitation will not bars appeals filed within the court-granted window. Conclusion: Petitioners who wish to appeal directly to the Tribunal must make the full pre-deposit (with existing first-appeal pre-deposit credited as half if applicable), file an acknowledgment of amounts already deposited, and may do so within eight weeks from the order's upload without being forestalled by limitation. Issue 4 - Interim procedural directions and liberty to revive writ petitions Legal framework: Courts may grant limited relief or procedural directions while preserving parties' rights, and may allow revival of petitions if circumstances change (e.g., appellate success in a higher court). Precedent treatment: The Court follows the co-ordinate Bench's approach of providing a limited exceptional route to the Tribunal and setting a temporal window, while preserving liberty to revive writ petitions if petitioners succeed in the Supreme Court. Interpretation and reasoning: The Court balances the need to respect precedent and statutory remedies with fairness to petitioners affected by delay and by pending higher-court proceedings. By extending the time from six to eight weeks (accounting for intervening holidays) and by granting liberty to revive writ petitions if petitioners obtain favorable relief from the Supreme Court, the Court provides pragmatic procedural accommodation without overruling existing precedent. Ratio vs. Obiter: Ratio - limited temporal extension and liberty to revive petitions are permissible accommodations in the facts; Obiter - such accommodations are fact-sensitive and not a precedent for general practice. Conclusion: An eight-week period (instead of six) is granted for filing the Tribunal appeal; petitioners retain liberty to seek revival of their writ petitions should they succeed before the Supreme Court; the State undertakes not to seek adjournment when such appeals are listed. Issue 5 - Detaching certain petitions from the group for separate listing Legal framework: Courts may detag matters from a bunch of connected petitions where the earlier ruling does not govern particular petitions and require separate adjudication. Precedent treatment: The Court identifies a subset of petitions that are not covered by the co-ordinate Bench's decision and orders their detachment for separate listing. Interpretation and reasoning: Where a co-ordinate Bench's ruling is not applicable to particular petitions, those petitions must be heard independently; administrative convenience or common issues do not preclude detachment where legal applicability differs. Ratio vs. Obiter: Ratio - petitions not covered by the precedent are to be detagged and listed separately for hearing; this is a procedural direction grounded in principles of issue-specific adjudication. Conclusion: Specified petitions are detagged from the grouped matters and directed to be listed separately on the specified date for independent adjudication.