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of <h1>Entry Tax Assessment writ petition dismissed for bypassing statutory appellate remedies under Section 20(5) MP VAT Act</h1> <h3>Abhiram Marketing Service Ltd. Through Its Authorized Signatory Bhaskar Roy Versus The State Of M.P. And Others</h3> The MP HC dismissed a writ petition challenging an Entry Tax Assessment order under Section 20(5) of the MP VAT Act, 2002. The petitioner failed to ... Maintainability of petition - availability of alternative remedy of appeal - Challenge to Entry Tax Assessment order u/s 20 (5) of the M.P. Vat Act, 2002 - petitioner did not furnish Return/Audit report as required under Section 39 (2) in time for the period 01.04.2017 to 30.06.2017 - HELD THAT:- The Apex Court in case of The State of Madhya Pradesh and Another vs. M/s Commercial Engineers and Body Building Company Limited [2022 (10) TMI 576 - SUPREME COURT] has held that in a tax matter when a statutory remedy of appeal is available, the High Court ought not to have entertained the writ petition under Article 226 of the Constitution of India against the Assessment Order by-passing the statutory remedy of appeal. Conclusion - The writ petition is not maintainable due to the availability of an alternative statutory remedy and that the petitioner must pursue the remedy of appeal under the M.P. VAT Act, 2002. Thus, no ground for interference at this stage is made out. However, petitioner may challenge the impugned order before the appellate authority in accordance with law, if so advised - petition dismissed. The core legal questions considered by the Court in this matter are:1. Whether the petitioner was denied adequate opportunity of hearing in violation of the principles of natural justice, specifically the failure to provide the petitioner the statutory 30 days' time to submit a reply to the show-cause notice issued under Section 20(5) of the M.P. VAT Act, 2002.2. Whether the High Court can entertain a writ petition under Article 226 of the Constitution of India challenging an assessment order under the M.P. VAT Act, 2002, when an alternative statutory remedy of appeal is available.3. The applicability and scope of judicial precedents regarding the exhaustion of statutory remedies before invoking constitutional writ jurisdiction in tax matters.Issue-wise Detailed Analysis1. Adequacy of Opportunity of Hearing under Section 20(5) of the M.P. VAT Act, 2002The petitioner contended that the impugned assessment order dated 12.07.2022 was passed without giving the petitioner the mandatory 30 days to file a reply to the show-cause notice dated 17.02.2021. The petitioner sought to rely on the principles of natural justice and the law laid down by the Apex Court in Godrej Sara Lee Ltd. vs. Excise and Taxation Officer-cum-Assessing Authority & Ors. (2023) and the Division Bench judgment of this High Court in Alok Kumar Choubey vs. State of M.P. & Ors. (2021) to argue that the order was liable to be quashed for non-compliance with procedural fairness.However, the Court noted that the petitioner had not challenged the order through the statutory appellate mechanism but directly approached the High Court by way of writ petition under Article 226. The Court observed that while principles of natural justice are fundamental, the exercise of writ jurisdiction in tax matters must be circumscribed by the availability of efficacious statutory remedies.2. Availability and Exhaustion of Statutory Remedy of AppealThe respondent State, through the Additional Advocate General, relied heavily on the Supreme Court's recent authoritative decision in The State of Madhya Pradesh and Another vs. M/s Commercial Engineers and Body Building Company Limited (2022), which reiterated the principle that when a statutory remedy of appeal is available in tax matters, the High Court should not entertain writ petitions under Article 226 challenging assessment orders.The Court examined the detailed reasoning in paragraphs 6 and 8 of the Supreme Court judgment, which relied on a series of precedents including United Bank of India v. Satyawati Tondon, Punjab National Bank v. O.C. Krishnan, and others. These precedents emphasize that:Article 226 is not intended to bypass or short-circuit statutory procedures.Judicial prudence requires exhaustion of alternative remedies provided by statute before invoking writ jurisdiction.Tax matters involving public revenue and statutory appeals demand strict adherence to the appellate hierarchy.Writ jurisdiction should be exercised sparingly and only in extraordinary situations where statutory remedies are inadequate or unavailable.The Court underscored that the M.P. VAT Act, 2002 provides a statutory appellate mechanism under Section 46(1), which the petitioner had not availed. The Court, therefore, held that the petitioner was required to challenge the assessment order through the appellate authority rather than by writ petition.3. Application of Law to Facts and Treatment of Competing ArgumentsWhile the petitioner argued that the failure to provide 30 days' time to reply violated natural justice, the Court found that this procedural grievance did not justify bypassing the statutory appellate remedy. The Court reasoned that the availability of the appeal mechanism under Section 46(1) of the M.P. VAT Act, 2002 provided an adequate and efficacious remedy to address such grievances.The Court also noted that the petitioner had not filed an appeal but instead approached the High Court directly, which is impermissible in light of the binding precedents. The Court declined to examine the merits of the input rebate claim or the substantive correctness of the assessment order at this stage.Further, the Court referred to the principle that the High Court, while exercising writ jurisdiction, must consider factors such as the complexity of facts, availability of alternative remedies, delay, and public interest, as emphasized in City and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala and Raj Kumar Shivhare v. Directorate of Enforcement.4. Directions and ConclusionThe Court dismissed the writ petition on the ground of non-exhaustion of statutory remedy and relegated the petitioner to file an appeal before the appellate authority under Section 46(1) of the M.P. VAT Act, 2002. The Court permitted the appeal to be filed within four weeks from the date of the order and directed that the appellate authority shall entertain and decide the appeal on merits without raising limitation objections, subject to compliance with other statutory requirements.The Court clarified that its order did not express any opinion on the merits of the input rebate claim or the assessment order and that the appellate authority was free to decide the matter independently, uninfluenced by any observations made by the High Court in the writ proceedings.Significant Holdings'Article 226 is not meant to short-circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill-suited to meet the demands of extraordinary situations... that recourse may be had to Article 226 of the Constitution. But then the Court must have good and sufficient reason to bypass the alternative remedy provided by statute. Surely matters involving the revenue where statutory remedies are available are not such matters.''When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation.''The writ petition preferred by the respondent herein - original writ petitioner - assessee is hereby dismissed on the ground of alternative efficacious statutory remedy of appeal available to the respondent. The respondent is relegated to prefer an appeal before the appellate authority under Section 46(1) of the MP VAT Act, 2002.'Core principles established include the mandatory exhaustion of statutory remedies before invoking writ jurisdiction in tax assessment matters, the limited scope of writ jurisdiction in fiscal matters, and the importance of adherence to procedural safeguards within the statutory framework.Final determinations were that the writ petition was not maintainable due to the availability of an alternative statutory remedy and that the petitioner must pursue the remedy of appeal under the M.P. VAT Act, 2002. No interference was made with the merits of the assessment order at this stage.
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