2022 (11) TMI 217 - HC - VAT and Sales Tax

Maintainability of petition - availability of efficacious alternative statutory remedy of filing of appeal - inter-state purchase of HSD at concessional tax rates against C-Forms - deletion of entry in registration certificate - Section 49 (4) of Chhattisgarh Value Added Tax, 2005 - whether proper notice was issued to petitioners for Sales Tax (Central) or not? - HELD THAT - Normally writ petitions filed by-passing alternate statutory remedy available under the law are not to be entertained, but there is no absolute bar. The bar created by Courts is self-restrained. Recently, in case of Assistant Commissioner of Sales Tax others vs. Commercial Steel Limited 2021 (9) TMI 480 - SUPREME COURT , Hon'ble Supreme Court while dealing with question of maintainability of writ petition has held that the High Court having regard to the facts of the case, can exercise discretion to entertain or not to entertain writ petition. An alternative remedy is not an absolute bar for invoking writ jurisdiction of the High Court under Article 226 of the Constitution of India and in cases where the authority against whom writ is filed is shown to have had no jurisdiction or had usurped jurisdiction without any legal foundation, writ petition can be entertained. In the case at hand, petitioners, who are registered dealers under the Act of 2005 as also the Act of 1956, have been awarded contract by South Eastern Coalfields Ltd. for execution of work of excavating overburden (all kinds of strata/ overburden in situ), loading into tippers, transportation and unloading of excavated materials; sprinkling spreading of material at the site shown and other related works, awarded to them by South Eastern Coalfields Ltd. under contract. After award of contract, petitioners submitted application seeking inclusion of 'high-speed diesel (HSD) and 'mining' in their registration certificates under the Act of 2005 and in certificate under the Act of 1956. Accordingly, their registration certificates were amended - The petitioners have raised the ground that respondent Department had not issued proper notice under Section 49 (3) of the Act of 2005 for deleting entries 'mining' and 'high-speed diesel (HSD)' from their registration certificates and deleted entries 'mining' and 'high-speed diesel (HSD)' from the registration certificates of petitioners issued under the Act of 1956. In some case, after deletion of entries from registration certificate, consequential order of recovery of tax with penalty has been passed against petitioners concerned. It is apparent that respondent Department had suo motu decided revision No.146 K.C. - 1/20 (Central) without issuing notice and without giving opportunity of being heard to registered dealer i.e. petitioner herien, which is mandatory under the provisions of Section 49 (3) the Act of 2005 and Rule 9 of the Rules of 1957. This Court is of the view that the order impugned with respect to suo motu revision No.146 K.C.-1/20 (Central) is passed in violation of provisions of the Act of 2005 as also the Rules of 1957 as no notice under Section 49 (3) of the Act of 2005 was issued giving opportunity of hearing to registered dealer before amending registration certificate issued in Form-B under Rule 5 of the Rules of 1957 by deleting entries made thereunder. Hence, in the opinion of this Court there was violation of principles of natural justice. This being the position, the impugned order is liable to be and is hereby quashed - petition allowed.

Issues Involved:
1. Validity of the notice issued under Section 49(3) of the Chhattisgarh Value Added Tax Act, 2005.
2. Deletion of "mining" and "High-Speed Diesel (HSD)" from the registration certificates.
3. Imposition of penalty under Section 10(a) of the Central Sales Tax Act, 1956.
4. Maintainability of writ petitions in light of alternative statutory remedies.

Issue-wise
Detailed Analysis:

1. Validity of the Notice Issued Under Section 49(3) of the Chhattisgarh Value Added Tax Act, 2005:
The petitioners argued that the notices issued under Section 49(1) of the Act of 2005 were not proper for amending the registration certificates. The respondents contended that amended notices under Section 49(3) were issued. However, the court found that these amended notices bore the same dispatch number as the original notices under Section 49(1), and no fresh dispatch number was issued. Additionally, the court noted that the notices were not in the prescribed format and lacked proper procedural compliance, thereby violating the principles of natural justice.

2. Deletion of "Mining" and "High-Speed Diesel (HSD)" from the Registration Certificates:
The court examined the procedural requirements under Section 49(3) of the Act of 2005 and Rule 9 of the Central Sales Tax (Registration and Turnover) Rules, 1957. It found that the deletion of entries "mining" and "HSD" from the registration certificates was done without issuing proper notice and without giving the petitioners a reasonable opportunity of being heard. The court emphasized that the statutory provisions mandate giving an opportunity of being heard before making any amendments to the registration certificates, which was not followed in this case.

3. Imposition of Penalty Under Section 10(a) of the Central Sales Tax Act, 1956:
The petitioners challenged the imposition of penalties, arguing that there was no mens rea or false representation on their part. The court noted that the penalties were consequential to the deletion of entries from the registration certificates. Since the deletion itself was found to be procedurally flawed, the imposition of penalties was also deemed invalid. The court quashed the orders imposing penalties on the petitioners.

4. Maintainability of Writ Petitions in Light of Alternative Statutory Remedies:
The respondents argued that the writ petitions should not be entertained due to the availability of alternative statutory remedies. However, the court held that the rule of exclusion of writ jurisdiction by the availability of an alternative remedy is a rule of discretion and not one of compulsion. The court cited precedents from the Supreme Court, stating that writ petitions can be entertained in cases where there is a violation of principles of natural justice or where the order is without jurisdiction. Given the procedural lapses and the violation of natural justice in this case, the court found it appropriate to entertain the writ petitions.

Conclusion:
The court quashed the impugned orders amending the registration certificates and imposing penalties on the petitioners. It held that the deletion of entries "mining" and "HSD" from the registration certificates was done without following due process and without giving the petitioners a reasonable opportunity of being heard, thereby violating the principles of natural justice. Consequently, the penalties imposed were also quashed. The court allowed all the writ petitions.

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