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2021 (10) TMI 123

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..... ax would deem to be an option exercised by the dealer to pay taxes at compounded rates is a legal question which cannot be decided by the Appellate Authority under the provisions of the TNVAT Act and this is all the more a reason that the appellant should be permitted to approach this Court. Therefore, the writ petitions were maintainable. The order passed in the writ petitions are set aside, consequently the orders of assessment passed by the respondent are set aside - the matter is remanded to the Assessing Officer to treat the returns filed by the assessee under Section 6(1) of the TNVAT Act and proceed to complete the assessment in accordance with law - Petition allowed by way of remand. - W.A.Nos.2262, 2263, 2264 & 2267 of 2021 And C,M.P.Nos.14408, 14412, 14409, 14414, 14416, 14428 & 14429 of 2021 - - - Dated:- 8-9-2021 - Honourable Mr.Justice T.S.Sivagnanam And Honourable Mr.Justice Sathi Kumar Sukumara Kurup For the Appellant in all appeals : Mr.S.N.Kirubanandam For the Respondent in all appeals : Mr.M.Venkateshwaran Government Advocate COMMON JUDGMENT T.S.SIVAGNANAM, J. These writ appeals filed by the writ petitioner are directed against t .....

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..... by-passing the remedy is not permissible. The correctness of the said order is called in question before us. The question to be answered in these appeal is whether there is a need for a registered dealer to file an option letter in a particular format and does the Act prescribed any such format. 6.Section 6 of the TNVAT Act deals with payment of tax at compounded rates by works contractor. Sub-section (1) of Section 6 states that notwithstanding anything contained in the TNVAT Act, every dealer, other than the dealer who purchases or receives goods from outside the State or imports goods from the outside the Country may, at his option, instead of paying tax in accordance with section 5, pay, on the total value of the works contract executed by him in a year, and the rate of tax will b e 2% of the total contract value of the civil works executed in so far as the civil works contract. Sub-section (2) of Section 6 stated that any dealer, who executes works contract, may apply to the assessing authority along with the first monthly return for the financial year or in the first monthly return after the commencement of the works contract, his option to pay the tax under sub-section ( .....

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..... ired to exercise an option to pay tax under Section 7-C of the TNGST Act by means of a separate letter or a petition. It also noted that under the provisions of the TNGST Act and the Rules framed thereunder, there is no prescribed format or procedure as to how the option should be exercised. After taking note of the decision of the Hon'ble Division Bench in the case of M/s.Kikani Exports P. Ltd. [supra], wherein it was held that in the absence of any separate form provided for under the Rules or a separate method provided for exercising option to pay tax under Section 7-C of the TNGST Act, it can be safely concluded that the assessee by filing a return and paying tax at compounded rate has exercised the option under the said provision and therefore, the Assessing Authority committed error in holding that the dealer did not exercised his option and accordingly, the said question was answered in favour of the dealer. The operative portion of the order reads as follows: 5.In this regard, useful reference can be made to the decision of the Hon ble Division Bench of this Court in the case of Commissioner of Income-tax v. M/s.Kikani Exports P. Ltd., in TCA No.330 of 2013 .....

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..... at the assessee has to exercise the option before the due date for furnishing the return of income. In other words, if the option is exercised after furnishing of the return of income under sub-section (1) of Section 139, it is of no avail. This assumes importance, as no procedure is prescribed for exercising the option. Form ITR- 6 gives the methodology on which depreciation can be claimed and therefore, the statue did not provide for any other method to exercise the option except through filing of return. Therefore, to read something more into the second proviso to Rule 5(1A), that an option should be exercised separately would make the returns filed meaningless. 6.The above referred decision can very well be applied to the facts of the present case, as under the TNGST Act or the Rules framed thereunder, there is no separate form provided or any separate method provided for exercising the option to pay tax under Section 7-C of the TNGST Act. Therefore, it can be safely concluded that the assessee by filing a return and paying tax under Section 7-C of the TNGST Act amounts to exercising option under the said provision. Thus, the respondent committed an error in holding that t .....

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..... noted that although it can entertain a petition under Article 226 of the Constitution, it must not do so when the aggrieved person has an effective alternate remedy available in law. However, certain exceptions to this rule of alternate remedy include where, the statutory authority has not acted in accordance with the provisions of the law or acted in defiance of the fundamental principles of judicial procedure; or has resorted to invoke provisions, which are repealed; or where an order has been passed in violation of the principles of natural justice. Applying this formulation, the High Court noted that the appellant has an alternate remedy available under the GST Act and thus, the petition was not maintainable. 26.In this background, it becomes necessary for this Court, to dwell on the rule of alternate remedy and its judicial exposition. In Whirlpool Corporation v. Registrar of Trademarks, Mumbai , a two judge Bench of this Court after reviewing the case law on this point, noted: 14.The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exerci .....

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..... ' dealership, which is their bread and butter, came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings. (emphasis supplied) 28.The principles of law which emerge are that: (i) The power under Article 226 of the Constitution to issue writs can be exercised not only for the enforcement of fundamental rights, but for any other purpose as well; (ii) The High Court has the discretion not to entertain a writ petition. One of the restrictions placed on the power of the High Court is where an effective alternate remedy is available to the aggrieved person; (iii) Exceptions to the rule of alternate remedy arise where (a) the writ petition has been filed for the enforcement of a fundamental right protected by Part III of the Constitution; (b) there has been a violation of the principles of natural justice; (c) the order or proceedings are wholly without jurisdiction; or (d) the vires of a legislation is challenged; (iv) An alternate remedy by itself does not divest the High C .....

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