2014 (5) TMI 1097 - HC - VAT and Sales Tax

Imposition of penalty - Excess of the jurisdiction conferred - Petitioner claimed that as per the provision of section 22(3)(b) of the Act read over rule 45 of the U. P. VAT Rules as existing at that time there was no requirement of indicating the name and address of the purchaser in the cash memo therefore imposition of penalty amounts to harassment - Held that - the Deputy Commissioner (Assessment) had the authority to issue a notice under section 54 of the Act. The notice so issued was for the alleged violation of the provision of section 22(3)(b) of the Act. Whether or not the petitioner has violated the provision is a question of fact which can be easily explained by the petitioner before the authority concerned. Once the court finds that the authority had the jurisdiction to issue a notice the basis on which the writ of prohibition is sought for by the petitioner disappears. The prayer for the issue of a writ of prohibition restraining the authorities from proceeding in the matter is essentially based on the constitutional challenge that the authority had no jurisdiction in the matter. Once we have held that the authority had the jurisdiction to issue notice and proceed in the matter the basis on which the writ of prohibition is sought by the petitioner disappears. It is not a case where the petitioner was being put to unnecessary harassment at the hands of the authority nor it is a case where a writ of prohibition should be issued because the authority had no jurisdiction to proceed in the matter. The petitioner claim that even section 22(3)(b) of the Act did not prohibit the petitioner from issuing a cash memo without the names of the purchaser is a question of appreciation which can easily be dealt with by the authority. Therefore this court is not inclined to issue a writ of prohibition and it would be open to the petitioner to file a reply to the notices issued by the authority under section 54 of the Act and satisfy the authority that no case of penalty is made out in the light of the provisions of the Act. - Decided against the petitioner

Issues Involved:
1. Legality of the issuance of notices under section 54(1)(22) of the U.P. VAT Act.
2. Requirement of mentioning the name and address of the purchaser in cash memos under section 22(3)(b) of the U.P. VAT Act.
3. Jurisdiction of the Deputy Commissioner (Assessment) to issue the notices.
4. Applicability of writ of prohibition and writ of certiorari to quash the notices.

Detailed Analysis:

1. Legality of the Issuance of Notices:
The petitioner argued that the notices issued under section 54(1)(22) of the U.P. VAT Act were unwarranted since there was no requirement under the law at the relevant time to mention the name and address of the purchaser in cash memos. The petitioner maintained that the entire exercise initiated by the Deputy Commissioner for the imposition of penalty was unnecessary and amounted to harassment. The court found that the authority had the jurisdiction to issue notices for the alleged violation of section 22(3)(b) of the Act, and whether the petitioner violated the provision is a factual question to be addressed by the concerned authority.

2. Requirement of Mentioning Purchaser Details in Cash Memos:
The petitioner contended that as per section 22(3)(b) and rule 45 of the U.P. VAT Rules, there was no requirement to mention the name and address of the purchaser in cash memos during the period in question (April 2008 to December 2008). The court noted that the rules were amended in 2009 to make it mandatory to indicate the purchaser's details in cash memos. Therefore, the petitioner argued that the assessing authority exceeded its jurisdiction by issuing the notices for penalty.

3. Jurisdiction of the Deputy Commissioner (Assessment):
The court held that the Deputy Commissioner (Assessment) had the authority to issue notices under section 54 of the Act. The notices were based on the presumption that the petitioner had acted in collusion with purchasing dealers to evade tax by not disclosing their identities in cash memos. The court found that the authority had the jurisdiction to proceed in the matter, and the petitioner could address the factual issues before the concerned authority.

4. Applicability of Writ of Prohibition and Certiorari:
The petitioner sought a writ of prohibition to prevent the authority from proceeding with the imposition of penalty and a writ of certiorari to quash the notices. The court referred to various precedents, stating that a writ of prohibition could be issued when an authority acts without or in excess of jurisdiction, in violation of natural justice, under an ultra vires law, or in contravention of fundamental rights. The court concluded that the Deputy Commissioner (Assessment) had the jurisdiction to issue the notices, and thus, the basis for seeking a writ of prohibition was not valid. The court also noted that the petitioner was not subjected to unnecessary harassment and could address the issues through proper legal channels.

Conclusion:
The court dismissed the writ petition, holding that the Deputy Commissioner (Assessment) had the jurisdiction to issue the notices under section 54 of the U.P. VAT Act. The petitioner could file a reply to the notices and satisfy the authority that no case for penalty was made out. The court did not find sufficient grounds to issue a writ of prohibition or certiorari. There was no order as to costs.

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