TMI Blog2008 (6) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... decided in this order, in any manner. W.P. dismissed. - W.P. Nos. 2392,2393, 13457 of 2008 - - - Dated:- 26-6-2008 - PAUL VASANTHAKUMAR N. , J. ORDER:- N. PAUL VASANTHAKUMAR J. By consent of the learned senior counsel appearing for the petitioner as well as the learned Additional Government Pleader (Tax) appearing for the respondent, the writ petitions are taken up for final disposal even at the admission stage. In W.P. No. 2392 of 2008, the assessment order dated December 7, 2007 passed by the respondent to the tune of Rs. 14,09,13,503 including penalty is challenged. In W.P. No. 2393 of 2008, the assessment order dated December 24, 2007 passed to the tune of Rs. 27,74,19,671 including penalty is under challenge. The assessment order dated April 29, 2008 to the tune of Rs. 12,04,10,462 including penalty is challenged in W.P. No. 13457 of 2008. In all the impugned orders, it is specifically stated that appeal against the said order can be filed before the Appellate Assistant Commissioner of Commercial Taxes-III, Chennai, within thirty days of receipt of the order. But the petitioner challenged the said assessment orders without availing the alternative remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner filing objections. It is also stated in the affidavit that the petitioner's business premises was inspected by the officials of the Enforcement Wing on November 3, 2006 and November 4, 2006 and on inspection it was noticed that the petitioner has no godown facility at all and all purchases were effected from three dealers placed at Chengalpet. The subsequent sales made by the petitioner were also effected at Chengalpet. The Enforcement Wing also pointed out that the three dealers placed at Chengalpet from whom the petitioner effected purchases, did not have their telephone numbers in their respective invoices and the necessity and motive of the petitioner to buy goods at Chengalpet for subsequent sales at Chengalpet. Based on the inspection, a final notice dated September 27, 2007 was issued by stating that all purchases were made from bogus dealers, who never in fact existed and therefore the entire turnover pertaining to the claim of second sales exemption to the effect of Rs. 2,32,00,51,305 was proposed to be disallowed and the petitioner is liable to pay tax at four per cent. Another revised notice was also issued on November 26, 2007 and the petitioner was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Rs. 174.51 crores for the year 2006-07, the onus is upon the petitioner to prove that those transactions had already suffered tax. A finding is also given to the effect that the three seller companies did not pay any tax and therefore section 10(2) of the TNGST Act, 1959, mandates the petitioner, who is claiming exemption, to prove that the iron and steel sold by the petitioner was already subjected to tax. Heard the learned senior counsel appearing for the petitioner-company as well as the learned Additional Government Pleader appearing for the respondent. The learned senior counsel appearing for the petitioner-company submitted that even though appeal remedy before the Appellate Assistant Commissioner is provided under the Act, the impugned orders of assessment having been passed in violation of the principles of natural justice, the petitioner is entitled to challenge the assessment orders in these writ petitions. The learned senior counsel cited some of the judgments of the Supreme Court and of this court to sustain his contention that even without resorting to appeal remedy, the writ petition filed is maintainable. The learned Additional Government Pleader submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order was passed. The learned Additional Government Pleader for the respondent contended that effective and adequate opportunity was given to the petitioner before passing the final assessment orders and principles of natural justice are not violated and therefore the petitioner can very well challenge the assessment orders of the respondent before the Appellate Assistant Commissioner under section 31 of the TNGST Act, 1959. Section 31(3) mandates the Appellate Assistant Commissioner to dispose of the appeal in the following manner: Section 31. (3) In disposing of an appeal, the Appellate Assistant Commissioner may, after giving the appellant a reasonable opportunity of being heard, and for the sufficient reasons to be recorded in writing (a) in the case of an order of assessment (i) confirm, reduce, enhance or annul the assessment or the penalty or both; (ii) set aside the assessment and direct the assessing authority to make a fresh assessment after such further inquiry as may be directed; or (iii) pass such other orders as he may think fit; or (b) in the case of any other order, confirm, cancel or vary such order: Provided that at the hearing of any a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o of the decision in the said case. That judicial discipline has not been adhered to. Looked at from any angle, the High Court's judgment is indefensible and is set aside. A Division Bench of this court in the decision in Nivaram Pharma Pvt. Ltd. v. CEGAT, Madras reported in [2006] 205 ELT 9 (Mad) considered similar issue of by-passing alternate remedy in tax matters. In paragraphs 5 to 14, the Division Bench held as follows: 5. It is well-settled by a series of decisions of the Supreme Court that particularly in tax matters there should be no short-circuiting of the statutory remedies, vide Titaghur Paper Mills Co. Ltd. v. State of Orissa [1983] 53 STC 315 (SC); AIR 1983 SC 603, Assistant Collector of Central Excise, Chandan Nagar v. Dunlop India Ltd. [1985] 19 ELT 22 (SC); AIR 1985 SC 330, etc. 6.. It is well-settled that when there is an alternative remedy ordinarily writ jurisdiction of this court under article 226 of the Constitution should not be invoked. This principle applies with greater force regarding tax proceedings. As observed by the Supreme Court in Titaghur Paper Mills Co. Ltd. v. State of Orissa [1983] 53 STC 315 (SC); AIR 1983 SC 603: 'Wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discouraged.' 9.. In Abraham (C.A.) v. Income-tax Officer [1961] 41 ITR 425 (SC); [1961] AIR 1961 SC 609, H. B. Gandhi v. Gopinath Sons [1990] 72 STC 1 (SC); [1992] (Suppl) 2 SCC 312 and in Karnataka Chemical Industries v. Union of India [1999] 113 ELT 17 (SC); [2000] 10 SCC 13 the Supreme Court held that where there is a hierarchy of appeals provided by the statute the party must exhaust the statutory remedies before resorting to writ jurisdiction. All these decisions are related to taxing statutes, and are hence apposite to the present context. 10.. In Sheela Devi v. Jaspal Singh AIR 1999 SC 2859 and Punjab National Bank v. Krishnan (O. C.) [2001] 6 SCC 569, the Supreme Court held that if the statute provides for remedy of revision or appeal, writ jurisdiction should not be invoked. 11.. In Union of India v. T.R. Varma AIR 1957 SC 882, the Supreme Court held that it is well-settled that when an alternative and equally efficacious remedy is open to a litigant, he should be required to pursue that remedy and not invoke the special jurisdiction of the High Court to issue a prerogative writ. It will be a sound exercise of discretion to refuse to interfere in a petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory remedies. 3.. In view of this well-settled principle, we direct the appellant to file an appeal within a period of three weeks from today before the appellate authority... (d) In the decision in Sharda Industries v. Commercial Tax Officer, Chennai reported in [2008] 14 VST 276 (Mad) similar view was taken by a learned single judge (M. Jaichandren, J.). The learned Additional Government Pleader submitted that the said view of the learned single judge was confirmed by a Division Bench. In view of the settled legal position, i. e., disputed facts cannot be gone into in a writ petition and in tax matters wherever alternate remedy is provided, writ petition shall not be entertained, I am of the view that these writ petitions challenging the orders of assessment made by the respondent, are not maintainable and the petitioner is bound to file appeals against the said orders of assessment as per section 31 of the Act. The petitioner is given two weeks time to file appeals against the orders of the assessment and if such appeals are filed within two weeks, the appellate authority is directed to consider the same on merits and in accordance with law, without referring to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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