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TMI Blog2022 (11) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... riods 2017-18 and 2018-19 vide Annexures-9 and 10: "It is, therefore, most respectfully prayed that this Hon'ble Court may graciously be pleased to admit this writ petition and issue rule nisi, calling upon the respondents to show cause as to why this writ petition shall not be allowed. If the opposite parties fail to show cause or show insufficient cause, the said rule may be made absolute and upon hearing the parties this Hon'ble Court may further be pleased to: a. To declare the Demand-cum-Show Cause Notices as ultra vires, illegal, unconstitutional and violative of the Fundamental Rights of the petitioner and thereby quash the Show Cause Notices with Reference Nos. ZD2108220041633 and ZD210822004217Y for the tax periods July, 2017 - March, 2018 and April, 2018 - May, 2018; and b. Pass any other order(s) and direction(s) as would be deemed just and proper by this Hon'ble Court; c. And for this act of kindness, the petitioner shall as in duty bound ever pray." 2. Fact leading the petitioner to approach this Court to beseech invocation of extraordinary jurisdiction under the provisions of Article 226/227 of the Constitution of India, 1950, is that the proper officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tilating the grievance. If such a representation is filed, the authority will consider and dispose of the same, in the light of the aforesaid revised guidelines dated 10.12.2018 issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably by 15.03.2021. 8. If the Petitioner(s) will be aggrieved by the decision of the authority, it will be open for the Petitioner(s) to challenge the same. 9. No coercive action shall be taken against the Petitioner till 15.03.2021. 10. The writ petition is disposed of accordingly." 2.2. Said order has further been modified with the following order dated 12.11.2021 in consideration of I.A. No.4735 of 2021 filed in the disposed of W.P.(C) No.3452 of 2021: "1. Last opportunity is granted to the Applicant (Petitioner) to file a representation to the Executive Engineer, Manjore Irrigation Division, Athamallik (Opposite Party No.3) and not to the tax authority. It is made clear that if such representation is not made on or before 1st December, 2021 the interim protection granted by this Court by the order dated 1st February, 2021 will stand vacated. 2. The time for disposal of such representation stands corres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the tender for the contract work. The Value Added Tax is applicable to the instant contract work as the Value Added Tax Act was prevailing at the time of floating/submission of tender for the respective contract work. ***" 2.6. The petitioner by referring to the following text from Guidelines issued by the Government of Odisha in Finance Department vide Memo No. 36116-FIN-CT1-TAX-0045-2017/F., dated 07.12.2017 urged that the authority ought not to have insisted on submission of bills for the work already executed showing goods and service tax element as inclusive of the contract price: "Works Contracts executed before 01.07.2017 and payments made in pre-GST and GST period.- (i) In the pre-GST regime, taxes like Central excise Duty, Entry Tax, OVAT and Service Tax have been included in the estimated value of the Works Contract and form a part of the bid price as well as of the contract price. Accordingly, value of the contract was inclusive of all taxes. (ii) In case of Running bills submitted before 1st July, 2017 for the works executed in the GST regime, the tax invoice is to be issued by the contractor showing CGST and SGST as applicable separately within the contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l; and Angul Irrigation Division, Angul; in the district of Angul, nothing is stated in the instant writ petition as to why the petitioner has arrayed Executive Engineer of Rengali Right Canal Division No.II, Dhenkanal against whom possibly no relief could have been asserted. Therefore, this Court does not find any merit in the contention of the petitioner that the Executive Engineer having not yet considered such representations, the CT&GST Officer of Angul Circle has no competence to initiate action under Section 73 of the GST Act for the purpose of determining tax liability in respect of amounts received on execution of works. It is, therefore, held that the writ petition is incompetent for non-joinder and mis-joinder of proper and necessary party and pendency of representation, if any, before such authority who is not impleaded as party in the writ petition does not deserve consideration for the purpose of adjudication as to whether the CT&GST Organisation is justified in initiating action for determination of tax liability under the GST Act. 4.2. This apart, it may also be pertinent for the authority concerned to determine as to whether the claim of the petitioner is within t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ines issued by the Government of Odisha in Finance Department vide Memo No. 36116-FIN-CT1-TAX:: 0045-2017/F., dated 07.12.2017 on the advent of the GST statute with effect from 01.07.2017. During the pendency of the writ petitions, being W.P.(C) No. 6178 of 2018 : All Orissa Contractors Association Vrs. State of Odisha, and other cases, the Government of Odisha in Finance Department brought out Revised Guidelines for works contract vide Office Memorandum bearing No.38535-FIN-CT1-TAX-0045-2017/F., dated 10.12.2018. This Court vide Order dated 12.12.2018 disposed of said writ petition(s) by extracting the Revised Guidelines in extenso and held as follows: "*** In that view of the matter, the Petitioner shall make a comprehensive representation before the appropriate authority within four weeks from today ventilating the grievance. If such a representation is filed, the authority will consider and dispose of the same, in the light of the aforesaid revised guidelines dated 10th December, 2018 issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably by 31.03.2019. If the petitioner(s) will be aggrieved by the decision of the authority, it will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te and price and calculate the differential amount of GST on the contract in which estimate was prepared under VAT?' *** 11. The basic price of materials as per SoR-2014 was inclusive of VAT, entry tax and other tax components. Since 1 July 2017 GST is payable on the value of the contract, the value of tax components in the price of the materials in SoR-2014 was revised and reduced by excluding such tax components prevalent during pre-GST period. As such, the revised SoR- 2014 was issued on 16 September, 2017. 12. The Petitioner complains that the procedure adopted in the preparation of the revised SoR-2014 dated 16 September, 2017 (Annexure-8) is illegal, arbitrary and contrary to the provisions of Odisha Public Works Department Code (OPWD Code) and that the rates have not been determined on the basis of actual rates prevailing in different areas of the State. 13. The said submission of the Petitioner is not found acceptable because the rates of materials are to be maintained uniformly all over the State. Further, if there is any difference in the actual rate and scheduled rate in any particular area, the Petitioner could submit the same to the employer and this has nothin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er shall make a comprehensive representation before the appropriate authority within two weeks from today ventilating the grievance. If such a representation is filed, the authority will consider and dispose of the same, in the light of the aforesaid revised guidelines dated 10.12.2018 issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably by 15.03.2021. ***" Hence, the petitioner again in the present writ petition, which is filed on 17.08.2022, without referring to Revised Guidelines dated 10.12.2018, has sought to rely on erstwhile Guidelines dated 07.12.2017 (Annexure-2, Paragraph 4 of the writ petition) which appears to be an attempt to misguide the Court. 4.7. This Court having threadbare compared the clauses contained in File No. NRRDA-GO21(17)/32017-FA, dated 06.06.2018 [Office Memorandum NRRDA-GO21(17)/32017-FA, dated 06.06.2018] issued by the National Rural Infrastructure Development Agency, Ministry of Rural Development, Government of India vis-à-vis Revised Guidelines contained in Office Memorandum No.38535- FIN-CT1-TAX-0045-2017/F., dated 10.12.2018 issued by the Government of Odisha in Finance Department in the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revised SoR-2014, the tax exclusive basic value of that goods or service shall be determined by removing the embedded tax incidences of VAT, Entry Tax, Excise Duty, Service Tax, etc. from the estimated Price/Quoted Price.) (iii) The revised estimated work value for the Balance Work shall then be enhanced or reduced in the same proportion as that of the tender premium/discount. (iv) Finally, the applicable GST rate (5%, 12% or 18% as the case may be) is to be added on the revised estimated work value for the Balance Work to arrive at the GST-inclusive work value for the Balance Work. (v) A model format for calculation of the GST-inclusive work value for the Balance Work is attached as Annexure. The competent authority responsible for making payment to the works contractor will determine GST inclusive work value for the Balance Work for which agreement executed on the basis of SoR-2014. (vi) A supplementary agreement shall be signed with the works contractor for the revised GST-inclusive work value for the Balance Work as determined above. (vii) In case the revised GST-inclusive work value for the Balance Work is more than the original agreement work value for the Balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of property in goods (whether as goods or in some other form) is involved in the execution of such contract; Section 7(1A): "Where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II." Schedule II: "Activities or transactions to be treated as supply of goods or supply of services- *** 5. Supply of services The following shall be treated as supply of service, namely:- (a) renting of immovable property; (b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. Explanation.- For the purposes of this clause- (1) the expression "competent authority" means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non:: requirement of such certific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s permissible even when the principal Act fails to bring out clearly the intention of the Legislature. In M.A. Rahman Vrs. State of Andhra Pradesh, (1961) 12 STC 392 (SC) wherein it has been stated that though there is no provision in the Act or the Rules specifically authorising the seller to pass on the tax to the consumer, what actually happens is that the seller includes the tax in the price and thus passes it on to the consumer. Then in his turn the seller pays the tax to the State. In effect by thus passing on the tax to the consumer through the price, the dealer has already collected the tax. The fault for failure to pay the tax or fraudulent evasion in payment thereof lies in the circumstances entirely on the dealer. 4.13. Conspectus of George Oaks Pvt. Ltd. Vrs. State of Madras, (1961) 12 STC 476 (SC); Tata Iron & Steel Co. Ltd. Vrs. State of Bihar, AIR 1958 SC 452; Delhi Cloth & General Mills Co. Ltd. Vrs. CST, (1971) 28 STC 331 (SC) leads to understand that even if statute permits the seller who is a registered dealer to collect the sales tax as a tax from the purchaser does not do away with the primary liability of the seller to pay the sales tax. The registered dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payments are received by me are arising out of the above contract executed prior to the commencement of the GST Act, i.e. w.e.f. 01.07.2017 wherein the Tender Notices were published prior to the commencement of the GST Act with the estimate prepared completely prior to the commencement of GST Act. Therefore, taking into consideration the works contractor required to pay the GST which was not envisaged while entering into the contract, the Finance Department vide Office Memorandum No. FIN-CT1-TAX-0045- 2017/38535/F., dated 10.12.2018 has introduced a revised guidelines envisaging the circumstances where the tender was invited before 01.07.2017 but payments made for the work after implementation of GST, for which I am not liable to pay the GST amount because my work executed prior to GST came into force. I, therefore, pray your good office kindly consider my representation not to demand GST and reimburse the same ***." 5.2. It is to be noted that determination of tax liability is the domain of "proper officer" defined under Section 2(91) by exercising powers conferred in Chapter XV of the GST Act. Section 73 in said Chapter deals with "determination of tax not paid or short paid o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oaches the High Court without availing the alternative remedy provided, the High Court should ensure that he has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction. 12. Constitution Benches of this Court in K.S. Rashid and Son Vrs. Income Tax Investigation Commission [1954 SCR 738 = AIR 1954 SC 207], Sangram Singh Vrs. Election Tribunal, Kotah [(1955) 2 SCR 1 = AIR 1955 SC 425], Union of India Vrs. T.R. Varma [1958 SCR 499 = AIR 1957 SC 882], State of U.P. Vrs. Mohd. Nooh [1958 SCR 595 = AIR 1958 SC 86] and Venkataraman and Co. Vrs. State of Madras [(1966) 2 SCR 229 = AIR 1966 SC 1089] held that Article 226 of the Constitution confers on all the High Courts a very wide power in the matter of issuing writs. However, the remedy of writ is an absolutely discretionary remedy and the High Court has always the discretion to refuse to grant any writ if it is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere. The Court, in extraordinary circumstances, may exercise the power if it comes to the conclusion that there has been a breach of principles of natural justice or procedure required for decision has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vrs. State of Orissa [(1983) 2 SCC 433 = 1983 SCC (Tax) 131 = AIR 1983 SC 603], H.B. Gandhi Vrs. Gopi Nath & Sons [1992 Supp (2) SCC 312], Whirlpool Corporation Vrs. Registrar of Trade Marks [(1998) 8 SCC 1 = AIR 1999 SC 22], Tin Plate Co. of India Ltd. Vrs. State of Bihar [(1998) 8 SCC 272 = AIR 1999 SC 74], Sheela Devi Vrs. Jaspal Singh [(1999) 1 SCC 209] and Punjab National Bank Vrs. O.C. Krishnan [(2001) 6 SCC 569] this Court held that where hierarchy of appeals is provided by the statute, the party must exhaust the statutory remedies before resorting to writ jurisdiction. 16. If, as was noted in Ram and Shyam Co. Vrs. State of Haryana [(1985) 3 SCC 267 = AIR 1985 SC 1147] the appeal is from 'Caesar to Caesar's wife' the existence of alternative remedy would be a mirage and an exercise in futility. ... There are two well recognized exceptions to the doctrine of exhaustion of statutory remedies. First is when the proceedings are taken before the forum under a provision of law which is ultra vires, it is open to a party aggrieved thereby to move the High Court for quashing the proceedings on the ground that they are incompetent without a party being obliged to wait until th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . [(2001) 6 SCC 634], Shri Sant Sadguru Janardan Swami (Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha Vrs. State of Maharashtra [(2001) 8 SCC 509], Pratap Singh Vrs. State of Haryana [(2002) 7 SCC 484 = 2002 SCC (L&S) 1075] and GKN Driveshafts (India) Ltd. Vrs. ITO [(2003) 1 SCC72] .] *** 15. Thus, while it can be said that this Court has recognized some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal case [AIR 1964 SC 1419], Titaghur Paper Mills case [Titaghur Paper Mills Co. Ltd. Vrs. State of Orissa, (1983) 2 SCC 433 = 1983 SCC (Tax) 131] and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in excise matters and held that entertaining writ petition is not proper where alternative remedy under statute is available. When there is a serious dispute with regard to classification of service, the respondents ought to have responded to the show cause notices by placing material in support of their stand but at the same time, there is no reason to approach the High Court questioning the very show cause notices. Further, as held by the High Court, it cannot be said that even from the contents of show cause notices there are no factual disputes. Further, the judgment of this Court in the case of Malladi Drugs & Pharma Ltd. Vrs. Union of India, (2020) 12 SCC 808 = 2004 SCC OnLine SC 358, relied on by the learned senior counsel for the appellants also supports their case where this Court has upheld the judgment of the High Court which refused to interfere at show cause notice stage." 5.9. The Supreme Court of India in South India Tanners & Dealers Association Vrs. Deputy Commissioner of Commercial Taxes, (2008) 23 VST 8 (SC) expressed displeasure in entertainment of writ petition against the Show Cause Notice. Said Hon'ble Court in the said case laid down the modality for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise, Hyderabad Vrs. M/s. Chemphar Drugs and Liniments, Hyderabad, (1989) 2 SCC 127 and in particular, Para-9 thereof is quoted as hereunder: "9. *** In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section (1) of Section 11-A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or willful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before (sic beyond) the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or willful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is squarely applicable to the facts of the present case. The expression used in Section 11-E of the Act is that the Commissioner must be satisfied on information or otherwise that the registered dealer has furnished incorrect statement of his turnover or furnished incorrect particulars of his sale in the return. A Show Cause Notice is issued to the dealer with the purpose of informing him that the Department proposes to reopen the assessment because the Commissioner himself is satisfied that the dealer has furnished incorrect statement of his turnover or incorrect particulars of his sales in the return submitted, so as to enable the dealer to reply to the show-cause notice as to why the said power vested in the Commissioner should not be exercised. 15. A notice was issued in order to provide an opportunity of natural justice to the dealer. There is nothing in the language of the aforesaid provision which either expressly or impliedly mandates the recording of any reasons. The provision of the Act nowhere postulates that the reasons which led to the issue of the said notice should be incorporated in the notice itself, and that in case of failure to do so, the same would invalidat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to reckon as to from which date the limitation has to be counted. *** 13. It must be noted that while issuing a show-cause notice under Section 11-A of the Act, what is entertained by the Department is only a prima facie view, on the basis of which the show-cause notice is issued. The determination comes only after a response or representation is preferred by the person to whom the show-cause notice is addressed. As a part of his response, the person concerned may present his view point on all possible issues and only thereafter the determination or decision is arrived at. In the present case even before the response could be made by the respondent and the determination could be arrived at, the matter was carried in appeal against the said internal order. The appellant was therefore, justified in submitting that the appeal itself was premature." 5.13. In Union of India Vrs. Bajaj Tempo Ltd., (1998) 9 SCC 281 = 1997 (94) ELT 285 SC = JT 1998 (9) SC 138 it is advised that the appropriate course for the assessee was to reply to the show cause notice enabling the authorities to record their findings of fact in each case and then, if necessary, the matter could be proceeded to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years." 5.16. The Hon'ble Supreme Court in the case of State of Maharashtra and Others Vrs. Greatship (India) Limited, 2022 SCC OnLine SC 1262 reiterated the scope of interference where there is existence of statutory remedy in exercise of power under Article 226/227 of the Constitution of India. The following are the observations: "14. At the outset, it is required to be noted that against the assessment order passed by the Assessing Officer under the provisions of the MVAT Act and CST Act, the assesse straightway preferred writ petition under Article 226 of the Constitution of India. It is not in dispute that the statutes provide for the right of appeal against the assessment order passed by the Assessing Officer and against the order passed by the first appellate authority, an appeal/revision before the Tribunal. In that view of the matter, the High Court ought not to have entertained the writ petition under Article 226 of the Constitution of India challenging the assessment order in view of the availability of statutory remedy under the Act. At this stage, the decision of this Court in the case of United Bank of India Vrs. Satyawati Tondon, (2010) 8 SCC 110 in which this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovide a special procedure for recovery of debts due to the banks and the financial institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the Court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act." 51. In CCT Vrs. Indian Explosives Ltd. [(2008) 3 SCC 688] the Court reversed an order passed by the Division Bench of the Orissa High Court quashing the show cause notice issued to the respondent under the Orissa Sales Tax Act by observing that the High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a matter of course only on the ground that the State did not file its counter-affidavit opposing the writ petition. Further, empty and self-defeating affidavits or statements of Government spokesmen by themselves do not form basis to grant any relief to a person in a public law remedy to which he is not otherwise entitled to in law." 53. In Raj Kumar Shivhare Vrs. Directorate of Enforcement [(2010) 4 SCC 772] the Court was dealing with the issue whether the alternative statutory remedy available under the Foreign Exchange Management Act, 1999 can be bypassed and jurisdiction under Article 226 of the Constitution could be invoked. After examining the scheme of the Act, the Court observed : (SCC p. 781, paras 31-32) "31. 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. In this case the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a goby by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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