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2006 DIGILAW 433 (GAU)

Allied Sales Corporation v. State of Assam

2006-05-10

BIPLAB KUMAR SHARMA

body2006
JUDGMENT B.K. Sharma, J. 1. All the writ petitions involving same set of facts and questions of law have been heard together and are being disposed of by this common judgment and order. 2. The Petitioners are aggrieved by the fresh assessment orders under Section 18 of the Assam General Sales Tax Act, 1993 read with Section 9(2) of the Central Sales Tax Act, 1956 against the original assessment orders pertaining to various assessment years. Learned Counsel for the parties made submissions in reference to the writ petitions being WP (C) No. 6254/2004 and 6108/2004 and submitted that the decision thereof would cover all the writ petitions. In fact, the Respondents have filed their counter affidavit only in WP(C) No. 6108/2004 and the learned Counsel submitted that the same would cover all the writ petitions. 3. In view of the above position, the basic facts as available in WP (C) No. 6254/2004 are only indicated below, as the facts in other writ petitions, which are similar in nature, except the dates of the impugned orders, the years of assessment and the amounts involved are only different. 4. The Petitioner is a proprietorship concern and is engaged in the business of purchase and sale of tea and is registered under the AGST Act, 1993 as well as the Central Sales Tax Act, 1956. It is also a member of the Guwahati Tea Auction Centre. It's business constitutes purchase of tea from Guwahati Tea Auction Centre and the entire purchase sold in the course of inter-state Trade and Commerce to the registered dealers having their business outside the State of Assam. 5. The Government of Assam vide notification dated 21.7.1972 notified that any registered dealer buying tea from Guwahati Tea Auction Centre and selling the same to the registered dealers in other States in the course of inter-state sale shall be exempted from payment of central sales tax. However, such exemption from payment of tax was done away with by Annexure-III notification dated 20.7.2004 notifying that inter-state sale of tea to a registered dealer purchased from Guwahati Tea Auction Centre shall attract central sales tax @ 1%. 6. The Petitioner submitted its return for the period in question ending 1998-99 under the AGST Act, 1993. However, such exemption from payment of tax was done away with by Annexure-III notification dated 20.7.2004 notifying that inter-state sale of tea to a registered dealer purchased from Guwahati Tea Auction Centre shall attract central sales tax @ 1%. 6. The Petitioner submitted its return for the period in question ending 1998-99 under the AGST Act, 1993. Accordingly the Superintendent of taxes after going through the books of accounts and documents submitted therewith completed the assessment under Section 17(4) of the Act, read with Section 9(2) of the CST Act and passed order dated 9.4.2001 and determined the tax as NIL, as the entire sale was made outside the States to the registered dealers in the course of inter-state sale. 7. The Annexure-V show cause notice dated 24.5.2004 was issued to the Petitioner alleging submission of fake 'C Forms for various amounts during the years 1998-99 and 2000-01. The Petitioner was asked to show cause in writing as to why the 'C Forms indicated in the notice should not be treated as fake/obsolete. For a ready reference, the show cause notice dated 24.5.2004 is reproduced below: Govt. of Assam Office of the Superintendent of Taxes, Guwahati Unit-B No. GAU/u-B/c-9/1227 dt. 24.5.2004 To, M/s Allied Sales Corpn. B.R. Phookan Road, Guwahati. Sub.: Use of obsolete/Fake 'C Forms. Information available in my possession that you have submitted 4 (four) fake 'C Forms bearing No. AA/HR 099903 for Rs. 36,70,200/-, No. AA/HR 099969 for Rs. 95,000/-, No. AA/HR 099977 for Rs. 1,85,100/- and No. AA/HR for Rs. 2,15,000/- issued by M/s. Rajesh Tea Co., Purani Mandi, Kurukhetra, Haryana bearing CST No. 25785 during the year 1998-99 and 2000-01. Your are therefore, hereby called upon to show cause in writing by appearing in person on or before 27.5.2004 as to why the above 'C Forms should not be treated as fake/obsolete. Sd/- Illegible Superintendent of Taxes Guwahati, Unti-B, Panbazar. 8. On receipt of the show cause notice, the Petitioner requested the Superintendent of Taxes by letter dated 27.5.2004 to allow them atleast three months time to find out the required details. They also requested to refix the date for submissions of show cause reply. The Superintendent of Taxes refixed the matter on 22.6.2004, on which date the representative of the Petitioner appeared and submitted in writing the following vide Annexure-VIII dated 18.6.2004. From: M/s. Allied Sales Corporation B.R. Phookan Road, Guwahati. Dt. They also requested to refix the date for submissions of show cause reply. The Superintendent of Taxes refixed the matter on 22.6.2004, on which date the representative of the Petitioner appeared and submitted in writing the following vide Annexure-VIII dated 18.6.2004. From: M/s. Allied Sales Corporation B.R. Phookan Road, Guwahati. Dt. 18.6.2004 The Superintendent of Taxes Unit-B, Pan Bazar, Guwahati Sub: Use of Obsolete/Fake "C" Forms Dear Sir, Kindly refer to your letter No. Gau/U-B/C-9/1786 dated 16.06.2004. In this connection we submit as under: 1. That the sales covered "C" Forms as mentioned in your show cause notices No. Gau/U-B/C-9/1227 dated 24.5.2004 were made to genuine parties. Full details of such sales were furnished to you at the time of assessment. 2. That "C" Forms sent by the above parties were accepted by us in good faith. We had no mechanism to verify the genuineness of the "C" forms received by us. 3. That we still have no reason or material to suspect that the "C" Forms mentioned in your show cause notices are fake/obsolete. We would therefore request you to kindly make available to us all the materials/evidences which is in your possession on the basis of which you have issued the above referred show cause notices to us. This will enable us to meet the case that might be made against us on the basis of such material/evidence. 4. That we had no intention/motive of evading any tax on the sales made by us. We simply collect the tax and pay it to the credit of State/Central Government. We had no derived any benefit by accepting "C" Forms from the parties to whom sales were made. If the "C" Forms in question are ultimately found to be fake/obsolete, the real beneficiary would the party who had issued it. In view of the above, we submit that this issue needs a thorough enquiry/investigation before making any assessment on us. It is needless to mention that we shall fully co-operate with any such enquiry. Thanking you. Yours faithfully For M/s. Allied Sales Corporation Sd/- Proprietor. 9. By Annexure-IX letter dated 16.7.2004, the Superintendent of Taxes asked the Petitioner to produce the books of accounts for the assessment years in question i.e. 1998-99 and 2000-01 together with sale vouchers, challans, despatch notes, evidence of payment etc. Thanking you. Yours faithfully For M/s. Allied Sales Corporation Sd/- Proprietor. 9. By Annexure-IX letter dated 16.7.2004, the Superintendent of Taxes asked the Petitioner to produce the books of accounts for the assessment years in question i.e. 1998-99 and 2000-01 together with sale vouchers, challans, despatch notes, evidence of payment etc. for scrutiny and examination so as to take action for disposal of the proceedings initiated on the basis of a report received from external sources that the claim of sales as was made by the Petitioner by way of production of declaration in Form 'C was not correct and proper for which the reassessment proceedings had to be initiated. It was intimated that in case of failure of the Petitioner to comply with the requirements, action would be taken in the matter in accordance with the provisions of Section 18 of the AGST Act, 1993 read with Section 9(2) of the CST Act, 1956 besides initiating proceedings under Section 60 of the AGST Act and Clause (e) of Section 10 of the CST Act, 1956 without any further reference and without allowing any further opportunity. 10. In response to the said communication, the Petitioner appeared before the Superintendent of Taxes on 20.7.2004 and submitted an application with the request to make available certified copies of all the documents/reports and/or other materials proposed to be utilized against the Petitioner. Thereafter the Annexure-XI impugned order dated 3.8.2004 was issued with the notice of demand for payment of Rs. 1,17,834/- being the assessed amount as tax and interest for the period ending 1998-99. 11. It is the aforesaid action and the order of the Respondents, which are under challenge in this writ petition. The Respondents in their counter affidavit apart from dealing with the matter on merit have taken the specific ground of the writ petitions being not maintainable, there being remedy of statutory appeal against the impugned orders. The specific averments made in the counter affidavit are reproduced below: That the Respondents respectfully beg to state that the power of reassessment as exercised in the instant case is vested upon the Assessing Officer in terms of Section 18(1)(a) of the AGST Act, 193. As such, no jurisdictional error can be attributed to the action taken by the Respondents in the instant case. As such, no jurisdictional error can be attributed to the action taken by the Respondents in the instant case. The Respondents humbly submit that it is settled principle of law that in a taxing statute where an appeal is provided for, the same must be exhausted. The Petitioner with an intention to circumvent the appeal provision has approached this Hon'ble Court. Moreover, as has already been narrated hereinabove the very conduct of the Petitioner disentitles it from any relief under Article 226 of the Constitution of India. The Respondents further humbly beg to submit that the purpose of judicial review is a review of the decision making process and not the decision itself. The in this regard has been crystallized in a catena of judgments by the Apex Court wherein it has been time and again reiterated that the High Courts in exercise of jurisdiction under Article 226 of the Constitution of India cannot assume appellate jurisdiction and reappreciate the primary or perceptive facts found by the fact finding authority. As such the Respondents humbly submit that not only the interim prayer so made in the writ petition is liable to be rejected but in fact the writ petition is entirely misconceived and hence liable to be dismissed with exemplary costs. 12. All the writ petitions have been heard for admission hearing. While the learned Counsel for the Petitioners argued that having regard to the facts and circumstances involved in each of the writ petitions, same are maintainable although there is alternative remedy of preferring appeal against the impugned order, the learned Counsel for the Respondents argued that the writ petitions are not within the exceptions so as to avoid statutory remedy of appeal. 13. Mr. D.K. Mishra alongwith Mr. H. Roy, learned Sr. Counsel, assisted by Mr. R. Goenka strenuously argued on the question of maintainability of the writ petitions placing reliance on the following decisions: AIR 1967 SC 234 State of Madras v. Radio & Electrical Ltd. AIR 1986 SC 1966 Chunni Lal Parshadi Lal v. Commissioner of Sales Tax (1972) 4 SCC 112 Gopiram Bhagwan Dass v. State of Bihar (2005) 6 SCC 499 State of H.P. v. Gujarat Ambuja Cement (2006) 2 SCC 269 L.K. Verma v. H.M.T. Ltd. 14. As against the above, Mr. K.N. Choudhury, learned Additional Advocate General assisted by Mr. As against the above, Mr. K.N. Choudhury, learned Additional Advocate General assisted by Mr. J. Patowary, learned Advocate made submissions in tune with the objections raised in counter affidavit about the maintainability of the writ petitions, with the help of the following decisions: AIR 1966 SC 12 Kedarnath Jute Manufacturing Co. Ltd. v. The Commercial Tax Officer and Ors. AIR 1967 SC 1758 State of Madras v. R. Nandlal 1992 Supp 2 SCC 312 H.B. Gandhi v. Gopi Nath (2003) 5 SCC 194 Union of India v. Hindalco Industries (2005) 2 SCC 129 Indian Agencies v. Additional Commissioner of Commercial Taxes. 2004 (2) GLT 290V.S.T Industries Ltd. v. State of Assam and Ors. 2006 (1) GLT 14 Common Judgment and Order dated 24.11.2005 in WP (C) No. 7044/2005 and Ors. Eastern Agency and Ors. v. State of Assam and Ors. 15. There is no dispute that the Petitioners have got remedy of appeal, as statutorily provided, against the impugned orders. Chapter VIII of the AGST Act deals with the appellate and revisional jurisdiction of the authorities. As per Section 33(6) of the Act an appeal against an order of assessment of tax with or without penalty or against an order imposing penalty shall lie unless such appeal is accompanied by satisfactory proof of the payment of tax including penalty, if any, which is admitted to be due or 20% of the amount of tax including penalty, if any, which has been assessed or levied whichever higher provided that the Appellate authority or Tribunal may, if it thinks fit for reasons to be recorded in writing and subject to furnishing of such security as such authority may deem fit, admit an appeal against such order with part payment or without any payment of the disputed amount of tax including penalty, if any, required under this sub-section with a view to mitigate undue hardship which is likely to be caused to the dealer or person if the payment of such disputed amount is insisted on. 16. Similarly, Section 19 of the CST Act, 1956 provides for constitution of Central Sales Tax Appellate Authority for settlement of disputes in course of inter-state trade and commerce. 16. Similarly, Section 19 of the CST Act, 1956 provides for constitution of Central Sales Tax Appellate Authority for settlement of disputes in course of inter-state trade and commerce. Section 20provides for appeal by aggrieved dealer against any order of the assessing authority made under Section 6A or Section 9 of the Act relatable to any dispute concerning the sale of goods affected in course of inter-state trade and commerce. 17. In the decision of this Court dated 24.11.2004 (2006 (1) GLT 14 in Eastern Agency (supra), the present Petitioners were involved as writ Petitioners. They were aggrieved by the order of the taxing authority assessing the tax payable summarily to the best of its judgment on the basis of the report furnished, without any opportunity of hearing to them. In that case also it was the grievance of the Petitioners that even the copy of the report was also not furnished. Learned Single Judge posing the following common question in all the writ petitions answered the same in the negative against the Petitioners. The common questions to be dealt with in all these writ petitions is whether the assessment orders passed by the Superintendent of Taxes, Unit-B, Guwahati for the year 2001-2002 under Section 17(5) of the AGST Act, 1993 read with Section 9(2) of the CST Act, 1956 could be reviewed in exercise of discretionary power of this Court under Article 226 in a case where the assessee approached the Court without availing of the alternative remedy. 18. The above writ petitions were also pertaining to submission of 'C Forms in respect of sale of tea outside the State. The Petitioners were issued with show cause notices as to why summary assessment as per the provisions of the Act would not be made on their failure to produce the books of accounts. In reply the Petitioners informed the assessing authority that they would produce the books of accounts on receipt of the same from the registered dealers and requested for time. It was the case of the Petitioners that they tried to collect the 'C Forms from the purchases and on failure to procure the same prayed for further time. On their failure to do so within the prescribed time, the notices of demand were served upon them. It was the case of the Petitioners that they tried to collect the 'C Forms from the purchases and on failure to procure the same prayed for further time. On their failure to do so within the prescribed time, the notices of demand were served upon them. Being aggrieved they approached this Court by filing the writ petitions without availing the alternative remedy available by way of appeal. 19. Learned Single Judge upon discussions of the factual matrix and the laws applicable to the case including the decisions on which the parties placed reliance, held the writ petitions to be not maintainable and accordingly directions were issued to approach the appellate authority. It was submitted at the bar that against this decision of the learned Single Judge, the Petitioners preferred writ appeal and the same has been dismissed affirming the said judgment and order. Learned Counsel for the Petitioners sought to distinguish the judgment projecting the alleged distinctive features of both the batch of writ petitions. 20. I have given my anxious consideration to the submissions made by the learned Counsel for the parties and the materials on record. Except the fact that in the writ petitions involved in the aforesaid judgment and order were in respect of assessment orders passed by the taxing authority on the basis of its best judgment unlike the present batch of writ petition, in which the Petitioners are aggrieved by the re-assessment orders, there is no qualitative distinction between the two batch of writ petitions. The issue involved is one and the same, which is, whether the impugned orders could be reviewed, exercising the power of judicial review under Article 226 of the Constitution of India, where there is alternative remedy by way of preferring statutory appeal against the impugned orders. This issue has been answered in the negative and the Division Bench of this Court has affirmed the same. This being the position I am bound by the said decision. 21. Once it is held that the writ petitions are not maintainable, there being statutory remedy open to the Petitioners by way of preferring appeals against the impugned orders, there is no need to refer to the decisions on which the learned Counsel for the Petitioners placed reliance touching the merit of the cases. 21. Once it is held that the writ petitions are not maintainable, there being statutory remedy open to the Petitioners by way of preferring appeals against the impugned orders, there is no need to refer to the decisions on which the learned Counsel for the Petitioners placed reliance touching the merit of the cases. In the case of Gopiram Bhagwan Dass (supra), the assessee after exhausting the remedies available under the Act including the approach to the Tribunal, finally approached the High Court under the appropriate provisions. The High Court, however, dismissed the petitions of the assessee in limine. According to the High Court, the findings were of fact and no question of law arose. The Apex Court found fault with the approach of the High Court inasmuch as the proceedings and the questions not only involved the questions of fact but also of law requiring examination of the High Court. It was in those circumstances the orders passed by the High Court were set aside and the matter was remanded back to the High Court for making appropriate direction to the Tribunal referring the questions sought to be referred to it. Thus, it will be seen that the said case was not a case of not exhausting the alternative remedy unlike the present case. This case is of no help to the case of the Petitioners. 22. The case of Gujarat Ambuja Cement and L.K. Verma (supra) have been pressed into service to put emphasis that availability of alternative remedy may not be a bar for entertaining a writ petition under Article 226 of the Constitution of India. In Ambuja Cement itself the Apex Court while observing that despite the existence of an alternative remedy it is within the jurisdiction of discretion of the High Court to grant relief under Article 226 of the Constitution also observed: At the same time, it cannot be lost sight of that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere, if there is an adequate efficacious alternative remedy. If somebody approaching 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 extra ordinary jurisdiction. 23. If somebody approaching 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 extra ordinary jurisdiction. 23. Similarly in the case of L.K. Verrr (supra), the Apex Court restating the circumstances in which alternative remedy is not a bar towards maintainability of writ petitions, also emphasized on the general principle not to entertain a writ petition inter alia on the ground of availability of an alternative remedy. This well settled principle of the alternative remedy being not an absolute bar to exercise the writ jurisdiction under Article 226 of the Constitution of India is well recognized and need not be over emphasized. At the same time, this principle cannot have universal application making the same applicable to all kind of situations. 24. None of the Petitioners has contended and/or pleaded anything as to why they are not in a position to pursue the statutory remedy and as to how the principles involved towards invoking writ jurisdiction even if statutory remedy of appeal is provided for, are attracted in the instant case. The Apex Court in various decisions has consistently reminded that the writ court will refrain to exercise its jurisdiction inasmuch as the proceeding under Article 226 is not a substitute for statutory appeal. Compared to statutory appeal, the scope and ambit of the writ jurisdiction is necessarily circumscribed. Though no hurdle can be put against the exercise of the constitutional powers of the High Court, it is a well recognized principle, which gained judicial recognition that the High Court should direct the party to avail himself of alternative remedies one or the other before he resorts to constitutional remedy. As observed in the case of Transmission Corporation of A.P. v. Ch. Prabhakar and Ors. as reported in (2004) 5 SCC 551 , in proceedings under Article226, the High Court cannot sit as a court of appeal to re-appreciate the evidence for itself or to correct an error of fact, however, apparent it might be on the ground that the evidence on which it was based was not satisfactory or sufficient. The Apex Court further observed that the proceedings under Article 226 are not a substitute for an appeal. 25. The Petitioner/Appellant will get all the opportunity to explain their case before the appellate authority. The Apex Court further observed that the proceedings under Article 226 are not a substitute for an appeal. 25. The Petitioner/Appellant will get all the opportunity to explain their case before the appellate authority. On their failure before the said authority they will have another channel open by way of preferring further appeal to the appropriate authority. Thereafter also they will have other remedies open. Merely because the Petitioner/Appellant feel that they have a good case on merit, they cannot bypass the statutory alternative remedy by way of invoking the writ jurisdiction. In fact, they had invoked the jurisdiction of the statutory authority and it was only upon insistence of compliance of the pre-requisites, they invoked the writ jurisdiction of this Court. 26. In view of the above, the decisions on which Mr. K.N. Choudhury, learned Additional Advocate General, Assam placed reliance to bring home his point of argument regarding non-maintainability of the writ petition which has found favour with the Court need not be referred to. Suffice is to say that the principles underlying those cases do support the preliminary objections raised by the Respondents about the maintainability of the writ petitions there being alternative statutory remedy. 27. For the forgoing reasons, discussions and the findings, all the writ petitions fail and accordingly they are dismissed. Dismissal of the writ petitions shall not stand on the way of the Petitioner to approach the appellate forums, if so advised. It is made clear that no opinion has been expressed on merit of the case and the writ petitions have been dismissed only on the ground of non-exhaustion of alternative statutory remedy. 28. Writ petitions are dismissed. There shall be no order as to costs.