Heard both sides.
2.The petitioner is a manufacturer of HDPE/PP Woven Bags and is a registered dealer under the TNGST and CST Acts. For the assessment year 2005- 2006, the petitioner reported a total and taxable turnover of Rs.10,70,55,248/- under the TNGST Act. At that time of finalisation of assessment, on the basis of the report of the Enforcement Wing Authorities, the Assessment Officer levied tax @ 1% being the different of tax between the tax as per the schedule and the concessional rate of tax @ 3% for the reason that the petitioner had sold the polythene granules purchased by giving Form XVII declaration, as per the second proviso to section 3(3) of the TNGST Act.
3.It is further stated by the petitioner that though the respondent proposed to impose the penalty under Section 12(3)(b) of the TNGST Act and also penalty under
Section 23 of the TNGST Act, the respondent, while passing the final assessment order did not impose the penalty under the above provision on the ground that the petitioner had paid tax over and above the tax levied, in his proceedings and passed the assessment order, dated 28.08.2007. Thereafter, the respondent issued a revision notice under section 16(1)(a) of the TNGST Act, by which he proposed to levy penalty under
Section 23 of the Act and also proposed to impose additional sale tax @ 1% on the turn over of Rs.10,71,00,990/- by taking into consideration, the purchase turn over of Rs.82,56,954/- for the purpose of arriving the taxable turnover under the Tamil Nadu Additional Sales Tax Act. The petitioner submitted his objection and without properly appreciating the same, the respondent by his revised proceedings in TNGST 4103479/2005-2006 dated 25.08.2008 levied the additional sale tax @ 1% after adding the purchase turnover of Rs.82,56,954/- and also penalty under
Section 23 and 12(3)(b) of the TNGST Act.
4.The petitioner challenges the said assessment order dated 25.08.2008 on the ground that the purchase turn over of Rs.82,56,954/- should not have been included in the taxable turn over of Rs.10,70,55,248/- as it was not taxed in the hands of the petitioner and suffered the tax in the hands of the seller and as the purchaser is only the 2nd purchaser, that sale is not liable to be taxed in their hand.
5.According to the petitioner, as per the Additional Sales Tax Act, under
section 2(1)(aa) explanation VI, Taxable Turnover for the purpose of this clause, does not include the turnover of resale, taxable u/s.3H of the Act and according to him, the turn over of Rs.82,56,954/- was taxed under section 3H of the Act and therefore, it is not sustainable.
6.It is further contended by the learned counsel appearing for the petitioner that while passing the assessment order dated 28.08.2007, no penalty was imposed under
Section 23 and
12(3)(b) of the Act, though there was a proposal to levy such penalty and that was dropped, as the petitioner has paid over and above the tax and therefore, the same cannot be levied in the revised assessment.
7.Further, the learned counsel appearing for the petitioner, submitted that there is no suppression of any sales turn over in the assessment order and therefore, there is no question of imposing penalty.
8.The respondent filed the counter affidavit raising the preliminary objection that against the order passed, which is challenged in this writ petition, the petitioner has got statutory appeal remedy under Section 31 of the TNGST Act and in similar circumstances, this Court has held in W.A.(MD)No.423 and 424 of 2008 dated 18.06.2008 in the case of P.K.Mookanambalam vs. CTO, Tallakulam Assessment Circle, Madurai, and dismissed the Writ Appeal on the ground of availability of alternative remedy. The respondent also justified the revised assessment order and the imposition of penalty.
9.The learned counsel appearing for the respondent submitted that there is an alternative remedy provided under the statute and without exhausting that, the writ is not maintainable.
10.The learned counsel appearing for the petitioner submitted that though there is an appeal remedy available under Section 31 of the TNGST Act, the writ petition is maintainable, as the Assessing Authority has passed the assessment order without jurisdiction and relied upon the judgment reported in 105 STC 202 (Mds) in the case of Eagle Flask Industries Ltd vs. CTO and another, and also a Division Bench judgment of this Court reported in [2006] 148 STC 419 (Mad) in the case of Sree Murugan Engineering Products v. Commercial Tax Officer, Coimbatore. The judgment reported in 105 STC 202 is the judgment of the Tamil Nadu Taxation Special Tribunal and in that case, the maintainability of the writ petition, the availability of alternative remedy was not at all discussed.
11.In the judgment reported in [2006] 148 STC 419, in the case of Sree Murugan Engineering Products v. Commercial Tax Officer, Coimbatore, the maintainability of the writ petition was discussed and having regard to the facts of the case, the Division Bench of this Court held that the impugned order of the Assessing Authority is without jurisdiction and therefore, the writ petition is maintainable.
12.In that reported case, for the contravention of condition in Form XVII, tax and penalty was imposed against the sales on the seller, which is against the provisions of 3(3) of the TNGST Act and in that context, the Division Bench has held that the assessment order is without jurisdiction.
13.In the present case, the petitioner is the purchaser and the petitioner purchased the polythene granules by giving Declaration in Form XVII and the goods worth of Rs.82,56,954/-, which were purchased against Form XVII Declaration, were resold by the petitioner and therefore, tax @ 1% being the difference tax between the tax as per the schedule and the concession rate of tax at the rate of 3% was levied and the petitioner has no objection for the same.
14.The main contention of the petitioner was that Additional sales tax can be levied if the total turn over exceeds 10 crores and as per the 2(p) of the TNGST Act, taxable turn over is the turnover on which a dealer shall be liable to pay sale tax as determined and so far as the sale in respect of Rs.82,56,954/- is concerned, the same cannot be classified as taxable turn over of the petitioner and the same is not liable to be included for the purpose of calculating the additional sale tax and if that amount is deducted, the taxable turn over will be only Rs.9,88,036/-, which is below 10 crores and therefore, the levy of additional sale tax at 1% is not correct. In my opinion, the contention of the learned counsel for the petitioner that by levying 1% on the total turnover, by virtue of the provisions of additional sale tax Act, the Assessing Authority has acted without jurisdiction cannot be accepted.
15.It is one thing to say that the Assessing Authority has no jurisdiction to levy the tax or penalty and another thing to say that the Assessing Authority has exceeded the power or wrongly applied the provision of the Act and passed the order. In respect of the first category viz. when the Assessing Authority has no jurisdiction to levy the tax, as held in the Division Bench in [2006] 148 STC 419, in the case of Sree Murugan Engineering Products v. Commercial Tax Officer, Coimbatore, the writ petition is maintainable.
16.But, when the Authority having jurisdiction exceeds the power or wrongly applied the provisions of law, the order can be challenged only by invoking the appeal provision under the Act and in that case the petitioner is not entitled to invoke the jurisdiction of the High Court under
Article 226 of the Constitution of India. It has been held in the reported judgment in 1983(2) SCC 433 in the case of Titaghur Paper Mills Co. Ltd. and another v. State of Orissa and other, 'Where a right or liability is created by a statute, which gives a special remedy for enforcing it, the remedy provided by that statute alone must be availed of. Under the scheme of the Orissa Sales Tax Act, there is a hierarchy of authorities for granting redress. The petitioners had an equally efficacious alternative remedy by way of an appeal to the Prescribed Authority under sub-section (1) of Section 23, then a second appeal to the Tribunal under sub-
section 3(a) thereof, and thereafter in the event the petitioners get no relief, to have the case stated to the High Court under
Section 24 of the Act. The Act provides for an adequate safeguard against an arbitrary or unjust assessment, such as right to prefer appeal under
Section 23(1) and to apply for stay of recovery under clause (a) of the second proviso to
Section 13(5). Thus the Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under Article
226."
17.In the same judgment, it is further held "Investment of authority to tax involves authority, to tax transaction which in exercise of his authority the Taxing Officer regards as taxable, and not merely authority to tax only those transactions which are, on a true view of the facts and the law, taxable. In the present case the challenge was only to the regularity of the proceedings before the S.T.O. as also his authority to treat the gross turnover returned by the petitioners to be the taxable turnover. The impugned orders of assessment were not challenged on the ground that they were based on a provision which was ultra vires. There was no question as to jurisdiction to make the assessment. the entrustment of power to assess was not in dispute, and the authority within the limits if his power was a Tribunal of exclusive jurisdiction."
18.In the judgment reported in (2005)6 SCC 499 in the case of State of H.P. and Others v. Gujarat Ambuja Cement Ltd and another, it has been held in para 18 as follows: The Constitution Benches of this Court in K.S.Rashid and Son v. Income Tax Investigation Commissioner, reported in 1954 SCR 738: AIR 1954 SC 207, Sangram Singh v Election Tribunal Kotah, reported in (1955) 2 SCR 1: AIR 1955 SC 425;, Union of India v. T.R.Varma, 1958 SCR 499: AIR 1957 SC 882, State of U.P.V Mohd. Nooh, reported in 1958 SCR 595: AIR 1958 SC 86 and K.S.Venkataraman and Co. (P) Ltd. vs. State of Madras, reported in (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 been adopted.
19.Another Constitution Bench, in State of M.P. V Bhailal Bhai; AIR 1964 SC 1006; [1964] 6 SCR 261 held that the remedy provided in a writ jurisdiction is not intended to supersede completely the modes of obtaining relief by an action in a civil court or to deny defence legitimately open in such actions. The power to give relief under
Article 226 of the Constitution is a discretionary power. Similar view has been reiterated in N.T.Velusami Thevar v G. Raja Nainar, 1959 Supp(1)SCR 623; AIR 1959 SC 422, Municipal Council, Khurai v. Kamal Kumar, (1965)2 SCR 653:AIR 1965 SC 1321, Siliguri Municipality v. Amalendu Das, (1984)2 SCC 436: 1984 SCC (Tax) 133: AIR 1984 SC 653, S.T.Muthusami v. K.Natarajan,[1988] 1 SCC 572:AIR 1988 SC 616, Rajasthan SRTC v. Krishna Kant, (1995)5 SCC 75: 1995 SCC (L&S)1207: (1995) 31 ATC 110: AIR 1995 SC 1715, Kerala SEB v. Kurien E.Kalathil, (2000)6 SCC 293: AIR 2000 SC 2573, A.Venkatasubbiah Najdu v. S.Chellappan, (2000)7 SCC 695, L.L. Sudhakar Reddy v. State of A.P.,(2001)6 SCC 634, Shri Sant Sadguru Janardan Swami (Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha v. State of Maharashtra, (2001)8 SCC 509, Pratap Singh v. State of Haryana, (2002) 7 SCC 484: 2002 SCC (L&S)1075 and GKN Driveshafts (India) Ltd. vs ITO, (2003)1 SCC 72.
20.In Harbanslal Sahnia v Indian Oil Corpn. Ltd. [2003] 2 SCC 107, the Apex Court held that the rule of exclusion of writ jurisdiction by availability of alternative remedy is a rule of discretion and not one of compulsion and the court must consider the pros and cons of the case and then may interfere if it comes to the conclusion that the petition seeks enforcement of any of the fundamental rights; where there is failure of principles of natural justice or where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged.
21.In G.Veerappa Pillai v. Raman & Raman Ltd., 1952 SCR 583; AIR 1952 SC 192, CCE v. Dunlop India Ltd., [1985]1 SCC 260; 1985 SCC (Tax) 75: AIR 1985 SC 330, Ramendra Kishore Biswas v. State of Tripura, (1999)1 SCC 472: 1999 SCC (L&S)295: AIR 1999 SC 294, Shivgonda Anna Patil v. State of Maharashtra, (1999) 3 SCC 5: AIR 1999 SC 2281, C.A,.Abraham v. ITO, (1961)2 SCR 765: AIR 1961 SC 609, Titaghur Paper Mills Co. Ltd., vs. State of Orissa, (1983) 2 SCC 433: 1983 SCC (Tax) 131: AIR 1983 SC 603, H.B.Gandhi v. Gopi Nath and sons,1992 Supp(2) SCC 312, Whirlpool Corpn. v. Registrar of Trade Marks, (1998) 8 SCC 1:AIR 1999 SC 22, Tin Plate Co. of India Ltd. v State of Bihar, (1998)8 SCC 272: AIR 1999 SC 74, Sheela Devi v. Jaspal Singh, (1999) 1 SCC 209 and Punjab National Bank V. O.C, Krishnan,(2001)6 SCC 569, the Apex Court held that where hierarchy of appeals is provided by the statute, party must exhaust the statutory remedies before resorting to writ jurisdiction.
22.Therefore, as per the above decided cases, the Court is entitled to consider the pros and cons of a particular case and then may interfere if it comes to the conclusion that the petitioner seeks enforcement of any of the fundamental rights, where there is failure of principles of natural justice or where the orders or proceedings are wholly without jurisdiction. It is not disputed that the respondent has no jurisdiction to issue a revised notice, but the petitioner only challenges the order on the ground that the respondent has wrongly included Rs.82,56,954/- in the total taxable turnover and levied additional sale tax. In other words, the respondent has jurisdiction but decided wrongly. Hence, without invoking the appeal remedy, the petitioner is not entitled to seek relief by invoking extraordinary jurisdiction of this Court under
Article 226 of the Constitution and hence, the writ petition is not maintainable and it is open to the petitioner to approach the appellate authority provided under that Act.
23.In the result, the writ petition is dismissed. Consequently, connected Miscellaneous Petitions are dismissed. No costs.
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