Telangana High Court
M/S Kakatiya Cement Sugar And ... vs The State Of Telangana on 22 July, 2024
THE HONOURABLE SRI JUSTICE SUJOY PAUL
AND
THE HONOURABLE SRI JUSTICE NAMAVARAPU
RAJESHWAR RAO
WRIT PETITION No.3148 of 2024
ORDER:
(Per Hon'ble Justice Sujoy Paul) This petition filed under Article 226 of the Constitution assails the order dated 09.01.2024 passed by respondent No.2 in exercise of power under Section 9 (2) of the Central Sales Tax Act, 1956 ('CST Act').
2. Learned counsel for the petitioner submits that although statutory alternative remedy is available to the petitioner, this matter may be directly entertained in the light of judgments of Supreme Court in the cases of Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai 1, Assistant Commissioner of State Tax vs. Commercial Steel Limited 2 and Godrej Sara Lee Ltd. vs. Excise and Taxation Officer-cum-Assessing Authority 3 and petitioner may not be relegated to avail statutory alternative remedy. To elaborate, learned counsel for the petitioner submitted that the Final Assessment Order was passed in his favour on 10.01.2020 and it was made clear that the 1 (1998) 8 SCC 1 2 2021 SCC OnLine SC 884 3 2023 SCC OnLine SC 95 2 SP, J & RRN, J WP_3148_2024 present turnover is covered by F-Form as prescribed under Section 6A of the CST Act. It is submitted that such order passed in exercise of power under Section 6A of the CST Act should have been altered only if conditions mentioned in Section 6A (3) are satisfied. Subsection (3) of Section 6A of the CST Act has the following condition on which power can be exercised namely, discovery of new facts or revision by a higher authority on the ground that findings of the Assessing Authority are contrary to law.
3. Learned counsel for the petitioner has drawn the attention of this Court to impugned order dated 09.01.2024 to contend that the power is exercised under Section 32 (2) of the Telangana Value Added Tax, 2005 (TVAT Act), for yet another ground that the same was found to be 'prejudicial to the interest of revenue'. This ground was not available as per Subsection 3 of Section 6A of CST Act mentioned hereinabove. By placing reliance on the judgment in the case of Ashok Leyland Ltd. vs. State of T.N. 4, learned counsel for the petitioner submits that the Final Assessment Order issued under Central Act cannot be altered by invoking 4 (2004) 3 SCC 1 3 SP, J & RRN, J WP_3148_2024 State Act provision. Moreso, when the necessary ingredients for exercising that power are not available.
4. Per contra, learned Special Government Pleader appearing for the State supported the impugned order and urged that the petitioner has an efficacious statutory alternative remedy of appeal. By placing reliance on the counter affidavit, it is contended that the petitioner is registered dealer on the rolls of respondent No.4 and is in the business of manufacture and sale of ordinary Portland cement and sugar. Although, Assessment Order was finalized under CST Act, for the period 2015-16 on 10.01.2020, after examining of Assessment Order, respondent No.2 noticed that to arrive at taxable turnover exemption was given on tax component, tax portion collected during CST sales for an amount of Rs.4,43,65,095/-and the tax liability arrived at on taxable turnover was Rs.8,04,263/- only, which is much less than the tax component collected. It was noticed by the department that the petitioner has effected inter-state sale of sugar for a turnover of Rs.105,00,05,905/- and claimed exemption without submitting any documentary evidence. This resulted in a short levy of tax. The petitioner in his reply dated 16.09.2019 stated 4 SP, J & RRN, J WP_3148_2024 that the tax amount was included in the Branch Transfer waybills in a sum of Rs.4,43,65,095/-. The petitioner himself admitted that tax component was Rs.4,43,65,095/-. In all, the petitioner showed the tax component in each waybill accumulating Rs.4,43,65,095/- total number of waybills submitted by petitioner are 3622. The Assessing Authority wrongly gave exemption to his amount. Since Assessment Order was prejudicial to the interest of revenue, due process was followed and petitioner was put to notice. The replies of the petitioner were obtained and thereafter, exemption was disallowed. In view of Section 80 of the TVAT Act, which is about 'repeal', the power under the said Act can be exercised. It is submitted that even as per Subsection 3 of Section 6A of the CST Act, when findings of the Assessing Authority are contrary to law, interference can be made.
5. We have heard the parties on admission.
6. A Writ Petition is maintainable despite availability of the alternative remedy in certain situations. However, it is discretion of the Court and there exists no compulsion to 'entertain' a petition merely because it is 'maintainable'. The 'maintainability' and 'entertainability' are two different facets. The Apex Court in 5 SP, J & RRN, J WP_3148_2024 its recent judgment dated 10.04.2024 in the case of PHR Invent Educational Society Vs. UCO Bank and Others 5 disapproved the order of Telangana High Court in W.P.No.5275 of 2021, dated 04.02.2022, wherein despite availability of 'statutorily efficacious remedy', the Writ Petition was entertained. The Apex Court has reiterated that merely because the Writ Petition is maintainable, it is not a compulsion on the Writ Court to entertain such petitions. In the matter, where huge involvement of tax, recovery of public money, bank loans etc are involved, the Writ Petition should be entertained with circumspection. The Apex Court in the said order at relevant portion opined as under:
"15. It could thus be seen that, this Court has clearly held that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person. It has been held that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. The Court clearly observed that, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. It has been held that, though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the Courts cannot be oblivious of the rules of self-imposed restraint evolved by 5 (2024) 4 S.C.R. 541 6 SP, J & RRN, J WP_3148_2024 this Court. The Court further held that though the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, still it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution."
(Emphasis Supplied)
7. In the instant case, only pure questions of law are not involved. The nature of waybills, assessment and impact of those aspects are also germane to decide whether the case falls within the ambit of Section 6A (3) of CST Act or Section 32 (2) of the TVAT Act etc,. In other words, mixed questions of facts and law are involved and departmental authority is best suited to adjudicate the matter.
8. In Godrej Sara Lee Ltd. (cited supra), the interference was made because only pure question of law was involved. As noticed above, in our opinion, mixed questions of facts and law are involved in this case, particularly, in view of counter filed by the Government, where huge amount was allegedly involved. These questions can very well be decided by the statutory authority. In this view of the matter, we are not inclined to entertain this petition and the petitioner is relegated to avail alternative remedy. 7
SP, J & RRN, J WP_3148_2024
9. With the above observation, this Writ Petition is disposed of by reserving liberty to the petitioner to avail the alternative remedy available. There shall be no order as to costs. Miscellaneous applications, if any pending shall stand closed.
_______________________ JUSTICE SUJOY PAUL ___________________________________________ JUSTICE NAMAVARAPU RAJESHWAR RAO Date: 22.07.2024 GVR