Madras High Court
M/S.Raja Traders vs The Commercial Tax Officer on 15 June, 2021
W.P.Nos.15232 to 15234 of 2014
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 15.06.2021
CORAM
THE HONOURABLE MR. JUSTICE S.M.SUBRAMANIAM
W.P.Nos.15232 to 15234 of 2014
and M.P.Nos.1 to 1 of 2014
M/s.Raja Traders,
Rep. By its Partner,
Tmt.P.Sundari, 127, Bhavani Road,
Erode 638 004. ..Petitioner in W.P.No.15232/2014
Sri Maharaja Traders,
Rep. By its Proprietrix Tmt.S.Saradha,
115, Bhavani Road,
Erode 638 004. ..Petitioner in W.P.No.15233/2014
Sri Lakshmi Enterprises,
Rep. By its Proprietor, S.Arunachalam,
129, Bhavani Road,
Erode 638 004. ..Petitioner in W.P.No.15234/2014
Vs.
1.The Commercial Tax Officer,
(Enforcement), CEW – II,
Coimbatore.
2.The Joint Commissioner (CT),
(Enforcement), Coimbatore.
3.The Assistant Commissioner (CT),
Chithode Assessment Circle,
Chithode, Erode District. ..Respondents in all W.Ps.
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
Prayer in W.P.No.15232/2014 : Writ Petition is filed under Article 226 of
the Constitution of India, to issue a Writ of Certiorarified Mandamus,
calling for the records on the file of the 1st respondent in his proceedings in
form-VSI-I and quash the surprise inspection – reports dated 17.03.2014,
18.03.2014 and 19.03.2014 as being without jurisdiction and authority of
law and further direct the 3rd respondent not to implement or use the
inspection results against the petitioner for the purpose of assessment/re-
assessment.
Prayer in W.P.No.15233/2014 : Writ Petition is filed under Article 226 of
the Constitution of India, to issue a Writ of Certiorarified Mandamus,
calling for the records on the file of the 1st respondent in his proceedings in
form-VSI-I and quash the surprise inspection – reports dated 17.03.2014
and 19.03.2014 as being without jurisdiction and authority of law and
further direct the 3rd respondent not to implement or use the inspection
results against the petitioner for the purpose of assessment/re-assessment.
Prayer in W.P.No.15234/2014 : Writ Petition is filed under Article 226 of
the Constitution of India, to issue a Writ of Certiorarified Mandamus,
calling for the records on the file of the 1st respondent in his proceedings in
form - VSI-I and quash the surprise inspection – reports dated 18.03.2014,
19.03.2014 and 25.03.2014 as being without jurisdiction and authority of
law and further direct the 3rd respondent not to implement or use the
inspection results against the petitioner for the purpose of assessment/re-
assessment.
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
(In all W.Ps.)
For Petitioner : Mr.R.Senniappan
For Respondents : Mr.V.Nanmaran
(Government Advocate)
COMMON ORDER
In all these Writ Petitions, the relief sought for is to quash the
surprise inspection reports submitted without jurisdiction and the authority
of law and further, direct the 3rd respondent not to implement or use the
inspection results against the petitioners for the purpose of assessment/re-
assessment.
2.The common issue raised in all these writ petitions is that the
Assessing Officer has erroneously applied the provisions of the Tamil Nadu
Value Added Tax Act, 2006 (hereinafter referred to as “the TNVAT Act”)
and passed the assessment orders which resulted exercise of jurisdiction
erroneously and thus, the petitioner is constrained to move these writ
petitions.
3.The learned counsel appearing on behalf of the writ petitioners
in order to substantiate the grounds, solicited the attention of this Court with
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
reference to Section 19 of the TNVAT Act and fairly submitted that an
amendment was issued in the Tamil Nadu Act, 13 of 2015 with effect from
29.01.2016, and the said amendment cannot be applied as far as the
impugned assessment orders in these writ petitions are concerned and the
assessment orders are to be passed considering the post-amendment carried
out under Section 19 in TNVAT Act, 13 of 2015 dated 29.01.2016.
4.The learned counsel for the petitioner reiterated that in all these
cases, the assessment years are falling prior to the amendment on
29.01.2016 and therefore, the pre-amended provision under Section 19 for
an input tax credit is to be considered for the purpose of passing an
assessment order. Pre-amendment provision in Section 19 enumerates that
“there shall be input tax credit of the amount of tax paid or payable under
the TNVAT Act, by the registered dealer to the seller on his purchases of
taxable goods specified in the First Schedule. The proviso states that “the
registered dealer, who claims input tax credit, shall establish that the tax due
on such purchases has been paid by him in the manner prescribed. Sub-
section (2) states that “input tax credit shall be allowed for the purchase of
goods made within the State from a registered dealer and which are for the
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
purpose of stated in the said provision. However, the respondent has
erroneously implemented the amended Section 19 with reference to the
assessment years falling prior to the amendment. Thus, the orders of
assessment were passed without any application of mind and thus, there is a
jurisdictional error in application.
5.It is contended on behalf of the petitioner that, when the
impugned orders are passed with jurisdictional error and based on erroneous
application of law, then a writ petition is to be entertained without
exhausting the statutory appellate remedy provided under the Act itself. It is
not in dispute that there is an appeal remedy made available in the statute.
However, it is contended that exhaustion of an alternate remedy is not
mandatory in the present case, as the Assessing Officer has not applied his
mind and there is lack of jurisdiction. In view of the fact that the impugned
orders are passed without any application of mind, the petitioner has chosen
to file these writ petitions without exhausting the appellate remedy and
therefore, the appellate remedy is to be dispensed with and the matter is to
be decided on merits.
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
6.The learned counsel for the petitioner relied on certain
judgments in support of their contentions regarding the appellate remedy by
stating that the High Courts and the Supreme Court have dispensed with the
appellate remedy in many cases and therefore, the benefit of the judgments
are to be extended in favour of the writ petitioner in the present writ
petitions.
7.This Court is of the considered opinion that Section 51 of the
TNVAT Act provides appeal to the Appellate Deputy Commissioner. The
appeal provision contemplates procedures also. Sub-section (2) of Section
51 stipulates that the appeal shall be in the prescribed form and shall be
verified in the prescribed manner and shall be accompanied by such fee not
exceeding one hundred rupees as may be prescribed. Sub-section (3) of
Section 51 denotes that in disposing of an appal, the Appellate Deputy
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
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
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. Proviso to
Section 51(3) provides that at the hearing of any appeal, the appropriate
authority shall have the right to be heard either in person or by a
representative.
8.Section 58 of the Act provides an appeal to the Appellate
Tribunal. Sub-Section (1) of Section 58 enumerates that any officer
prescribed by the Government or any person objecting to an order passed by
the Appellate Deputy Commissioner under sub-Section (3) of Section 51, or
by the Appellate Joint Commissioner under Sub-section (3) of Section 52, or
by the Joint Commissioner under sub-Section (1) of Section 53, may, (a)
within a period of one hundred and twenty days, in the case of an officer so
prescribed by the Government; (b) within a period of sixty days, in the case
of any other person, from the date on which the order was served, appeal
against such order to the Appellate Tribunal. Procedures are also
contemplated.
9.Section 59 provides appeal to High Court. Section 60
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
contemplates revision by High Court. These all are the framework of the
statutes in order to facilitate the aggrieved persons to redress their
grievances and therefore, the importance of appellate remedy cannot be
dealt with in a casual manner.
10.Exhausting the appeal remedy is the rule. Dispensing with the
appellate remedy is an exception. Power of discretion is to be exercised
discretely only if there is an imminent urgency or damage, if any, caused or
there is any threat, which cannot be compensated then alone, the
extraordinary power may be invoked for the purpose of granting relief by
dispensing with the appellate remedy. However, the transactions in account
books and the nature of trade, business etc., and the manner in which such
transactions are carried on by the assessees, its intricacies and other
practical aspects are to be considered by the competent appellate authorities
with reference to the original records. The appellate authority is the final
fact finding authority. Thus, the findings of the appellate authority as well
as the original authority are of paramount importance for the purpose of
dealing with the issues by the High Court for exercising the power of
judicial review under Article 226 of the Constitution of India. In other
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
words, findings of the original authority as well as the appellate authority
would be of greater assistance to the High Court for effective disposal of the
writ petitions and for providing complete justice to the parties. In the event
of dispensing with the appeal on frivolous grounds, the aggrieved persons
are also deprived of their opportunity to adjudicate issues before the
appellate authorities. Thus, it is not preferable to encourage by dispensing
with the appellate remedy, which all are provided under the statute.
11.Power of judicial review of the High Court under Article 226
of the Constitution of India is to scrutinise the processes and the procedures
adopted by the competent authorities for arriving a particular decision in
accordance with law, but not the decision itself. Thus, the High Court
cannot entertain an adjudicative process regarding the mixed question of
fact and law with reference to the documents and evidences in original.
High Court cannot resolve the disputed issues between the parties only
based on the affidavits filed in the writ petitions. There is a possibility of
omissions and commissions. Thus, adjudication before the appellate
authority with reference to such disputed findings of the original authority
would be of greater importance.
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
12.The learned counsel for the petitioners raised a point that the
impugned assessment orders are passed by the original authority by
applying the post-amended provision of the TNVAT Act, which is total non
application of mind. Thus, a writ proceedings is entertainable. Even in
such case of erroneous application of the provisions of the TNVAT Act, the
appellate authority is empowered to correct the same and they are
empowered to consider all the legal grounds raised by the parties by
affording opportunity. The appeal provision itself contemplates the powers
of the appellate authority and they possess enough powers to deal with all
issues including the jurisdictional issues and other legal grounds raised by
the respective parties.
13.This Court elaborately discussed the importance of exhausting
the appellate remedy in the case of M/s.Hyundai Motor India Limited v.
The Deputy Commissioner of Income Tax, Chennai and another
[W.P.No.22508 of 2017 dated 16.07.2018], from which, the following
paragraphs are extracted :
“19.Unnecessary or routine invasion into the
statutory powers of the competent authorities under a statute
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
should be restrained by the Constitutional Courts. Frequent or
unnecessary invasions in the executive power will defeat the
constitutional perspectives enshrined under the Constitution of
India. Undoubtedly, the separation of powers under the Indian
Constitution has been narrated and settled in umpteen number
of judgments. Separation of powers demarcated in the
Constitution of India is also to be considered, while exercising
the powers of judicial review in the matter of dispensing with
the appeal remedy provided for an aggrieved person under a
statute. If the High Courts started interfering with such
Appellate powers without any valid and substantiated reasons,
then the very purpose and object of the statute and provision
of appeal under the statute became an empty formality and the
High Courts also should see that the provisions of appeal
contemplated under the statutes are implemented in its real
spirit and in accordance with the procedures contemplated
under the rules constituted thereon. While entertaining a writ
petition as narrated by the Apex Court, the provision of
efficacious alternative remedy under the statute also to be
considered. If the writ petitions are entertained in a routine
manner, by not allowing the competent Appellate authority to
exercise their powers under the provisions of the statute, then
this Court is of an opinion that the power of judicial review
has not exercised in a proper manner. Thus, it is necessary for
this Court to elaborate the legal principle settled in respect of
the separation of powers under the Constitution of India.
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
1. Madras Bar Association vs. Union of India (UOI)
(25.09.2014 - SC) : MANU/SC/0875/2014
If the historical background, the preamble, the entire
scheme of the Constitution, relevant provisions thereof
including Article 368 are kept in mind there can be no
difficulty in discerning that the following can be regarded as
the basic elements of the constitutional structure. (These
cannot be catalogued but can only be illustrated):
(1) The supremacy of the Constitution.
(2) Republican and Democratic form of government and
sovereignty of the country.
(3) Secular and federal character of the Constitution.
(4) Demarcation of power between the Legislature, the
executive and the judiciary.
(5) The dignity of the individual secured by the various
freedoms and basic rights in Part III and the mandate to build
a welfare State contained in Part IV.
(6) The unity and the integrity of the Nation.
2. Holiness Kesavananda Bharati Sripadagalvaru v. State of
Kerala and Anr. [MANU/SC/0445/1973 : (1973) 4 SCC
225].
That separation of powers between the legislature,
the executive and the judiciary is the basic structure of the
Constitution is expressly stated by Sikri, C.J.
3. P. Kannadasan and Ors. v. State of T.N. and Ors.
[MANU/SC/0650/1996 : (1996) 5 SCC 670] the Supreme
Court noted that the Constitution of India recognised the
doctrine of separation of powers between the three organs of
the State, namely, the legislature, the executive and the
judiciary. The Court said:
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
It must be remembered that our Constitution recognises and
incorporates the doctrine of separation of powers between the
three organs of the State, viz., the Legislature, the Executive
and the Judiciary. Even though the Constitution has adopted
the parliamentary form of government where the dividing line
between the legislature and the executive becomes thin, the
theory of separation of powers is still valid.
4. State of Tamil Nadu and Ors. vs. State of Kerala and Ors.
(07.05.2014 - SC) : MANU/SC/0425/2014
121. On deep reflection of the above discussion, in our
opinion, the constitutional principles in the context of Indian
Constitution relating to separation of powers between
legislature, executive and judiciary may, in brief, be
summarized thus:
(i) Even without express provision of the separation of
powers,the doctrine of separation of powers is an entrenched
principle in the Constitution of India.
The doctrine of separation of powers informs the Indian
constitutional structure and it is an essential constituent of
rule of law.
In other words, the doctrine of separation of power though not
expressly engrafted in the Constitution, its sweep, operation
and visibility are apparent from the scheme of Indian
Constitution. Constitution has made demarcation, without
drawing formal lines between the three organs- legislature,
executive and judiciary. In that sense, even in the absence of
express provision for separation of power, the separation of
power between legislature, executive and judiciary is not
different from the constitutions of the countries which contain
express provision for separation of powers.
(ii) Independence of courts from the executive and
legislature is fundamental to the rule of law and one of the
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
basic tenets of Indian Constitution.
Separation of judicial power is a significant constitutional
principle under the Constitution of India.
(iii) Separation of powers between three organs--legislature,
executive and judiciary--is also nothing but a consequence of
principles of equality enshrined in Article 14 of the
Constitution of India. Accordingly, breach of separation of
judicial power may amount to negation of equality Under
Article 14. Stated thus, a legislation can be invalidated on the
basis of breach of the separation of powers since such breach
is negation of equality Under Article 14 of the Constitution.
(iv) The superior judiciary (High Courts and Supreme Court)
is empowered by the Constitution to declare a law made by the
legislature (Parliament and State legislatures) void if it is
found to have transgressed the constitutional limitations or if
it infringed the rights enshrined in Part III of the Constitution.
(v) The doctrine of separation of powers applies to the final
judgments of the courts. Legislature cannot declare any
decision of a court of law to be void or of no effect. It can,
however, pass an amending Act to remedy the defects pointed
out by a court of law or on coming to know of it aligned.
In other words, a court's decision must always bind unless the
conditions on which it is based are so fundamentally altered
that the decision could not have been given in the altered
circumstances.
(vi) If the legislature has the power over the subject-matter
and competence to make a validating law, it can at any time
make such a validating law and make it retrospective. The
validity of a validating law, therefore, depends upon whether
the legislature possesses the competence which it claims over
the subject-matter and whether in making the validation law it
removes the defect which the courts had found in the existing
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
law.”
20.This Court is of a strong opinion that
institutional respects are to be maintained by the
constitutional Courts. Whenever there is a provision for an
appeal under the statute, without exhausting the remedies
available under the statute, no writ petition can be entertained
in a routine manner. Only on exceptional circumstances, the
remedy of appeal can be waived, if there is a gross injustice or
if there is a violation of fundamental rights ensured under the
Constitution of India. Otherwise, all the aggrieved persons
from and out of the order passed by the original authority is
bound to approach the Appellate Authority. The Constitutional
Courts cannot make an appeal provision as an empty
formality. Every Appellate Authority created under the statute
to be trusted in normal circumstances unless there is a specific
allegation, which is substantiated in a writ proceedings. Thus,
the institutional functions and exhausting the appeal remedies
by the aggrieved persons, are to be enforced in all
circumstances and writ proceedings can be entertained only
on exceptional circumstances. Rule is to prefer an appeal and
entertaining a writ is only an exception. This being the legal
principles to be followed, this Court cannot entertain the writ
petitions in a routine manner by waiving the remedy of appeal
provided under the statute.
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
21.Now, let us look into the legal principles settled
by the Apex Court for exhausting the efficacious alternative
remedy provided under the statute.
22.When an effective alternative remedy is available,
a writ petition cannot be maintained
1. In City and Industrial Development Corporation v.
DosuAardeshirBhiwandiwala and Ors. MANU/SC/8250/2008
: (2009) 1 SCC 168, this Court had observed that:
The Court while exercising its jurisdiction under Article 226 is
duty-bound to consider whether:
(a) adjudication of writ petition involves any complex and
disputed questions of facts and whether they can be
satisfactorily resolved;
(b) the petition reveals all material facts;
(c) the Petitioner has any alternative or effective remedy for
the resolution of the dispute;
(d) person invoking the jurisdiction is guilty of unexplained
delay and laches;
(e) ex facie barred by any laws of limitation;
(f) grant of relief is against public policy or barred by any
valid law; and host of other factors.
2. KanaiyalalLalchand Sachdev and Ors. vs. State of
Maharashtra and Ors. (07.02.2011 - SC) :
MANU/SC/0103/2011
It is well settled that ordinarily relief Under Articles 226/227
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
of the Constitution of India is not available if an efficacious
alternative remedy is available to any aggrieved person. (See
Sadhana Lodh v. National Insurance Co. Ltd.; Surya Dev Rai
v. Ram Chander Rai and SBI v. Allied Chemical Laboratories.)
3. Commissioner of Income Tax and Ors. v. ChhabilDass
Agarwal, MANU/SC/0802/2013 : 2014 (1) SCC 603, as
follows:
Para 15. while it can be said that this Court has recognised
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 ThansinghNathmal case,
Titaghur Paper Mills case 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 contains a
mechanism for redressal of grievance still holds the field.
Therefore, when a statutory forum is created by law for
redressal of grievances, a writ petition should not be
entertained ignoring the statutory dispensation.
4. Authorized Officer, State Bank of Travancore and Ors. vs.
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
Mathew K.C. (30.01.2018 - SC) : MANU/SC/0054/2018
The petitioner argued that the SARFAESI Act is a complete
code by itself, providing for expeditious recovery of dues
arising out of loans granted by financial institutions, the
remedy of appeal by the aggrieved under Section 17 before the
Debt Recovery Tribunal, followed by a right to appeal before
the Appellate Tribunal under Section 18. The High Court
ought not to have entertained the writ petition in view of the
adequate alternate statutory remedies available to the
Respondent. The interim order was passed on the very first
date, without an opportunity to the Appellant to file a reply.
Reliance was placed on United Bank of India vs. Satyawati
Tandon and others, 2010 (8) SCC 110, and General Manager,
Sri Siddeshwara Cooperative Bank Limited and another vs.
Ikbal and others, 2013 (10) SCC 83. The writ petition ought to
have been dismissed at the threshold on the ground of
maintainability. The Division Bench erred in declining to
interfere with the same. The Supreme Court agreed to the
arguments and held the same also noted that the writ petition
ought not to have been entertained and the interim order
granted for the mere asking without assigning special reasons,
and that too without even granting opportunity to the
Appellant to contest the maintainability of the writ petition
and failure to notice the subsequent developments in the
interregnum.
5. State of Himachal Pradesh v. Gujarat Ambuja Cement
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
Ltd. reported at AIR 2005 SC 3856, the Supreme Court
explained the rule of 'alternate remedy' in the following terms
Considering the plea regarding alternative remedy as raised
by the appellant-State. Except for a period when Article 226
was amended by the Constitution (42nd Amendment) Act,
1976, the power relating to alternative remedy has been
considered to be a rule of self imposed limitation. It is
essentially a rule of policy, convenience and discretion and
never a rule of law. 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. 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 approaches 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.
6. K.S. Rashid and Sons v. Income Tax Investigation
Commission and Ors., AIR (1954) SC 207; Sangram Singh v.
Election Tribunal, Kotah and Ors., AIR (1955) SC 425;
Union of India v. T.R. Varma, AIR (1957) SC 882; State of
U.P. and Ors. v. Mohammad Nooh, AIR (1958) SC 86 and
M/s K.S. Venkataraman and Co. (P) Ltd. v. State of Madras,
AIR (1966) SC 1089,
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
Constitution Benches of the Supreme Court 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.
7. First Income-Tax Officer, Salem v. M/s. Short Brothers (P)
Ltd., [1966] 3 SCR 84 and State of U.P. and Ors. v. M/s.
Indian Hume Pipe Co. Ltd., [1977] 2 SCC 724.
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 those proceedings run their full course.
Secondly, the doctrine has no application when the impugned
order has been made in violation of the principles of natural
justice. We may add that where the proceedings itself are an
abuse of process of law the High Court in an appropriate case
can entertain a writ petition.”
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
14.As far as the judgment of the Hon'ble Supreme Court of India
in the case of M/s.Canon India Private Limited v. Commissioner of
Customs [Civil Appeal No.1827 of 2018, dated 09.03.2021] is concerned,
as rightly pointed out by the learned Senior Standing Counsel appearing on
behalf of the respondent, the matter went to the Hon'ble Apex Court by way
of regular appeal and the Hon'ble Supreme Court of India, while
adjudicating the final orders passed by the Appellate Tribunal, formed an
opinion that the issuance of show cause notice itself was by an improper
authority. Thus, by citing the said finding, the appellate remedy otherwise
provided under the Statute cannot be dispensed with, and in the event of
accepting the said contention, in all such cases, every litigant will approach
the High Court by way of writ petition bypassing the appellate remedy,
which is not desirable and cannot be accepted. As observed earlier,
Institutional respect is of paramount importance. Even the point of
jurisdiction, limitation, error apparent on the face of the record, are on
merits and all are to be adjudicated before the appellate authority and the
appellate authority, more specifically, the Appellate Tribunal or the
Commissioner (Appeals), as the case may be, is empowered to adjudicate all
such legal grounds raised by the respective parties and make a finding on
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
merits. Thus, usurping the powers of the appellate authorities by the High
Court by invoking its powers under Article 226 of the Constitution of India
is certainly unwarranted. The parties must be provided an opportunity to
approach the appropriate authorities for redressal of their grievances in the
manner known to law. In the event of entertaining all such writ petitions,
the High Court will not only be over-burdened, but usurping the powers of
the appellate authority, which is certainly not desirable.
15.Jurisdictional error should not result in exoneration of liability.
Jurisdictional error, if any committed, is technical, and thus, rectifiable. In
such circumstances, the Courts are expected to quash the order passed by an
incompetent authority and remand the matter back for fresh adjudication.
Contrarily, if an assessee is exonerated from liability, undoubtedly, the
purpose and object of the Act is defeated.
16.The growing practice in the High Court is to file writ petitions
under Article 226 of the Constitution of India without exhausting the
statutory remedies provided under the Act. The points raised in this regard
are statutory violations. However, even such statutory violations can be
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
dealt with by the Appellate authorities or the Appellate Tribunals. This
apart, in a writ petition, if such orders are passed with jurisdictional errors
and quashed without any remand, then an injustice would be caused to the
very spirit of the statute enacted for the benefit of the public at large. Thus,
Courts are expected to be cautious, while granting exoneration of liability
merely on the ground of jurisdictional errors, if any committed by the
authorities competent. On some occasions, jurisdictional errors are
committed wantonly or in collusion with the assessees, knowingly that there
is a possibility of escaping from the clutches of law. Thus, the higher
authorities of the Department are expected to be watchful and review the
orders passed by the subordinate authorities and in the event of any
negligence, dereliction of duty, collusion or corrupt activities, such officials
are liable to be prosecuted apart from initiation of departmental disciplinary
proceedings. The procedures to be followed in the department for
assessment are well settled. Thus, the authorities competent are not expected
to commit such jurisdictional errors in a routine manner. In these
circumstances, review of such orders by the higher authorities are imminent
to form an opinion that there is willful or intentional act for commission of
such jurisdictional errors, enabling the assesses to get exonerated from the
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
liability. Liability and jurisdictional errors are distinct factors, and therefore,
Courts are expected to provide an opportunity to the Department to decide
the liability on merits and in accordance with law with reference to the
provisions of the Act and Rules and guidelines issued by the Department.
17.Large number of writ petitions are filed without exhausting the
statutory appeal remedies and High Court is also entertaining such writ
petitions in a routine manner. Keeping such writ petitions pending for long
time would cause prejudice to the interest of the assessee also. Thus, such
statutory provisions regarding the appeal are to be decided at the first
instance, enabling the litigants to avail the remedy by following the
procedures as contemplated under law. Such writ petitions are filed may be
on the ground of jurisdiction or otherwise. However, the Courts are
expected to ensure that all such legal grounds available to the parties are
adjudicated before the proper forum and only after exhausting the statutory
remedies, writ petitions are to be entertained. In the absence of exhausting
such remedies, High Court is losing the benefit of deciding the matter on
merits, as the High Court cannot conduct a trial or examine the original
records in the writ proceedings under Article 226 of the Constitution of
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
India. Thus, the Courts shall not provide unnecessary opportunities to the
assessee to escape from the liability merely on the ground of jurisdictional
error, which is rectifiable.
18.These being the principles to be followed, this Court has no
hesitation in arriving a conclusion that the petitioner is bound to exhaust the
statutory appellate remedy as contemplated under the provisions of the
TNVAT Act. It is needless to state that all the materials available on record
with reference to the provisions of the TNVAT Act is to be considered for
the purpose of passing an assessment order. Thus, the relief as such sought
for cannot be granted. However, taking note of the facts and circumstances,
the authorities competent are bound to consider the amended provision
under Section 19 of the TNVAT Act and pass the assessment orders on
merits and in accordance with law and by affording opportunity to the
assessee concerned. The said exercise is directed to be done as
expeditiously as possible and preferably within a period of twelve weeks
from the date of receipt of a copy of this order.
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
19.With these directions, all these Writ Petitions stand disposed
of. Consequently, connected Miscellaneous Petitions are closed. No costs.
15.06.2021
gsa
Index : Yes
Speaking order
To
The Assistant Commissioner (CT)
T. Nagar (East) Assessment Circle,
Chennai 600 028.
https://www.mhc.tn.gov.in/judis/
W.P.Nos.15232 to 15234 of 2014
S.M.SUBRAMANIAM, J.
gsa
W.P.Nos.15232 to 15234 of 2014
15.06.2021
https://www.mhc.tn.gov.in/judis/
