Madras High Court
M/S.Criticam Medical Systems vs Additional Deputy Commercial Tax ... on 17 June, 2021
W.P.Nos.26565, 26566 & 39518 of 2016, 2306 &
2307 of 2017, 10658 to 10661 & 25326 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 17.06.2021
CORAM:
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
W.P.Nos.26565, 26566 & 39518 of 2016,
2306 & 2307 of 2017, 10658 to 10661 & 25326 of 2018
and W.M.P.Nos.22755, 22756 & 33802 of 2016,
2293 & 2294 of 2017, 12604 to 12607 & 29474 of 2018
W.P.No.26565 of 2016
M/s.Criticam Medical Systems,
Rep. By its,
Mr.Anil Chhugani
No.15-A, 3rd Cross (Main Road),
Anna Nagar,
Pondicherry. .. Petitioner
Vs.
Additional Deputy Commercial Tax Officer – I,
Pondicherry. .. Respondent
Prayer in W.P.No.26565/2016: Writ Petition filed under Article 226 of the
Consitution of India, to issue a Writ of Certiorarified Mandamus, calling for
the impugned proceedings of the respondent passed in CST
34420012066/2012-13 dated 01.07.2016 and quash the same in so far as it
seeks to revoke the reversal of ITC amounting to Rs.62,16,148/- pertaining to
non-submission of C declaration forms in respect of interstate sales falling
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W.P.Nos.26565, 26566 & 39518 of 2016, 2306 &
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under Section 21 of the PVAT Act 2007 as zero rated sales and further direct
the respondent to restore the reversal of Input Tax Credit (ITC) amounting to
Rs.62,16,148/- and thereby permit the petitioner to adjust the same under the
provisions of the PVAT Act 2007.
(In W.P.Nos.26565, 26566 & 39518 of 2016,
2306 & 2307 of 2017 & 25326 of 2018)
For Petitioner : Mr.AR.L.Sundaresan, (Senior Counsel)
for M/s.I.Joseph
For Respondent : Mr.T.P.Manoharan, (Senior Counsel)
for Mr.J.Kumaran
(Government Advocate, Puducherry)
(In W.P.Nos.10658 to 10661 of 2018)
For Petitioner : Mr.AR.L.Sundaresan, (Senior Counsel)
for M/s.N.Murali
For Respondent : Mr.T.P.Manoharan, (Senior Counsel)
for Mr.J.Kumaran
(Government Advocate, Puducherry)
COMMON ORDER
All these Writ Petitions are filed either challenging the original
assessment order or the First Appellate order passed by the competent
authority under Section 47 of the Puducherry Value Added Tax Act, 2007
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(hereinafter referred to as 'the PVAT Act').
2.The learned Senior Counsel appearing on behalf of the writ petitioner
in all the petitions contended that the petitioners are entitled for the benefit of
Input Tax Credit for the zero rated transactions and the provisions in this
regard are unambiguous. The petitioners have enabled the provisions with
reference to the zero rated transactions, more specifically, the explanation for
zero rated transaction under Section 21 of the PVAT Act, which denotes zero
rated transactions and further provisions under the Central Sales Tax Act,
1956. Relying on the provisions under the PVAT Act, 2007 and the Central
Sales Tax Act, 1956, the learned Senior Counsel is of the opinion that the
petitioners are entitled for the benefit of Input Tax Credit in respect of the
transactions made by them.
3.The learned Senior Counsel appearing on behalf of the respondent
objected the said contentions by stating that admittedly the writ petitioners
have not exhausted the appeal remedies as provided under the provisions of
the PVAT Act. Section 47 provides an appeal to the appellate Assistant
Commissioner and Section 49 contemplates appeal to the Appellate Tribunal.
The two appellate forums are created in the provisions of the PVAT Act, to
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redress the grievances of the aggrieved persons. Section 51 of the Act
provides an appeal to the High Court. Thus, without exhausting the remedies
contemplated under the scheme of the Act, the Writ Petitions are not
entertainable and liable to be rejected in limini. The learned Senior Counsel
for the respondent even opposed the contentions raised on merits by stating
that the petitioners are not entitled for any such benefits as claimed and
therefore, the Writ Petitions are devoid of merits.
4.This Court is of the considered opinion that exhausting the appeal
remedies are imminent for adjudicating mixed question of facts and law.
Finding of facts are of paramount importance for application of law in force.
When the cases are involving mixed question of law and fact, then the
aggrieved persons are bound to exhaust the appellate remedy and a rowing
enquiry cannot be conducted by the High Court under Article 226 of the
Constitution of India. The adjudication of facts are to be done effectively
with reference to the documents and evidences to be produced by the parties
to the dispute and finding in this regard alone would be assisting the High
Court for exercise of powers in a judicial review in a writ proceedings. The
scope of judicial review under Article 226 of the Constitution of India is to
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scrutinize the processes through which a decision is taken by the competent
authority by following the procedures contemplated under the statute or rules,
but not the decision itself. Thus, the Appellate remedies are vital for the
purpose of fact findings regarding the disputed facts. The High Court based
on the affidavits filed by the parties cannot make any finding in respect of the
disputed facts as the documents and evidences cannot be examined in a writ
proceedings and therefore, this Court is of the opinion that the appellate
remedy is to be exhausted by the petitioner in all these Writ Petitions. Some
Writ Petitions are filed challenging the original assessment order and the
other Writ Petitions are filed challenging the orders passed by the First
Appellate Authority. In all such cases, the petitioners are entitled to file an
appeal under Section 47 and thereafter, under Section 49 and finally, before
the High Court under Section 51 of the PVAT Act. This being the scheme of
legislation, dispensing with the provisions contemplated under the statute is
not preferable.
5.The practice of filing Writ Petitions without exhausting the statutory
appellate remedy is in ascending mode and most of such Writ Petitions are
filed with an idea to evade payment of pre-deposit for filing an appeal which
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is contemplated under the procedures. However, the High Court need not
encourage such practise. Respecting the institutions created under the
legislations is of paramount importance. The High Court cannot undermine
the importance of the appellate forum created under the statute, unless there
are compelling reasons. Regarding the appellate remedy to be exhausted, this
Court has elaborately considered the principles in judgment dated 15.04.2021
in W.P.Nos.3144 of 2016 & etc. batch and the relevant paragraphs are
extracted hereunder:
“7.In order to avoid the Pre-Deposit, which is
contemplated under the Statute, the practice of filing writ
petitions is prevailing in the High Court and the High
Court cannot encourage such practice and the appellate
remedy contemplated under the Act is to be exhausted in all
circumstances and only under extraordinary
circumstances, in order to mitigate injustice, the High
Court can intervene and not otherwise. Such power of
dispensing with the appeal remedy is to be exercised
sparingly and not in a routine manner. The learned Senior
Standing Counsels reiterated that, in respect of the writ
petitions on hand, the original assessment order has been
passed either by the Joint Commissioner or by the
Commissioner of Customs. Against such original orders
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passed by the original authorities under the provisions of
the Customs Act, an appeal is contemplated under Sections
128 and 129 of the Customs Act, respectively. Without
exhausting the appellate remedy, the writ petitioners have
filed these writ petitions, and therefore, the writ petitions
are liable to be dismissed.
8.With reference to the appellate remedy, the
Hon'ble Division Bench of this Court in W.A.No.640 of
2021 [M/s.Fourceess Diamond Pvt. Ltd. and another v.
The Joint Commissioner of Customs (Air Cargo),
Meenambakkam, Chennai] delivered a judgment on
25.02.2021 and the relevant paragraphs are extracted
hereunder :
“8.After elaborately hearing the
learned counsel for the appellants and the
learned Senior Standing Counsel appearing
for the respondent, we are of the view that the
issues raised in the writ petition are not
purely questions of law, but mixed questions
of fact, which would require a process of
adjudication. Such matters cannot be decided
by a Writ Court based on affidavits.
Therefore, we do agree with the ultimate
conclusion of the learned Writ Court that the
appellant should avail the alternate remedy
available under the Act.
9.For the reasons, which we have
assigned in the preceding paragraph, the Writ
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Appeal stands dismissed and the appellants
are granted 60 days time from the date of
receipt of a copy of this judgment to file an
appeal before the Commissioner of Customs
(Appeals) and if the same is filed, the
Commissioner of Customs (Appeals) shall
entertain the appeal, without reference to the
limitation as the writ petition was filed before
this Court in the year 2016, which is well
within the period of limitation, had the
appellants filed appeals before the
Commissioner of Customs (Appeals) at the
relevant point of time.
10.Since the learned counsel for the
appellants submitted that the certified copy of
the impugned order was filed in the writ
petition, the Registry is directed to return the
impugned original order filed in the writ
petition, after retaining a photostat copy. No
costs. Consequently, connected miscellaneous
petition is closed.”
................
11.This Court is of the considered opinion that all
such grounds raised on merits are to be adjudicated with
reference to the documents and evidences to be produced
and the scope of the writ petition under Article 226 of the
Constitution of India cannot be expanded so as to exercise
the powers of the appellate authority in the matter of
examination or scrutiny of original documents and
evidences produced by the respective parties. The very
purpose of the statutory appeal is to scrutinize the orders
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passed by the original authorities, and therefore, the
legislative intention in this regard is to be scrupulously
followed in the mater of adjudication of merits with
reference to the documents and evidences.
12.In common parlance, Statutes contain appeal
provisions. In some of the Statutes, there are two-tier
appeal provisions in order to ensure that the facts,
grounds, evidences are appreciated and the grievances are
redressed in the manner known to law. Such appeal
provisions are provided with the legislative intention to
provide remedy to the aggrieved persons. The High Court,
in normal circumstances, would not interfere nor dispense
with the appellate remedy.
13.The High Court cannot adjudicate the facts and
merits with reference to documents and evidences. Trial is
not entertainable under Article 226 of the Constitution of
India. All such procedural aspects are to be followed by
complete adjudication/trial by the original authorities as
well as by the appellate authorities under the provisions of
the Statute and the powers under Article 226 of the
Constitution of India is limited to find out whether the
processes contemplated under the Statutes and the
procedural aspects are followed by the competent
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authorities as well as the appellate authorities or not. The
High Court, under Article 226 of the Constitution of India,
is not expected to usurp the powers of the appellate
authorities by adjudicating the merits of the matter on
certain documents and evidences. In the event of
adjudication of merits under Article 226 of the Constitution
of India in the absence of complete trial with reference to
the documents and evidences, there is a possibility of
miscarriage of justice, and therefore, the High Court is
expected to be cautious, while entering into the venture of
adjudication of certain merits with reference to the original
documents and evidences produced by the respective
parties to the lis. This being the legislative intention, High
Court is expected to trust the institutional authorities as
well as the hierarchy of institutions contemplated under the
Statutes. Institutional respects are of paramount
importance for providing complete justice to the parties
and the various stages of adjudication are important for
the purpose of correcting omissions, commissions, errors
in appreciation of evidence, etc. Powers of the High Court
under Article 226 of the Constitution of India cannot be
extended nor widened so as to allow lay hands on the facts
and circumstances by conducting the trial, nor certain facts
and circumstances with reference to documents and
evidences can be assumed or presumed or inference can be
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drawn, which is not preferable.
...................
15.As far as the judgment of the Hon'ble Supreme
Court of India in the case of M/s.Canon India Private
Limited (supra) is concerned, as rightly pointed out by the
learned Senior Standing Counsels appearing on behalf of
the respondents that 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
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finding on 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 is certainly not desirable.
...........
18.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 loosing the benefit
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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 India.
Thus, the Courts shall not provide an unnecessary
opportunity to the assessee to escape from the liability
merely on the ground on jurisdictional error, which is
rectifiable.
19.This being the facts and circumstances
established, this Court has no hesitation in arriving at a
conclusion that the petitioners are bound to exhaust the
appellate remedy, either under Section 128 or Section 129
of the Customs Act, respectively. Thus, the petitioners are
at liberty to approach the appellate authority and file an
appeal by following the procedures contemplated and by
complying with the conditions to prefer the appeal, within
a period of 60 days from the date of receipt of a copy of
this order, and in the event of filing of appeal(s) by the writ
petitioners within a period of 60 days, all such appeals are
directed to be entertained without reference to the period
of limitation, and the matters are to be adjudicated on
merits and in accordance with law and by affording
opportunity to all the parties, and the appeals are to be
disposed of as expeditiously as possible.”
6.In view of the principles laid down in the aforementioned paragraphs,
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the petitioner in all the Writ Petitions are at liberty to file respective appeals
before the appellate forum concerned under Sections 47, 49 and 51, as the
case may be, by following the procedures contemplated and in a prescribed
format. In the event of filing any such appeal by the writ petitioners, the
appellate forum shall condone the delay in filing the appeal alone and
entertain the appeal, object the issues on merits by affording liberty to all the
parties and dispose of the same as expeditiously as possible. The writ
petitioners are at liberty to file the appeals within a period of four weeks from
the date of receipt of a copy of this order by complying with all the pre-
conditions contemplated under the statute and the rules in force, except the
delay.
7.With these directions, all the Writ Petitions stand disposed of. No
costs. Consequently, connected Miscellaneous Petitions are closed.
17.06.2021
gsa
Index : Yes
Speaking Order
Note: Registry is directed to return the
original copy of the impugned orders to the
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respective learned counsel on record.
To
The Additional Deputy Commercial Tax Officer – I,
Pondicherry.
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W.P.Nos.26565, 26566 & 39518 of 2016, 2306 &
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S.M.SUBRAMANIAM, J.
gsa
W.P.Nos.26565, 26566 & 39518 of 2016,
2306 & 2307 of 2017 and 25326 of 2018
17.06.2021
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