Madras High Court
M/S.Kanunga Extrusion Private ... vs The Assistant Commissioner (St) on 21 October, 2021
W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21.10.2021
CORAM
THE HON'BLE Mr.JUSTICE M.SUNDAR
W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and
W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
M/s.Kanunga Extrusion Private Limited,
14-2 Thally Road,
Near Railway Gate,
Hosur 635109
Represented by its
Managing Director ...Petitioner in all W.Ps.
-Vs.-
The Assistant Commissioner (ST)
Hosur (South) I Hosur. ... Respondent in all W.Ps.
Common Prayer:
Writ Petitions filed under Article 226 of the Constitution of India
praying to issue a Writ of Certiorari, to call for the connected records of
the impugned proceedings of the respondent herein made in TIN
33163364594/2010-11, TIN 33163364594/2011-12, TIN
33163364594/2012-13, TIN 33163364594/2013-14, TIN
33163364594/2014-15 and TIN 33163364594/2015-16 respectively
dated 21.04.2021 and quash the same as illegal.
1/19
https://www.mhc.tn.gov.in/judis/
W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
For Petitioner in all W.Ps : Mr.Manoharan Sundaram
For Respondent in all W.Ps : Ms.Amirta Dinakaran
Government Advocate
******
COMMON ORDER
Captioned six main writ petitions have been filed assailing six
separate revisional/re-assessment orders under Section 27 of 'Tamil Nadu
Value Added Tax Act, 2006 (Tamil Nadu Act No.32 of 2006)' [hereinafter
'TNVAT' for the sake of convenience and clarity]. All these six orders are
dated 21.04.2021, but they pertain to six different assessment years with
different reference numbers. The details are as follows:
S.No Date Reference Assessment W.P. No.
Year
1 21.04.2021 TIN:33163364594/2010-11 2010-2011 22049/2021
2 21.04.2021 TIN:33163364594/2011-12 2011-2012 22056/2021
3 21.04.2021 TIN:33163364594/2012-13 2012-2013 22060/2021
4 21.04.2021 TIN:33163364594/2013-14 2013-2014 22064/2021
5 21.04.2021 TIN:33163364594/2014-15 2014-2015 22066/2021
6 21.04.2021 TIN:33163364594/2015-16 2015-2016 22069/2021
2. The aforementioned six revisional/re-assessment orders shall be
collectively referred to as 'impugned orders' in plural and 'impugned
order' in singular wherever necessary (if it becomes necessary).
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
3. Mr.Manoharan Sundaram, learned counsel for writ petitioner in
all the six writ petitions, who is before this Virtual Court submits that this
is the second round of litigation. The respondent had made revisional/re-
assessment orders earlier, the same were called in question/assailed by
the writ petitioner by way of six writ petitions in this Court being
W.P.Nos.5818 to 5823 of 2018 and all these six writ petitions together
with writ miscellaneous petition Nos.7155 to 7160 of 2018 thereat came
to be disposed of by a Hon'ble Single Judge in and by a common order
dated 15.03.2018.
4. Adverting to aforementioned common order in earlier round of
litigation and more particularly paragraph Nos.3 and 5 thereat, learned
counsel submitted that this is a case of mismatch and if the dealer at the
far end had not paid the tax, the writ petitioner cannot be penalized for
the same. According to learned counsel for writ petitioner, the impugned
orders are not in accordance with directions given by this Court in the
aforementioned previous common order, more particularly, paragraph
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
No.3 thereat wherein paragraph Nos.56 to 58 of another order made in
W.P.No.105 of 2016 etc., dated 01.03.2017 have been extracted and
reproduced. To be noted, this W.P.No.105 of 2016 etc., has now come to
stay as what is known as JKM Graphics Solutions principle in litigation
parlance. However, in the case on hand, notwithstanding very many
averments and several grounds raised in writ affidavit, the lone grievance
projected by learned counsel for writ petitioner in the hearing is, this
being a case of alleged mismatch, writ petitioner cannot be penalized if
the dealer at the far end had not paid the tax.
5. Ms.Amirta Dinakaran, learned State counsel (hereinafter
'Revenue counsel' for the sake of convenience and clarity), accepts notice
on behalf of lone respondent in all six writ petitions. Owing to the
narrow compass of captioned writ petitions and acute/short legal angle
on which the matters turn, main captioned writ petitions were taken up
with the consent of learned counsel on both sides.
6. Adverting to the impugned orders and more particularly, No.3 in
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
reference thereat, learned Revenue counsel submits that the respondent
has in fact given an opportunity of personal hearing to writ petitioner in
and by communication dated 11.02.2021, but writ petitioner-dealer had
failed to even submit a reply. It was pointed out that this is not disputed
by writ petitioner. Learned Revenue counsel also submits that if reply
had been filed by the dealer and if the dealer had responded to
11.02.2021 personal hearing notice (issued pursuant to aforementioned
earlier common order of this Court), the respondent would have got an
opportunity to examine the same, but not having done that, the
dealer/writ petitioner has now embarked upon second round of litigation
to avoid pre-deposit qua alternate remedy. Learned Revenue counsel
pointed out that the writ petitioner has appeal remedy by way of statutory
Appeal under Section 51 of TNVAT Act. To be noted, this is mentioned
in the impugned order itself by way of a note and the same reads as
follows:
'Note:- An appeal against this order lies before the Appellate
Deputy Commissioner of Commercial Taxes, Salem within 30 days
of receipt of this order.'
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
7. Before proceeding further, this Court is constrained to record
that this is yet another case where the respondent has made the impugned
order without mentioning exact provision of law under which it has been
made. However, in this case, there is no disputation or disagreement
between the parties that the impugned orders have been made under
Section 27 of TNVAT Act. By way of reply, learned counsel for writ
petitioner besides reiterating his submissions made in the opening
arguments, submitted that personal hearing was no doubt offered vide
11.02.2021 communication, but the respondent should have gone into the
question of whether the dealer at the far end has paid the tax, the same
has not been done in spite of specific observations in this regard made by
this Court in aforementioned previous common order dated 15.03.2018.
8. This Court now considers the rival submissions or in other
words, this Court now embarks upon the exercise of discussion,
dispositive reasoning and arriving at a conclusion.
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
9. At the outset, this Court is clear in its mind that personal hearing
is not statutorily imperative for a legal drill i.e., assessment of escaped
turnover/wrong availment of 'Input Tax Credit' ['ITC']. This is owing to
the language in which common proviso to sub-sections (1) and (2) of
Section 27 of TNVAT Act is couched. Common proviso to sub-sections
(1) and (2) of Section 27 of TNVAT Act reads as follows:
'27. Assessment of escaped turnover and wrong availment of
input tax credit.-
(1) (a) Where, for any reason, the whole or any part of the
turnover of business of a dealer has escaped assessment to tax, the
assessing authority may, subject to the provisions of sub-section (3),
at any time within a period of five years from the date of assessment
order by the assessing authority, determine to the best of its
judgment the turnover which has escaped assessment and assess the
tax payable on such turnover after making such enquiry as it may
consider necessary.
(b) Where, for any reason, the whole or any part of the
turnover of business of a dealer has been assessed at a rate lower
than the rate at which it is assessable, the assessing authority may,
at any time within a period of five years from the date of assessment,
reassess the tax due after making such enquiry as it may consider
necessary.
(2) Where, for any reason, the input tax credit has been
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
availed wrongly or where any dealer produces false bills, vouchers,
declaration certificate or any other documents with a view to
support his claim of input tax credit or refund, the assessing
authority shall, at any time, within a period of five years from the
date of order of assessment, reverse input tax credit availed and
determine the tax due after making such a enquiry, as it may
consider necessary:
Provided that no order shall be passed under sub-sections (1) and
(2) without giving the dealer a reasonable opportunity to show cause
against such order.
(underlining made by this Court to supply emphasis and
highlight)
10. The expression 'a reasonable opportunity to show cause against
such order' occurring in the proviso has been explained by this Court in a
detailed and elaborate order in State Bank of India officers case law,
[State Bank of India Officer's Association (CC) - SBIOA Vs. The
Assistant Commisioner, Chennai-1 in W.P.No.22634 of 2019 order
dated 01.08.2019]. This Court is informed that this order has not been
reported in any law journal. Therefore, this Court deems it appropriate to
give case number and date of order for the benefit of all concerned. Be
that as it may, what is of greater significance is, this order made in State
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
Bank of India officers case law was carried in appeal by way of intra-
Court appeal vide W.A.No.4073 of 2019 and a Hon'ble Division Bench
of this Court dismissed the writ appeal in and by order dated 16.12.2019.
Therefore, the order of this Court made in State Bank of India officers
case law, has been sustained vide order of Hon'ble Division Bench.
11. Be that as it may, in State Bank of India officers case law, this
Court noticed that the language in which proviso to sub-section (4) of
Section 22 of TNVAT Act is couched is different from the language in
which common proviso to sub-sections (1) and (2) of Section 27 of
TNVAT Act is couched. This Court observed that the expression used in
sub-section (4) of Section 22 of TNVAT Act is 'a reasonable opportunity
of being heard'. This is distinguishable from the expression 'reasonable
opportunity to show cause' and it was on this basis that this Court has
held that personal hearing is not statutorily imperative qua a legal drill
under Section 27 of TNVAT Act. However, it is not necessary to dilate or
elaborate further on this facet of the case on hand, as this Court has
considered it appropriate to direct the respondent to give personal
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
hearing and personal hearing has also been given. To be noted, even in
State Bank of India officers case law, this Court has made it clear that if
the Assessing Authority considers it necessary to hold a personal hearing,
it is well open to the Authority to hold a personal hearing if it appears
necessary owing to the nature of the issue raised and therefore, personal
hearing for revision of assessments under Section 27(1) and/or 27(2) is
optional depending on the nature of the issues involved, but it is not
statutorily imperative. It is not necessary to elaborate any further on this
facet of the matter.
12. Reverting to the case on hand, from the narrative thus far, it
will be clear that there is no disputation or disagreement that the writ
petitioner has been given an opportunity of personal hearing vide
communication dated 11.02.2021 (cited in reference as No.3 in the
impugned orders), but the writ petitioner did not respond/avail the same.
Therefore, the only grievance of the writ petitioner is, mismatch ought to
have been examined by the Assessing Officer though the writ petitioner
has not responded. However, learned Revenue counsel points out that it
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
would have been examined if the dealer/writ petitioner had responded. It
may not be necessary to delve further into this aspect of the matter,
owing to alternate remedy that is available to the writ petitioner i.e.,
statutory appeal under Section 51 of TNVAT Act. There is no disputation
or disagreement before this Court that alternate remedy against impugned
orders is available to writ petitioner-dealer by way of statutory appeal
under Section 51 of TNVAT Act.
13. This takes us to alternate remedy rule. Law is well settled that
alternate remedy rule is not an absolute rule. In other words, alternate
remedy rule is a discretionary rule and it is a self-imposed restraint qua
writ jurisdiction. In this scenario, in a long line of authorities i.e., catena
of case laws, Hon'ble Supreme Court has repeatedly held that alternate
remedy rule though not absolute, should be applied with utmost rigour
when it comes to fiscal Statutes. The authorities are Dunlop India case
[Assistant Collector of Central Excise, Chandan Nagar, West Bengal
Vs. Dunlop India Ltd., and others reported in (1985) 1 SCC 260],
Satyawati Tandon [United Bank of India Vs. Satyawati Tondon and
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
others reported in (2010) 8 SCC 110] and K.C.Mathew [Authorized
Officer, State Bank of Travancore and another Vs. Mathew K.C.
reported in (2018) 3 SCC 85]. To be noted, these are only illustrative and
not exhaustive.
14. Relevant paragraph in Dunlop case is paragraph No.3 and
relevant portion of the same reads as follows:
'3. ....... Article 226 is not meant to short-circuit or
circumvent statutory procedures. It is only where statutory
remedies are entirely ill-suited to meet the demands of
extraordinary situations, as for instance where the very vires of
the statute is in question or where private or public wrongs are
so inextricably mixed up and the prevention of public injury
and the vindication of public justice require it that recourse
may be had to Article 226 of the Constitution. But then the
Court must have good and sufficient reason to bypass the
alternative remedy provided by statute. Surely matters
involving the revenue where statutory remedies are available
are not such matters. We can also take judicial notice of the
fact that the vast majority of the petitions under Article 226 of
the Constitution are filed solely for the purpose of obtaining
interim orders and thereafter prolong the proceedings by one
device or the other. The practice certainly needs to be strongly
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
discouraged.'
(Underlining made by this Court to supply
emphasis and highlight)
15. Satyawati Tandon principle was reiterated by Hon'ble
Supreme Court in K.C.Mathew case. Relevant paragraph in K.C.Mathew
case is paragraph 10 and the same reads as follows:
'10. In Satyawati Tondon the High Court had restrained
further proceedings under Section 13(4) of the Act. Upon a
detailed consideration of the statutory scheme under the
SARFAESI Act, the availability of remedy to the aggrieved under
Section 17 before the Tribunal and the appellate remedy under
Section 18 before the Appellate Tribunal, the object and purpose
of the legislation, it was observed that a writ petition ought not to
be entertained in view of the alternate statutory remedy available
holding: (SCC pp.123 & 128, Paras 43 & 55)
“43. Unfortunately, the High Court overlooked
the settled law 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 and 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. In our view, while dealing with the
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
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.
Therefore, in all such cases, the High Court must insist
that before availing remedy under Article 226 of the
Constitution, a person must exhaust the remedies
available under the relevant statute.
55.It is a matter of serious concern that despite
repeated pronouncement of this Court, the High Courts
continue to ignore the availability of statutory remedies
under the DRT Act and the SARFAESI Act and exercise
jurisdiction under Article 226 for passing orders which
have serious adverse impact on the right of banks and
other financial institutions to recover their dues. We
hope and trust that in future the High Courts will
exercise their discretion in such matters with greater
caution, care and circumspection.'
(underlining made by this Court to supply emphasis and highlight)
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
16. To be noted in paragraph No.10 of K.C.Mathew's case,
Satyawati Tondon principle has been extracted and reproduced.
Therefore, this Court refrains itself from embarking upon exercise of
extracting and reproducing relevant paragraphs from Satyawati Tondon
case law. More importantly, in a very recent judgment in Commercial
Steel Limited case [Civil Appeal No 5121 of 2021, The Assistant
Commissioner of State Tax and Others Vs. M/s Commercial Steel
Limited], Hon'ble Supreme Court i.e., a three member Bench of Hon'ble
Supreme Court speaking through Hon'ble Justice Dr.Dhananjaya Y
Chandrachud reiterated this alternate remedy rule and held that writ
jurisdiction can be exercised only if any of the exceptions arise,
exceptions have also been adumbrated and all these are captured in
paragraph Nos.11 and 12 of Commercial Steel Limited case which read
as follows:
'11 The respondent had a statutory remedy under
section 107. Instead of availing of the remedy, the respondent
instituted a petition under Article 226. The existence of an
alternate remedy is not an absolute bar to the maintainability
of a writ petition under Article 226 of the Constitution. But a
writ petition can be entertained in exceptional circumstances
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
where there is: (i) a breach of fundamental rights; (ii) a
violation of the principles of natural justice; (iii) an excess of
jurisdiction; or (iv) a challenge to the vires of the statute or
delegated legislation.
12 In the present case, none of the above exceptions
was established. There was, in fact, no violation of the
principles of natural justice since a notice was served on the
person in charge of the conveyance. In this backdrop, it was
not appropriate for the High Court to entertain a writ petition.
The assessment of facts would have to be carried out by the
appellate authority. As a matter of fact, the High Court has
while doing this exercise proceeded on the basis of surmises.
However, since we are inclined to relegate the respondent to
the pursuit of the alternate statutory remedy under Section
107, this Court makes no observation on the merits of the case
of the respondent.'
17. From the narrative, discussion and dispositive reasoning thus
far, it is very clear that this case does not fall under any of the
aforementioned exceptions. The question of looking into the records,
going into the facts and examining mismatch, this exercise can be done
by the Appellate Authority. This Court is of the considered view that the
Appellate Authority doing such an exercise would be appropriate. This is
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
more so as the Appellate Authority can well go into facts. This Court,
therefore, is of the considered view that this is not a case for exercising
writ jurisdiction for interference qua impugned orders. Therefore, the
campaign against impugned orders in writ jurisdiction in the captioned
main writ petitions fail. However, it is made clear that it is open to the
writ petitioner to avail alternate remedy under Section 51 of TNVAT Act,
if the writ petitioner chooses to do so, subject to limitation and pre-
deposit conditions set out therein, i.e., if the writ petitioner satisfies these
conditions and takes alternate remedy route i.e., statutory appeal, the
Appellate Authority shall deal with the appeals on its own merits and in
accordance with law, uninfluenced by any of the observations made in
this order. In any event, though obvious, it is made clear that no opinion
has been expressed on the merits of the matter in this order.
18. The sequitur that follows from the narrative discussion and
dispositive reasoning set out thus far is captioned writ petitions fail and
the same deserve to be dismissed albeit preserving the rights of the writ
petitioner to pursue alternate remedy subject to pre-deposit and limitation
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
conditions.
19. Captioned Writ Petitions are dismissed preserving rights of the
writ petitioner in the above manner. Consequently, connected writ
miscellaneous petitions are also dismissed as closed. There shall be no
order as to costs.
21.10.2021
Speaking/Non-speaking order
Index: Yes/No
mk/nsa
To
The Assistant Commissioner (ST)
Hosur (South) I Hosur.
M.SUNDAR.J.,
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W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
mk
W.P.Nos.22049, 22056, 22060, 22064, 22066 and 22069 of 2021
and
W.M.P.Nos.23286, 23282, 23277, 23276, 23274 and 23265 of 2021
21.10.2021
https://www.mhc.tn.gov.in/judis/
