Madras High Court
M/S.M.S.Marketing vs The State Tax Officer on 3 January, 2022
WP(MD)No.23217 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 03.01.2022
CORAM
THE HON'BLE MR. JUSTICE M.SUNDAR
W.P(MD)No.23217 of 2021
and W.M.P.(MD)No.19645 of 2021
M/s.M.S.Marketing,
Represented by its Proprietor M.Selvi,
No.8-21 A, Kaliamman Koil Street,
Vilangudi, Madurai – 625 018. ...Petitioner
-Vs-
The State Tax Officer,
West Veli Street Assessment Circle,
Commercial Taxes Buildings,
Madurai – 20. ... Respondent
Prayer: Writ Petition filed under Article 226 of Constitution of India, to
issue a Writ of Certiorarified Mandamus, calling for the records on the file
of the respondent in Roc.No.in TIN No.33/2015-2016 dated 08.04.2021
impugned order for the assessment year 2015-2016 and 2016-17 in TIN No.
33725024829/2 issued by the respondent and quash the same is wholly
without jurisdiction, being contrary to the judgment of this Hon'ble Court
reported in the case of The Assistant Commissioner (CT), Koyambedu
Assessment Circle, Chennai Vs. Infiniti Wholesale Limited reported in
[2017] 99 VST 430 and direct the respondent to conduct an enquiry with
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WP(MD)No.23217 of 2021
other end dealers as contemplated under Section 27 of the TNVAT Act 2006
and pass a assessment order afresh in the light of the guidelines enunciated
in the batch of writ petitions in the case of M/s.JKM Solutions Private
Limited reported in 2017 (99) VST 343 (Mad) including the opportunity of
personal hearing to the petitioner.
For Petitioner : Mr.G.Kasinatha Durai
For Respondent : Mr.M.Lingadurai,
Special Government Pleader.
ORDER
In the captioned main writ petition 'two orders both dated 15.11.2018
bearing reference TIN:33725024829/2016-17 and TIN
33725024829/2015-16' have been assailed (hereinafter 'impugned orders'
for the sake of convenience and clarity). One impugned order pertains to
assessment year 2015-16 and the other pertains to assessment year 2016-17.
2. Impugned orders have been made under Section 27 of 'Tamil Nadu
Value Added Tax Act, 2006 (Tamil Nadu Act 32 of 2006)' [hereinafter
'TNVAT Act' for the sake of convenience and clarity]. To be noted, this is
second round of litigation. Earlier, writ petitioner came to this Court vide
W.P.(MD)No.4760 of 2021 and that was disposed of by a Hon'ble Single
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WP(MD)No.23217 of 2021
Judge vide order dated 09.03.2021. In that order, the respondent was
directed to furnish copies of the orders qua assessment years 2015-2016 and
2016-2017, pursuant to which impugned orders were served on the writ
petitioner under cover of a letter dated 08.04.2021. The prayer in the
captioned writ petition is not happily worded but it is the case of the counsel
for writ petitioner that impugned orders were served on the writ petitioner
under cover of one letter dated 08.04.2021 and the both orders (impugned
orders) have been assailed.
3. Notwithstanding very many averments in the writ affidavit and
notwithstanding several grounds raised in the writ affidavit, learned counsel
for writ petitioner assailed the impugned orders on two points and they are
as follows:
a) writ petitioner was not given reasonable
opportunity to show cause before the impugned orders were
made and
b) as it is a case of alleged mismatch qua ITC (Input
Tax Credit) the Assessing Officer-respondent has not
verified with the dealer at the other end.
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WP(MD)No.23217 of 2021
4. Mr.M.Lingadurai, learned Special Government Pleader accepted
notice on behalf of the lone respondent and responded in the following
manner:
a) with regard to the first point, learned State
Counsel drew the attention of this Court to portions in the
impugned orders where it has been mentioned that two
notices dated 30.11.2017 and 01.10.2018 for personal
hearing have been issued to the writ petitioner-dealer
calling for objections but the writ petitioner- dealer had not
responded and
b) the Assessing Officer, notwithstanding the writ
petitioner not responding has made comparison based on
available records.
5. In response to the above, learned counsel for writ petitioner
reiterated his submissions made in the opening arguments which have been
captured elsewhere in this order supra.
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WP(MD)No.23217 of 2021
6. This Court has carefully considered the rival submissions and this
Court is not inclined to interfere qua impugned orders and the reasons are as
follows:
a) regarding the first point of opportunity not being
given, as rightly pointed out by learned State Counsel two
notices one dated 30.11.2017 and another dated 01.10.2018
have been issued affording personal hearing to the writ
petitioner and calling for objections. There is a clear
mention about one of these two notices i.e., pre-revisional
notice i.e., 30.11.2017 notice and this is contained in
paragraph 4 of the writ affidavit. Writ petitioner has not
even mentioned whether he responded to the notice or not.
The writ petitioner has not responded to the notice regarding
the other pre-revision notice dated 01.10.2018 and there is
no averment in the writ petition regarding the notice dated
01.10.2018. Therefore, the first argument predicated on
opportunity not being given to the writ petitioner falls flat
on its face.
b) Before going to the next point, this Court deems it
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WP(MD)No.23217 of 2021
appropriate to remind itself that when it comes to legal drill
of revision under Section 27 of TNVAT Act, it will suffice if
a reasonable opportunity to show cause is given. In other
words, personal hearing is not statutorily imperative and it is
only optional at the discretion of the Assessing Officer. This
position of law was laid down in State Bank of India
Officer's Association case being W.P.No.22634 of 2019
[State Bank of India Officer's Association (CC) – SBIOA
Vs. The Assistant Commissioner (ST), Chennai], dated
01.08.2019. This order was carried in appeal by way of an
intra Court appeal in W.A.No.4073 of 2019 and a Division
Bench of this Court dismissed the State appeal. In this case,
the respondent has chosen to give a personal hearing but the
writ petitioner has not availed the same (as already alluded
to supra). There is a clear mention about atleast one of the
pre-revision notices viz., pre-revision notice dated
30.11.2017 in the writ petition more particularly in
paragraph 4 of the writ affidavit.
c) This takes this discussion to the second point
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WP(MD)No.23217 of 2021
regarding mismatch verification. A careful perusal of the
impugned orders reveal that the respondent has made some
verification inter alia on the basis of available records
(besides resorting to the departmental intranet website) and
thereafter, accepted the proposals. Therefore, it cannot be
gainsaid that verification qua mismatch has not been done at
all. Though not specifically pointed out, it is obvious that
this argument is predicated on JKM Graphics principle
{JKM Graphics Solutions Private Limited Vs. CTO
reported in (2017) 99 VST 343 (Mad)}. JKM principle does
not aid the petitioner in the case on hand as there is some
discussion about correlation qua mismatch albeit resorting
available records. There is another reason as to why the
JKM principles does not come to the aid of the writ
petitioner in the instant case and that reason is writ
petitioner has not responded to the pre-revisional notices.
d) There is yet another reason as to why this Court is
not inclined to interfere qua the impugned orders and that is
the alternate remedy Rule. The writ petitioner has an
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WP(MD)No.23217 of 2021
alternate remedy i.e., an appeal remedy under Section 51 of
TNVAT Act. Alternate remedy no doubt is not an absolute
rule and it is a rule of discretion. It is a self imposed
restraint qua writ jurisdiction. Be that as it may, Hon'ble
Supreme Court starting from Dunlop India case [Assistant
Collector of Central Excise, Chandan Nagar, West Bengal
Vs. Dunlop India Ltd., and others reported in (1985) 1
SCC 260] in a long line of case laws has repeatedly held that
the alternate remedy rule has to be very strictly enforced
with utmost rigour when it comes to fiscal Statutes. The
other case laws are Satyawati Tandon [United Bank of
India Vs. Satyawati Tondon and 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]. Relevant paragraph in Dunlop case
law is paragraph No.3 and relevant portion of the same reads
as follows:
'3. ....... Article 226 is not meant to short-circuit or
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WP(MD)No.23217 of 2021
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 discouraged.'
(Underlining made by this Court to supply emphasis
and highlight)
e) Satyawati Tandon principle was reiterated by Hon'ble
Supreme Court in K.C.Mathew case. Relevant paragraph in
K.C.Mathew case law 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
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WP(MD)No.23217 of 2021
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 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
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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)
f) One other case law of significance is a recent
judgment of a three member Bench of Hon'ble Supreme
Court 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]. The three
member Bench of the Honble Supreme Court speaking
through Hon'ble Justice Dr.Dhananjaya Y Chandrachud, set
out the exceptions to the rule of alternate remedy and made it
clear that only in exceptional cases (where the exceptions are
attracted), there would be interference in writ jurisdiction.
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WP(MD)No.23217 of 2021
Relevant paragraphs in Commercial Steel Limited case law
are paragraph Nos.11 and 12, 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 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 CA 5121/2021 7 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.'
The only point that comes across as a possible exception is
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WP(MD)No.23217 of 2021
NJP i.e., Natural Justice Principle violation. In the instant case
on hand, there is a clear mention about pre-revision notice
dated 30.11.2017 in the writ affidavit itself, therefore faint NJP
argument vanishes / pales into insignificance and sequitur is no
exception has been made out warranting interference in writ
jurisdiction.
h) Be that as it may, though there is a mention about
atleast one of the two pre-revision notices, there is no
averment in the writ petition as to why the writ petitioner did
not avail the opportunity given. As already alluded to supra, in
the case on hand, though personal hearing is only optional, the
revisional authority i.e., respondent has chosen to give
personal hearing to the writ petitioner. Absent any explanation
by the writ petitioner as to why he did not avail the same, this
Court is not inclined to entertain writ petitioner's campaign
against the impugned orders in writ jurisdiction. In other
words, the NJP argument becomes a non-starter too owing to
this reason also.
7. This Court having set out the reasons for not acceding to the prayer
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WP(MD)No.23217 of 2021
of the writ petitioner now sets out infra the conclusion and that is the
captioned writ petition fails.
8. Before parting with the matter, it is made clear that if the writ
petitioner chooses to file statutory appeal under Section 51 of TNVAT Act, it
will be open to the Appellate Authority to consider the same (subject to
limitation and subject to pre-deposit condition, if any) on its own merits and
in accordance with law uninfluenced by any observation made in this order.
9. Ergo, captioned writ petition is dismissed. Consequently,
captioned WMP is also dismissed. There shall be no order as to costs.
03.01.2022
Index : Yes/No
Internet : Yes /No
vsm
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WP(MD)No.23217 of 2021
Note :
In view of the present lock down owing to
COVID-19 pandemic, a web copy of the order may be
utilized for official purposes, but, ensuring that the copy of
the order that is presented is the correct copy, shall be the
responsibility of the advocate / litigant concerned.
To
The State Tax Officer,
West Veli Street Assessment Circle,
Commercial Taxes Buildings,
Madurai – 20.
M.SUNDAR, J.
https://www.mhc.tn.gov.in/judis
WP(MD)No.23217 of 2021
vsm
W.P(MD)No.23217 of 2021
and W.M.P.(MD)No.19645 of 2021
03.01.2022
https://www.mhc.tn.gov.in/judis
