Telangana High Court

M/S Kakatiya Cement Sugar And ... vs The State Of Telangana on 22 July, 2024

             THE HONOURABLE SRI JUSTICE SUJOY PAUL
                           AND
           THE HONOURABLE SRI JUSTICE NAMAVARAPU
                     RAJESHWAR RAO

                           WRIT PETITION No.3148 of 2024

ORDER:

(Per Hon'ble Justice Sujoy Paul)

This petition filed under Article 226 of the Constitution

assails the order dated 09.01.2024 passed by respondent No.2 in

exercise of power under Section 9 (2) of the Central Sales Tax Act,

1956 ('CST Act').

2. Learned counsel for the petitioner submits that although

statutory alternative remedy is available to the petitioner, this

matter may be directly entertained in the light of judgments of

Supreme Court in the cases of Whirlpool Corporation vs.

Registrar of Trade Marks, Mumbai 1, Assistant Commissioner

of State Tax vs. Commercial Steel Limited 2 and Godrej Sara

Lee Ltd. vs. Excise and Taxation Officer-cum-Assessing

Authority 3 and petitioner may not be relegated to avail statutory

alternative remedy. To elaborate, learned counsel for the

petitioner submitted that the Final Assessment Order was passed

in his favour on 10.01.2020 and it was made clear that the

(1998) 8 SCC 1

2021 SCC OnLine SC 884

2023 SCC OnLine SC 95

SP, J & RRN, J WP_3148_2024

present turnover is covered by F-Form as prescribed under

Section 6A of the CST Act. It is submitted that such order passed

in exercise of power under Section 6A of the CST Act should have

been altered only if conditions mentioned in Section 6A (3) are

satisfied. Subsection (3) of Section 6A of the CST Act has the

following condition on which power can be exercised namely,

discovery of new facts or revision by a higher authority on the

ground that findings of the Assessing Authority are contrary to

law.

3. Learned counsel for the petitioner has drawn the attention of

this Court to impugned order dated 09.01.2024 to contend that

the power is exercised under Section 32 (2) of the Telangana Value

Added Tax, 2005 (TVAT Act), for yet another ground that the same

was found to be 'prejudicial to the interest of revenue'. This

ground was not available as per Subsection 3 of Section 6A of CST

Act mentioned hereinabove. By placing reliance on the judgment

in the case of Ashok Leyland Ltd. vs. State of T.N. 4, learned

counsel for the petitioner submits that the Final Assessment

Order issued under Central Act cannot be altered by invoking

(2004) 3 SCC 1

SP, J & RRN, J WP_3148_2024

State Act provision. Moreso, when the necessary ingredients for

exercising that power are not available.

4. Per contra, learned Special Government Pleader appearing

for the State supported the impugned order and urged that the

petitioner has an efficacious statutory alternative remedy of

appeal. By placing reliance on the counter affidavit, it is

contended that the petitioner is registered dealer on the rolls of

respondent No.4 and is in the business of manufacture and sale of

ordinary Portland cement and sugar. Although, Assessment

Order was finalized under CST Act, for the period 2015-16 on

10.01.2020, after examining of Assessment Order, respondent

No.2 noticed that to arrive at taxable turnover exemption was

given on tax component, tax portion collected during CST sales for

an amount of Rs.4,43,65,095/-and the tax liability arrived at on

taxable turnover was Rs.8,04,263/- only, which is much less than

the tax component collected. It was noticed by the department

that the petitioner has effected inter-state sale of sugar for a

turnover of Rs.105,00,05,905/- and claimed exemption without

submitting any documentary evidence. This resulted in a short

levy of tax. The petitioner in his reply dated 16.09.2019 stated

SP, J & RRN, J WP_3148_2024

that the tax amount was included in the Branch Transfer waybills

in a sum of Rs.4,43,65,095/-. The petitioner himself admitted

that tax component was Rs.4,43,65,095/-. In all, the petitioner

showed the tax component in each waybill accumulating

Rs.4,43,65,095/- total number of waybills submitted by petitioner

are 3622. The Assessing Authority wrongly gave exemption to his

amount. Since Assessment Order was prejudicial to the interest

of revenue, due process was followed and petitioner was put to

notice. The replies of the petitioner were obtained and thereafter,

exemption was disallowed. In view of Section 80 of the TVAT Act,

which is about 'repeal', the power under the said Act can be

exercised. It is submitted that even as per Subsection 3 of Section

6A of the CST Act, when findings of the Assessing Authority are

contrary to law, interference can be made.

5. We have heard the parties on admission.

6. A Writ Petition is maintainable despite availability of the

alternative remedy in certain situations. However, it is discretion

of the Court and there exists no compulsion to 'entertain' a

petition merely because it is 'maintainable'. The 'maintainability'

and 'entertainability' are two different facets. The Apex Court in

SP, J & RRN, J WP_3148_2024

its recent judgment dated 10.04.2024 in the case of PHR Invent

Educational Society Vs. UCO Bank and Others 5 disapproved the

order of Telangana High Court in W.P.No.5275 of 2021, dated

04.02.2022, wherein despite availability of 'statutorily efficacious

remedy', the Writ Petition was entertained. The Apex Court has

reiterated that merely because the Writ Petition is maintainable, it

is not a compulsion on the Writ Court to entertain such petitions.

In the matter, where huge involvement of tax, recovery of public

money, bank loans etc are involved, the Writ Petition should be

entertained with circumspection. The Apex Court in the said

order at relevant portion opined as under:

"15. It could thus be seen that, this Court has clearly held that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person. It has been held that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. The Court clearly observed that, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. It has been held that, though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the Courts cannot be oblivious of the rules of self-imposed restraint evolved by

(2024) 4 S.C.R. 541

SP, J & RRN, J WP_3148_2024

this Court. The Court further held that though the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, still it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution."

(Emphasis Supplied)

7. In the instant case, only pure questions of law are not

involved. The nature of waybills, assessment and impact of those

aspects are also germane to decide whether the case falls within

the ambit of Section 6A (3) of CST Act or Section 32 (2) of the

TVAT Act etc,. In other words, mixed questions of facts and law

are involved and departmental authority is best suited to

adjudicate the matter.

8. In Godrej Sara Lee Ltd. (cited supra), the interference was

made because only pure question of law was involved. As noticed

above, in our opinion, mixed questions of facts and law are

involved in this case, particularly, in view of counter filed by the