Chattisgarh High Court
M/S Jaika Automobiles And Finance Ltd vs State Of Chhattisgarh 47 Wpc/2636/2010 ... on 16 February, 2018
1
NAFR
HIGH COURT OF CHHATTISGARH, BILASPUR
Writ Petition (T) No. 36 of 2018
M/s Jaika Automobiles and Finance Ltd. a company Duly
Incorporated Under The Companies Act , 1956 / 2013 Having Its
Registered Offices At Jaika Building Commercial Road Civil Lines
Nagpur ( Maharashtra ) 440001 And Also Having Its Office And Place
Of Business At Ring Road No. 1 G. E. Road Raipur Chhattisgarh
Through Its Authorized Signatory And Accounts Manager
Chandrakant Raut , S/o Madhukar Raut, Aged About 44 Years And
Resident Of Samta Colony Raipur Chhattisgarh.
---- Petitioner
Versus
1. State of Chhattisgarh Through Secretary Commercial Tax
Department Mahanadi Mantralaya New Raipur District Raipur
Chhattisgarh.
2. Commissioner, Commercial Tax , Vikraya Kar Bhavan , Civil Lines
Raipur Chhattisgarh.
3. Assistant Commissioner, Commercial Tax Raipur, Chhattisgarh.
---- Respondents
For Petitioner : Shri Neelabh Dubey, Advocate.
For respondents : Shri JK Gilda, Advocate General along
with Shri Anand Dadariya, Dy. G.A.
SB: Hon'ble Shri Justice P. Sam Koshy
Order On Board
16/02/2018
1. The present writ petition under Article 226 of the Constitution of India has been filed assailing the order dated 01.02.2018 passed by the Commissioner, Commercial Tax, Raipur, in exercise of revisional jurisdiction under Section 49(1) of the Chhattisgarh Valued Added Tax Act, 2005 (in short, the VAT Act). Vide the impugned order, the Commissioner has rejected the revision petition which was preferred by the petitioner assailing the assessment order dated 04.10.2017 2 passed by the Assistant Commissioner, Commercial Tax, Raipur, Division-1-the Assessing Officer (in short, AO).
2. The dispute involved in the case revolves around the trade discount offered by the petitioner to its customers. According to the department, the petition is said to have collected the amount of tax as mentioned in his invoice from the customers, but have not passed on the said tax to the state authorities and have retained the said amount and thus have evaded the tax which was otherwise to be paid to the State. The charges against the petitioner is that the petitioner have collected tax from the customers on the ex-showroom price and after discount, retained the excess tax with themselves.
3. The contention of the petitioner is that, firstly the assessment proceedings which have been initiated is from the year 2012- 13,2013-14, 2014-15, 2015-16 and 2016-17. He further submits that the officer who has proceeded with for the assessment years 2012- 13 and 2013-14, the proceedings have till date not been completed and the same is going on. However, for the remaining period, since it was a different Assessing Officer who without providing sufficient time to the petitioner to adduce evidence in respect of the fact that the petitioner has not charged the tax from the customers on the ex- showroom price, rather the tax was collected on the discounted price.
4. The counsel for the petitioner further submits that the petitioner has immediately preferred a revision before the revisional authority but the revisional authority also has abruptly without properly appreciating the contention raised by the petitioner and also without 3 appreciating the prevailing trade practice in similar business have rejected the revision petition. It is the contention of the petitioner that the petitioner also have a similar dealership at Nagpur in the State of Maharashtra where again an identical proceeding had been drawn by the Commercial Tax Department of the State of Maharashtra. Though initially the officer in the State of Maharashtra also had passed an order against the petitioner, but in an appeal before the Joint Commissioner of State Tax (Appeals), Nagpur Division, Nagpur, has set aside the order of Assessing Officer and has approved the practice adopted by the petitioner's establishment which is an identical practice which is also being followed at Chhattisgarh and thus, prayed for the interference with the impugned order.
5. It is also the contention of the petitioner that the issue involved in the instant case is also squarely covered by the decision of the Supreme Court in case of Sadan Motors Vs. State of Karnataka, 2017 (3)SCC 467 which also was dealing with the similar set of facts and where the Supreme Court has approved such practice. Further, the said judgment of Supreme Court in case of Sadan Motors (Supra) has again been reiterated by the recent larger Bench decision of the Supreme Court in case of M/s Maya Appliances Pvt. Ltd. Vs. Additional Commissioner, Commercial Tax and Others, decided on 06.02.2018.
6. Per contra, opposing the petitioner, learned Advocate General raised two preliminary objections. Firstly, the order being an appealable order, the petitioner having bypassed the appellate authority and 4 having filed revision petition was not justified and the petition thus for non availing the remedy of appeal is not sustainable. According to State counsel, since under the Act there is a provision of preferring an appeal against the assessment order and the petitioner not availing the said remedy, should not be permitted to approach the High Court under Article 226/227 of the Constitution of India. The petitioner is trying to circumvent the statutory remedy of appeal available to him which otherwise is not acceptable.
7. The Advocate General further submitted that taxing provisions are always a complete code in itself. The State counsel drew the attention of the court through the various provisions under the Act and submitted that it has its own built-in mechanism of the procedure for assessment, reassessment, appeal and revision and the various remedies privileges and the rights conferred under the said mechanism available to an assessee. According to the State counsel once when the statute itself provides for a complete procedure and mechanism, the writ court should not entertain a petition when the party prefers a writ petition non availing the statutory remedy.
8. It was the further contention of the State that the petitioner should have first knocked the door of the statutory authority under Section 48 of the VAT Act and thereafter should have thought of either preferring a revison or a writ petition under Article 226 of the Constitution. Having not done so, the act on the part of the petitioner in filing the writ petition is a mischief and malafide only with an intention to avoid pre-deposit part which is otherwise required while 5 filing the appeal.
9. According to the State, the petitioner has played fraud with the State to the extent of evading substantial chunk of tax which otherwise was payable to the State. According to him, it is a case where the petitioner has collected tax from the customers on the ex-showroom prise of the vehicle and thereafter has deposited tax with the State authorities on the discounted price provided to the customers. Thus, have retained the difference of tax collected. This, according to State counsel, is an act of mischief, malafide and fraud and which was detected by the state authorities in the course of investigation and as such since the petitioner have not availed the statutory remedy of appeal available to it, the present petition should be rejected on this ground alone.
10. The second objection which was raised by the State was that the petitioner have not challenged the original assessment order in his petition, but have only challenged the order of revisional authority. According to him, since the original assessment order has not been questioned and if the revisional order is quashed, even then the assessment order would still remain intact and the petitioner would be liable to pay tax so assessed. He further submits that unless the specific order is challenged in the writ petition, merely challenging the revisional order by itself would not be sufficient. According to him, doctrine of merger would not be applicable when the order under challenge was an order passed by the revisional court. It would only be applicable in the event if the impugned order is one by the 6 appellate authority.
11. In support of his contention, the State has relied upon the decisions of Supreme Court in cases of Hari Ram Vs. Hira Singh & Ors., 1984 (2) SCC 36, Union Territory of Pondicherry & Ors. Vs. P.V. Suresh & Ors., 1994 (2)SCC 70, Assistant Collector of Central Excise, Chandan Nagar, West Bengal Vs. Dunlop India Pvt. Ltd. & Ors., 1985 (1) SCC 260.
12. All these judgments cited and relied upon by the State predominantly lays down the ratio that a petition under Article 226/227 should not be normally entertained as to substitute to an appellate court against the decision of an authority whose order is appellable order under the statute. The High Court cannot by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by the statute. It was also laid down by the Supreme Court in the aforesaid judgments that a petition should not, as a matter of routine, be entertained if the same has been filed directly without availing the statutory remedy, more particularly when it is pertaining to orders of recovery of tax or demand notice of tax evaded or in respect of cess or fees which were chargeable under the statute.
13. The Supreme Court has repeatedly in the aforesaid judgments have reiterated the fact that petitions under Article 226 in a tax related matters should not be entertained.
14. So far as the impugned order of revisional authority and the Assessing authority is concerned, learned counsel for the State submits that a plain reading of the revisional authorities order itself 7 would show that the petitioner has played mischief with the State authorities in the process of evading tax. The petitioner has been given due opportunity of hearing before the assessing orders were passed as such it cannot be said to be a case where there was a violation of principles of natural justice.
15. Having heard the counsel on either side and on due considerations of the decisions which have been relied upon, what clearly culls out is that none of the judgments of the Supreme Court holds that there is a complete bar for a person to avail writ jurisdiction. It is further reiterated in all these judgments that mere existence of an alternative remedy by itself will not preclude the remedy of exercise of writ jurisdiction or its power of judicial review under Article 226 of the Constitution of India. According to Supreme Court, in a given case though under exceptional circumstances, the writ court has got power of judicial review.
16. Since rightly or wrongly the revision petition filed by the petitioner was entertained by the revisional court and the same having been decided on merits, the only remedy left for the petitioner would be that of filing of a petition before the High Court. Since the revisional authority has gone into the veracity of the contentions put forth in the revision petition, without touching maintainability aspect of the revisional authority in a case where the revision was preferred without preferring an appeal, the petitioner now may not have any other statutory remedy available and under the said circumstances, the only recourse left for him is to file a writ petition. 8
17. Thus, the revisional authority having jurisdiction has entertained the revision preferred by the petitioner against the order of Assessing Officer and has also decided the revision on its merits deciding the veracity of the order passed by the Assessing Officer. Thus, for all practical purposes, it can only be presumed that the petitioner has infact availed a remedy available to him under the Act. Though the petitioner may not have preferred an appeal, but he has duly preferred a revision in accordance with Section 49 of the VAT Act and which has also been entertained by the revisional authority, thereby leaving the petitioner with the only remedy of a judicial review under Article 226 of the Constitution of India before the High Court.
18. Under the said circumstances, the objection of the State counsel of the petition being not maintainable for not availing statutory alternative remedy is not sustainable.
19. So far as the second objection raised in respect of the assessing order not under challenge is concerned, this court is of the opinion that the same may not be so fatal to hold the petition as not maintainable. The petitioner has challenged the order of revisional authority. The petition also has questioned the action on the part of the assessing officer while passing the assessing order on 04.10.2017 in its pleading and so far as non challenging the order of Assessing Officer can be safely held to be a curable defect. Thus, the said ground raised is also not acceptable.
20. As regards, prima facie case of the petitioner is concerned, the petitioner have an order in their favour passed by the appellate 9 authority of the State Tax Department at Nagpur in respect of the same transaction carried out from the petitioner's establishment at Nagpur (M.H.). Once when there is an order in favour of the petitioner on an identical set of facts, though of course in a different forum and a different State, but prima facie there is an approval of the trade practice and the manner of billing and tax deposit by the petitioner's establishment. Further, there is also two recent decisions of the Supreme Court, one in case of Sadan Motors (Supra) which has been further reiterated in case of M/s Maya Appliances (Supra), this court is of the opinion that prima facie a strong case has been made out by the petitioner.
21. Accordingly, the present petition is admitted for hearing.
22. Since the respondents have entered appearance, requirement of payment of PF stands dispensed with. As the issue involved in the instant case is a limited issue, let the State file its reply on merits at the earliest so that the writ petition can be disposed of at the motion stage itself.
23. Further, taking into consideration the fact that petitioner is running business for about 34 years and have also a similar nature of business at Nagpur where also they are operating the business for many decades, the co-coercive measure which has been initiated by the department would lead to closing down the petitioner's establishment and which would also be detrimental to the interest of the persons associated directly or indirectly with the petitioner's business, and therefore, there shall be stay of the effect and 10 operation of the order of revisional authority till the next date of hearing.
24. It is further directed that the respondents shall release the bank accounts which have been attached and also release all those stocks which have been seized by them.
25. List for further hearing on 20.03.2018. Sd/-
(P. Sam Koshy) Judge inder