Jharkhand High Court
M/S Telco Construction Equipme vs State Of Jharkhand & Ors on 1 August, 2011
Author: Prakash Tatia
Bench: D.N.Upadhyay, Prakash Tatia
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI.
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W.P.(T) No. 2936 of 2011
M/s Telco Construction Equipment
Company Limited ... ... Petitioner
Versus
The State of Jharkhand & Ors ... ... Respondents.
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CORAM: HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE D.N.UPADHYAY
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For the Petitioner : Mr. Sumeet Gadodia, Advocate.
For the Respondents : Mr. Rajesh Shankar, S.C.-I.
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REPORTABLE Dated 01st August, 2011
By court Heard learned counsel for the parties.
2. The petitioner has sought declaration declaring that
the petitioner is liable to pay tax @ 5% on the sale of
"spare parts, accessories and components" of earth moving
machineries even after the amendment carried out at
Serial No. 25 of Schedule II Part B of the Jharkhand Value
Added Tax Act, 2005 vide notification No. SO-2 dated 7 th
May, 2011.
3. The contention of the petitioner is that petitioner is a
law abiding person and wants to pay the tax but only in
accordance with law which is levyable upon the goods of
the petitioner. The petitioner is asked to pay the tax @ 14%
and upon finding this situation, he submitted his petition
before the Commissioner of Commercial Taxes, Jharkhand,
Ranchi seeking clarification with respect to the tax payable
on purchase and sale of "spare parts, accessories and
components" of earth moving machineries pursuant to
aforesaid notification by submitting application dated
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26.05.2011.
4. It is admitted fact that no adverse orders have been passed against the petitioner and petitioner's own case is that whenever tax is demanded @ 14%, he paid the said tax with his contention that said tax has been paid without prejudice to his right. According to learned counsel for the petitioner, in case the petitioner will not pay the tax and will contest the issue before the Assessing Officer himself, and ultimately he may be found liable to pay not only tax though he may have to pay the interest and may also be saddled with the penalty. The petitioner's petition for answer to the legal question has not been decided by the Commissioner of Commercial Taxes, Jharkhand and petitioner wants answer to his question. On 22.06.2011, the petitioner was asked to satisfy this Court whether the writ petition for mere declaration for asking for consequential relief is maintainable.
5. However, the State has filed the reply in which it has been asserted that proper tax is @ 14% and not @ 5%. Taking benefit of this stand, learned counsel for the petitioner submitted that in view of the stand taken by the State, now the Assessing Officer will have to decide the tax liability of the petitioner @ 14% and there is every likelihood that petitioner's contention of liability of 5% tax is likely to be rejected.
6. Learned counsel for the petitioner relied upon three judgments of the Hon'ble Supreme Court delivered in the 3 case of State of Madhya Pradesh & another Vs. Bhailal Bhai & Others reported in AIR 1964 SC 1006, in the case of State of U.P. & Others Vs. M/s. Indian Hume Pipe Co. Ltd. reported in (1977) 2 SCC 724 and in the case of Union of India & Another Vs. State of Haryana & Another reported in (2000) 10 SCC 482.
7. At the outset, we may observe that there are provisions for obtaining advance ruling under the other statutes like Income Tax Act as well as central Excise Act. No such provision is in the Jharkhand Value Added Tax Act, 2005. In the said Act, power has been given to the adjudicating authority to decide such issue which has been raised by the petitioner in this writ petition. Admittedly the petitioner has paid the tax @ 14% though with condition without affecting his rights but at the same time he did not get the issue adjudicated from the adjudicating authority. Therefore, there is no question of adjudication of the issue by the Assessing Officer and in appeal and further, appeal or revision which could have been done under the Act of 2005 itself. The petitioner is seeking only declaration without any consequential relief and that too after making payment of the tax @ 14% before the authority who has a right to decide the objection if it would have been raised before the authority. Therefore, exercising of power of this Court straightway will be taking away the power of the adjudicating authority, appellate authority and the other authorities under the Act itself who may decide in favour of 4 the petitioner itself.
8. Be that as it may, we do not find any reason to entertain such type of petitions which can be filed only for obtaining a ruling from the Court in the form of advance ruling as permissible under the other Acts referred above and under the reference which can be made to the High Court for answer if law provides for it. We have also considered the judgments relied upon by the learned counsel for the petitioner in the case of State of State of Madhya Pradesh & another Vs. Bhailal Bhai & Others (Supra) in which the Hon'ble Supreme Court has observed that "We see no reason to think that the High Courts have not got this power. If a right has been infringed - whether a fundamental right of a statutory right - and the aggrieved party comes to the court for enforcement of the right it will not be giving complete relief if the court merely declares the existence of such right or the fact that that existing right has been infringed. Where there has been only a threat to infringe the right, and order commanding the Government or other statutory authority not to take the action contemplated would be sufficient. It has been held by this Court that where there has been a threat only and the right has not been actually infringed an application under Article 226 would lie and the courts would give necessary relief by making an order in the nature of injunction. It will hardly be reasonable to say that while the court will grant relief by such command in the nature of an 5 order, of injunction where the invasion of a right has been merely threatened the court must still refuse, where the right has been actually invaded, to give the consequential relief and content itself with merely a declaration that the right exists and has been invaded or with merely quashing the illegal order made".
9. With the help of above, learned counsel for the petitioner vehemently submitted that in a case where there is no actual loss to the party but there is only a threat to infringement of right of the party even then writ petition under Article 226 can be entertained and so has been held by the Hon'ble Supreme Court in an unequivocal terms. It is also submitted that in this case the petitioner wants to abide by law but to avoid his all loss, he wants a ruling on the question of law which this Court also can decide straightway.
10. We have considered the above judgment of the Supreme Court and said has been relied upon out of the context in which the said observations have been made by the Hon'ble Supreme Court. In the same judgment Hon'ble Supreme Court at para 17 observed that "at the same time we cannot lose sight of the fact that the special remedy provided in Article 226 is not intended to supersede completely the modes of obtaining relief by an action in a Civil Court or to deny defences legitimately open in such action". The Hon'ble Supreme Court, making it clear more than once, has observed that the power to give relief under Article 226 is a discretionary power. More important 6 observation of the Hon'ble Supreme Court is that "another is the nature of controversy of facts and law that may have to be decided as regards the availability of consequential relief".
11. Here in this case, admittedly yet the issue has not been decided so as to draw inference that the petitioner has been saddled with illegal tax liability by even original authority after rejection of petitioner's plea and, furthermore, is that the petitioner has already paid the tax @ 14%, though with protest but has not raised and contested the issue before the adjudicating authority.
12. In another case of Union of India & Another Vs. State of Haryana & Another (Supra), the tax was duly assessed and without availing remedy of the appeal, the Union of India preferred writ petition straightway and challenged the assessment order on the ground that it involves no question of fact and in that situation Hon'ble Supreme Court observed that "alternative remedy in the form of statutory appeal is not an absolute bar"
13. In the case of State of U.P. & Others Vs. M/s. Indian Hume Pipe Co. Ltd. (Supra), a case where the Sales Tax Department levied the tax which was found illegal and straightway writ petition was preferred wherein the Hon'ble Supreme Court observed that "alternative remedy was not in the facts of the case was bar against entertaining the writ petition".
14. As we have already observed that only for declaration 7 of a right without any consequential relief which can be sought is not permissible in view of the principles which are applicable in civil title dispute under Section 34 of the Specific Relief Act,1963 and which can be applied. Otherwise also, we do not find any just reason for allowing the opening of the flood gate of litigation for obtaining the advance ruling of the High Court straightway where machinery has been provided for adjudicating legal question by the expert in the field by creating the post of the officer under the Act who may decide first and, thereafter, the matter can be examined by the Court under the extra ordinary jurisdiction of Article 226 of the Constitution of India.
15. Another reason for our above view is that in any dispute or lis all matters like question of facts and questions of law should be decided in one lis by one authority and this principle is required to be followed in a case where the authority constituted under the act is not debarred from deciding any question like about constitutional validity of any act or rule etc. This would be in consonance with normal rule of law to avoid multiplicity of litigation. In this case petitioner wants determination of question of law from this Court even when the other authorities under the act are competent to decide this issue and more particularly when the original adjudicating authority yet even has not taken a contrary view, not in petitioner's own case nor in any other matter much less to 8 taking a contrary view by any higher authority to the adjudicatory authority. In this situation, this court is of the view, there exist no reason to give go bye to the procedure of law and take away the right of adjudicatory authority and appellate authority to decide the question of law for which they are established and allow the litigant to avail extra ordinary discretionary jurisdiction of the High Court where exist no special reason to invoke writ jurisdiction.
16. Learned counsel for the petitioner at this juncture, pointed out that petitioner paid tax for one or two months only after amendment made in the entry. However, we are making it clear that neither any of the observation made by us is against or in favour of any of the parties in this petition nor the reply filed by the respondent can be treated to be binding upon the adjudicating authority because he, under the law, is bound to decide each and every question in accordance with law in accordance with his own decision uninfluenced by any of the correspondences, reply etc. Therefore, with these observations, this writ petition is disposed of with liberty to the petitioner to raise the objection before the Assessing Officer and obtain any order. In case any order is passed against the petitioner by the assessing authority, the petitioner will be free to avail the lawful remedy.
(Prakash Tatia, A.C.J.) (D.N.Upadhyay, J) Raman/Birendra