Allahabad High Court
Ricoh India Ltd. Through Its Authorised ... vs State Of U.P. Through Institutional ... on 18 May, 2007
Author: R.K. Agrawal
Bench: R.K. Agrawal, Bharati Sapru
JUDGMENT R.K. Agrawal, J.
1. By means of the present petition filed under Article 226/227 of the constitution of India the petitioner, M/s. Ricoh India Ltd., seeks the flowing reliefs:
1. To issue a Writ, Order or Direction in the nature of Certiorari, Mandamus or Prohibition restraining/prohibiting the respondents from realizing any Trade Tax on the stock transfers effected by the petitioner, in respect of impugned orders (Annexure No. 2 and 3 to the petition) date 26.03.07 and 28.03.07 for the AY 1998-99, 1999-2000, 2000-2001 and 2004-2005 respectively.
2. To issue a Writ, Order or Direction in the nature of certiorari quashing the impugned orders (Annexure No. 2 and 3 to the petition) dated 26.03.07 and 28.03.07 for the AY 1998-1999, 1999-2000, 2000-2001 and 2004-2005 respectively.
3. To issue, any other suitable Writ, Order or Direction as this Hon'ble Court may deem fit and proper in the circumstances of the case.
4. To award costs throughout to the petitioner.
2. Briefly stated the facts giving rise to the present petition are as follows.
3. The petitioner is a company duly incorporated under the Companies Act, 1956, having its registered office at 52-B, Ground Floor, Okhla Industrial Estate, Phase III, New Delhi and is a registered dealer under the provisions of the U.P. Trade Tax Act, 1948 hereinafter referred to as "the U.P. Act" and the Central Sales Tax Act 1956, hereinafter referred to as "the Central Act" in the State of U.P. It is engaged in the import and sale of office automation equipments and spares/consumables (mainly multi functional devices) i.e. printers. Faxes, scanners, etc. It has set up a logistics centre in Noida, U.P. as a hub where the goods i.e. the machines, accessories, spares and consumables are imported from outside India, received and stocked in the logistics centre and thereafter dispatched by way of stock transfer to its various branches located all over the country. The petitioner had Riled returns before the Deputy Commissioner (Assessment), 7(A), Trade Tax, Noida, respondent No. 4 in respect of the Assessment Years 1998-99, 1999-2000, 2000-01 and 2004-05. The original assessments Bore made in respect of the Assessment Year 1998-99 on 30th March, 2001, 1999-2000 on 26th March, 2002 and 2000-01 on 20th February, 2003. The assessments in respect of the aforesaid three years had been reopened and separate re-assessment orders were passed on 30th March, 2005. The petitioner preferred separate appeal against Border dated 30th March, 2005, which were remanded to the Assessing Authority vide order dated 29th November, 2005. Pursuant to the order of remand passed by the Joint Commissioner (Appeals), the Respondent No. 4 has passed the assessment orders on 21st September, 2006. The petitioner had again preferred separate appeals Before the Joint Commissioner (Appeals), Trade Tax, Noida, which had been rejected by a common order dated 26th March, 2007. In respect of the Assessment Year 2004-05, the respondent No. 4 has passed a regular assessment order on 28th March, 2007. The two orders, namely, dated 26th March, 2007 passed by the Joint Commissioner (Appeals) rejecting the petitioner's appeals for the assessment Years 1998-99 to 2000-01 and assessment order dated 26th March, 2007 passed by the respondent No. 4 i.e. Assessing Authority in respect of the Assessment Year 2004-05 are under challenge in the present writ petition.
4. We have heard Sri Venkataraman, learned Senior Advocate, assisted by Sri Gaurav Mahajan, Advocate, on behalf of the petitioner and Sri S.P. Kesarwani, learned Standing Counsel, appearing for the respondents on the question of admission.
5. Sri Venkataraman, learned Senior Counsel, submitted that in the original assessment orders passed by the Assessment Years 1998-99 to 2000-01, the stock transferred, which was covered against the declaration form 'F' had been accepted and, therefore, in view of the decision of the Apex Court in the case of Ashok Leyland Ltd. v. State Tamil Nadu and Anr. , they cannot be reopened. The reopening of the assessments in respect of the three assessment years was, therefore, wholly without jurisdiction. He further submitted that each and every transaction of stock transfer/inter State sale ought to be examined before coming to the conclusion as to whether there was stock transfer or inter State sale. Reliance in this behalf has been placed upon a decision of the Apex Court in the case of Tata Engineering and Locomotive Co. Ltd. v. The Assistant commissioner of Commercial Taxes and Anr. . On the question of remedy by way of appeal being available against both the orders under challenge i.e. second appeal under Section 10 of the U.P. Act against the order dated 26th March, 2007 passed by the Joint Commissioner (Appeals) and under Section 9 of TO. U.P. Act against the order dated 28th March, 2007 passed by the Assessing Authority, he submitted that as the two orders are wholly without jurisdiction, the petitioner is well within its right to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India and the alternative remedy would not be a bar for entertaining the petition. In support of his aforesaid plea he has relied upon the following decisions:
1. Calcutta Discount Co. Ltd. v. Income-tax Officer, Companies District I, Calcutta and Anr. .
2. Raza Textiles Ltd. v. Income Tax Officer, Rampur .
3. Shrisht Dhawan (Smt) v. Shaw Brothers .
4. Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Ors. .
5. Canon India Private Limited v. State of Uttar Pradesh and Ors. 2003 U.P.T.C. 10 (Alld.) 1
6. Shahnaz Ayurvedics, Noida and Anr. v. Commissioner of Central Excise and Ors. 2004 U.P.T.C. 737 (Alld.).
7. Barco Electronic Systems (Pvt.) Ltd. v. State of U.P. and Ors. 2005 U.P.T.C. 347 (Alld.)
6. He further submitted that the petitioner has paid local taxes under the sales tax law applicable in the respect states where the goods upon stock transferred have been sold and, therefore, this Court ought to stay the demand pending disposal of the appeals for which he relied upon two decisions of the Apex Court, namely, Sri Shriram Refrigeration Industries Ltd. and Anr. v. Commercial Tax Officer and Ors. (1994) 95 Sales Tax Cases 488 and K.C.P. Ltd. and Ors. v. State of M.P. and Ors. (1998) 208 Sales Tax Cases 580
7. Sri S.P. Kesarwani, learned Standing Counsel, on the other hand submitted that against the order dated 26th March, 2007 passed by the Joint Commissioner (Appeals) whereby the petitioner's appeals filed under Section 9 of the U.P. Act for the Assessment Years 1998-99 to 2000-01 have been dismissed, the petitioner has an equally efficacious and speedy alternative remedy available to it by way of filing second appeals under Section 10 of the U.P. Act before the Trade Tax Tribunal, Ghaziabad. In so far as the assessment order dated 28th March, 2007 in respect of the Assessment Year 2004-05 is concerned he submitted that the petitioner has an equally efficacious and speedy alternative remedy by way of filing an appeal under Section 9 of the U.P. Act before the Joint Commissioner (Appeals), Noida. Thus, this Court should decline to exercise the discretion under Article 226 of the Constitution of India and the writ petition should be dismissed on the ground of alternative remedy. In support of his aforesaid plea he relied upon the decisions of the Apex Court in the cases of Titaghur Paper Mills Co. Ltd. and Anr. v. State of prissa and Anr. and Assistant Collector of Central Excise, Chandan Nagar, W.B. v. Dunlop India Ltd. and Ors. .
8. We have given our anxious consideration to the various pleas raised by the learned Counsel for the parties.
9. We find that against the order dated 26th March, 2007 passed by the Joint Commissioner (Appeals) wherein the petitioner's appeals for the Assessment Years 1998-99 to 2000-01 have been dismissed, the petitioner has a remedy by way of filing a second appeal before the Trade Tax Tribunal, Ghaziabad under Section 10 of the U.P. Act. So far as the assessment order dated 28th March, 2007 is concerned, which relates to the Assessment Year 2004-05, the petitioner has a right of appeal under Section 9 of the U.P. Act. The powers of the Tribunal constituted under Section 10 of the U.P. Act as also of the first Appellate Authority constituted under Section 9 of the U.P. Act are f very wide and they can go into all questions of facts and law in respect I: to the subject matter of appeal.
10. We further find that the Joint Commissioner (Appeals) has considered the decision of the Apex Court in the case of Ashok Leyland Ltd. (supra) and after discussing the facts of the case at hand he had held that the same was not applicable. He has applied; exclusionary clause stated in the aforesaid decision for holding the alleged stock transfer to be inter State sale. The question whether the stock transfers were in fact stock transfers or inter-State sales can more appropriately be decided in appeal by the authorities constituted under the Act. Similar is the position with respect to the assessment order passed for the Assessment Year 2004-05.
11. In the case of Calcutta Discount Co. Ltd. (supra) the Apex ± Court has held as follows:
(27) ...It is well settled however that though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit C£ se an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, it is well settled will issue appropriate orders or directions to prevent such consequences.
12. In the case of Raza Textiles Ltd. (supra), the Apex Court has held as follows:
3. ...No authority, much less a quasi-judicial authority, can confer jurisdiction on itself by deciding a jurisdictional fact wrongly. The question whether the jurisdictional fact has been rightly decided or not is a question that is open for examination by the High Court in an application for a writ of certiorari. If the High Court comes to the conclusion, as the learned single Judge has done in this case, that the Income Tax Officer had clutched at the jurisdiction of deciding a jurisdictional fact erroneously, then the assessee was entitled for the writ of certiorari prayed for by him....
13. In the case of Shrisht Dhawan (Smt.) (supra), the Apex Court has held as follows:
19. ...No statutory authority or tribunal can assume jurisdiction in respect of subject matter which the statute does not confer on it and if by deciding erroneously the fact on which jurisdiction depends the court or tribunal exercises the jurisdiction then the order is vitiated. Error of. jurisdictional fact renders the order ultra vires and bad.
14. In the case of Cannon India Pvt. Ltd. (supra) this Court has held that where there is no factual dispute, the writ petition without relegating the petitioner to the alternative remedy under the Act can be disposed of.
15. In the case of Shahnaz Ayurvedics (supra), this Court after preferring various decisions of the Apex Court has held as follows:
11. Thus, the law can be summarized that rule of exclusion of the writ jurisdiction is not a law. Discretion should be exercised by the writ Court considering the facts and circumstances involved in each case. But where there has been violation of the principle of natural justice or failure of any rule of fundamental procedure or Tribunal places erroneous interpretation on the statutory provision, or exceeds its jurisdiction, writ petition can be entertained, even if the Statute provides for appeal/revision.
16. In the case of Barco Electronic Systems (Pvt.) Ltd. (supra), this Court has held that it is well settled that where the controversy is likely to be of a recurring nature and it does not involve disputed questions of fact it should be decided by the High Court instead of relegating the petitioner to his alternative remedy of appeal.
17. In the case of Whirlpool Corporation (supra), the Apex Court has held as follows:
15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged....
18. In the case of Titaghur Paper Mills Co. Ltd. (supra), the Apex Court has held as follows:
8 We are dealing with a case in which the entrustment of power to assess is not in dispute, and the authority within the limits of his power is a Tribunal of exclusive jurisdiction. The challenge is only to the regularity of the proceedings before the learned Sales Tax Officer as also his authority to treat the gross turnover returned by the petitioners to be the taxable turnover. Investment of authority to tax involves authority to tax transactions which in exercise of his authority the Taxing Officer regards as taxable, and not merely authority to tax only those transactions which are, on a true view of the facts and the law, taxable.
19. It has further held as follows:
11. Under the scheme of the Act, there is a hierarchy of authorities before which the petitioners can get adequate redress against the wrongful acts complained of. The petitioners have the right to prefer an appeal before the prescribed authority under Sub-section (1) of Section 23 of the Act. If the petitioners are dissatisfied with the decision in tie appeal, they can prefer a further appeal to the Tribunal under Sub-section (3) of Section 23 of the Act, and then ask for a case to be stated upon a question of law for the opinion of the High Court under Section 24 of the Act. The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not b a petition under Article 226 of the Constitution. It is now veil recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes, J. in Wolverhampton New Water Works Co. v. Hawkesford (1859) 6 CBNS 336 at p.356 in the following passage:
There are three classes of cases in which a liability may be established founded upon statute.****** But there is a third class, viz., where a liability not existing at common law is created by a statute which at he same time gives special and particular remedy for enforcing it***********the remedy provided by he statute must be followed, and it is not competent to the party to pursue the course applicable to case of the second class. The form given by the statute must be adopted and adhered to.
The rule laid down in this passage was approved by the House of Lords in Neville v. London Express Newspaper Ltd. 1919 AC 368 and has been reaffirmed by the Privy Council in Attorney General of Trinidad and Tobago v. Gordon Grant and Co. 1935 AC 532 and Secretary of State v. Mask and Co. AIR 1940 PC 105. It has also be held to be equally applicable to enforcement of rights, and has been followed by this Court throughout. The high Court was therefore justified in dismissing the writ petitions in limine.
20. In the case of Dunlop India Ltd. (supra), the Apex Court has held as follows:
3. In Titaghur Paper Mills Co. Ltd. v. State of Orissa A.P. Sen, E.S. Venkataramiah and R.B. Misra, JJ. Held that where the statute itself provided the petitioners with an efficacious alternative remedy by way of an appeal to the Prescribed Authority, a second appeal to the Tribunal and thereafter to have the case stated to the High Court, it was not for the High Court, it was not for the High Court to exercise its extraordinary jurisdiction under Article 226 of the Constitution ignoring as it were, the complete statutory machinery. That it has become necessary, even now, for us to repeat this admonition is indeed a matter of tragic concern to us. 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 by-pass the alternative remedy provided by statute. Surely matters involving the revenue where statutory remedies are available are not such matters....
21. In the case of State of U.P. v. Anil Kumar Ramesh Chandra Glass Works and Anr. (2005) 11 SCC 451, the Apex Court has held that-
...this Court dad repeatedly held that Article 226 should not be permitted to be invoked in order to challenge show cause notices unless accepting the fact in the show cause notices to be correct, either no offence is disclosed or the show cause notices are ex facie without jurisdiction.
22. In the case of L.K. Verma v. HMT Ltd. and Anr. , the Apex Court has held as under:
20. The High Court in exercise of its jurisdiction under Article 226 of the Constitution, in a given case although may not entertain a writ petition inter alia on the ground of availability of an alternative remedy, but the said rule cannot be said to be of universal application. Despite existence of an alternative remedy, a writ court may exercise its discretionary jurisdiction of judicial review inter alia in cases where the court or the tribunal lacks inherent jurisdiction or for enforcement of a fundamental right or if there has been a violation of a principle of natural justice or where vires of the act is in question. In the aforementioned circumstances, the alternative remedy has been held no to operate as a bar. See Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Ors. , Sanjana M. Wig v. Hindustan Petroleum Corporation Ltd. , State of H.P. v. Gujarat Ambuja Cement Ltd. and Anr. (2005) 6 SCC 499.
23. In the case of Mrs. Sanjana M. Wig v. Hindustan Petro Corporation Ltd. the Apex Court has held that:
16. ...However, there cannot be any doubt whatsoever that the question as to when such a discretionary jurisdiction is to be exercised or refused to be exercised by the High Court has to be determined having regard to the facts and circumstances of each case wherefor, no hard and fast rule can be laid down.
24. In the case of Star Paper Mills Ltd. v. State of U.P. and Ors. 2006 AIR SCW 5782, the Apex Court has held as follows:
5. The issues relating to entertaining writ petitions when alternative remedy is available, were examined by this Court in several cases and recently in State of Himachal Pradesh and Ors. v. Gujarat Ambuja Cement Ltd. and Anr. 2005 (6) SCC 499.
6. Except for a period when Article 226 was amended by the Constitution (42nd Amendment) Act, 1976, the power relating to alternative remedy has been considered to be a rule of self imposed limitation. It is essentially a rule of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy it is within the jurisdiction of discretion of the High Court to grant relief under Article 226 of the Constitution. At the same time, it cannot be lost sight of that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere if there is an adequate efficacious alternative remedy, if somebody approaches the High Court without availing the alternative remedy provided the High Court should ensure that he has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction.
7. Constitution Benches of this Court in K.S. Rashid and Sons v. Income Tax Investigation Commission and Ors. ; Sangram Singh v. Election Tribunal, Kotah and Ors. ; Union of India v. T.R. Varma ; State of U.P. and Ors. v. Mohammad Nooh AIR 1958 SC 86; and K.S. Venkataraman and Co. (P) Ltd. v. State of Madras , held that Article 226 of the Constitution confers on all the High Courts a very wide power in the matter of issuing writs. However, the remedy of writ if is an absolutely discretionary remedy and the High Court has always the discretion to refuse to grant any writ if it is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere. The Court, in extraordinary circumstances, may exercise the power if it comes to the conclusion that there has been a breach of principles of natural justice or procedure required for decision has not been adopted.
8. Another Constitution Bench of this Court in State of Madhya Pradesh and Anr. v. Bhailal Bhai etc. etc. held that the remedy provided in a writ jurisdiction is not intended to supersede completely the modes of obtaining relief by an action in a civil court or to deny defence legitimately open in such actions. The power to give relief under Article 226 of the Constitution is a discretionary power. Similar view has been reiterated, in N.T. Veluswami Thevar v. G. Raja Nainar and Ors. ; Municipal Council, Khurai and Anr. v. Kamal Kumar and Anr. ; Siliguri Municipality and Ors. v. Amalendu Das and Ors. ; S.T. Muthusami v. K. Natarajan and Ors. ; R.S.R.T.C. and Anr. v. Krishna Kant and Ors. ; Kerala State Electricity Board and Anr. v. Kurien E. Kalathil and Ors. ; A. Venkatasubbiah Naidu v. S. Chellappan and Ors. ; and L.L. Sudhakar Reddy and Ors. v. State of Andhra Pradesh and Ors. ; Shri Sant Sadguru Janardan Swami Moingiri Maharaj Sahakari Dugdha Utpadak Sanstha and Anr. v. State of Maharashtra and Ors. ; Pratap Singh and Anr. v. State of Haryana G.K.N. Driveshafts (India) Ltd. v. Income Tax Officer and Ors. 2003 (1) SCC 72.
9. In Harbans Lal Sahnia v. Indian Oil Corporation Ltd. , this Court held that the rule of exclusion of writ jurisdiction by availability of alternative remedy is a rule of discretion and not one of compulsion and the Court must consider the pros and cons of the case and then may interfere if it comes to the conclusion that the petitioner seeks enforcement of any of the fundamental rights; where there is failure of principles of natural justice or where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged.
10. In G. Veerappa Pillai v. Raman and Raman Ltd. ; Assistant Collector of Central Excise v. Dunlop India Ltd. ; Ramendra Kishore Biswas v. State of Tripura ; Shivgonda Anna Patil and Ors. v. State of Maharashtra and Ors. ; C.A. Abraham v. I.T.O. Kottayam and Ors. ; Titaghur Paper Mills Co. Ltd. v. State of Orissa and Anr. ; H.B. Gandhi v. Gopinath and Sons 1992 (Suppl.) 2 SCC 312; Whirlpool Corporation v. Registrar of Trade Marks and Ors. ; Tin Plate Co. of India Ltd. v. State of Bihar and Ors. ; Sheela Devi v. Jaspal Singh and Punjab National Bank v. O.C. Krishnan and Ors. , this Court held that where hierarchy of appeals is provided by the statute, party must exhaust the statutory remedies before resorting to writ jurisdiction.
11. If, as was noted in Ram and Shyam Co. v. State of Haryana and Ors. the appeal is from "Caeser to Caeser's wife" the existence of alternative remedy would be a mirage and an exercise in futility. There are two well recognized exceptions to the doctrine of exhaustion of statutory remedies. First is when the proceedings are taken before the forum under a provision of law which is ultra vires, it is open to a party aggrieved thereby to move the High Court for quashing the proceedings on the ground that they are incompetent without a party being obliged to wait until those proceedings run their full course. Secondly, the doctrine has no application when the impugned order has been made in violation of the principles of natural justice. We may add that where the proceedings itself are an abuse of process of law the High Court in an appropriate case can entertain a writ petition.
12. The above position was recently highlighted in U.P. State Spinning Co. Ltd. v. R.S. Pandey and Anr. .
25. From the aforesaid decisions the principle which emerges is that the alternative remedy would not be a bar where the vires of a provision of a statute is under challenge, orders complained of have been passed in gross violation of principles of natural justice, the orders passed is wholly without jurisdiction and where the proceedings are itself the abuse of process of law.
26. Applying the principles laid down in the aforesaid decisions to the facts of the present case, we find that the case in hand is not one of such cases. In the present case we find that the assessments for the three Assessment Years 1998-99 to 2000-01 were reopened some times during the year 2003 to 2005 (the exact date is not available but as the reassessment orders were passed on 30th March, 2005, this presumption has been drawn). The petitioner had participated in the reassessment proceedings. After the reassessment proceedings were finalised vide order dated 30th March, 2005, the petitioner had Challenged the orders by preferring appeals under Section 9 of the U.P. Act. The Appellate Authority had remanded the matter to the Assessing Authority who had passed the orders again on 21st September, 2006. The petitioner had again challenged the orders passed by the Assessing Authority in appeals preferred under Section 9 of the U.P. Act. The Joint Commissioner (Appeals) had dismissed he appeals vide order dated 26.3.2007. The petitioner had submitted to the jurisdiction of the authorities all along and cannot be permitted at this stage to bypass the statutory remedy of appeal available under Section 10 of the U.P. Act and instead to invoke the extraordinary it jurisdiction of this Court under Article 226 of the Constitution of India. So far as the Assessment Year 2004-05 is concerned the question whether stock transfer is inter-State sale or not has been examined by the Assessing Authority on the basis of evidence and material on record. It is not a pure question of law but a mixed question of fact and law. The principle laid down by the Apex Court in the case of Ashok Leyland Ltd. (supra) is not attracted in the present case as the claim made on the basis of form 'F' has not been accepted by the Assessing Officer. We are, therefore, of the considered opinion that all these questions can more appropriately be gone into by the authorities in appeal provided under the Statute. As the petitioner has equally efficacious and speedy alternative remedy available to it under Sections 9 and 10 of the U.P. Act, we decline to exercise our discretionary jurisdiction under Article 226 of the Constitution of India.
27. So far as the two cases, namely, Shriram Refrigeration Industries Ltd. (supra) and K.C.P. Ltd. (supra) are concerned, the Apex Court had stayed the recovery of the central sales tax pending adjudication of the matter in appeal. These orders appears to have been passed by the Apex Court in exercise of the power under Article 142 of the Constitution of India. The High Court has no power to pass such orders under Article 226 of the Constitution of India.
28. In view of the aforesaid discussions, the writ petition is dismissed on the ground of alternative remedy.