ABB India Ltd. vs The Deputy Commissioner of Commercial Taxes

Aravind Kumar, J.—Petitioner is seeking for quashing of reassessment order dated 13.02.2015, Annexure-M, and consequential demand notice, Annexure-N, issued by respondent.

I have heard the arguments of Sri. T. Suryanarayana, learned counsel appearing for petitioner and Sri. Vedamurthy, learned HCGP for respondent, who has been put on advance notice.

Grievance of the petitioner is that issue involved in impugned order was the subject matter of consideration by first appellate authority in respect of very same petitioner for previous assessment years 2010-11, 2011-12 and 2012-13 and as such, a request for grant of adjournment for thirty (30) days was sought for before respondent, which was not considered and by rejecting said prayer, seven (7) days time was granted to file reply and reply having been filed by petitioner, has not been considered in proper perspective by respondent authority before passing assessment orders. He would also contend that respondent - authority ought to have awaited orders of the first appellate authority, which was ceased of the matter in respect of very same assessee wherein very same issue was also involved before appellate authority and respondent, in haste, has passed the impugned order and personal hearing sought for, has also not been granted and as such, he seeks for quashing of the impugned order.

Per contra, learned HCGP would support the impugned order and would contend that present writ petition is liable to be dismissed on the ground of petitioner having not availed alternate remedy of appeal available to it under the Act and as such, petition is liable to be dismissed.

Sri. T. Suryanarayana, learned counsel appearing for petitioner in reply would contend that availability of an alternate remedy, is not inviolable rule for this Court to exercise power and jurisdiction under Article 226 of Constitution of India and in support of his submission, he has relied upon judgment of this Court in the case of Bangalore Turf Club Limited v. Union of India and Ors. passed in W.P. Nos. 6565-6568/2013 and 6651-6652/2013 c/w 18696-18697/2013 and 6674/2013, dated 26.09.2014.

Having heard the learned Advocates appearing for parties and on perusal of records, it would indicate that impugned orders have been passed by respondent under Section 39(1), 72(2) and 36 of the Karnataka Value Added Tax Act, 2003, for the period April'' 2013 to March'' 2014 vide Annexure-M. Undisputedly, said orders are appealable under Section 62(1) of the KVAT Act.

Perusal of impugned order would indicate that personal hearing was provided to petitioner/assessee by respondent on 12.02.2015 as per endorsement dated 10.02.2015, Annexure-K. However, assessee did not appear for hearing and a communication was forwarded by petitioner on 12.02.2015 addressed to respondent vide Annexure-L indicating thereunder that concerned official of petitioner - company, who is incharge of tax matters, is busy with finalization of cost audit and as such, petitioner pleaded its inability to appear for personal hearing on 12.02.2015 and made a request for hearing date being fixed to 22.02.2015. Said prayer for adjournment came to be turned down granted by respondent and on the basis of available records and reply which had been filed on 09.02.2015, Annexure-J, pursuant to notice dated 23.01.2015, Annexure-C, it came to be examined and impugned orders dated 13.02.2015, Annexure-M, came to be passed followed by raising a demand as per Annexure-N.

Hon''ble Apex Court in the case of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and Others, while examining the maintainability of writ petition against a show cause notice, has held that availability of alternate remedy would not operate as a bar to invoke extraordinary jurisdiction atleast in three contingencies namely, where petitioner seeks to enforce fundamental rights; or where there is violation of principles of natural justice; or where action of respondent or authorities being without jurisdiction or vires of an Act, is under challenge.

It has been held by Hon''ble Apex Court in the above referred judgment as under:

"14. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for "any other purpose".

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 atleast 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. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field."

In the case of State of H.P. and Others Vs. Gujarat Ambuja Cement Ltd. and Another, , Hon''ble Apex Court has held as under:

"17. Stand of the respondents on the other issues was to the effect that the submissions of the appellants do not carry any weight and have been made overlooking the factual and legal position. The submissions completely overlook the essence of the notifications and are based on misreading them.

We shall first deal with the plea regarding alternative remedy as raised by the appellant-State. 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 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 should ensure that he has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction.

Constitution Benches of this Court in K.S. Rashid and Son Vs. The Income Tax Investigation Commission etc., , Sangram Singh Vs. Election Tribunal, Kotah, Bhurey Lal Baya, , Union of India (UOI) Vs. T.R. Varma, , The State of Uttar Pradesh Vs. Mohammad Nooh, and K.S. Venkataraman and Co. Vs. 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 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 of 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.

Another Constitution Bench of this Court in State of Madhya Pradesh Vs. Bhailal Bhai and Others, , 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 xxx in GKN Driveshafts (India) Ltd. Vs. Income Tax Officer and Others, .

In Harbanslal Sahnia and Another Vs. Indian Oil Corpn. Ltd. and Others, , 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.

In Veerappa Pillai Vs. Raman and Raman Ltd. and Others, ; xxx Punjab National Bank Vs. O.C. Krishnan and Others, , this Court held that where hierarchy of appeals is provided by the statute, party must exhaust the statutory remedies before resorting to writ jurisdiction."

Keeping the above principles laid down by the Hon''ble Apex Court in mind, when facts on hand are examined, it would clearly indicate that petitioner is assailing the impugned orders under one of the exceptions carved out in Whirlpool Corporation''s case namely, violation of principles of natural justice. In this background, when impugned orders are perused, it would not detain this Court too long to brush aside the contention raised by Sri. T. Suryanarayana, learned counsel for petitioner for simple reason that in the instant case opportunity was extended as could be seen from personal hearing notice dated 10.02.2015-Annexure-K, issued to petitioner and further time which was sought for by petitioner and requesting the matter to be heard on a particular date, was considered and rejected by respondent-authority. In that view of the matter, it cannot be construed that no opportunity was extended to petitioner or there has been violation of principles of natural justice. Endorsement dated 10.02.2015, Annexure-K, would clearly indicate that opportunity of personal hearing had been provided to the petitioner by fixing the date of hearing as 12.02.2015 at 11.00 a.m. in that view of the matter, contention raised with regard to there being violation of principles of natural justice, cannot be accepted and it stands rejected.

One another factor, which requires to be noticed by this Court, which is intriguing in the instant case is the fact that in respect of same petitioner namely same assessee for earlier period i.e., 2010-11, 2011-12, 2012-13, on same issue as is involved and adjudicated under impugned order, Annexure-M was being adjudicated by the appellate authority in the appeals filed before the Joint Commissioner of Commercial Taxes (6), Shanthinagar, Bengaluru and decision was awaited. The least that could have been done by original authority was to await for the decision of appellate authority for some reasonable time and then it could have proceeded with the matter. For reasons best known, it did not chose to adopt this course. As on date petitioner herein has succeeded before the appellate authority and appeals filed by it has been allowed in favour of petitioner/appellant vide order dated 19.02.2015, Annexure-P. Said order would also indicate that first appellate authority had called for parawise remarks from respondent therein namely, authority which has passed the impugned order, Annexure-M, in this writ petition and as such, respondent herein cannot feign ignorance of pendency of appeal. In all fairness, it could have awaited the decision of appellate authority for some reasonable time.

As already noticed hereinabove respondent herein without adopting said course, has proceeded to adjudicate the matter on merits and has passed the impugned order dated 13.02.2015-Annexure-M. In that view of the matter, it would suffice and meet the ends of justice if petitioner is reserved liberty to challenge impugned order dated 13.02.2015, Annexure-M, before first appellate authority and if first appellate authority is directed to dispose of said appeal within a period of 4 weeks from the date of filing of appeal. It is also made clear that before appellate authority petitioner shall deposit 30% of demand raised as per Annexure-N on such appeal being presented with proof of 30% of amount determined under impugned order dated 13.02.2015 amounts having been deposited, appellate authority shall not insist on deposit of remaining 70% of amount, but shall proceed to adjudicate the appeal on merits and in accordance with law.

With these observations, writ petitions stands disposed of.

Ordered accordingly.