Sleek Textile Industries Ltd. vs Deputy Commercial Tax Officer and Another

Vinod K. Sharma, J.—The petitioner has approached this court, by invoking the writ jurisdiction of this court, to challenge the order passed by the Special Committee, u/s 16D of the Tamil Nadu General Sales Tax Act, 1959, (hereinafter referred to as, "the Act") upholding the order passed by the Deputy Commercial Tax Officer. In the application filed u/s 16D, it was admitted by the petitioner, that the impugned order was appealable, but the appeal was not being filed to avoid payment of 25 per cent of tax.

The learned Special Committee dismissed the application holding that the points raised by the petitioner on merit, could not be gone into in exercise of powers u/s 16D of the Act, as prima facie, there was no violation of statutory provision. The petitioner is dealing in fabric, which fell under Part A of the Third Schedule, which stood exempted from purview of section 3(3) of the Act. The question whether on facts, a case was one falling u/s 3(3) of the Act, could be decided in appeal as it is not a jurisdictional point or the one barred under the Act.

The Special Committee also held, that there was no violation of principles of natural justice, which could entitle to the petitioner, to invoke the jurisdiction of the Special Committee, u/s 16D of the Act.

The learned counsel for the petitioner challenged the impugned order, by contending that the Special Committee, committed error, in misinterpreting the provision of section 3(3) of the Act, under which the consumable "furnace oil", the subject-matter of dispute was used for manufacture and therefore, taxable at three per cent against form XVII. The order of the Deputy Commercial Tax Officer, disallowing its purchase against form XVII, was thus, in violation of statutory provision of section 3(3) of the Act.

It is also the contention of the learned counsel for the petitioner that the penalty could not be levied.

On consideration, I find no force in the contentions raised by the learned counsel for the petitioner.

There is no violation of statute in imposing penalty or in the findings recorded, holding that provisions of section 3(3) of the Act do not apply to fabric. The remedy with the petitioner was to file a statutory appeal, which the petitioner deliberately failed to file, and chose to move an application, u/s 16D, by-passing the ordinary statutory remedy, to avoid payment of 25 per cent of the tax imposed.

The jurisdiction of the Special Committee u/s 16D is a limited jurisdiction, to check patent illegality regarding bar under statute or violation of natural justice. The Special Committee is not a substitute of appellate authority to decide the order on merit.

The Legislature, while enacting section 16D was careful in giving limited jurisdiction to the Special Committee, to interfere with the orders, passed in violation of principles of natural justice, or the one barred by the provisions of the statute, thus to check violation of statute.

The provision, therefore, has to be strictly construed, as assessee cannot by-pass the statutory remedy under the Act, wherein the appellate authority can go into the validity of the impugned order to see, whether it is in order or not.

Once, by the provisions of the Act, a particular category is taken out of the purview of section 3(3) of the Act, then the question, as to "whether the petitioner was entitled to a benefit of purchase, by issuing form XVII for use of consumable" is a question of fact, to be decided and jurisdictional point, which could be looked into by the Special Committee u/s 16D.

The order passed by the Special Committee, therefore, is in consonance with the jurisdiction vested in it, under the statute, which does not call for any interference by this court, specially when there is no violation of principle of natural justice, as the petitioner was given full opportunity before passing the order of assessment.

No merit. "Dismissed". Consequently, connected miscellaneous petition is closed. No costs.