Carborandum Universal LTD. vs. Deputy Commissioner

Petitioner claims that it had stock transfer in and stock transfer out of both raw materials as well as finished products to its Thrissur unit. According to the petitioner, in Ext.P2 impugned order under section 25(1) of the Act, the assessing authority regarded the stock transfer out from the unit at Thrissur to the other units of the petitioner in Ernakulam itself as local sales solely on the ground that these different units of petitioner had different TIN numbers. Petitioner contends that the aforesaid reasoning of the assessing officer is a basic fallacy which will strip the assessment orders of any valid reason. It is also pointed out that the delivery notes used to the stock transfers were all available in the system and the assessing officer was bound to verify the same. It is also argued that for the assessment year 2013-14, when a similar reasoning was adopted by the assessing officer, the appellate authority interfered and held that the different units of the petitioner are not separate units but one and the same.

The learned counsel for the petitioner Adv.A.Kumar, assisted by Adv.G.Mini, contends that the impugned order was issued without considering the delivery notes and even without directing the assessee to produce the delivery notes. According to the learned counsel, the failure of respondent to direct the petitioner to produce the delivery notes has rendered the order of assessment as one passed in violation of the principles of natural justice thereby enabling the petitioner to invoke the remedy of Article 226 of the Constitution of India.

Adv.Thushara James, learned Senior Government Pleader on the other hand contended that the question raised for consideration are all disputes on facts, requiring an appreciation of facts and this Court in the exercise of its juri iction under Article 226 of the Constitution of India cannot consider or appreciate the same.

Having regard to the contentions raised, it is noticed that the issue as to whether the transactions that have been taxed are of stock transfer or are local sales and whether the delivery notes were available for consideration of the assessing officer are all matters to be raised and considered by an appreciation of the facts involved in the case. Even if one of the reasonings of the assessing officer is found to be wrong or incorrect that is not a ground to invoke the remedy under Article 226 of the Constitution. Such a ground, if available, is to be agitated by invoking the statutory remedy. Further, the assessment order deals not only with the issue relating to the alleged stock transfer between different units of petitioner but have also considered various other contentious issues. As has been held repeatedly by this Court as well as the Supreme Court, the remedy under Article 226 can be invoked only in exceptional circumstances.

In the recent judgment of the Supreme Court in Assistant Commissioner of State Tax and Others v. M/s.Commercial Steel Ltd. (C.A. No.5121 of 2021) it was held that the existence of an alternate remedy though not a bar to the maintainability of a writ petition under Article 226 of the Constitution of India, a writ petition must be entertained only in exceptional circumstances when there is a breach of fundamental rights or violation of the principles of natural justice or if the order is passed in excess of juri iction or when there is a challenge to the constitutionality of the statute.

On a consideration of the arguments of the learned counsel for the petitioner as well as the facts of the case, I am of the opinion that no such circumstances exist to invoke the extraordinary juri iction of this Court under Article 226 of the Constitution of India.