M/S.Sri Balaji Traders, Rep.By Its Proprietor- vs. The Commercial Tax Officer-I

Held

The Court allowed the writ appeals, setting aside the order of the High Court that dismissed the writ petitions. The Court reasoned that while it is true the appellant did not file objections to the pre-revision notice, it was a fit case to grant liberty to approach the assessing officer. The Court acknowledged that in cases of gross error, arbitrariness, or error apparent on the face of it, the High Court can correct such injustices under Article 226. The Court directed that the assessment orders dated March 31, 2016, be treated as show cause notices/pre-revision notices. The appellant was granted fifteen days from the receipt of the judgment to submit objections. Upon receipt, the respondent was directed to provide a personal hearing and re-do the assessment in accordance with law. No coercive action for recovery of VAT tax and penalty was to be initiated until the assessment was completed.

Facts

M/s. Sri Balaji Traders (the appellant) filed writ petitions challenging assessment orders dated March 31, 2016, passed by the Commercial Tax Officer-1, Rajapalayam (the respondent) for the assessment years 2009-10 and 2011-12 under the Tamil Nadu Value Added Tax Act, 2006. The writ petitions were dismissed by the High Court on August 8, 2019, on the ground that the appellant had not availed the statutory appellate remedy. The appellant then filed these writ appeals against the High Court's dismissal order. The appellant had not filed objections to a pre-revision notice dated December 1, 2015.

Key Issues

1. Whether the High Court, in its writ jurisdiction under Article 226 of the Constitution of India, was justified in dismissing the writ petitions solely on the ground of non-availability of statutory remedy, despite alleged gross errors in the assessment orders? Petitioner's arguments: The appellant contended that the assessment orders suffered from gross errors and arbitrariness, warranting interference under Article 226. They relied on decisions like Althaf Shoes (P) Ltd. Vs. Assistant Commissioner (CT), Jinsasan Distributors Vs. Commercial Tax Officer, and Sri Vinayaga Agencies Vs. Assistant Commissioner (CT), to argue that if the selling dealer collected tax but failed to remit it, this should not be a ground to revoke the input tax credit availed by the purchasing dealer. Revenue's arguments: The respondent's primary contention, as reflected in the High Court's initial dismissal, was that the appellant had failed to exhaust the statutory appellate remedy available under the Act.