Vfive Homes PVT. LTD. vs. State Tax Officer (Int.)

Facts

The petitioner, VFIVE HOMES PVT. LTD., filed a writ petition challenging penalty orders (Exts.P4, P4(a), and P4(b)) dated January 31, 2020, for assessment years 2014-15, 2015-16, and 2016-17. These orders were a result of an inspection and subsequent notices. The petitioner was called upon to supply documents, which were provided. However, the revenue found them unsatisfactory, leading to a notice under Section 67 dated December 30, 2019. The petitioner replied to this notice on January 17, 2020, and January 29, 2020. The petitioner contended that the orders were appealable under the erstwhile Kerala Value Added Tax Act, 2003, but invoked the High Court's extraordinary jurisdiction due to alleged non-compliance with principles of natural justice and jurisdictional error.

Held

The Court held that while an alternative remedy is available, a litigant cannot be prevented from invoking the extraordinary jurisdiction of the High Court under Article 226 if the impugned order, prima facie, suffers from a jurisdictional error or irrationality, or a non-compliance with the principles of natural justice. However, upon perusal of Ext.P4, the Court found that the concerned officer had indeed noticed the compliance with the principles of natural justice. This included affording an opportunity to the petitioner, granting adjournments, noting the petitioner's appearance, and considering the reply submitted. Since the procedure of natural justice was followed, the Court reiterated that it could not entertain such a writ petition for the sake of repetition. The petitioner was advised to pursue the alternative remedy of filing an appeal if so advised. The writ petition was disposed of with these observations.

Key Issues

1. Whether the penalty orders, issued under the erstwhile Kerala Value Added Tax Act, 2003, suffer from a jurisdictional error or non-compliance with the principles of natural justice, thereby warranting invocation of the High Court's extraordinary jurisdiction under Article 226 of the Constitution of India, despite an alternative appellate remedy being available? Petitioner's arguments: The petitioner argued that the penalty orders were issued without adhering to the principles of natural justice and were therefore prima facie erroneous and suffered from jurisdictional error. This justified invoking the High Court's extraordinary jurisdiction under Article 226, even though an alternative remedy of appeal under the KVAT Act, 2003, existed. Respondent's arguments: The State Tax Officer (respondent) contended that there was no case of non-compliance with the principles of natural justice. The respondent pointed to page 39 of Ext.P4, which reflected that the petitioner was given an effective opportunity to be heard, and the contents of the petitioner's reply were considered before passing the detailed order. Therefore, the writ petition should be dismissed.