2021-TIOL-NEWS-050, Dated: Monday, March 01, 2021

2021-TIOL-502-HC-MAD-CT

Mahindra And Mahindra Ltd Vs JCCT

Commercial Tax - Appeal is directed against the Single Judge order dated 19.11.2020 which dismissed the petitions challenging the orders 30.1.2014 and 16.9.2014 levying penalty respectively for the assessment years 2008- 09 and 2013-14 as well as the consequential garnishee orders - Single Judge did not go into the merits of the matter, but dismissed all the three writ petitions on the ground that the Court could not exercise its jurisdiction under Article 226 of The Constitution of India - Single Judge placed reliance on the Supreme Court decision in the case of ACCT, LTU, Kakinada Vs. Glaxo Smith Kline Consumer Health Care Ltd.- 2020-TIOL-93-SC-VAT wherein it was emphatically laid down that the High Court, in exercise of power under Article 226 of The Constitution of India, ought not to have entertained the writ petition assailing the order passed by the Statutory Authority, which was not appealed against within the maximum period of limitation before the Appellate Authority concerned.

Held:

+ Decision of the Supreme Court in the said decision (supra) has not held that a writ petition under Article 226 of the Constitution of India is an absolute bar.

+ It is seen that the Supreme Court, after referring to the decision of the Constitution Bench in the case of Thansingh Nathmal, held that although the power of the High Court under Article 226 of the Constitution is very wide, the Court must exercise self imposed restraint and not entertain the writ petition. Further, in paragraph 15, the Supreme Court observed that the High Court may accede to such a challenge and can also non suit the petitioner on the ground that alternative efficacious remedy is available and that be invoked by the writ petitioner. In addition, in paragraph 19, the Supreme Court took note of the fact that when the High Court refuses to exercise the jurisdiction under Article 226 of The Constitution of India, it would be necessary for the Court to record that there was no case of violation of the principles of natural justice or non compliance of statutory requirements in any manner.

+ There are certain broad parameters, within which, the Court has to exercise its jurisdiction under Article 226 of The Constitution of India, which read as hereunder :

(i) if there is unfairness in the action of the Statutory Authority;

(ii) if there is unreasonableness in the action of the Statutory Authority;

(iii) if perversity writs large in the action taken by the Authority;

(iv) if the Authority lacks jurisdiction to decide the issue and

(v) if there has been violation of the principles of natural justice, the Court will step in and exercise its jurisdiction under Article 226 of The Constitution of India.

+ In the light of the Constitution Bench decision of the Supreme Court in the case of Mafatlal Industries Ltd. - 2002-TIOL-54-SC-CX-CB , Bench has no hesitation to hold that the observation of the Single Judge to the effect that there is absolute bar for entertaining a writ petition does not reflect the correct legal position. Hence, Bench is inclined to interfere with the observation made in the impugned order.

+ It is worthwhile to point out that the order levying penalty for the assessment year 2008-09 is dated 30.1.2014. Though the dealer's objections were received on 16.10.2012, the Assessing Officer did not afford any opportunity of personal hearing to the appellant though more than one year had lapsed. This, in our considered view, is a serious issue because the dealer has taken a specific stand that the software is being used in the manufacture. Furthermore, the dealer's case is that in their registration certificate issued under the CST Act, as mentioned in Clause 9 in the annexure, computer software is also one of the items mentioned in their certificate of registration. Had an opportunity of hearing been granted to the dealer, especially when the Assessing Officer took more than one year to complete the assessment, the dealer would have explained the same. That apart, the proposal to levy penalty was made by an officer, who was not the officer, who passed the order dated 30.1.2014, as there has been a transfer of the officer and the new officer took over charge. This is also one more aspect, which should have weighed in the mind of the Assessing Officer to afford an opportunity of personal hearing because the officer, who completed the assessment, was not the officer, who made the proposal to levy penalty.

+ It is also seen that even in respect of the assessment year 2013-14, no opportunity of personal hearing was granted to the dealer .

+ Bench is of the considered view that the case in hand having fallen under one of the exceptional circumstances as mentioned above warranting exercise of jurisdiction under Article 226 of The Constitution of India and as the defect, which has occurred by levying penalty without affording an opportunity of personal hearing would go to the root of the very levy itself, Bench is inclined to interfere with the impugned order, the assessment orders and remand the matters to the Assessing Officer for a fresh consideration.

+ It is inevitable that (i) the orders both dated (i) 30.1.2014 and (ii) 16.9.2014 as well as the consequential garnishee orders passed therein both dated 07.10.2015 are also required to be set aside, otherwise, the connected and consequential proceedings would be lingering before various Authorities.

- Appeal allowed: MADRAS HIGH COURT

2021-TIOL-498-HC-MAD-VAT

Emrald Resilient Tyre Manufacturers Pvt Ltd Vs Assistant Commissioner

Whether notice that does not grant personal hearing before AO and considers objections, does not satisfy principles of natural justice as per Act – YES: HC

- Writ allowed : MADRAS HIGH COURT

2021-TIOL-486-HC-AHM-VAT

Swastik Overseas Corporation Vs State of Gujarat

Whether payment of pre-deposit as directed by authorities is mandatory for an application/appeal to be saved from dismissal as per Act – YES: HC.

- Assessees' writ application dismissed: GUJARAT HIGH COURT