M/s.Lakshmi Oil Company v. The Deputy Commissioner (CT), No.II Division, Vijayawada & Anr.

THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU WRIT PETITION No.31369 of 2011 ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) The petitioner is a dealer – at the relevant time – under the Andhra Pradesh General Sales Tax Act, 1957 (the GST Act, for brevity). After coming into force of the Andhra Pradesh Value Added Tax Act, 2005 (the VAT Act, for brevity), for the year 2005-2006, the petitioner filed claim of Sales Tax Relief (STR) in Form VAT 115 under Section 13(2) of the VAT Act. The second respondent partially allowed the claim vide orders in Form VAT 126, dated

02.09.2005. The STR is to be utilized in six monthly instalments commencing from August, 2005. In view of this, in his VAT return, Form VAT 200, the petitioner claimed the tax credit carrying forward the amounts relating to 2005 to 2006 (which he claimed towards STR). The second respondent allowed it vide order dated

20.12.2008 upholding the claim of cash refund of Rs.11,89,431/-. The first respondent issued a show cause notice dated

27.01.2011 proposing to set aside the assessment dated 10.12.2008 of the second respondent allowing cash refund. The petitioner submitted objections on 14.02.2011. After considering the same, by detailed order, the first respondent passed the impugned order dated 23.02.2011 under Section 13(2) of the VAT Act. There is no dispute that against order passed by the first respondent, the petitioner is provided with an effective, alternative and efficacious statutory remedy of preferring an appeal under Section 31 of the VAT Act. He did not do so. The counsel, however, contends that the petitioner was denied adequate opportunity and that the impugned order is beyond the period of limitation of four years provided under Section 37 of the VAT Act. This Court after giving anxious consideration to both the submissions is not able to accept the plea. A Division Bench of this Court, to which one of us is a Member (VVSR,J), in Flemingo (DFS) Private Limited v Commissioner of Customs [1] considered whether the plea of violation of natural justice is an inflexible exemption rule to escape the principle of exhaustion of alternative remedy.

After referring to English decisions in Banin v Mackinlay (Inspector of [2] Taxes) and R v Brentford General Commissioners Ex p. Chan [3] , this Court held as under. Even in cases where there is demonstrable breach of natural justice, as of right a petition for judicial review would not lie. The aggrieved can appear before a specialist agency, be it a departmental authority or a quasi-judicial tribunal – and agitate in matters like taxes, social security, distribution of benefits to poor where in which elaborate background facts need to be justice can always be evaluated. The considered even by the appellate authority/tribunal. issue of natural Insofar as question of limitation is concerned, except making a feeble submission, no effort is made to substantiate the submission. We way also refer to United Bank of India v Satyawati [4] Tondon , the Supreme Court reiterated the importance of High Court exercising restraint in ignoring the rule of exhaustion of alternative remedy.

It is apt to quote the following observations (para 43 of SCC). Unfortunately, the high Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person.

Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. (emphasis supplied) In the result, for the above reasons, the writ petition as well the W.P.M.P.No.38930 of 2011 stand dismissed. There shall be no order as to costs. _______________ (V.V.S.RAO, J) _____________________________________

(SAMUDRALA GOVINDARAJULU, J)

12.04.2012 Pln [1] 2011 (2) ALD 245 (DB) : 2011 (5) ALT 256 [2] [3] [4] (1985) 1 All E.R. 842 : (1985) STC 144 (1986) STC 65 (2010) 8 SCC 110