Larsen and Toubro Limited vs State of Haryana and Others

Ajay Kumar Mittal, J.—The assessee-petitioner has approached this court through the present writ petition under articles 226 /227 of the Constitution of India challenging assessment order dated March 31, 2011, annexure P3, for the assessment year 2007-08. Brief facts as narrated in the petition may be noticed. The petitioner-company is engaged in execution of works contracts for construction of buildings, roads, dams, water projects factories and railway electrification jobs in various States including the State of Haryana. It is registered under the provisions of the Haryana Value Added Tax Act, 2003 (in short, "the HVAT Act") and the Central Sales Tax Act, 1956 (hereinafter referred to as "the CST Act"). During the assessment year 2007-08, the petitioner effected transit sale in favour of M/s. Power Grid Corporation in respect of a turnover of Rs. 30,05,62,103 and claimed exemption on such sale in terms of section 6(2) of the CST Act. The Assessing Authority vide impugned order dated March 31, 2011, annexure P3, rejected the returns filed by the petitioner and disallowed exemption u/s 6(2) of the CST Act. Aggrieved by the order, the petitioner filed an application dated June 16, 2011, annexure P4, u/s 19 of the HVAT Act for rectification of the assessment order on the ground of errors apparent on record. The said application was also dismissed by the assessing authority on June 20, 2011. Hence this petition.

The learned counsel for the petitioner submitted that the assessment was in violation of judgments of the apex court in Tata Iron and Steel Co., Limited, Bombay Vs. S.R. Sarkar and Others, , G.A. Galiakotwala and Co. (P) Ltd., Madras Vs. The State of Madras, and State of Tamil Nadu Vs. Dharangadhara Trading Co. Ltd., ). It was, thus, submitted that in such circumstances, the assessing authority had exceeded its jurisdiction in framing the assessment for the assessment year in question.

In the reply, a preliminary objection has been taken that the order is appealable as the first appeal lies to the Joint Excise and Taxation Commissioner (A), Rohtak and thereafter, second appeal is maintainable before the Value Added Tax Tribunal and if there is any substantial question of law involved, appeal is maintainable before this court as well. In the circumstances, it has been prayed that the petitioner deserves to be relegated to the alternative remedy of appeal.

After giving thoughtful consideration to respective submissions made by learned counsel for the parties, we sustain the preliminary objection raised by the learned State counsel.

The following are the broad principles when a writ petition can be entertained without insisting for adopting statutory remedies:

(i) where the writ petition seeks enforcement of any of the fundamental rights;

(ii) where there is failure of principles of natural justice; or

(iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged.

We are not inclined to entertain this petition against the assessment order as it does not fulfill any of the broad outlines noticed hereinabove. The apex court in Titaghur Paper Mills Co. Ltd. and Another Vs. State of Orissa and Others, observed as under (page 321 in 53 STC):

Under the scheme of the Act, there is a hierarchy of authorities before which the petitioners can get adequate redress against the wrongful acts complained of. The petitioners have the right to prefer an appeal before the prescribed authority under sub-section (1) of section 23 of the Act. If the petitioners are dissatisfied with the decision in the appeal, they can prefer a further appeal to the Tribunal under subsection (3) of section 23 of the Act, and then ask for a case to be stated upon a question of law for the opinion of the High Court u/s 24 of the Act. The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under article 226 of the Constitution. It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes, J. in Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 CB (NS) 336 at page 356 in the following passage:

There are three classes of cases in which a liability may be established founded upon statute........But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it.........The remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to.

The rule laid down in this passage was approved by the House of Lords in Neville v. London Express Newspaper Ltd. [1919] AC 368 and has been reaffirmed by the Privy Council in AIR 1940 105 (Privy Council)

In view of the above, we refrain from interfering with the assessment order and dispose of the writ petition by relegating the petitioner to the appellate authority to challenge the assessment order before it. It is, however observed that in case the appeal is filed within 15 days from today, then application for condonation of delay shall be considered by the appellate authority sympathetically.