M/s. Raj Auto Wheels Pvt. Ltd. vs Commercial Tax Officer, Ajmer and Others

Alok Sharma

Aggrieved of an assessment order dated 19-9- 2011 u/s 33 of the Rajasthan Value Added Tax Act, 2003 (herein after `2003 Act'') levying VAT allegedly earlier short paid by the petitioner company, the petitioner company filed an appeal before the Dy. Commissioner (Appeals) Commercial Tax Department, Ajmer, who vide order dated 4-11-2011 partially stayed the demand against the petitioner company to an extent of Rs. 56,12,987/- but required the petitioner to deposit the remainder demand in a sum of Rs. 1,75,63,135/- during the pendency of the appeal. Aggrieved of the interim order dated 4-11-2011, passed by the Deputy Commissioner (Appeals) the petitioner preferred a further appeal u/s 83 of the 2003 Act before the Rajasthan Tax Board, Ajmer, which vide order dated 25-1-2012, even while staying the remainder demand of Rs. 1,75,63,135/- made it conditional on the petitioner company furnishing a bank guarantee for the said amount and simultaneously required the Appellate Authority to dispose of the appeal against the order dated 19-9- 2011 passed by the Assessing Authority within a period of three months.

Counsel for respondent submits that in terms of Rule 77 of the Rajasthan Value Added Tax Rules, 2006 (herein after `2006 Rules'') every dealer or person who is required under any of the provisions of the Act or the Rules to furnish a security, can furnish it in any of the forms detailed in the said rule, which inter alia includes executing a bond in Form VAT-64, with necessary modifications where necessary, with two sureties acceptable to the officer or authority concerned. Counsel submits that the Tax Board while staying the demand against the petitioner vide its order dated 25-1-2012 directed the petitioner to furnish a bank guarantee of the amount of Rs. 1,75,63,135/-, as security and in doing so overlooked the provisions of Rule 77 of 2006 Rules. He submits that the anachronism of the order dated 25-1-2012 is further evident from the fact that while in respect of a sum of Rs. 56,12,987/- the appellate authority allowed the petitioner to furnish a security by way of bond in Form VAT-64 with two sureties acceptable to the officer concerned, yet the Tax Board has mandated that against the remainder amount of Rs. 1,75,63,135/(which was stayed by the Board) the petitioner should furnish security by way of bank guarantee. Counsel for the petitioner as per instruction of his client further submits that the appeal pending before the Appellate Authority is to be heard and dispose of on 26-3-2012 itself and he would be ready to argue the appeal finally on that day itself.

Counsel for respondent however submits that in view of the failure of the petitioner to furnish a bank guarantee in terms of the order dated 25-1-2012, passed by the Tax Board, the bank accounts of the petitioner firm have already been attached on 9-32012. He further submits that the petitioner has filed the present writ petition against the order dated 25-12012 passed by the Tax Board which order is a final order, and the petitioner should have instead filed a revision petition in terms of 2003 Act, instead and as such in view of an alternative remedy being available to the petitioner under the governing statute, the writ petition should be dismissed.

Heard Learned Counsel for the parties, and perused the material available on record.

At the outset, I must deal with the argument based on alternative remedy. It is trite that the doctrine of alternative remedy is not a foreclosure of the jurisdiction of this Court under Article 226 of the Constitution of India, and is only a self imposed limitation. Parameters for invoking self imposed limitation have been well enunciated by the courts. Thus, the doctrine of alternative remedy does not obstruct this Court from doing substantial justice in the facts of given case. In the context of submission of Learned Counsel for the parties, and the relief prayed for including a direction that the Appellate Authority should be directed to dispose of the appeal pending before it against the order of assessment dated 19-92011 expeditiously, I am of the view that alternative remedy as may be available to the petitioner should not obstruct adjudication of writ petition.

Rule 77 of 2006 Rules makes it clear that every dealer or person who is required to furnish a security, shall furnish it in cash in accordance with rule 39; or by depositing with the officer concerned, savings certificates issued by the Government of India of a face value not less than the amount of security required to be furnished duly endorsed in favour of the officer concerned; or by way of bank guarantee; or otherwise by executing a bond in Form VAT-64 with two sureties acceptable to the officer or authority concerned. The Dy. Commissioner (Appeals) Commercial Tax Department, Ajmer at the first instance stayed the recovery of an amount of Rs. 56,12,987/- with the direction to the petitioner to furnish bond in Form VAT-64 with two sureties acceptable to the concerned officer to the extent of Rs. 56,12,987/-. In respect of the same assessee and in respect to the same order of assessment the Tax Board Ajmer in respect of remainder amount Rs. 1,75,63,135/- even while staying the recovery has made it conditional on the assessee submitting security by way of bank guarantee. No reason has been given by the Tax Board Ajmer for overlooking the statutory option to the petitioner to furnish security by way of bond in the Form VAT-64 with two sureties. The order dated 25-1-2012 passed by the Tax Board is thus vitiated by non application of mind and hence arbitrary.

However, apart from above, as submitted counsel for the petitioner the whole controversy would stand resolved on decision of the appeal against the order of assessment dated 19-9-2011 pending before the Dy. Commissioner (Appeals), Ajmer and which is fixed for final adjudication on 26-3-2012. The submission of the counsel for the petitioner appears to be earnest and with the possibility of resolving the dispute finally pushing the issue of an interim order into irrelevance. In fact the Tax Board in its impugned order dated 25- 1-2012 has already directed that the appeal pending before the Dy. Commissioner (Appeals) Ajmer against the order dated 19-9-2011 be disposed of in three months.

In this view of the matter, I would direct that the appeal pending before the Dy. Commissioner (Appeals) Commercial Tax Department, Ajmer filed by the petitioner against the order dated 19-9-2011 be disposed of on 26-3-2012 itself. Meanwhile the attachment of bank accounts of the petitioner shall continue. However, the respondents shall not take any further coercive action against the petitioner for recovery of amount in question subject to the petitioner company furnishing a security for a sum of Rs. 1,75,63,135/- by way of submitting a bond in VAT Form 64 along with two sureties acceptable to the authorised officer as per the provisions of Rule 77 of VAT Rules 2006. The writ petition stands disposed of accordingly. Stay application also stands disposed of.