M/S Quippo Construction Equipment Ltd. Vs. State of Rajasthan and ors. - Court Judgment

Excerpt:
[dr. mukundakam sharma; anil r. dave, jj.] - rajasthan sales tax act, 1994 - section 29(7) -- aggrieved by the aforesaid order dated 29.03.2005 of the deputy commissioner [appeals], bikaner the appellant herein preferred an appeal before the rajasthan taxation board, ajmer, which was heard and disposed of by the taxation board by allowing the same vide its order dated 13.05.2008. having held thus, the taxation board allowed the appeal and order dated 29.03.2005 passed by the deputy commissioner [appeals], bikaner was set aside and order passed by the tax assessing officer was restored. the assessee-respondent thereafter filed a rectification/amendment application purportedly under section 37 of the act of 1994, which was decided by the rajasthan taxation board, ajmer by passing an order.....1. by way of the instant writ petition, the petitioner has sought the following relief:(i) issue an appropriate writ, order or direction in the nature thereof quashing and setting aside the proclamation dated 22-02-2011 issued by the respondent no.2;(ii) that the petitioner has a prima facie strong case on merits as would be evident from the averments made in the writ petition.(iii)that an interim order of injunction may be passed restraining the respondents, their servants and agents, from giving any effect to and/or in pursuance of proclamation dated 22-02-2011, and all proceedings thereunder and/or in pursuance thereof till the disposal of this writ application;2. having considered the submissions made at the bar and carefully perused the relevant material on record, it is noticed that.....

Judgment:
1. By way of the instant writ petition, the petitioner has sought the following relief:

(i) issue an appropriate writ, order or direction in the nature thereof quashing and setting aside the Proclamation dated 22-02-2011 issued by the Respondent No.2;

(ii) that the petitioner has a prima facie strong case on merits as would be evident from the averments made in the writ petition.

(iii)that an interim order of injunction may be passed restraining the respondents, their servants and agents, from giving any effect to and/or in pursuance of Proclamation dated 22-02-2011, and all proceedings thereunder and/or in pursuance thereof till the disposal of this writ application;

2. Having considered the submissions made at the bar and carefully perused the relevant material on record, it is noticed that the petitioner is a Company incorporated under the Companies Act, 1956 entailed in the business of providing high value multipurpose, specialized and general infrastructure equipment on rental for specific periods. The petitioner had commenced business in the State of Rajasthan in the financial year 2003-04 and set up an Equipment Yard at Neemrana, Tehsil Behror, District Alwar, Rajasthan. The petitioner in view of the incentives granted by the State of Rajasthan vide Notification dated 4th February, 2003 undertook the project of establishing a hub of infrastructure equipment at Neemrana in the State of Rajasthan. Respondent No.2 raised a demand of Rs.37,20,18,875/- comprising of additional tax, interest and penalty.

3. Respondent No.2, the Assistant Commissioner, Commercial Taxes Shahjahanpur, District Alwar is alleged to have issued a Proclamation of Sale dated 22nd February, 2011 proposing to auction Neemrana Yard of the petitioner which includes land & building of Plot No.SP2-6(c) at Industrial Area-Neemrana, Tehsil Behror (Alwar).

4. The petitioner has impugned the said Proclamation order and implored to quash and set aside the same. Further imploring that the respondent be restrained from giving any effect to the Proclamation dated 22nd February, 2011 as also other proceedings undertaken thereunder.

5. During arguments it emerged that the petitioner filed an appeal against the demand raised by respondent No.2 before the Deputy Commissioner (Appeals) under Section 82 of the Value Added Tax Act, 2003. The appeal stood decided and dismissed by the Appellate Authority. Being aggrieved with the order of the Appellate Authority, the petitioner further filed the second appeal under Section 83 of the Value Added Tax Act 2003 before the Tax Board where the stay petition has been pending and fixed for hearing on 29th March, 2011.

6. E-converso, learned counsel for the respondents vehemently opposed and contended that the petition was not maintainable under Article 226 of the Constitution as the appeal is subjudice before the Tax Board and the stay application is already fixed for hearing on 29th March, 2011 the relief which the petitioner is going to get before the Tax Board cannot be had under this writ petition under Article 226 of the Constitution, hence the writ petition being not maintainable, deserves to be dismissed.

7. At the very outset, it is relevant to record that in plethora of judgments, the Hon'ble Apex Court has reiterated the well settled principle of law that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person.

8. In the case of United Bank of India Versus Satyawati Tondon and others reported in 2010 (8) SCC 110, the Hon'ble Apex Court has held thus:

42.There is another reason why the impugned order should be set aside. If respondent No.1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1).

9. The Hon'ble Apex Court further deprecated the practice of High Courts grating stay on the recovery of revenue in the following terms:

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.

10. Further the Hon'ble Apex Court cautioned the High Court in following words :

46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters.

Emphasis supplied

11. In the latest judgment pronounced by the Hon'ble Supreme Court (Kanhaiya Lal Sachdev and others Versus State of Maharashtra and others : (2011) 2 SCC 782), not only the settled principle was upheld but was further strengthened as the Hon'ble Apex Court dismissed the appeals with costs quantified at Rs. 20,000/-.

12. Adverting to the facts of the instant case, it is found that the second appeal has already been pending before the Tax Board against the order passed by the First Appellate Court-Deputy Commissioner(Appeals), Jaipur wherein the stay petition has been pending for hearing and the same has been fixed on 29th March, 2011. Before the petitioner could get any order from the Tax Board and get the remedy available to be exhausted , he in between filed the writ petition under Article 226/227 of the Constitution of India. It has consistently been held by the Hon'ble Apex Court that the petitioner cannot be permitted to invoke the extraordinary jurisdiction under Article 226 of the Constitution when the alternative efficacious statutory remedy is already available to the aggrieved person. In view of above afore-stated pronouncement of the Hon'ble Apex Court, the writ petition, to my firm view, is not at all maintainable and deserves to be dismissed in limine.

13. For the reasons afore-stated, the writ petition being bereft of any substance/merit stands dismissed.