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2020 Supreme(Guj) 594
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Vikram Nath, J.B. Pardiwala, JJ.
IHI Corporation - Petitioner
Versus
State of Gujarat & 3 Others - Respondents
R/Special Civil Application No. 8116 of 2020
Decided On : 17-08-2020
For the Petitioner: Mr. Prakash Shah, Ld. Sr. Counsel with Mr. Dhaval Shah.
For the Respondent: Ms. Manisha Luvkumar Shah, Ld. Government Pleader with Mr. Dharmesh Devnani, Ld. AGP.
Point of Law:
Writ applicant should not be permitted to abandon that machinery and to invoke jurisdiction of High Court under Article 226 of Constitution, more particularly, when writ applicant has adequate remedy open him by an appeal to Joint Commissioner.
Headnote:
Constitution of India – Article 226 – GVAT Act, 2003 – Section 73 – Tax Assesment – Fine Imposed – By this writ application under Article 226 of Constitution of India, the writ applicant has prayed to issue a writ of Certiorari or a writ in nature of Certiorari calling for records pertaining to Petitioner's case and after going into legality and validity thereof forthwith quash and set aside Assessment Order passed by Respondent No.4 – To issue a writ of Mandamus or a writ in nature of Mandamus or any other appropriate writ, order or direction ordering and directing Respondents, their subordinates servants and agents to forthwith (i) withdraw and/or cancel Order passed by Respondent No.4 and (ii) refrain from taking any further proceedings or steps in furtherance of and/or in implementation of the Order passed by Respondent No.4 for recovery of amounts so confirmed pending hearing and final disposal of this Petition.
Facts of the Case:
Writ applicant is engaged in providing consulting engineer and construction services in respect of commercial or industrial building and civil structure – Writ applicant is, engaged in buying and selling of goods for its products in State of Gujarat –Writ applicant came to be awarded two contracts by following two project owners in State of Gujarat, India for engineering, procurement, construction and commissioning assistance for the Liquefied Natural Gas Storage Tanks – Assessing Officer treated and assessed both the contracts as the works contract – Writ applicant was served with a notice issued by respondent No.4 in Form 309 for imposition of penalty under Section 34(12) of GVAT Act – It appears from materials on record that respondent No.4, in course of assessment proceedings, issued notice for Auditing Assessment in Form No.302 and called for certain necessary information – Information as called for was furnished by the writ applicant over a period of time – Respondent No.4 passed impugned assessment order in Form 304 assessing total taxable turnover of writ applicant at Rs.2,89,99,95,224/- and raised demand of tax to tune of Rs.43,49,99,284/- along with interest to tune of Rs.26,05,21,888/- and also imposed penalty at Rs.18,35,95,411/-. – Being dissatisfied with impugned assessment order passed by respondent No.4, writ applicant is here before this Court with present writ application.
Findings of Court:
GVAT Act, 2003 provides complete machinery for the assessment/reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the authorities, in court’s opinion, writ applicant should not be permitted to abandon that machinery and to invoke jurisdiction of High Court under Article 226 of Constitution, more particularly, when writ applicant has adequate remedy open him by an appeal to Joint Commissioner – Court is convinced that it is not a case wherein court should entertain this writ application under Article 226 of Constitution of India despite there being an efficacious alternative remedy of filing an appeal – Court decline to entertain this writ application and relegate writ applicant to avail alternative remedy of filing an appeal under Section 73 of GVAT Act, 2003.
Result: Writ Application Rejected
JUDGMENT :
J.B. PARDIWALA, J.
1. By this writ application under Article 226 of the Constitution of India, the writ applicant, a Company incorporated under the Laws of Japan and having its Project Office located in India, has prayed for the following reliefs;
“(a) this Hon'ble Court be pleased to issue a writ of Certiorari or a writ in the nature of Certiorari under Article 226 and 227 of the Constitution of India, calling for the records pertaining to the Petitioner's case and after going into the legality and validity thereof forthwith quash and set aside the Assessment Order dated 23.03.2020 passed by the Respondent No.4;
(b) this Hon'ble Court be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ, order or direction under Article 226 and 227 of the Constitution of India, ordering and directing the Respondents, their subordinates servants and agents to forthwith (i) withdraw and/or cancel Order dated 23.03.2020 passed by the Respondent No.4 and (ii) refrain from taking any further proceedings or steps in furtherance of and/or in implementation of the Order dated 23.03.2020 passed by the Respondent No.4 for recovery of the amounts so confirmed pending the hearing and final disposal of this Petition,
(c) That pending hearing and final disposal of the above Petition, by an interim order and injunction of this Hon'ble Court, this Hon'ble Court be pleased to (i) stay the operation and effect of the impugned Orders dated 23.03.2020 and (ii) restrain the Respondents, their subordinate servants and agents from taking any further proceedings or steps in furtherance of and/or in implementation of the Orders dated 23.03.2020 for recovery of the amount;
(d) for ad-interim reliefs in terms of prayer (c ) above;
(e) for costs of the Petition,
(f) Such other and further order or orders as may be deemed just and proper in the facts and circumstances of the present case may kindly be granted.”
2. The facts, giving rise to this litigation, may be summarized as under:
2.1 The writ applicant is engaged in providing the consulting engineer and construction services in respect of commercial or industrial building and civil structure. In the course of providing such services, the writ applicant is, inter alia, engaged in the buying and selling of goods for its products in the State of Gujarat.
2.2 The writ applicant is registered as a dealer under the GVAT Act and the Central Sales Tax Act.
2.3 The writ applicant came to be awarded two contracts by the following two project owners in the State of Gujarat, India for engineering, procurement, construction and commissioning assistance for the Liquefied Natural Gas Storage Tanks.
(A) GPSC LNG Limited (“GLL”-the SEZ Co-Developer) in a Special Economic Zone (“SEZ”) at Mundra in November 2013; and
(B) Petronet LNG Limited (“PIL”) at Dahej in December, 2013.
2.4 The Assessing Officer treated and assessed both the contracts as the works contract.
2.5 Broadly, the activities undertaken by the writ applicant under the aforesaid two contracts are divided into following three sub-heads;
(i) On-shore supply of services
(ii) Buying and selling of goods during the execution of the EPC contract for construction of tank
(iii) Erection/construction services provided.
2.6 The writ applicant was served with a notice issued by the respondent No.4 herein, i.e., the Deputy Commissioner of State Tax dated 6th April, 2018 in Form 309 for imposition of penalty under Section 34(12) of the GVAT Act. It appears from the materials on record that the respondent No.4, in the course of the assessment proceedings, issued notice for Auditing Assessment in the Form No.302 and called for certain necessary information. The information as called for was furnished by the writ applicant over a period of time.
2.7 Ultimately, the respondent No.4 passed the impugned assessment order in Form 304 (under the GVAT Act) dated 23rd March, 2020 assessing the total taxable turnover of the writ applicant at Rs.2,89,99,9
