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2015 Supreme(J&K) 370
IN THE HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR
Ali Mohd. Magrey, J.
Medicare Diagnostic Imaging Centre and Ors. – Appellant
Vs.
State of J&K and Ors. – Respondent
OWP No. 912/2008 and CMP No. 1806/2008
Decided On : 19-05-2015
For the Appellant :A. Haqani, Advocate
For the Respondents:T.H. Khawja, Advocate
The main legal point established in the judgment is that the availability of an alternative remedy under the GST Act precluded the maintainability of the writ petition under Article 226 of the Constitution.
Headnote:
Entry Tax - Challenge to order under Jammu and Kashmir Entry Tax on Goods Act, 2000 - Section 4(2) - Summary of Acts and Sections: Jammu and Kashmir Entry Tax on Goods Act, 2000 - Section 4, Section 6, Jammu and Kashmir General Sales Tax Act, 1962 - Section 11, Section 11-A - The court discussed the provisions of the Entry Tax Act, burden of proof, and the applicability of provisions of the Jammu and Kashmir General Sales Tax Act, 1962 to the proceedings under the Entry Tax Act. The court emphasized the availability of alternative remedy under the GST Act and the need for the petitioners to exhaust the same before seeking relief under Article 226 of the Constitution.
Fact of the Case:
The petition challenged the order passed by the Assessing Authority under Section 4(2) of Jammu and Kashmir Entry Tax on Goods Act, 2000, and the seizure memo of the goods seized. The petitioners refused to pay entry tax on the purchase of medical equipment, and the goods were seized. The respondents objected to the maintainability of the writ petition, stating that the petitioners had an alternative remedy of filing an appeal under the GST Act.
Finding of the Court:
The court found that the petition was not maintainable as the petitioners had an effective alternative remedy available to them under the GST Act, and no exceptional circumstances existed to warrant the exercise of the extraordinary jurisdiction under Article 226 of the Constitution. The petition was dismissed, and the interim direction of stay was vacated. The dismissal of the petition did not preclude the petitioners from challenging the impugned order before the Appellate Authority.
Issues: The crucial issue was whether the writ petition challenging the order under the Entry Tax Act was maintainable, considering the availability of an alternative remedy under the GST Act.
Ratio Decidendi: The court held that the petition was not maintainable as the petitioners had an effective alternative remedy available to them under the GST Act, and no exceptional circumstances existed to warrant the exercise of the extraordinary jurisdiction under Article 226 of the Constitution.
Final Decision: The petition was held to be not maintainable and was dismissed, along with the connected CMP. The interim direction of stay, if any, was vacated. The dismissal of the petition did not preclude the petitioners from challenging the impugned order before the Appellate Authority.
Ali Mohd. Magrey, J.
1. This writ petition challenges the order dated 15.12.2008 passed by respondent No. 3, the Assessing Authority, Commercial Taxes Officer, Circle (1), Srinagar, under Section 4 clause (2) of Jammu and Kashmir Entry Tax on Goods Act, 2000, and the seizure memo dated 17.11.2008 of the goods seized. The petitioners set up a diagnostic centre at Karan Nagar, Srinagar, and installed connected equipments therein. They also purchased Acuson S. 2000 Doppler System worth Rs. 65,00,000 from Seimens Ltd., Mumbai. Respondent No. 4, Deputy Commissioner Taxes, Check Post, Lakhanpur, demanded entry tax thereon under the provisions of Section 4(2) of J&K Entry Tax on Goods Act, 2000 (for short, Entry Tax Act) @ 12.5%. Since the petitioner refused to pay entry tax, the goods were seized. Relying on an earlier decision dated 29.05.2008, passed by the J&K Sales Tax Appellate Tribunal (hereinafter referred to as the Appellate Tribunal) in an appeal, titled M/s. Medicare Diagnostic Imaging Centre v. Dy. Commissioner, Commercial Taxes, filed by the petitioners in relation to their earlier consignment, they filed an application before the Appellate Tribunal seeking a direction to the concerned respondent not to charge any entry tax from them. The Appellate Tribunal referred the application with a copy of the aforesaid decision to respondent No. 4.
2. Simultaneously, it appears, the petitioners made an application before the Commissioner, Commercial Taxes, respondent No. 2 who, vide his order dated 08.12.2008, withdrew seizure case from respondent No. 4 and referred it to the Commercial Taxes Officer, Circle (I), Srinagar, respondent No. 3 herein, for disposal in accordance with law. Respondent No. 3, holding that diagnostic centres and hospitals cannot be treated as manufacturing units, vide the impugned order dated 15.12.2008, levied entry tax @ 12.5% on the cost of the goods of the petitioners. The petitioners have challenged the aforesaid order together with the seizure memo in this petition on various grounds taken in the writ petition.
3. The respondents have filed their objections. Apart from objecting to the maintainability of this writ petition, the respondents have, inter alia, stated that the petitioner-dealer is registered with the Industries Department as a Small Scale Services and Business Enterprise and there is no manufacturing activity. The petitioners' unit is purely a diagnostic centre rendering service to his customers. In the objections, it is also stated that perusal of the records revealed that the petitioner dealer has not shown any kind of sales, nor is there any remission claim whatsoever. It is stated that Small Scale Industrial Units are governed by SRO 91 of March, 2006 and that the principal characteristics of SRO 91 are: (i) the price adjustment scheme; and (ii) the tax remission claim. It is averred that both these relevant characteristics are absent in the instant case. Therefore, the claim of the petitioners of being an Industrial Unit is refuted. It is also stated that SRO 428 is not applicable to the petitioner. As regards the order dated 29.05.2008 passed by the Appellate Tribunal, the respondents have stated that an application under Section 75 of the J&K VAT Act stands already filed before the Tribunal seeking reference of the case to the High Court on several questions mentioned in paragraph 2 of the objections under the heading 'parawise reply'.
4. I have heard learned counsel for the parties on the admission of this petition and considered the matter.
5. The crucial question that falls for determination is whether in view of the provisions of the Entry Tax Act and the facts and circumstances of the case, this petition would be maintainable before this Court at this stage? Let the relevant provisions of the Entry Tax Act be noticed.
6. The Entry Tax Act has been enacted by the State Legislature to provide for levy of entry tax on goods in the State of Jammu and Kashmir. Section 2(b) th
