Summary
A mosquito repellent manufacturer challenged suo motu revisional orders under Section 34 of the Haryana Value Added Tax Act, 2003 taxing its products at 10 per cent instead of 4 per cent, although the Haryana Tax Tribunal had held such repellents to be insecticides taxable at the lower rate; the High Court dismissed the writ petition for non-exhaustion of the statutory appeal. The Supreme Court allowed the appeal: an alternative remedy goes to entertainability, not maintainability, and a pure question of the revisional authority's jurisdiction should have been decided; the first proviso to Section 34 barred revision of an issue settled by the Tribunal, whose decision bound the Revisional Authority, and the assessment orders suffered no illegality or impropriety. The Court decided the issue itself and invalidated the revisional orders.
Issues
- Whether a High Court may dismiss a writ petition as not maintainable merely because the petitioner has not pursued the statutory appeal, where the petition raises a pure question of the revisional authority's jurisdiction.
- Whether the Revisional Authority could exercise suo motu power under Section 34 of the Haryana Value Added Tax Act, 2003 to revise assessments on an issue already settled by the Haryana Tax Tribunal.
Provisions considered
- Article 226, Constitution of IndiaThe power to issue writs is plenary and the rule requiring exhaustion of statutory remedies is one of policy and discretion, not of law; following Mohd. Nooh, Whirlpool and Commercial Steel, a petition raising a jurisdictional or purely legal question deserves consideration on merits, and 'entertainability' must not be confused with 'maintainability'. (¶¶ 4, 5, 6, 7, 8, 9, 10, 11, 12)
- Section 34 (as it stood before 20.03.2009) and Section 2(b), Haryana Value Added Tax Act, 2003Suo motu revision lies only against an order suffering from illegality or impropriety prejudicial to the State, and the first proviso bars revision of an issue settled by an appellate authority, which includes the Tribunal; the Tribunal's unreversed order of 21.11.2001 holding mosquito repellents to be insecticides bound the Assessing and Revisional Authorities alike. (¶¶ 26, 27, 33, 34, 36, 37, 38)
Held
- The High Court's reliance on Titagarh Paper Mills (1975), concerning an arbitration clause, was misplaced, and even Titaghur Paper Mills (1983) is distinguishable because here the very jurisdiction of the Revisional Authority was questioned; after fourteen years remand would not serve justice, so the Court decided the jurisdictional issue itself. (¶¶ 10, 11, 12, 13)
- Sonic Electrochem turned on a specific Gujarat entry for mosquito repellents absent from the Haryana statute, as the Tribunal had found; the Assessing Authority was bound to follow the Tribunal, no contrary decision of any Tribunal or High Court was shown, and branding orders that correctly followed a superior tribunal as illegal or improper reflected a lack of understanding of suo motu revisional power and a breach of judicial discipline; the revisional orders, not the assessments, suffered patent illegality. (¶¶ 29, 30, 31, 32, 33, 34, 35, 38)
Result
Appeal allowed with parties bearing their own costs; Punjab and Haryana High Court order dated 12.10.2009 in CWP No. 9191 of 2009 set aside; revisional orders dated 02.03.2009 for Assessment Years 2003-04 and 2004-05 invalidated; interim order dated 18.01.2010 made absolute.