2026-VIL-185-CAL
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VAT High Court Cases

Andaman and Nicobar Islands Value Added Tax Regulation, 2017 - Maintainability of Writ Petition – Availability of Alternative Statutory Remedy – Petitioners challenged notices of assessment of tax, interest, and penalties issued under Andaman and Nicobar Islands VAT Regulation, 2017 - Respondents raised a preliminary objection regarding maintainability, citing the availability of an alternative remedy of appeal to the Appellate Tribunal - The petitioners argued that the Tribunal was not functional at the time of filing and that the notices were without jurisdiction due to being time-barred - Whether the High Court should entertain writ petitions under Article 226 when a statutory appellate forum exists and has become functional during the pendency of the proceedings - HELD - The High Court’s jurisdiction under Article 226 is discretionary and governed by rules of self-imposed restraint, particularly in fiscal matters involving the recovery of public dues. While an alternative remedy is not an absolute bar, the Court should be slow to intervene when a specialized Tribunal is available. Although the Appellate Tribunal was not functional when some petitions were initially filed, it was designated and made operational via a notification dated August 19, 2025. Tax disputes, which often involve complex factual inquiries, are more effectively adjudicated by the statutory Tribunal - Furthermore, by filing objections under Section 74 and participating in hearings before the Commissioner, the petitioners elected a statutory path and waived their right to challenge the initial notices through a writ after receiving an unfavorable decision. The records of writ petitions filed before the Tribunal became functional are transferred to the Appellate Tribunal, while petitions filed thereafter are dismissed with liberty to pursue statutory appeals - the writ petitions are disposed of - Limitation as a Jurisdictional Bar – Mixed Question of Fact and Law – Determination of Tax Period – The petitioners contended that the assessment notices for financial years 2017-18, 2018-19, and 2019-20 were issued beyond the four-year limitation period prescribed under Section 34 of the 2017 Regulation, thereby rendering the proceedings void for want of jurisdiction - HELD - Limitation is generally a mixed question of fact and law. In this instance, the parties were in dispute as to whether returns had been duly filed and the exact dates of such filings, with the petitioners failing to provide copies of the returns to the Court. Since the foundational facts for determining the limitation period were not admitted, the issue did not emerge as a pure jurisdictional error. Such disputes requiring factual verification regarding the filing of returns and the applicability of grace periods are best suited for adjudication by the Appellate Tribunal rather than the writ court - The Court declined to decide the limitation issue on merits, relegating it to the Appellate Tribunal - Principles of Natural Justice – Post-Decisional Hearing – Compliance in Fiscal Statutes – The petitioners alleged that the assessment notices were vitiated by a breach of natural justice because they were issued without a prior audit or an opportunity for a pre-decisional hearing - Whether the absence of a pre-decisional hearing before the issuance of a tax demand notice violates the principles of natural justice when a subsequent statutory hearing is provided - HELD - The principles of natural justice are not rigid and do not always require a hearing at the pre-decisional stage, especially in taxing statutes. A post-decisional hearing that allows for a full review of the original order on merits satisfies the requirement of fairness. Section 74 of the 2017 Regulation provides for a personal hearing upon request when an assessee files an objection. As the petitioners had already availed themselves of this opportunity and participated in a reasoned hearing before the Joint Commissioner, no prejudice was demonstrated. The statutory scheme of issuing a notice followed by an objection and hearing process constitutes sufficient compliance with the rule of audi alteram partem - The challenge based on violation of natural justice is rejected, and the parties were relegated to the statutory appellate forum.
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