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When a dispute is raised over the jurisdiction of the local sales tax authorities on sales made from a State, it is for the petitioner to exhaust the remedies available under the local VAT law and not seek the extraordinary remedy of filing writ before the High Court.
In Zunaid Enterprises v State of Chhattisgarh, the petitioner's plea in his writ petition before the High Court was that the sales made by him were inter-state in nature and hence no local VAT was payable. The High Court disposed of the writ petition by saying that in the face of a clause to this effect in the tender documents, whosoever sold tendu leaves on the basis of a contract awarded by the state government must to pay local VAT, period. The Supreme Court said that such a summary disposal of the matter was not warranted and pointed out that in fact the writ petition should not have been admitted in the first place. The facts were not before the High Court and in fact the local VAT authorities were in a better position to adjudicate upon the issue through the assessment and appellate mechanisms provided for in the local VAT law.
The High Court order was thus quashed and the matter remanded to the local sales tax authorities in Chhattisgarh with directions to dispose of the issue expeditiously within two months. Exhaustion of statutory remedies has been the refrain of the Apex Court while expressing itself against indiscriminate and ready use of the writ weapon.
(The author is a New Delhi based Chartered Accountant)
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