Calcutta HC Refuses to Quash Andaman VAT Notices, Holds Limitation & Natural Justice issues Not Grounds to Bypass Statutory Remedy [Read Order]
Calcutta HC refused to quash Andaman VAT assessment and penalty notices, holding that limitation and natural justice pleas cannot be used to skip the statutory appeal remedy.
The Calcutta High Court, Circuit Bench at Port Blair, has refused to quash assessment and penalty notices issued under Sections 32 and 33 of the Andaman and Nicobar Islands Value Added Tax Regulation, 2017, and has held that pleas relating to limitation and alleged breach of natural justice are not sufficient grounds to bypass the statutory remedy of appeal provided under the Regulation.
Seashell and other petitioners had challenged notices and the orders passed under Section 74 rejecting their statutory objections. They argued that the notices were time-barred under Section 34 and that they were not given proper hearing before the notices were issued. They also said the Appellate Tribunal was not functional when they filed the writ petitions
The Administration argued that an effective alternative remedy is available under Section 76, and the Tribunal became functional from 19 August 2025. They also argued that limitation in this case involves disputed facts and the petitioners already participated in the objection process.
Justice Arijit Banerjee observed that limitation is usually a mixed question of fact and law, and since the filing of returns was disputed, the Court cannot treat it as a clear jurisdiction issue at this stage. The court also observed that Section 74 gives post-decisional hearing, which is sufficient in such tax matters, and no real prejudice was shown.
In respect of writ petitions filed before 19 August 2025, when the Tribunal was not yet functional, the court directed that the records be transferred to the Appellate Tribunal and clarified that pre-deposit under Section 76 would not be insisted upon in those cases.
As regards petitions filed on or after 19 August 2025, the court dismissed them on the ground of availability of an alternative statutory remedy, while granting liberty to approach the Tribunal, which would consider any issue of limitation in accordance with law
The court clarified that it had not examined the merits of the assessments and directed that the Appellate Tribunal decide the matters independently and in accordance with law. All the writ petitions were disposed of on these terms.
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