J.B.PARDIWALA,J. - (1.) By this writ application under Article 226 of the Constitution of India, the writ applicant, a Company incorporated under the Laws of Japan and having its Project Office located in India, has prayed for the following reliefs; "(a) this Hon'ble Court be pleased to issue a writ of Certiorari or a writ in the nature of Certiorari under Article 226 and 227 of the Constitution of India, calling for the records pertaining to the Petitioner's case and after going into the legality and validity thereof forthwith quash and set aside the Assessment Order dated 23.03.2020 passed by the Respondent No.4; (b) this Hon'ble Court be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ, order or direction under Article 226 and 227 of the Constitution of India, ordering and directing the Respondents, their subordinates servants and agents to forthwith (i) withdraw and/or cancel Order dated 23.03.2020 passed by the Respondent No.4 and (ii) refrain from taking any further proceedings or steps in furtherance of and/or in implementation of the Order dated 23.03.2020 passed by the Respondent No.4 for recovery of the amounts so confirmed pending the hearing and final disposal of this Petition, (c ) That pending hearing and final disposal of the above Petition, by an interim order and injunction of this Hon'ble Court, this Hon'ble Court be pleased to (i) stay the operation and effect of the impugned Orders dated 23.03.2020 and (ii) restrain the Respondents, their subordinate servants and agents from taking any further proceedings or steps in furtherance of and/or in implementation of the Orders dated 23.03.2020 for recovery of the amount; (d) for ad-interim reliefs in terms of prayer (c ) above; (e) for costs of the Petition, (f) Such other and further order or orders as may be deemed just and proper in the facts and circumstances of the present case may kindly be granted."
(2.) The facts, giving rise to this litigation, may be summarized as under; 2.1 The writ applicant is engaged in providing the consulting engineer and construction services in respect of commercial or industrial building and civil structure. In the course of providing such services, the writ applicant is, inter alia, engaged in the buying and selling of goods for its products in the State of Gujarat. 2.2 The writ applicant is registered as a dealer under the GVAT Act and the Central Sales Tax Act . 2.3 The writ applicant came to be awarded two contracts by the following two project owners in the State of Gujarat, India for engineering, procurement, construction and commissioning assistance for the Liquefied Natural Gas Storage Tanks. (A) GPSC LNG Limited ("GLL"-the SEZ Co-Developer) in a Special Economic Zone ("SEZ") at Mundra in November 2013; and (B) Petronet LNG Limited ("PIL") at Dahej in December, 2013. 2.4 The Assessing Officer treated and assessed both the contracts as the works contract. 2.5 Broadly, the activities undertaken by the writ applicant under the aforesaid two contracts are divided into following three sub-heads; (i) On-shore supply of services (ii) Buying and selling of goods during the execution of the EPC contract for construction of tank (iii) Erection/construction services provided. 2.6 The writ applicant was served with a notice issued by the respondent No.4 herein, i.e, the Deputy Commissioner of State Tax dated 6th April, 2018 in Form 309 for imposition of penalty under Section 34(12) of the GVAT Act. It appears from the materials on record that the respondent No.4, in the course of the assessment proceedings, issued notice for Auditing Assessment in the Form No.302 and called for certain necessary information. The information as called for was furnished by the writ applicant over a period of time. 2.7 Ultimately, the respondent No.4 passed the impugned assessment order in Form 304 (under the GVAT Act) dated 23rd March, 2020 assessing the total taxable turnover of the writ applicant at Rs.2,89,99,95,224/- and raised demand of tax to the tune of Rs.43,49,99,284/- along with interest to the tune of Rs.26,05,21,888/- and also imposed penalty at Rs.18,35,95,411/- 2.8 Being dissatisfied with the impugned assessment order passed by the respondent No.4, referred to above, the writ applicant is here before this Court with the present writ application.
(3.) Submissions on behalf of the writ applicant; 3.1 Mr. Prakash Shah, the learned senior counsel assisted by Mr. Dhaval Shah, the learned counsel appearing for the writ applicant vehemently submitted that the impugned order of assessment has been passed in gross violation of the principles of natural justice inasmuch as the Assessing Officer declined to even look into the judgments of the Supreme Court and this High Court on various issues. Mr. Shah would submit that he is very much conscious of the fact that the impugned assessment order is appealable as a statutory appeal has been provided under the GVAT Act before the First Appellate Authority. However, as the impugned assessment order is in gross violation of the principles of natural justice, this writ application, under Article 226 of the Constitution of India, may be entertained. 3.2 Mr. Shah, the learned senior counsel, in the course of the hearing of this matter, brought to our notice the findings recorded by the respondent No.4 in the impugned assessment order. According to Mr. Shah, in the impugned order of assessment, the following has been noted; "5.20The petitioner has not submitted CA certified Trial Balance or Balance Sheet of Gujarat. 5.21 The petitioner failed to submit the proof like endorsement on invoices, dispatch of goods etc. used within SEZ. The said sales have been treated as local sales liable to @15%. 5.22 The petitioner has provided job-works services of Rs.2,47,43,62,483/- and paid applicable service tax. However, due to non-submission of proof of labour work (services) by virtue of provisions of Rule 18(AA) of GVAT Rules, 30% will be considered as labour (services) component and balance 70% as materials. 5.23 The petitioner had made local sales of Rs.53,00,88,982/- on which VAT is paid @ 4% and additional tax @ 1%. However, due to non-submission of sales invoice, the same has to be assessed @ 15%. 5.24 The VAT credit of Rs.14,24,481.00 is not available to the Petitioner as purchases are made from Vendors with cancelled VAT registration." 3.3 Mr. Shah, the learned senior counsel vehemently submitted that the assessment of goods used in the execution of work for the co-developer of the special economic zone as local sale is absolutely contrary to the decision of this High Court in the case of State of Gujarat vs. Shandong Tiejun Electric Power Engineering Company Ltd ., 2015 (11) TMI 1496-Gujarat High Court. Mr. Shah would submit that in the said decision of this High Court, it has been held that the condition of Rule 42 (2A) of the GVAT Rules is not mandatory. Mr. Shah would submit that the benefit of the exemption as claimed under Section 5A of the GVAT Act could not have been declined on the ground that the writ applicant failed to get the invoice endorsed from the SEZ authorities. Mr. Shah would submit that voluminous record in the form of various documents were placed before the respondent No.4. However, none of those documents have been looked into or referred to in the impugned assessment order. 3.4 Mr. Shah would submit that the impugned assessment order is not tenable in law to the extent it seeks to levy VAT on the value of the services provided. Mr. Shah further submitted that taxing the construction items under the residuary entry at the highest rate is contrary to the judgment of the Supreme Court in the case of State of Karnataka vs. Durga Projects , 2018 (10) GSTL 513 (SC). 3.5 Mr. Shah would submit that non-consideration of the submissions canvassed on behalf of the writ applicant not only demonstrates non-application of mind but also resulted in a serious miscarriage of justice. Mr. Shah, in the last, submitted that as held by this High Court in the case of U.M. Cables vs. Union of India , reported in 2017 347 ELT 78 (Guj.) and Larsen and Toubro Ltd. vs. Union of India , 2017 (52) STR 457 (Guj.) , despite the existence of alternate remedy in the form of a statutory appeal, a writ application can be entertained if the impugned order passed by the authority is wholly without jurisdiction or against the principles of natural justice or contrary to the statutory provisions of law. In such circumstances, referred to above, Mr. Shah prays that there being merit in his writ application, the same may be allowed and the impugned assessment order may be quashed and set aside. Mr. Shah prays that the matter deserves to be remitted to the respondent No.4 for fresh hearing with appropriate directions to take into consideration the documentary evidence and the case laws. ;