GULATI, J. - (1.) M /s. Indian Hume Pipe Company Ltd., Aish Bagh, Lucknow, hereinafter referred to as the petitioner, has filed this petition under article 226 of the Constitution, praying for a writ of certiorari against the assessment orders passed against the petitioner under the U.P. Sales Tax Act for the assessment years 1962-63 and 1965-66, both dated 22nd January, 1970.
(2.) THE petitioner is engaged in the manufacture and supply of pipes which are marketed under the trade name "hume pipes". The basic raw material used in the manufacture of pipes is cement and steel fabrication. The bulk of the pipes produced by the petitioner is reinforced cement concrete pipes but it also manufactures high quality and high pressure pipes like prestressed concrete pipes for water supply, R.C.C. pressure pipes, penstock pipes used in hydro-electric projects, etc. The reinforced cement concrete pipes are used mainly for drainage and sewage disposal. The petitioner has stated that bulk of the stock of pipes is supplied to various Government departments both Central and State such as Irrigation, Public Works, Local Self-Government Engineering, Railways and Ministry of Petroleum etc., and the main use to which they are put is for culverts and other irrigation purposes as outlet for channels etc. In hydro-electric works, they are used for carrying water from reservoir to generator turbine, from dam site or source of supply to treatment works, for distribution of water, for use for underground electric cables etc. They are also used as tunnels and for transmitting petroleum from one place to another. In respect of the assessment year 1961-62, a dispute arose between the petitioner and the sales tax department as to the rate of tax on the sale of pipes manufactured by the petitioner. The Sales Tax Officer treated them as sanitary fittings and assessed their turnover at 7 per cent. while the assessee contended that the pipes manufactured and supplied by it were not sanitary fittings, but were unclassified goods taxable at the rate specified under the charging section 3 of the Act. On appeal, the assessee's contention was accepted and it was held that the pipes manufactured and supplied by the petitioner were not sanitary fittings but were unclassified items. This finding of the appellate authority was confirmed by the Judge (Revisions) before whom the matter went in revision at the instance of the Commissioner of Sales Tax. For the assessment years 1962-63, 1963-64 and 1964-65 the Sales Tax Officer once again taxed the turnover of pipes at 7 per cent. with the result that the petitioner had to file appeal against the assessment orders for those three years also. The assessment order for the year 1962-63 was set aside by the Assistant Commissioner (Judicial) who remanded the case to the Sales Tax Officer for fresh assessment. The remaining appeals relating to the assessment years 1963-64 and 1964-65 are still pending before the Assistant Commissioner (Judicial), Sales Tax, Lucknow. The petitioner has further alleged that during the remand proceedings before the Sales Tax Officer in respect of the assessment year 1962-63, the petitioner filed an affidavit dated 25th April, 1968, along with the opinion of different dealers in sanitary wares and sanitary fittings of different places and States to show that in the commercial and business world, these pipes were not recognised or treated as items of sanitary wares or sanitary fittings. The petitioner also filed copies of the judgment of the Assistant Commissioner (Judicial) and the Judge (Revisions), Sales Tax, relating to the assessment year 1961-62. Besides, the petitioner filed a certificate of the Chief Engineer, Local Self-Government Engineering Department, to show that pipes supplied to his department were not used as sanitary fittings. The petitioner also filed before the Sales Tax Officer a letter dated 11th May, 1961, written by the Commissioner of Sales Tax to the effect that the cement pipes not meant for sanitation or electrical fittings, would continue to be liable to tax at the rate of 2 per cent. The petitioner also pointed out to the assessing authority that almost all the dealings of the petitioner were either with the State or Central Government departments and the petitioner had realised tax from the various Government departments at the rate of 2 per cent. The petitioner further brought to the notice of the Sales Tax Officer the fact that the Director-General of Supplies and Disposals, New Delhi, while publishing the Central Government rates in the official gazette relating to concrete pipes mentioned the rate of sales tax in Uttar Pradesh at 2 per cent. alone and even in the contract rates published by the U.P. Government for supply of these pipes in the official gazette, the State Government also mentioned the rate of sales tax at 2 per cent. It has been averred by the petitioner that in spite of all this material placed before the Sales Tax Officer, the latter framed a fresh assessment for the assessment year 1962-63 on 22nd January, 1970, treating the pipes again as sanitary fittings and levied tax at the rate of 7 per cent. He simultaneously completed the assessment for the year 1965-66 levying tax at the rate of 7 per cent. The petitioner has challenged these assessment orders in this petition.
(3.) THE learned counsel for the department has raised a preliminary objection. According to him, an alternative remedy by way of appeal is open to the petitioner and this court should not exercise its jurisdiction under article 226 of the Constitution permitting the petitioner to by-pass the statutory remedy. The petitioner has submitted that the question involved in this petition relates to the interpretation of an entry in the notification issued under the U.P. Sales Tax Act. The dispute raised by the department is of a recurring nature. The petitioner has stated in paragraph 16 of the writ petition that on account of the extra amount by way of tax which the petitioner is called upon to pay every year as a result of wrong interpretation placed by the Sales Tax Officer on the notification in question, the petitioner is being saddled with an additional liability running into several lacs. It has been stated that the additional liability for the year 1962-63 comes to Rs. 78,272; for the year 1965-66 the additional liability comes to Rs. 2,10,144, thus the total additional liability for the two assessment years alone comes to Rs. 2,88,416. Similarly for the remaining two assessment years, namely 1963-64 and 1964-65, the additional liability comes to Rs. 2,87,000. The petitioner submits that it is unable to meet this heavy demand and unless the dispute is expeditiously decided, the petitioner's business is likely to be adversely affected. The petitioner further submits that the assessment orders, impugned in this writ petition, are clearly arbitrary and perverse being contrary to the materials on record including the judgment of the Judge (Revisions) on the point which normally is binding upon the Sales Tax Officer.;