Bombay HC Imposes ₹1 Lakh Cost On 'Venus Entertainment' For 'Taking Chance' By Filing Writ Plea Avoiding Alternate Remedy

The Bombay High Court recently imposed a cost of ₹1 lakh on 'Venus Worldwide Entertainment Pvt. Ltd.' for "taking a chance" by filing a writ petition challenging a review order passed under the Maharashtra Value Added Tax Act, 2002, despite having a remedy of appeal under the 2002 Act. “The Petitioner was required to explain why the practice of exhausting alternate remedies should be abandoned in this case. No such reasons are either pleaded or urged. The attempt was to simply take a chance by avoiding the alternate remedies provided by the statute,” a bench of Justice MS Sonak and Justice Jitendra Jain remarked. The Court noted that the Petitioner has tried to take chances by making misleading statements and omitting statements that are required in such matters in the context of the availability of alternate remedies.Importantly, the bench also emphasised that the trend of bypassing alternative remedies by filing petitions under Articles 226 and 227 of the Constitution of India is on the rise. Essentially, the petitioner had moved the HC by filing a writ plea challenging an alleged 'illegal' review order passed under the 2002 Act, despite having the remedy of filing an appeal under Section 26 of the MVAT Act 2002. For context, the said review order was passed pursuant to proceedings initiated against it, under the MVAT Act 2002. It was the contention of the petitioner, represented by Advocate Rahul Thakar that since the dispute had already been settled under the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2019, no proceedings could have been initiated against it under the 2002 Act. This contention was rejected in the original as well as in the review order. Now, they moved the HC against the said review order, by misleadingly arguing that the Tribunal was not capable to deal with its objections and thus, the filing of writ plea was the only remedy available to it. Opposing the writ plea, AGP Amar Mishra, appearing for the state, argued that this contention (regarding the application of the 2019 Act in the case) was considered and rejected in the original as well as in the review order and that the Tribunal could always examine whether such rejection was correct or not. Therefore, it was contended that by urging that “the Tribunal is not capable to deal with objections and jurisdiction issue raised with relation to Settlement Act, 2019”, the Petitioner cannot avoid the alternate and efficacious remedy provided under the 2002 Act. Noting that in its writ plea, the petitioner failed to explain why the practice of exhausting alternate remedies should be abandoned in this case, the Court observed that the petioner was simply taking a chance by avoiding the alternate remedies provided by the statute. “There are provisions for part payment, though the Tribunal has been given the authority to waive part payment. Possibly, to avoid part payment or otherwise take a chance, this Petition was instituted based on vague and misleading averments,” the court further remarked. In this regard, the Court also referred to its November 2024 ruling in Oberoi Constructions vs. Union of India 2024 LiveLaw (Bom) 599 wherein it observed that the taxpayers can't seek a writ remedy by bypassing statutory requirements of pre-deposit. In this case, the Bombay HC had held the practice of instituting petitions bypassing the statutory remedies only to avoid a pre-deposit cannot be encouraged. Thus, refusing to entertain the plea, the Court imposed a cost of Rs. 1 Lakh on the petitioner with a further order that Rs 50,000 of the cost be paid to Tata Memorial Hospital, and the remaining Rs 50,000 be paid to the High Court Class IV Employees' Association. The court also directed that a compliance report, along with proof of payment, should be filed in the Registry within four weeks. Before parting with the order, the Court clarified that since the Petitioner was being relegated to avail of the alternate remedy, all contentions of the Petitioner and the Respondents on merits would be kept open. The Court added that if such an appeal is indeed filed within four weeks after complying with all the preconditions required under the law and paying the costs, the Appellate Authority should entertain the appeal on merits without adverting to the limitation issue. Case title: M/s. Venus Worldwide Entertainment Pvt. Ltd. vs. The State of Maharashtra and ors.Case citation: 2024 LiveLaw (Bom) 645Click here To Read/Download Order

Bombay HC Imposes ₹1 Lakh Cost On 'Venus Entertainment' For 'Taking Chance' By Filing Writ Plea Avoiding Alternate Remedy

Sparsh Upadhyay

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