The division judge bench of Justice M.R. Shah and Justice B.V. Nagarathana of the apex court in the case of the State of Maharashtra & Ors Vs Greatship (India) Limited held that when there is an alternate remedy available, judicial prudence demands that the court refrains from exercising its jurisdiction under constitutional provisions.
BRIEF FACTS
The factual matrix of the case is that the respondent was subjected to the proceedings under the Maharashtra Value Added Tax, 2002 (hereinafter referred to as the ‘MVAT Act’) and Central Sales Tax Act, 1956. The Assessing Officer sent the assessee a notice of assessment requesting the production of pertinent documents as well as a justification for not assessing the assessee in accordance with the applicable provisions of Section 23 of the MVAT Act. Thereafter, the assessing officer passed an order in determining the tax liability along with interest and penalty under the MVAT Act and CST Act. Furthermore, the respondent without preferring an appeal before the first appellate court preferred to file a writ petition before the high court challenging the assessment order passed under the provisions of the MVAT Act and CST Act.
The learned counsel appearing on behalf of the appellant has contended that the high court has committed a grave error in entertaining the writ petition under Article 226 of the Indian Constitution. It was also submitted that the assessee had another remedy in way of appeal before the first appellate authority.
The learned counsel further relied upon the judgments titled Titaghur Paper Mills Co. Ltd. v. State of Orissa; Punjab National Bank v. O.C. Krishnan, Raj Kumar Shivhare v. Directorate of Enforcement, and United Bank of India v. Satyawati Tondon and others.
The learned senior counsel appearing on behalf of the respondent has contended that as the assessment order was passed beyond the period of limitation prescribed under the Act, the High Court was justified in entertaining the writ petition and quashing and setting aside the assessment order. It was further contended that the first appellate authority in the current case for an earlier assessment order decided against the assessee on the merits, it may only be formal to file an appeal with the first appellate authority. As a result, the original writ petitioner did not err in filing the writ petition with the High Court.
The learned senior counsel appearing on behalf of the respondent has relied upon the judgments titled M/s Filterco & Another v. Commissioner of Sales Tax, Madhya Pradesh and Another, Assistant Commissioner (CT) LTU & Another v. Amara Raja Batteries Limited, and Whirlpool Corporation v. Registrar of Trademarks, Mumbai.
COURT’S OBSERVATION
The hon’ble apex court stated that the High Court ought not to have entertained the writ petition under Article 226 of the Constitution of India challenging the assessment order in view of the availability of statutory remedy under the Act.
The apex court relied upon the judgment titled Titaghur Paper Mills Co. Ltd. vs. State of Orissa in which it was held that
“… Article 226 is not meant to short-circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill-suited to meet the demands of extraordinary situations, for instance where the very vires of the statute are in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article 226 of the Constitution. But then the Court must have good and sufficient reason to bypass the alternative remedy provided by statute. Surely matters involving the revenue where statutory remedies are available are not such matters. We can also take judicial notice of the fact that the vast majority of the petitions under Article 226 of the Constitution are filed solely for the purpose of obtaining interim orders and thereafter prolonging the proceedings by one device or the other. The practice certainly needs to be strongly discouraged.”
Further, the reliance was put on the judgment titled Punjab National Bank v. O.C. Krishnan, CCT v. Indian Explosives Ltd, City, and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala, and Raj Kumar Shivhare v. Directorate of Enforcement.
The hon’ble apex court held that the question is not about the maintainability of the writ petition under Article 226 of the Constitution, but the question is about the entertainability of the writ petition against the order of assessment by-passing the statutory remedy of appeal. There are serious disputes on facts as to whether the assessment order was passed on 20.03.2020 or 14.07.2020 (as alleged by the assessee). No valid reasons have been shown by the assessee to bypass the statutory remedy of appeal. This Court has consistently taken the view that when there is an alternate remedy available, judicial prudence demands that the court refrains from exercising its jurisdiction under constitutional provisions. Moreover, the High Court has seriously erred in entertaining the writ petition against the assessment order. The High Court ought to have relegated the writ petitioner – assessee to avail the statutory remedy of appeal and thereafter to avail other remedies provided under the statute. Under the circumstances, the impugned judgment and order passed by the High Court is hereby quashed and set aside.
CASE NAME- State of Maharashtra & Ors Vs Greatship (India) Limited
CITATION- CIVIL APPEAL NO. 4956 OF 2022
CORUM- Justice M.R. Shah and Justice B.V. Nagarathana
DATE- 20.09.22
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