Madras High Court
British Agro Products (India) P ... vs The Assistant Commissioner Of ... on 22 October, 2021
W.P.No.22071 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 22.10.2021
CORAM
THE HONOURABLE MR.JUSTICE M.SUNDAR
W.P.No.22071 of 2021
&
WMP.Nos.23287,23292, 23289, 23293 of 2021
British Agro Products (India) P Ltd
(Rep by its Managing Director)
No.9, State Bank Officers Colony
Shastri Nagar, Adyar
Chennai - 600 020
PAN: AAFCB8238H. ... Petitioner
Vs
1. The Assistant Commissioner of Income Tax
National Faceless Assessment Centre, Delhi
E-Ramp, Jawaharlal Nehru Stadium,
Delhi - 110 003.
2. The Income Tax Officer,
Corporate Ward -1(3),
Income Tax Department,
121, Nungambakkam High Road
Chennai - 600 034.
3. The Principal Commissioner of Income Tax -1
Income Tax Department,
121, Nungambakkam High Road
Chennai - 600 034. ...Respondents
Prayer: Petition filed under Article 226 of the Constitution of India to issue a
Writ of Certiorarified Mandamus to call for the records of the writ petitioner
company on the file of the first respondent to quash the impugned order
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1/13
W.P.No.22071 of 2021
dated 23.09.2021 passed u/s 143 (3) r/w Section 144B of the Act for the
Assesment Year 2018-19 in ITBA/AST/143(3)/2021-22/1035833472(1) and
consequently direct the First Respondent to complete the fresh assessment
for the assessment year 2018-19 after granting reasonable/sufficient
opportunity of hearing and pass such other /further order or orders.
For Petitioner : Mr.S.Sridhar
For Respondents : Mr.Prabhu Mukunth Arunkumar
Junior Standing Counsel (IT)
ORDER
In the captioned main writ petition, an 'assessment order dated
23.09.2021 bearing reference no.ITBA/AST/143(3)/2021-22/1035833472(1)
pertaining to Assessment Year 2018-19 qua writ petitioner company'
(hereinafter 'impugned order' for the sake of convenience and clarity) has
been assailed.
2. A perusal of the impugned order reveals that it has been made
under Section 143(3) of the 'The Income-tax Act, 1961 (43 of 1961)'
[hereinafter 'IT Act' for the sake of brevity] read with Section 144B of IT
Act. To be noted, Section 144B of IT Act is captioned 'Faceless Assessment'.
3. Notwithstanding very many averments in the writ affidavit,
notwithstanding several grounds raised in the writ affidavit, Mr. Sridhar,
learned counsel for writ petitioner projects his case qua challenge to
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W.P.No.22071 of 2021
impugned order on two points and they are as follows:
(a) The impugned order was preceded by a show cause
notice (SCN) dated 21.09.2021 and the SCN is captioned 'Show
cause Notice as to why the proposed variation should not be
made', this SCN has been digitally signed on 21.09.2021 and
time has been given to the writ petitioner (to show cause) upto 59
minutes past 23 hours on 22.09.2021. In other words, just one
day time was given for showing cause and this is too short more
so considering the proposed variation.
b) Owing to the requirement under Section
144B(1)(xvi)(c), the draft assessment order should have been
assigned to a review unit in any one Regional Faceless
Assessment Centres through an automated allocation system and
a review of the order should have been done and it is quite
unlikely that this has been done as the impugned order has been
made on 23.09.2021, one day after writ petitioner's reply to SCN.
4. Mr.Prabhu Mukunth Arunkumar, learned junior Standing Counsel,
accepts notice on behalf of all the three respondents.
5. Owing to the narrow legal compass on which captioned main
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W.P.No.22071 of 2021
revision turns, with the consent of learned counsel on both sides, main writ
petition is taken up.
6. Responding to the aforementioned two points urged by learned
counsel for writ petitioner, learned Revenue counsel made submissions, a
summation of which is as follows:
(a) It cannot be gainsaid that one day time given qua SCN
is too short as the writ petitioner has chosen to reply the very
next day i.e., 22.09.2021 and it has also not chosen to ask for a
personal hearing, though there is an option to ask for personal
hearing vide sub-paragraph (c) of Paragraph 3 of SCN.
(b) Adverting to the argument predicated on Section
144B(1)(xvi)(c) of IT Act, learned counsel submitted that in the
light of automation it is quite feasible. Be that as it may, learned
Revenue counsel pointed out that there is an alternate remedy
available to the writ petitioner vide a statutory appeal under
Section 246A of IT Act.
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W.P.No.22071 of 2021
7. This Court now embarks upon the exercise of considering the rival
submissions, setting out its discussion on the same and giving its dispositive
reasoning qua conclusion.
8. The first point urged i.e., a mere one day time qua SCN under the
normal circumstances would have certainly been a formidable argument, but
not in this case qua writ petitioner as writ petitioner has a) chosen to reply on
the very next day i.e., 22.09.2021 and has also not chosen to ask for a
personal hearing vide sub-paragraph (c) of Paragraph 3 of SCN. This draws
the curtains on the first point.
9. As regards the second point, this Court is of the considered view
that it is dovetailed with the alternate remedy argument as that may well
qualify as a ground of appeal rather than a ground compelling interference in
writ jurisdiction.
10. Therefore, the second point is left open to be decided by the
Appellate Authority if the writ petitioner chooses to file a statutory appeal
under Section 246A.
11. This takes this Court to the alternate remedy rule. Alternate
remedy rule no doubt is a rule of discretion. In other words, alternate
remedy rule is not an absolute rule. It is a self-imposed restraint qua writ
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W.P.No.22071 of 2021
jurisdiction. However, Hon'ble Supreme Court in a long line of
authorities/case laws starting from Dunlop India case [Assistant Collector
of Central Excise, Chandan Nagar, West Bengal Vs. Dunlop India Ltd.
and others reported in (1985) 1 SCC 260], Satyawati Tandon case [United
Bank of India Vs. Satyawati Tondon and others reported in (2010) 8 SCC
110] and K.C.Mathew case [Authorized Officer, State Bank of
Travancore Vs. Mathew K.C. reported in (2018) 3 SCC 85] has repeatedly
held that when it comes to fiscal statutes matters, the alternate remedy rule
has to be applied with utmost rigour. To be noted, these three case laws do
not constitute a exhaustive list, but are only some amongst the several
celebrated judgments on this alternate remedy rule touching upon fiscal
laws. On alternate remedy, relevant paragraph in Dunlop India case is
paragraph 3 and relevant paragraph in K.C.Mathew case is paragraph 10,
which read as follows:
Paragraph 3 of Dunlop India case
'3. ....... 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, as for instance where the very vires of
the statute is in question or where private or public wrongs are
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W.P.No.22071 of 2021
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 prolong the proceedings by one
device or the other. The practice certainly needs to be strongly
discouraged.'
(Underlining made by this Court to
supply emphasis and highlight)
Paragraph 10 of K.C.Mathew case
'10. In Satyawati Tondon the High Court had restrained
further proceedings under Section 13(4) of the Act. Upon a
detailed consideration of the statutory scheme under the
SARFAESI Act, the availability of remedy to the aggrieved
under Section 17 before the Tribunal and the appellate remedy
under Section 18 before the Appellate Tribunal, the object and
purpose of the legislation, it was observed that a writ petition
ought not to be entertained in view of the alternate statutory
remedy available holding: (SCC pp.123 & 128, Paras 43 & 55)
“43. Unfortunately, the High Court overlooked the
settled law that the High Court will ordinarily not entertain a
petition under Article 226 of the Constitution if an effective
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W.P.No.22071 of 2021
remedy is available to the aggrieved person and that this Rule
applies with greater rigour in matters involving recovery of
taxes, cess, fees, other types of public money and the dues of
banks and other financial institutions. In our view, while
dealing with the petitions involving challenge to the action
taken for recovery of the public dues, etc., the High Court must
keep in mind that the legislations enacted by Parliament and
State Legislatures for recovery of such dues are a code unto
themselves inasmuch as they not only contain comprehensive
procedure for recovery of the dues but also envisage
constitution of quasi-judicial bodies for redressal of the
grievance of any aggrieved person. Therefore, in all such
cases, the High Court must insist that before availing remedy
under Article 226 of the Constitution, a person must exhaust the
remedies available under the relevant statute.
55.It is a matter of serious concern that despite repeated
pronouncement of this Court, the High Courts continue to
ignore the availability of statutory remedies under the DRT Act
and the SARFAESI Act and exercise jurisdiction under Article
226 for passing orders which have serious adverse impact on
the right of banks and other financial institutions to recover
their dues. We hope and trust that in future the High Courts will
exercise their discretion in such matters with greater caution,
care and circumspection.'
(underlining made by this Court to supply
emphasis and highlight)
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W.P.No.22071 of 2021
12. To be noted, in aforementioned paragraph 10 in K.C.Mathew's
case, Satyawati Tondon principle has been reiterated and therefore, this
Court refrains itself from extracting and reproducing relevant paragraphs
from Satyawati Tondon case law.
13. Be that as it may, very recently a three member Hon'ble Bench of
Hon'ble Supreme Court speaking through Hon'ble Dr. Dhananjaya Y
Chandrachud in Commercial Steel case law [The Assistant Commissioner
of State Tax Appellant(s) and Others Vs.M/s Commercial Steel Limited],
culled out the exceptions to alternate remedy rule and reiterated principle qua
ration in Dunlop India, Satyawati Tandon and K.C.Mathew principles i.e.,
principle that interference qua writ jurisdiction should be an exception or in
other words, only under exceptional circumstances where exception
adumbrated therein attracted. To be noted, Commercial Steel case law was
rendered by Hon'ble Supreme Court very recently i.e., as recently as on
03.09.2021. Relevant paragraphs in Commercial Steel case law are
Paragraphs 11 and 12, which read as follows:
'11 The respondent had a statutory remedy under section
107. Instead of availing of the remedy, the respondent instituted
a petition under Article 226. The existence of an alternate
remedy is not an absolute bar to the maintainability of a writ
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W.P.No.22071 of 2021
petition under Article 226 of the Constitution. But a writ
petition can be entertained in exceptional circumstances where
there is: (i) a breach of fundamental rights; (ii) a violation of
the principles of natural justice; (iii) an excess of jurisdiction;
or (iv) a challenge to the vires of the statute or delegated
legislation.
12 In the present case, none of the above exceptions was
established. There was, in fact, no violation of the principles of
natural justice since a notice was served on the person in
charge of the conveyance. In this backdrop, it was CA
5121/2021 7 not appropriate for the High Court to entertain a
writ petition. The assessment of facts would have to be carried
out by the appellate authority. As a matter of fact, the High
Court has while doing this exercise proceeded on the basis of
surmises. However, since we are inclined to relegate the
respondent to the pursuit of the alternate statutory remedy
under Section 107, this Court makes no observation on the
merits of the case of the respondent.'
14. A perusal of adumbration of the exceptions read in the context of
narrative, discussion and dispositive reasoning supra brings to light that
none of the exceptions set out by Hon'ble Supreme Court qua Commercial
Steel case law is attracted in the case on hand.
15. The sequitur to the discussion and dispositive reasoning thus far
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W.P.No.22071 of 2021
is, this is a fit case to relegate the writ petitioner to alternate remedy of
statutory appeal inter alia under Section 246 A of IT Act subject of course to
pre-deposit condition, if any and limitation. If the writ petitioner chooses to
take the alternate remedy rule and file a statutory appeal, the Appellate
Authority shall consider all the arguments/ grounds of appeal of the writ
petitioner (including those raised in the instant writ petition) uninfluenced /
untrammelled by observations made in this writ petition order. In other
words, the appeal shall be considered and decided on its own merits and in
accordance with law untrammelled by this order.
16. Owing to all that have been set out supra, the campaign of the writ
petitioner against the impugned order comes to a conclusion, it fails and the
sequitur is captioned main writ petition is dismissed albeit preserving the
rights of the writ petitioner to prefer a statutory appeal, if so advised and if
so desired. Consequently, the aforementioned WMPs also are dismissed.
There shall be no order as to costs.
22.10.2021
Index: Yes/ No
Speaking/Non-speaking Order
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W.P.No.22071 of 2021
gpa/nst
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W.P.No.22071 of 2021
M.SUNDAR,J.
gpa/nst
To
1. The Assistant Commissioner of Income Tax
National Faceless Assessment Centre, Delhi
E-Ramp, Jawaharlal Nehru Stadium,
Delhi - 110 003.
2. The Income Tax Officer,
Corporate Ward -1(3),
Income Tax Department,
121, Nungambakkam High Road
Chennai - 600 034.
3. The Principal Commissioner of Income Tax -1
Income Tax Department,
121, Nungambakkam High Road,
Chennai - 600 034.
W.P.No.22071 of 2021 &
WMP.Nos.23287,23292, 23289, 23293 of 2021
22.10.2021
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