Madras High Court
Mrs.Amjathkhan Sharmila Siraj vs The Income Tax Officer on 4 January, 2022
W.P.(MD)No.2387 of 2020
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 04.01.2022
CORAM:
THE HONOURABLE MR.JUSTICE M.SUNDAR
W.P.(MD)No.2387 of 2020
and
W.M.P(MD).No.2043 of 2020
Mrs.Amjathkhan Sharmila Siraj : Petitioner
Vs.
1. The Income Tax Officer,
Income Tax Department,
Office of the Income Tax Officer,
Non Corp. Ward 3 (3) MDU,
No.2, V.P.Rathinasamy Nadar Road,
CR Building, Bibikulam,
Madurai – 625 002.
2. The Union of India,
Rep. by the Secretary to the Government,
Ministry of Finance,
Income Tax Department,
New Delhi. : Respondents
https://www.mhc.tn.gov.in/judis
1/14
W.P.(MD)No.2387 of 2020
PRAYER: Writ Petitions filed under Article 226 of the Constitution of
India for issuance of Writ of Certiorari calling for the records relating to
the impugned Assessment Order
No.ITBA/ASTS/S/144/2019-20/1021992420(1) issued by the first
respondent and quash the same.
For Petitioner : Mr.V.Veerapandian
For Respondents : Mr.N.Dilip Kumar,
Senior Standing Counsel for Income Tax
for R1
Ms.S.Ragaventhre,
Junior Standing Counsel for Central
Excise and Customs
ORDER
********************
In the captioned main writ petition an 'assessment order dated
09.12.2019 bearing reference No.ITBA / ASTS /S /144 / 2019-20 /
1021992420(1)' and a consequential 'demand notice which has also dated
09.12.2019 bearing reference No. ITBA / AST / S / 156 / 2019-20 /
1021992539(1)' have been assailed and the same shall be collectively
referred to as 'impugned orders' for the sake of convenience and clarity.
2. Mr.V.Veerapandian, learned counsel for writ petitioner
notwithstanding very many averments made in the writ affidavit and very
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.2387 of 2020
many grounds raised in the writ affidavit, in the hearing, made one
focussed submission qua his campaign against the impugned orders and
that one point is the writ petitioner was served with a show cause notice
dated 23.11.2019 fixing hearing date and time on 29.11.2019 at 10:30
AM qua assessment order 2017-18, writ petitioner went over to the
Office of the first respondent but she was informed that the first
respondent is on leave. Thereafter, the impugned orders came to be
issued and therefore it would only be appropriate that one opportunity is
given to the writ petitioner to explain her stand as the matter pertains to
cash deposits made by the writ petitioner during demonetisation period.
3. In response to the aforementioned focussed submission made by
learned counsel for writ petitioner, Mr.N.Dilip Kumar, learned Revenue
counsel adverting to the counter-affidavit submitted that the averment of
the writ petitioner that she went over to the Office of the first respondent
has been specifically denied. To be noted, the averment that the writ
petitioner went over to the Office of the first respondent has been made
in paragraph 6 of the writ petitioner's affidavit and the same has been
refuted in paragraph 6 of the counter-affidavit of the Revenue.
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.2387 of 2020
A scanned reproduction of Paragraph 6 of the writ petitioner's
affidavit is as follows:
A scanned reproduction of Paragraph 6 of first respondent's
counter-affidavit is as follows:
I do not propose to enter upon the aforementioned factual disputation in
writ jurisdiction.
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.2387 of 2020
4. This takes us to the other submissions made by learned Revenue
counsel. Learned Revenue counsel submits that the 23.11.2019 show
cause notice is not the first and lone notice which the writ petitioner was
served with. Adverting to typed set of papers filed along with the
counter-affidavit, learned Revenue counsel submitted that a notice under
Section 143(2) of 'the Income Tax Act, 1961' [hereinafter 'IT Act' for the
sake of convenience and brevity] dated 10.08.2018 was issued followed
by another notice under Section 143(2) of IT Act dated 28.09.2018. Both
these notices did not evoke any reply is learned Revenue counsel's say.
Thereafter, a notice dated 14.01.2019 under Section 142(1) of IT Act was
issued and it is only after all of these that aforementioned 23.11.2019
show cause notice was issued is learned Revenue counsel's emphatic say.
5. Learned counsel for writ petitioner, by way of reply arguments
submitted that at the time of inception of captioned writ petition, an
interim order was made on 07.02.2020 saying that there shall be an order
of interim stay subject to payment of 25% of the amount demanded and
this payment of 25% of the amount demanded has since been made.
There is no disputation on this aspect of the matter.
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.2387 of 2020
6. In the light of the narrative thus far, the matter on hand, in my
considered opinion now hinges on one argument of learned Revenue
counsel and that argument is alternate remedy available to the writ
petitioner by way of an appeal under Section 246A of IT Act. Learned
Revenue counsel also points out that it is well open to the writ petitioner
to avail the alternate remedy and also make a prayer before the appellate
authority to not to treat the writ petitioner as 'Assessee-in-default' and
under normal circumstances, such an interim prayer is acceded to on
condition that 20% of the demand should be deposited. To be noted, in
the case on hand 25% of the demand has already been paid.
7. Alternate remedy rule is no doubt not an absolute rule. It is a
rule of discretion. It is not only a rule of discretion, it is a self-imposed
restraint qua writ jurisdiction. However, Hon'ble Supreme Court in a long
line of authorities 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
[United Bank of India Vs. Satyawati Tondon and others reported in
(2010) 8 SCC 110] and K.C.Mathew [Authorized Officer, State Bank of
Travancore and another Vs. Mathew K.C. reported in (2018) 3 SCC
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.2387 of 2020
85], has repeatedly held that when it comes to fiscal law Statutes,
alternate remedy rule has to be applied with utmost rigour. Relevant
paragraph in Dunlop case law is paragraph No.3 and relevant portion of
the same reads as follows:
'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
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)
Relevant paragraph in K.C.Mathew case is paragraph 10 and the
same reads as follows:
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.2387 of 2020
'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 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
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.2387 of 2020
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 highlight and for
ease of reference)
Paragraph 10 of K.C.Mathew case extracts Satyawati Tandon
principle i.e., portions of case law from Satyawati Tandon and the same
has been reproduced. Therefore, I deem it appropriate to not to burden
this order with extracts from Satyawati Tandon case.
8. In this regard, this Court deems it appropriate to refer to a recent
judgment which was rendered by a three Member Bench of the Hon'ble
Supreme Court on 03.09.2021 i.e., Commercial Steel Limited case [The
Assistant Commissioner of State Tax and others Vs. M/s.Commercial
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.2387 of 2020
Steel Limited in Civil Appeal No.5121 of 2021] . Three Member Hon'ble
Bench had culled out the exceptions to the alternate remedy rule and had
clearly held that interference in writ jurisdiction will arise only in
exceptional cases where the exception adumbrated therein are attracted.
Relevant paragraphs in Commercial Steel case law are paragraph Nos.
11, 12 and the same 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 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
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.2387 of 2020
remedy under Section 107, this Court makes no observation
on the merits of the case of the respondent.'
9. To be noted, the exceptions qua alternate remedy rule are well
settled vide Whirlpool principle [Whirlpool Corporation Vs. Registrar
of Trade Marks, Mumbai and others reported in (1998) 8 SCC 1].
These exceptions are so well settled that it has come to stay as 'Whirlpool
exceptions' in litigation parlance. In the case on hand, the writ petitioner's
case does not fall in any one of the exceptions, i.e., there is no violation
of NJP (Natural Justice Principles) owing to the series of notices prior to
29.11.2019 show cause notice the details of which have been captured
supra.
10. A careful perusal of the narrative thus far will make it clear that
the writ petitioner has been given adequate and ample opportunities but
the writ petitioner has not availed the same. The argument that the notice
dated 10.08.2018 itself makes it clear that it is a e-process also weighs in
the mind of this Court. In the light of the alternate remedy being not only
efficacious and effective but also a highly tenable option in the case on
hand owing to 25% of demand having been already deposited by the writ
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.2387 of 2020
petitioner, I deem it appropriate to relegate the writ petitioner to the
alternate remedy of an appeal under Section 246A of IT Act.
11. In the light of the narrative, discussion and dispositive
reasoning set out supra, I find no reason to interfere qua impugned orders
i.e., impugned assessment order dated 09.12.2019 and impugned demand
notice dated 09.12.2019, but it is made clear that if the writ petitioner
chooses to approach the appellate authority under Section 246A of IT
Act, it is well open to the appellate authority to consider the appeal on its
own merits and in accordance with law uninfluenced by any observation
made in this order which may come across as an observation on merits or
which may come across as an observation having the trappings of an
expression of opinion on merits of the matter.
12. Captioned writ petition is disposed of on above terms.
Consequently, captioned W.M.P is disposed of as closed. There shall be
no order as to costs.
04.01.2022
Index : Yes / No
Internet : Yes / No
pkn
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.2387 of 2020
To
1. The Income Tax Officer,
Income Tax Department,
Office of the Income Tax Officer,
Non Corp. Ward 3 (3) MDU,
No.2, V.P.Rathinasamy Nadar Road,
CR Building, Bibikulam,
Madurai – 625 002.
2. The Secretary,
Union of India,
Ministry of Finance,
Income Tax Department,
New Delhi.
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.2387 of 2020
M.SUNDAR., J.
pkn
W.P.(MD)No.2387 of 2020
04.01.2022
https://www.mhc.tn.gov.in/judis
