2003 (7) TMI 18 - HC - Income Tax

Alternate remedy - It is true that the appeals filed by the appellant against the earlier assessment orders are not decided by the appellate authority. Still we fail to see any justification in the action of the State Bank of Bikaner and Jaipur to file the writ petition and then to file this special appeal against the interim order of the learned single judge vacating the interim stay earlier granted. - In case the appellate authority of the Income-tax Department does not decide the appeals filed by the appellants within a reasonable time, we can appreciate of filing of writ of mandamus by the bank to this court for direction to the said authority to decide the same at an early date but not this writ petition and that too of the bulky record and then this bulky record appeal against the order of the learned single judge under which the interim relief granted earlier has been vacated. - On the merits also the appellant has no case.

Issues involved:
1. Challenge to the order of a learned single judge under article 226(3) of the Constitution of India.
2. Maintainability of a writ petition in an income-tax matter.
3. Exhaustion of statutory remedies before seeking discretionary remedies under articles 226 and 227 of the Constitution of India.
4. Justifiability of bypassing statutory remedies and resorting to article 226 proceedings.
5. Delay in deciding appeals by the appellate authority of the Income-tax Department.
6. Imposition of costs for unnecessary litigation.

Issue 1: Challenge to the order of a learned single judge under article 226(3) of the Constitution of India.
The State Bank of Bikaner and Jaipur challenged the order of a learned single judge under article 226(3) of the Constitution of India, where the interim order granted on March 27, 2003, was vacated. The court noted that the appeal against an interim order on an interlocutory application is ordinarily not maintainable, but the merits of the matter were considered at the insistence of the counsel. The court observed that the filing of the writ petition was unnecessary and avoidable, leading to wastage of public money.

Issue 2: Maintainability of a writ petition in an income-tax matter.
The court emphasized that in income-tax matters, recourse must be had to the statutory remedy before seeking discretionary remedies under articles 226 and 227 of the Constitution of India. The appellant had already preferred an appeal before the Commissioner (Appeals), Income-tax Department, against the assessment order. The court found it unjustified for the appellant to bypass the statutory remedy and approach the court directly, especially when the assessing authority's jurisdiction was not in question.

Issue 3: Exhaustion of statutory remedies before seeking discretionary remedies.
The court reiterated the principle that when a statute prescribes a remedy for enforcing a right or liability, that statutory remedy must be exhausted before seeking discretionary remedies under articles 226 and 227 of the Constitution of India. Exceptions to this rule include cases of lack of jurisdiction, contravention of fundamental rights, violation of natural justice, or actions under ultra vires provisions of the law.

Issue 4: Justifiability of bypassing statutory remedies and resorting to article 226 proceedings.
The court criticized the appellant for bypassing the statutory remedy of filing an appeal and resorting to article 226 proceedings. It highlighted that such actions could enable litigants to defeat statutory provisions like limitation, court fees, or other conditions for filing appeals. The court emphasized the need to follow the prescribed statutory procedures before seeking discretionary relief under the Constitution.

Issue 5: Delay in deciding appeals by the appellate authority of the Income-tax Department.
The court expressed concern over the delay in deciding appeals by the appellate authority of the Income-tax Department. It directed the authority to decide the pending appeals of the State Bank of Bikaner and Jaipur within three months to ensure timely resolution of tax-related matters and refunds, emphasizing the importance of expeditious decision-making.

Issue 6: Imposition of costs for unnecessary litigation.
In response to the unnecessary and avoidable litigation initiated by the State Bank of Bikaner and Jaipur, the court imposed costs of Rs. 2,000 on the bank to be paid to the Income-tax Department. The court emphasized the importance of avoiding wastage of public money in litigation and highlighted that litigation should not be treated as a luxury or amusement, but as a serious and necessary legal process.

This detailed analysis of the judgment highlights the key issues involved and the court's reasoning behind dismissing the appeal and imposing costs due to the unnecessary litigation and bypassing of statutory remedies in the income-tax matter.

← Previous Next →