1962 (4) TMI 90 - SC - Indian Laws

Is an order of assessment made by an authority, under a taxing statute which is Intra vires, open to challenge as repugnant to Art. 19 (1) (g), on the sole ground that it is based on a misconstruction of a provision of the Act or of a notification issued there under? Can the validity of such an order be questioned in a petition under Art. 32 of the Constitution ? Held that - The correct answer to the two questions which have been referred to this larger Bench must be in the negative. An order of assessment made by an authority under a taxing statute which is intra vires and in the undoubted exercise of its jurisdiction cannot be challenged on the sole ground that it is passed on a misconstruction of a provision of the Act or of a notification issued thereunder. Nor can the validity of such an order be questioned in a petition under Art. 32 of the Constitution. The proper remedy for correcting an error in such an order is to proceed by way of. appeal, or if the error is an error apparent on the face of the record, then by an application under Art. 220 of the Constitution. It is necessary to observe here that Art. 32 of the Constitution does not give this Court an appellate jurisdiction such as is given by Arts. 132 to 136. Article 32 guarantees the right to a constitutional remedy and relates only to the enforcement of the rights conferred by Part III of the Constitution. Unless a question of the enforcement of a fundamental right arises, Art. 32 does not apply. There can be no question , of the enforcement of a fundamental right if the order challenged is a valid and legal order, in spite of the allegation that it is erroneous. Therefore, come to the conclusion that no question of the enforcement of a fundamental right arises in this case and the writ petition is not maintainable.

Summary

Issues Involved:

1. Whether an order of assessment made under a taxing statute which is intra vires can be challenged as repugnant to Article 19(1)(g) solely on the ground of misconstruction of a provision of the Act or a notification issued thereunder.
2. Whether the validity of such an order can be questioned in a petition under Article 32 of the Constitution.

Detailed Analysis:

1. Challenge to Intra Vires Assessment Order under Article 19(1)(g):

The primary issue revolves around whether an order of assessment made under a valid taxing statute can be challenged under Article 19(1)(g) of the Constitution solely because it is based on a misconstruction of a provision of the Act or a notification issued under it. The Court considered the nature of the taxing authority's jurisdiction and the implications of a misconstruction of statutory provisions.

The Court held that if a taxing authority, acting within its jurisdiction under a valid statute, makes an erroneous decision based on a misconstruction of the statute or a notification, such an error does not constitute a violation of the fundamental right to carry on trade or business under Article 19(1)(g). The Court emphasized that the taxing authority has the jurisdiction to decide matters of law and fact, and its decisions, whether right or wrong, are binding until reversed on appeal. The Court stated:
"The right to carry on trade, business, etc., with which we are concerned here falls under cl. (1) (g) and can be restricted by a law permissible by cl. 6. This right is further subject to the sovereign power of the State to levy a tax."

2. Validity of Assessment Order in Petition under Article 32:

The second issue is whether the validity of an assessment order can be questioned in a petition under Article 32 of the Constitution. The Court examined the scope of Article 32 and the conditions under which it can be invoked.

The Court held that Article 32 guarantees the right to move the Supreme Court for the enforcement of fundamental rights, but it does not grant appellate jurisdiction to the Court. The Court can only intervene under Article 32 if there is a clear violation of a fundamental right. In cases where the taxing authority acts within its jurisdiction under a valid statute, even if there is a misconstruction of the statute, the proper remedy is to proceed by way of appeal or revision under the statutory framework, not by a petition under Article 32. The Court observed:
"Article 32 guarantees the right to a constitutional remedy and relates only to the enforcement of the rights conferred by Part III of the Constitution. Unless a question of the enforcement of a fundamental right arises, Article 32 does not apply."

Conclusion:

The Court concluded that an order of assessment made by an authority under a taxing statute which is intra vires cannot be challenged as repugnant to Article 19(1)(g) solely on the ground that it is based on a misconstruction of a provision of the Act or a notification issued thereunder. Additionally, the validity of such an order cannot be questioned in a petition under Article 32 of the Constitution. The proper remedy for correcting an error in such an order is to proceed by way of appeal or revision under the statutory framework.