2015 (11) TMI 302 - HC - Income Tax

Maintainability of the petition on the ground of there being an alternative statutory remedy - Disallowance of the final installment of the price paid for milk - Held that - This court is of the opinion that the petitioner has made out a strong case to contend that the present writ petition is maintainable despite the fact that the petitioner has availed of an alternative remedy against the impugned order, inasmuch as, the lapse on the part of the Assessing Officer is quite glaring and the high pitched assessment made as a result of ignoring the decision of the jurisdictional High Court results in palpable injustice to the petitioner. Nonetheless, without expressing any opinion on the maintainability of the present petition, considering the fact that the petitioner has already availed of the remedy of appeal before the Commissioner of Income-tax (Appeals) against the impugned order in relation to several points, including the point involved in the present case, this court is not inclined to exercise its extraordinary jurisdiction, inasmuch as, interference by this court would result in examination of the same order, may be, on different points by the Commissioner (Appeals) as well as this court, leading to an anomalous situation. High Court must be followed by all authorities and subordinate Tribunals when it has been declared by the highest court in the State and they cannot ignore it either in initiating proceedings or deciding the rights involved in such a proceeding. If in spite of the earlier exposition of law by the High Court having been pointed out and attention being pointedly drawn to that legal position, proceedings are initiated, it must be held to be a wilful disregard of the law laid down by the High Court and would amount to civil contempt as defined in section 2(b) of the Contempt of Court s Act, 1971. Subject to the above observations, the petition is disposed of as not entertained. However, having regard to the peculiar facts of the case, the Commissioner (Appeals) is directed to hear and decide the appeal as expeditiously as possible, and preferably within a period of two months from the date of receipt of a copy of this order. Considering the fact that in earlier years the issue had been decided in favour of the petitioner, there shall be no coercive recovery pursuant to the demand notice to the extent of ₹ 48,92,85,432/-, which is the component pertaining to the addition in question.

Summary

Issues involved:
Challenge to assessment order based on ignoring previous court decision and assessment history.

Analysis:
The petitioner challenged the assessment order directly in court due to the Assessing Officer's high-pitched assessment, adding a significant amount by disallowing a payment for milk. The petitioner argued that previous assessment years had no such additions, and the current decision contradicted a previous High Court ruling. The petitioner emphasized the need for court intervention under Article 226 of the Constitution of India.

On the other hand, the respondent argued that the petitioner should have pursued the statutory appeal route before approaching the High Court. The respondent defended the Assessing Officer's decision, suggesting that the facts in the current year differed from previous years, justifying the addition made.

The court considered the principle that a litigant should exhaust alternative remedies before seeking court intervention. However, the court acknowledged that glaring lapses by the Assessing Officer, including disregarding a previous court decision and consistent assessment history, warranted consideration of the petition. Despite this, the court refrained from interfering to avoid duplication of assessment review by multiple authorities.

The court criticized the Assessing Officer's conduct for not justifying the departure from previous assessments and not providing reasons for the significant addition made. The court referenced legal precedents emphasizing the importance of following higher appellate authorities' decisions to maintain judicial discipline in tax assessments.

In conclusion, the court disposed of the petition without entertaining it but directed the Commissioner (Appeals) to expedite the pending appeal, considering the past favorable decisions for the petitioner. The court also ordered no coercive recovery for the disputed amount until the appeal was decided. The court highlighted the importance for revenue authorities to adhere to legal precedents to avoid facing contempt proceedings for willful disregard of court decisions.