2022 (7) TMI 971 - HC - Income Tax

Assessment order passed on a date subsequent to the dissolution - Notice of striking off and dissolution petitioner/company stood dissolved w.e.f. the date of issuance of notice itself as issued by the Government of India, Ministry of Corporate Affairs - HELD THAT - There would be an alternate statutory remedy available under Section 246-A of the Income Tax Act which ought to be availed of. As we may refer to the judgment of the Hon'ble Supreme Court in Munshi Ram vs. Municipal Committee, Chheharta, 1979 (3) TMI 58 - SUPREME COURT wherein it had been observed that where a revenue statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be sought in that forum and in that manner, and all other forums and modes of seeking remedy are excluded. Such view was reiterated by the Apex Court in Union of India vs. Guwahati Carbon Limited 2012 (11) TMI 885 - SUPREME COURT and subsequently in Commissioner of Income Tax and another vs. Chhabil Dass Aggarwal and another 2013 (8) TMI 458 - SUPREME COURT Learned counsel apart from citing other judgments has placed reliance upon a recent judgment of the Hon'ble Supreme Court in Magadh Sugar and Energy Ltd. Vs. State of Bihar and others 2021 (10) TMI 691 - SUPREME COURT wherein the issue as regards the exercise of writ jurisdiction under Article 226 of the Constitution of India, against the availability of an alternative remedy of an appeal was dealt with and certain principles were summarised. It was argued that as per parameters laid down, a writ petition under Article 226 of the Constitution of India would be maintainable. We are of the view that it is only in a case under extraordinary circumstances and where there is a patent infirmity on the face of record that we would be inclined to entertain a writ petition under Article 226 of the Constitution of India. In the facts of the present case, the assertion as regards violation of Instructions/Circular of CBDT is an issue which the petitioner-company ought to raise in appeal itself. Even in the case of Magadh Sugar's case (supra), it had been observed as follows Wherein a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion. Writ petition is disposed of in terms of granting liberty to the petitioner to avail of its statutory remedy of appeal.

Summary

Issues:
1. Challenge to assessment order, notice of demand, and notice of penalty post-dissolution of the company.
2. Contention regarding violation of Circular dated 29.12.2017 and Section 250 of the Companies Act.
3. Availability of alternate statutory remedy under Section 246-A of the Income Tax Act.
4. Jurisdiction of the court to entertain a writ petition under Article 226 of the Constitution of India.

Analysis:
1. The petitioner challenged the assessment order, notice of demand, and notice of penalty issued after the dissolution of the company. The counsel argued that the assessment order passed post-dissolution should be considered a nullity. However, the court held that no intervention was warranted at this stage and suggested availing the alternate statutory remedy under Section 246-A of the Income Tax Act.

2. The contention of the petitioner regarding the violation of Circular dated 29.12.2017 and Section 250 of the Companies Act was raised. The court referred to various judgments, including the one in Munshi Ram vs. Municipal Committee, emphasizing the need to follow the prescribed statutory remedies. The court highlighted that statutory remedies must be exhausted before seeking discretionary remedies under Article 226 of the Constitution of India.

3. The court emphasized the availability of an alternate statutory remedy under Section 246-A of the Income Tax Act, which should be pursued by the petitioner. Citing precedents, the court reiterated the importance of following the specific statutory procedures for seeking remedies related to revenue statutes.

4. Regarding the jurisdiction of the court to entertain a writ petition under Article 226 of the Constitution of India, the court clarified that such petitions would only be entertained in exceptional circumstances where there is a clear infirmity on the face of the record. The court disposed of the writ petition, granting liberty to the petitioner to avail of its statutory remedy of appeal, emphasizing the rule of exhaustion of statutory remedies before seeking discretionary remedies.