9911796707
TMI Blog2002 (3) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, heard and they are being disposed of by this common judgment. The background facts leading to the filing of the writ petitions be summarised as follows: The petitioner-Institute is an educational unit, and claims to be one of the foremost educational units in India. It is stated that highly advanced subjects such as Securities Valuation, International Money Markets, Management Accountancy, etc., are covered with the collaboration of expert foreign institutes along with basic studies therefor. It is also stated that the Institute conducts "Distance Education" through post and has a number of students from distant places in India and abroad. On January 5, 1996, the officers of the Income-tax Department made a surprise visit to the premises of the petitioner and conducted inspection and during the inspection, it was noticed that the Institute had not deduced tax at source on contracts, i.e., AMC of computers, printing, courier and also on rental payments. At the time of inspection, one Sri B. Venkata Rao, Registrar, and Sri Sharma, manager, along with an accountant appeared and filed the information called for. After examining the same, the Assistant Commissioner of Income-tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e guise of exercising power under section 119 of the Act and that the provisions of the law or the judgment of the courts can be interpreted only by the competent courts and not by the statutory authorities like the Central Board of Direct Taxes or the administrative authorities. Assailing the impugned orders of the first respondent, learned counsel would contend, that there is no oral or written contract with any of the courier units through whom the transactions were done. Each packet, each time, to each candidate, to each place of destination, is a clear, simple and separate transaction. The "charge" for each transaction is separate and it is a "per piece contract" not falling under the tax deducted at source provisions of the Act. According to learned counsel, the transaction relating to printing is essentially in the realm of sale of goods and hence it is not amenable to section 194C of the Act. Learned counsel would also point out that Explanation III to section 194C of the Act was inserted with effect from July 1, 1995, that is to say, after the assessment year 1995-96 widening the meaning of the word "work" and therefore before insertion of Explanation III, there was no val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idity of the impugned circulars in order to decide the controversies between the petitioner-assessee and the Income-tax Department. From the pleadings of the parties filed in these writ petitions, it is clear that during the inspection of the premises of the petitioner on January 5, 1996, when the books of account produced by the petitioner were verified, the inspecting staff found non-deduction of tax at source on some items like payments effected to the printers, hoteliers and courier service and when that was brought to the notice of the petitioner, the petitioner itself prepared detailed statements of such deductions and remittances and filed copies of the same before the inspecting officials. In the course of inspection on January 5, 1996, the officials of the petitioner-Institute admitted that there was an obligation on it to deduct tax at source on annual maintenance contract of computers and courier service and accordingly paid a sum of Rs. 55,563 towards tax deductible at source. It needs to be noticed that the said amount was paid on March 11, 1996, that is to say, even before passing of the orders dated March 22, 1996, and March 25, 1996, under section 201 of the Act b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x in terms of section 201 of the Act. As regards the courier charges, according to the petitioner, there is no oral or written contract with the courier units, and therefore it cannot be construed as a case of contract of work. This claim is also seriously contested by the Department. Thus, it is quite clear that there are serious factual controversies between the parties and the effective resolution of it is possible only after recording findings on factual issues on appreciation and on the basis of evidence that may be adduced by the parties. A High Court, shall not, ordinarily, enter into disputed questions of fact. One of the grounds against the exercise of the discretion under article 226 is that the right claimed by the petitioner is not capable of being established in summary proceeding under article 226 because it requires a detailed examination of the evidence as may be had in a suit. The object of article 226 is the enforcement and not the establishment of a right, or title and a petition under article 226 cannot be converted into a suit and the High Court cannot take up adjudication of disputed facts and record findings on questions of fact. For effective adjudication, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article 32 or under article 226 of the Constitution. The Supreme Court in Mohd. Yasin v. Town Area Committee, AIR 1952 SC 115 and the cases to follow that case held that an alternative remedy is not a bar to move a writ petition in the High Court to enforce a fundamental right. This is the only exception. In all other cases where no fundamental right is involved, it has been ruled that the High Court would not exercise its jurisdiction under article 226 when an alternative, adequate and efficacious legal remedy is available and the petitioner has not availed of the same before coming to the High Court. Of course, article 226 is silent on this point; it does not say in so many words anything about this matter, but the courts have themselves evolved this rule as a kind of self-imposed restriction on their jurisdiction under article 226. The rule of exhaustion of a remedy before invoking jurisdiction under article 226 has been characterised as a rule of policy, convenience and discretion rather than a rule of law, per decision of the Supreme Court in State of Uttar Pradesh v. Md. Nooh, AIR 1958 SC 86 and Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, AIR 1969 SC 556. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the aggrieved petitioner to move another Tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under article 226 of the Constitution the machinery created under the statute to be by-passed, and will leave the party applying to it to seek resort to the machinery so set up". In Assistant Collector of Central Excise v. Dunlop India Ltd. [1985] 154 ITR 172; AIR 1985 SC 330; [1985] 58 Comp Cas 145, 149, the Supreme Court observed: "Article 226 is not meant to shortcircuit 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 by-pass the alternative remedy provided by statute. Surely matters involving the revenue where statutory remedies are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of fact. The purpose of judicial review is to ensure that the individual receives fair treatment and not to ensure that the authority after according fair treatment reaches, on a matter which it is authorised by law to decide, a conclusion which is correct in the eyes of the court, judicial review is not an appeal from a decision but a review of the manner in which the decision is made. It will be erroneous to think that the court sits in judgment not only on the correctness of the decision-making process but also on the correctness of the decision itself." H.W.R. Wade in his Treatise on Administrative Law (sixth edition) at page 36, observes: "The system of judicial review is radically different from the system of appeals. When hearing an appeal the court is concerned with the merits of the decision under appeal. When subjecting some administrative act or order to judicial review, the court is concerned with its legality. On an appeal the question is 'right or wrong'? On review the question is 'lawful or unlawful'?" The other underlying object of the rule is that the High Courts are the apex judicial institutions in the States, and it is but natural that if an alterna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w unless it becomes absolutely necessary for them to decide the lis brought before the court. In other words, if the lis brought before the court can be resolved on any other grounds without going into the validity or constitutionality of an instrument or rule, then, the court should decline to go into such questions. In State of Bihar v. Rai Bahadur Hurdut Roy Moti Lall Jute Mills [1960] 11 STC 17; AIR 1960 SC 378, the Supreme Court held that the court shall not enter upon the question of validity or constitutionality of a law if it is possible to dispose of the case and determine the rights of the parties before it, on other grounds. To the same effect is the opinion in K.I. Shephard v. Union of India [1988] 72 FJR 38; [1988] 63 Comp Cas 244; [1988] 4 SCC 431. In the result and for the foregoing reasons, we dismiss these writ petitions reserving liberty to the petitioner to file appeal before the jurisdictional appellate authority under section 246(1)(i) of the Act within one month from today. No costs. We make it very clear that all factual and legal contentions raised by the parties in these two writ petitions are left open to be agitated by the parties before the appellate a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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