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TMI Blog2021 (6) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... r affidavit. This Court is of the considered opinion that all these mixed question of facts and law are to be adjudicated by the Appellate Authority in the present case with reference to the original documents and evidences. Such an exercise cannot be done by the High Court in writ proceedings. The High Court cannot proceed with these complicated facts merely based on the affidavits and counter-affidavits filed by the respective parties. It requires some deliberation and exhaustive enquiry, which is to be done by the Appellate Authority by examining the original documents and evidences. Thus, interference, in such circumstances, in a writ jurisdiction, is not preferable and the High Court may allow Assessees to prefer an appeal, so as to adjudicate the disputed question of facts as well as other legal grounds raised, including the violation of principles of natural justice. The Appellate Authorities are empowered to set aside, modify or to remand the matter back to the Original Authority, as the case may be. When such a power has been conferred on the Appellate Authorities, interference by the High Court in a writ jurisdiction may not be preferable. Thus this Court has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 19.05.2008 approved the capital share of the petitioners-Company. Clauses 4 and 22 of the said order reads as under:- 4. Foreign Equity Participation (in Foreign Exchange) : 100.00% (One Hundred Percent) amounting to US $ 250 million in the paid-up capital of M/s.Rakindo Developer Pvt. Ltd., Chennai . 22. In case of any problem encountered during implementation of this foreign collaboration approval, you are advised to contact Foreign Investment Implementation Authority (FIIA) at email address [email protected] or write to Foreign Investment Implementation Authority, Department of Industrial Policy and Promotion, Ministry of Commerce and Industrial, Udyog Bhawan, New Delhi-110 011. 6. Relying on the said order passed by the Government of India, petitioners state that there was no illegal flow of money nor the investment is made in an inappropriate manner. When the share capital was made the approval of the Competent Authorities of the Government of India, there is no reason whatsoever to pass the impugned order of assessment contrary to the legality of investments made by petitioners-Company. 7. The learned Senior Counsel, appearing on behalf of the petitioners, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny had simply been used by the UAE Company to hoodwink the taxing authorities in India, whereas actually, it is the UAE Company which has made the investment in the Assessees-Company . Therefore, the mere contention raised by petitioners regarding the alleged admission by the respondents, is incorrect and it is mere extraction of the averments of petitioners in their affidavit. 12. This Court is of the considered opinion that all these mixed question of facts and law are to be adjudicated by the Appellate Authority in the present case with reference to the original documents and evidences. Such an exercise cannot be done by the High Court in writ proceedings. 13. The transactions made, if any, in a calculated manner, are to be culled out by examining the evidences by the Experts in the field. That is the reason why the Appellate Authorities are vested with the power to adjudicate the facts and law, so as to provide findings in respect of those mixed question of facts and law. 14. The High Court cannot proceed with these complicated facts merely based on the affidavits and counter-affidavits filed by the respective parties. It requires some deliberation and exhaustive en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is further observed in the impugned order that it is seen from the Balance Sheet of the Assessees-Company that the Indian Promoters who had subscribed in the Share Capital are Ms.Vimala Devi for ₹ 50,000/- and 9 others for ₹ 4,50,000/-. As per Joint Venture Agreement, the Indian Promoters should also bring in equivalent contribution with the Foreign Promoters. From the perusal of the Balance Sheet, it is found that the foreign promoter had brought in 127.52 crores as Share Application Money. Therefore, the Indian Promoters/Share Holders should have made an equivalent contribution. However, only one lakh rupees was shown to have been brought in the form of share capital by the Indian promoters. 20. Relying on the findings in the impugned assessment order, the learned Senior Standing Counsel, appearing on behalf of respondents, reiterated that if at all petitioners possess sufficient evidence to disprove the findings of the Assessing Officer, they have to prefer an appeal under the provisions of the Income Tax Act. 21. This Court is of the considered opinion that when the facts are disputed by the parties to the writs on hand, then the appeal alone would be a prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 226 of the Constitution of India is limited to find out whether the processes contemplated under the Statutes and the procedural aspects are followed by the competent authorities as well as the appellate authorities or not. The High Court, under Article 226 of the Constitution of India, is not expected to usurp the powers of the appellate authorities by adjudicating the merits of the matter on certain documents and evidences. In the event of adjudication of merits under Article 226 of the Constitution of India in the absence of complete trial with reference to the documents and evidences, there is a possibility of miscarriage of justice, and therefore, the High Court is expected to be cautious, while entering into the venture of adjudication of certain merits with reference to the original documents and evidences produced by the respective parties to the lis. This being the legislative intention, High Court is expected to trust the institutional authorities as well as the hierarchy of institutions contemplated under the Statutes. Institutional respects are of paramount importance for providing complete justice to the parties and the various stages of adjudication are impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paration of powers under the Constitution of India. 1. Madras Bar Association vs. Union of India (UOI) (25.09.2014 - SC) : MANU/SC/0875/2014 If the historical background, the preamble, the entire scheme of the Constitution, relevant provisions thereof including Article 368 are kept in mind there can be no difficulty in discerning that the following can be regarded as the basic elements of the constitutional structure. (These cannot be catalogued but can only be illustrated): (1) The supremacy of the Constitution. (2) Republican and Democratic form of government and sovereignty of the country. (3) Secular and federal character of the Constitution. (4) Demarcation of power between the Legislature, the executive and the judiciary. (5) The dignity of the individual secured by the various freedoms and basic rights in Part III and the mandate to build a welfare State contained in Part IV. (6) The unity and the integrity of the Nation. 2. Holiness Kesavananda Bharati Sripadagalvaru v. State of Kerala and Anr. [MANU/SC/0445/1973 : (1973) 4 SCC 225]. That separation of powers between the legislature, the executive and the judiciary is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iary--is also nothing but a consequence of principles of equality enshrined in Article 14 of the Constitution of India. Accordingly, breach of separation of judicial power may amount to negation of equality Under Article 14. Stated thus, a legislation can be invalidated on the basis of breach of the separation of powers since such breach is negation of equality Under Article 14 of the Constitution. (iv) The superior judiciary (High Courts and Supreme Court) is empowered by the Constitution to declare a law made by the legislature (Parliament and State legislatures) void if it is found to have transgressed the constitutional limitations or if it infringed the rights enshrined in Part III of the Constitution. (v) The doctrine of separation of powers applies to the final judgments of the courts. Legislature cannot declare any decision of a court of law to be void or of no effect. It can, however, pass an amending Act to remedy the defects pointed out by a court of law or on coming to know of it aligned. In other words, a court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd disputed questions of facts and whether they can be satisfactorily resolved; (b) the petition reveals all material facts; (c) the Petitioner has any alternative or effective remedy for the resolution of the dispute; (d) person invoking the jurisdiction is guilty of unexplained delay and laches; (e) ex facie barred by any laws of limitation; (f) grant of relief is against public policy or barred by any valid law; and host of other factors. 2. KanaiyalalLalchand Sachdev and Ors. vs. State of Maharashtra and Ors . (07.02.2011 - SC) : MANU/SC/0103/2011 It is well settled that ordinarily relief Under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person. (See Sadhana Lodh v. National Insurance Co. Ltd.; Surya Dev Rai v. Ram Chander Rai and SBI v. Allied Chemical Laboratories.) 3. Commissioner of Income Tax and Ors. v. ChhabilDass Agarwal , MANU/SC/0802/2013 : 2014 (1) SCC 603, as follows: Para 15. while it can be said that this Court has recognised some exceptions to the Rule of alternative remedy i.e. where the statutory authority has not acted in accordance with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at AIR 2005 SC 3856, the Supreme Court explained the rule of 'alternate remedy' in the following terms: Considering the plea regarding alternative remedy as raised by the appellant-State. Except for a period when Article 226 was amended by the Constitution (42nd Amendment) Act, 1976, the power relating to alternative remedy has been considered to be a rule of self imposed limitation. It is essentially a rule of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy it is within the jurisdiction of discretion of the High Court to grant relief under Article 226 of the Constitution. At the same time, it cannot be lost sight of that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere if there is an adequate efficacious alternative remedy. If somebody approaches the High Court without availing the alternative remedy provided the High Court should ensure that he has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction. 6. K.S. Rashid and Sons v. Income Tax Investigation Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be dispensed with, and in the event of accepting the said contention, in all such cases, every litigant will approach the High Court by way of writ petition bypassing the appellate remedy, which is not desirable and cannot be accepted. As observed earlier, Institutional respect is of paramount importance. Even the point of jurisdiction, limitation, error apparent on the face of the record, are on merits and all are to be adjudicated before the appellate authority and the appellate authority, more specifically, the Appellate Tribunal or the Commissioner (Appeals), as the case may be, is empowered to adjudicate all such legal grounds raised by the respective parties and make a finding on merits. Thus, usurping the powers of the appellate authorities by the High Court by invoking its powers under Article 226 of the Constitution of India is certainly unwarranted. The parties must be provided an opportunity to approach the appropriate authorities for redressal of their grievances in the manner known to law. In the event of entertaining all such writ petitions, the High Court will not only be over-burdened, but usurping the powers of the appellate authority is certainly n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules and guidelines issued by the Department. 18.Large number of writ petitions are filed without exhausting the statutory appeal remedies and High Court is also entertaining such writ petitions in a routine manner. Keeping such writ petitions pending for long time would cause prejudice to the interest of the assessee also. Thus, such statutory provisions regarding the appeal are to be decided at the first instance, enabling the litigants to avail the remedy by following the procedures as contemplated under law. Such writ petitions are filed may be on the ground of jurisdiction or otherwise. However, the Courts are expected to ensure that all such legal grounds available to the parties are adjudicated before the proper Forum and only after exhausting the statutory remedies, writ petitions are to be entertained. In the absence of exhausting such remedies, High Court is loosing the benefit of deciding the matter on merits as the High Court cannot conduct a trial or examine the original records in the writ proceedings under Article 226 of the Constitution of India. Thus, the Courts shall not provide an unnecessary opportunity to the assessee to escape from the liability me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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