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TMI Blog2021 (8) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petitions, the High Court will not only be over-burdened, but usurping the powers of the appellate authority is certainly not desirable. Regarding the contentions raised on behalf of the writ petitioner with reference to the jurisdiction and violations of the principles of natural justice, they are not striking the conscious of this Court, so as to invoke the extraordinary jurisdiction, as the adjudication on disputed facts became necessary. The point of jurisdiction and principles of natural justice are pleaded commonly, which all are deeply associated with the disputed facts and circumstances. Thus, an elaborate adjudication with reference to the original documents and records are necessary. Undoubtedly, the appellate authority or the Tribunal, as the case may be, are the quasi-judicial authorities and competent to adjudicate the ground raised regarding jurisdiction and violations of principles of natural justice. Thus, the opportunity of an aggrieved person to adjudicate the legal grounds must be allowed to be provided before the appellate authority or before the Tribunal, as the case may be. The High Court cannot adjudicate the disputed facts in a writ proceedings for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. Thus, a factual inference is to be drawn that the notice was not served within the period of limitation and the Courts have held that service of notice also to be taken into account for the purpose of deciding the point of limitation. The reasons furnished for reopening of assessment was communicated in proceedings dated 16.09.2010, which reveals that it is noticed that provisions for anticipated contract losses of ₹ 10835 Lakhs to be added back in computing the book profit u/s 116 JB as the same is only provision and not an ascertained liability . The petitioner assessee submitted their objections and thereafter, the petitioner filed W.P.Nos.989 of 2011, challenging the initiation of reopening of assessment under Section 147/148 of the Act and consequential proceedings initiated. This Court passed as under: 4 .With the above observations, the Writ Petitions stand closed with liberty to the petitioner either to file their returns or seek for reasons, if not already given. Such an exercise of raising their objections shall be done within a period of four weeks from the date of receipt of a copy of this order. In case, such objections are filed before the assessing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the added condition set out in the proviso to Section 147 of the Act. Normally, the time limit for initiation of re- assessment is four years from the end of the subject assessment year with an extended period of two years provided to the Department conditional upon the Department establishing that the alleged escapement of income was attributable to the failure of the assessee to file a return or to make a full and true disclosure of its income for the relevant period. ................ 12 .A perusal of the reasons extracted elsewhere in this order only referred to the issue of classification of royalty on merits and nowhere it is stated that there has been any failure by the petitioner in making a disclosure in this regard. To be fair to the Assessing Officer, he does not even make such allegation in the reasons for re-assessment and rightly so, since the material available would show a full disclosure by the petitioner at all stages of assessment. Thus I am of the view that the impugned order dated 26.08.2019 rejecting the objections to assumption of jurisdiction is liable to be quashed and I do so. 8.In the case of M/s.Kone Elevators (India) Pvt. Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be obtained from the CBDT for claiming exemption under Section 10B of the Act. However, there are certain confusions even within the Department Officials regarding production of such ratification certificate from the CBDT. The dispute arises in view of the fact that the assessee is of an opinion that the approval granted by the STPI under the delegated powers of the Directors of STPI by IMSC is a valid approval for the purpose of claiming exemption under Section 10B of the Act. Therefore, the presumption cannot be construed as suppression on the part of the assessee. It is not a mere presumption in the present case by the assessee. The presumption has got a valid reason because the assessee is holding a valid approval obtained from the STPI and the power to grant approval was delegated to the Directors of STPI by IMSC. It is not as if the assessee claimed exemption under Section 10B without any such approval. It is a case where the order of approval, which was validly granted, was produced before the Assessing Officer at the time of scrutiny and the Assessing Officer also accepted the approval order and granted exemption. Thus, the reason stated in the impugned proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of T.M.Hotels Private Limited Vs. The Additional Commissioner of Central Excise , this Court passed an order on 06.07.2021 in W.P.No.14099 of 2014 as under: 7 .This Court is of the considered opinion that in all circumstances, the parties aggrieved are bound to prefer an appeal before the appellate authority. However, in certain circumstances, the Courts are bound to consider whether the denial of opportunity caused certain prejudice to the interest of the person aggrieved. In the present case, admittedly, the summons were issued to the petitioner. However, the learned counsel for the petitioner entered appearance in the proceedings before the respondent on 04.03.2014 itself. Thus, there is a possibility that the petitioner would not have informed about the summons to their counsel regarding the personal hearing. Under those circumstances, the counsel was not aware of the date of hearing and the same resulted in passing of the final order without hearing the learned counsel who entered appearance on behalf of the writ petitioner. 11.Relying on the above judgments, the learned Senior Counsel reiterated that the petitioner need not be unnecessarily driven t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e need not be undermined, nor an opportunity provided to the aggrieved person under the statute need not be taken away in casual and routine manner. In the event of dispensing with the appellate remedy, the aggrieved person is deprived of an opportunity to adjudicate the disputes/merits with reference to the original documents and evidences. Undoubtedly, the appellate authority is the final fact finding authority and their findings in a appellate proceedings may be of valuable assistance to the constitutional Courts to exercise the power of judicial review, effectively under Article 226 of the Constitution of India, for the purpose of providing complete justice to the parties to the lis. Therefore, the Courts are expected to be cautious, while dispensing with the appellate remedy and casual admissions of writ petitions are to be avoided. Whenever the appellate remedy is contemplated, which is efficacious, then the parties are bound to exhaust the same. 16.The litigants are approaching the High Court without exhausting the remedy. Sometimes, with an idea to avoid pre-deposits, if any prescribed, or by stating that they may not get speedy and efficacious remedy. These grounds c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter of dispensing with the appeal remedy provided for an aggrieved person under a statute. If the High Courts started interfering with such Appellate powers without any valid and substantiated reasons, then the very purpose and object of the statute and provision of appeal under the statute became an empty formality and the High Courts also should see that the provisions of appeal contemplated under the statutes are implemented in its real spirit and in accordance with the procedures contemplated under the rules constituted thereon. While entertaining a writ petition as narrated by the Apex Court, the provision of efficacious alternative remedy under the statute also to be considered. If the writ petitions are entertained in a routine manner, by not allowing the competent Appellate authority to exercise their powers under the provisions of the statute, then this Court is of an opinion that the power of judicial review has not exercised in a proper manner. Thus, it is necessary for this Court to elaborate the legal principle settled in respect of the separation of powers under the Constitution of India. 1. Madras Bar Association vs. Union of India (UOI) (25.09.2014 - SC) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of powers informs the Indian constitutional structure and it is an essential constituent of rule of law. In other words, the doctrine of separation of power though not expressly engrafted in the Constitution, its sweep, operation and visibility are apparent from the scheme of Indian Constitution. Constitution has made demarcation, without drawing formal lines between the three organs- legislature, executive and judiciary. In that sense, even in the absence of express provision for separation of power, the separation of power between legislature, executive and judiciary is not different from the constitutions of the countries which contain express provision for separation of powers. (ii) Independence of courts from the executive and legislature is fundamental to the rule of law and one of the basic tenets of Indian Constitution. Separation of judicial power is a significant constitutional principle under the Constitution of India. (iii) Separation of powers between three organs-- legislature, executive and judiciary--is also nothing but a consequence of principles of equality enshrined in Article 14 of the Constitution of India. Accordingly, breach of separatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, the institutional functions and exhausting the appeal remedies by the aggrieved persons, are to be enforced in all circumstances and writ proceedings can be entertained only on exceptional circumstances. Rule is to prefer an appeal and entertaining a writ is only an exception. This being the legal principles to be followed, this Court cannot entertain the writ petitions in a routine manner by waiving the remedy of appeal provided under the statute. 21.Now, let us look into the legal principles settled by the Apex Court for exhausting the efficacious alternative remedy provided under the statute. 22.When an effective alternative remedy is available, a writ petition cannot be maintained 1. In City and Industrial Development Corporation v. DosuAardeshirBhiwandiwala and Ors. MANU/SC/8250/2008 : (2009) 1 SCC 168, this Court had observed that: The Court while exercising its jurisdiction under Article 226 is dutybound to consider whether: (a) adjudication of writ petition involves any complex and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te alternate statutory remedies available to the Respondent. The interim order was passed on the very first date, without an opportunity to the Appellant to file a reply. Reliance was placed on United Bank of India vs. Satyawati Tandon and others, 2010 (8) SCC 110, and General Manager, Sri Siddeshwara Cooperative Bank Limited and another vs. Ikbal and others, 2013 (10) SCC 83. The writ petition ought to have been dismissed at the threshold on the ground of maintainability. The Division Bench erred in declining to interfere with the same. The Supreme Court agreed to the arguments and held the same also noted that the writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. 5. State of Himachal Pradesh v. Gujarat Ambuja Cement Ltd. reported 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 ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round that they are incompetent without a party being obliged to wait until those proceedings run their full course. Secondly, the doctrine has no application when the impugned order has been made in violation of the principles of natural justice. We may add that where the proceedings itself are an abuse of process of law the High Court in an appropriate case can entertain a writ petition. 18.The Hon'ble Supreme Court of India, in the case of M/s.Canon India Private Limited v. Commissioner of Customs [Civil Appeal No.1827 of 2018, dated 09.03.2021] dealt with the jurisdiction aspect with reference to the provisions of the statute in paragraph Nos.9, 12, 13 and 15, which all are extracted hereunder: 9 .The question that arises is whether the Directorate of Revenue Intelligence had authority in law to issue a show cause notice under Section 28(4) of the Act for recovery of duties allegedly not levied or paid when the goods have been cleared for import by a Deputy Commissioner of Customs who decided that the goods are exempted. It is necessary that the answer must flow from the power conferred by the statute i.e. under Section 28(4) of the Act. This Section empowers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the same officer or his successor and not by another officer of another department though he is designated to be an officer of the same rank. In our view, this would result into an anarchical and unruly operation of a statute which is not contemplated by any canon of construction of statute. ... 15 .It is obvious that the re-assessment and recovery of duties i.e. contemplated by Section 28(4) is by the same authority and not by any superior authority such as Appellate or Revisional Authority. It is, therefore, clear to us that the Additional Director General of DRI was not the proper officer to exercise the power under Section 28(4) and the initiation of the recovery proceedings in the present case is without any jurisdiction and liable to be set aside. 19.The Appellate Tribunal, formed an opinion that the issuance of show cause notice itself was by an improper authority. Thus, by citing the said finding, the appellate remedy otherwise provided under the Statute cannot 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 to be preferred 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 merely on the ground on jurisdictional error, which is rectifiable. 23.Regarding the contentions raised on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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