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TMI Blog2024 (7) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... id to be passed unless it is in some way pronounced or published or the party affected has the means of knowing it and that it is not enough if the order is made, signed, and kept in the file, because such order may be liable to change at the hands of the authority who may modify it, or even destroy it, before it is made known, based on subsequent information, thinking or change of opinion. It is hereby held that the proceeding of the reassessment of the Return submitted by the assessee for the AY 2003-2004 shall be deemed to be completed only on 05-04-2007 when the assessment order was served/ communicated to the representative of the assessee and the same was not completed within the period prescribed under section 153(2) of the Act. Objection raised by the DSGI about the maintainability of the present writ petition on ground of availability of filing a statutory appeal u/s 246 - It is to be pointed out that it is a settled principle of law that availability of an alternative and effective remedy does not exclude or completely barred the High Court from entertaining a writ petition under Article 226 of the Constitution of India. The normal rule is that a writ petition under Artic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same date. After about one year from the date of filing the aforesaid Return, the Income Tax Officer, Ward-2, Imphal (hereinafter referred to as the Assessing Officer , for short), by holding that he had reasons to believe that the income chargeable to tax had escaped assessment within the meaning of section 147 of the Act, issued notice under section 148 of the Act dated 28-07-2005 to the original petitioner requiring her to submit a Return of her income in the prescribed form within 30 days from the date of service of the said notice. There is nothing on record to indicate as to when the said notice was received by the original petitioner, however, it has been submitted on behalf of the petitioner that the said notice under section 148 was received on 06-12-2005 and the respondents have not denied such contention. [4] On receiving the said notice, the original petitioner through her counsel submitted an application dated 06-12-2005 to the Assessing Officer with the request to make available information/ documents collected from different sources for taking up proceedings of escaped income so as to enable her to furnish details of the same for early settlement of the issue. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) complied with all the subsequent notices, the case was discussed with the authorised representative of the Assessee, who appeared before the Assessing Officer from time to time and thereafter, on completion of the reassessment proceeding, the Assessing Officer passed the assessment order dated 28-12-2006 under section 143(3)/ 147 of the Act. By the said order, the Assessing Officer assessed the total income of the assessee at Rs. 3,17,508/- and raised a demand of Rs. 1,07,969/-. Following the same, notice of demand dated 28-12-2006 under section 156 of the Act was issued by the Assessing Officer raising a demand of Rs. 1,07,969/- for the said assessment year and copies of the said assessment order/ demand notice and challan were served on the authorized representative of the assessee on 05-01-2007. [7] In terms of the direction contained in the assessment order dated 28-12-2006, the Assessing Officer issued a Show Cause notice dated 25-05-2007 asking the assessee to show cause as to why penalty proceeding should not be initiated against her and also asking her to appear in the Office of the Assessing Officer. When the assessee failed to respond to the said show cause notice, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on or after the 1st day of April, 2005 but before the 1st day of April, 2011, the provisions of this sub-section shall have effect as if for the words one year , the words nine months had been substituted] [9] It has further been submitted by the learned senior counsel that the first notice under section 148 dated 28-07-2005 was served to the assessee on 06-12-2005 and the second notice under section 148 dated 03-03-2006 was served on the assessee in the month of March, 2006 and as such, the period of nine months shall start from 01-04-2006 and will end on 31-12-2006 as per the second proviso to section 153(2) of the Act. It has been strenuously submitted that the impugned assessment order dated 28-12-2006 is a back dated one and a copy of the same was served to the authorised representative of the assessee only on 05-01-2007, beyond the prescribed period of nine months. The learned senior counsel submitted that the impugned assessment order will take effect only from 05-01-2007, on which date it was served to the representative of the assessee and not from 28-12-2006, on which date it was allegedly passed. The learned senior counsel, accordingly, submitted that since the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... understand this argument. Even if the Council of Ministers had provisionally decided to reinstate the respondent that would not prevent the Council from reconsidering the matter and coming to a contrary conclusion later on, until a final decision is reached by them and is communicated to the Rajpramukh in the form of advice and acted upon by him by issuing an order in that behalf to the respondent. Thus it is of the essence that the order has to be communicated to the person who would be affected by that order before the State and that person can be bound by that order. For, until the order is communicated to the person affected by it, it would be open to the Council of Ministers to consider the matter over and over again and, therefore, till its communication the order cannot be regarded as anything more than provisional in character. (2) State of Punjab Vs. Amar Singh Harika reported in AIR 1966 SC 1313, wherein it has been held as under:- 11. The first question which has been raised before us by Mr. Bishan Narain is that though the respondent came to know about the order of his dismissal for the first time on the 28th May 1951, the said order must be deemed to have taken effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order is actually written out by the said authority; such an order can only be effective after it is communicated to the officer concerned or is otherwise published. When a public officer is removed from service, his successor would have to take charge of the said office; and except in cases where the officer concerned has already been suspended, difficulties would arise if it is held that an officer who is actually working and holding charge of his office, can be said to be effectively removed from his office by the mere passing of an order by the appropriate authority. In our opinion, therefore, the High Court was plainly right in holding that the order of dismissal passed against the respondent on the 3rd June 1949 could not be said to have taken effect until the respondent came to know about it on the 28th May 1951. (3) Bipromasz Bipron Trading SA Vs. Bharat Electronics Limited (BEL) reported in (2012) 6 SCC 384 , wherein it has been held as under:- 31. Apart from the aforesaid statutory provision, it is also settled that an official order takes effect only when it is served on the person affected. In Bachhittar Singh v. State of Punjab this Court has clearly enunciated the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by an authority cannot be said to take effect unless the same is communicated to the party affected. The order passed by a competent authority or by an appropriate authority and kept with itself, could be changed, modified, cancelled and thus denuding such an order of the characteristics of a final order. Such an uncommunicated order can neither create any rights in favour of a party, nor take away the rights of any affected party, till it is communicated. 34. The aforesaid proposition has been reiterated in Laxminarayan R. Bhattad v. State of Maharashtra, wherein it has been held that: (SCC p. 431, para 52) 52. It is now well known that a right created under an order of a statutory authority must be communicated so as to confer an enforceable right. Similar view has been reiterated in Greater Mohali Area Development Authority v. Manju Jain wherein it is observed as follows: (SCC p. 164, para 24) 24. Thus, in view of the above, it can be held that if an order is passed but not communicated to the party concerned, it does not create any legal right which can be enforced through the court of law, as it does not become effective till it is communicated. (4) Cochin Plantations Ltd. Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by issuing the same by the office of the assessing authority, the assessee has filed its returns. Taking into consideration all these aspects, we are of the view that the application filed under section 19 by the assessee is to be allowed and fresh opportunity should be given to the assessee on the basis of the returns filed by it on November 5, 1976. [10] Mr. Kh. Samarjit, learned DSGI appearing for the respondents submitted that there is provision for filing a statutory appeal under section 246 of the Income Tax Act, 1961, however, without availing such an opportunity of filing a statutory appeal, the assessee approached this court directly by filing the present writ petition for redressing her grievances. It has been submitted that since there is an alternative and effective remedy of filing an appeal, the present writ petition is not maintainable and liable to be rejected outright. The learned DSGI further submitted that there is no requirement under law for communicating the impugned assessment order within the prescribed period of limitation stipulated under section 153(2) of the Act. In support of his contentions, the learned DSGI cited the judgment rendered by the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on by various banks undoubtedly has an impact and effect on the economy of the country in general. Money of the shareholders and the depositors is with such companies, carrying on banking activity. The banks finance the borrowers on any given rate of interest at a particular time. They advance loans as against securities. Therefore, it is obviously necessary to have regulatory check over such activities in the interest of the company itself, the shareholders, the depositors as well as to maintain the proper financial equilibrium of the national economy. The banking companies have not been set up for the purposes of building the economy of the State; on the other hand such private companies have been voluntarily established for their own purposes and interest but their activities are kept under check so that their activities may not go wayward and harm the economy in general. A private banking company with all freedom that it has, has to act in a manner that it may not be in conflict with or against the fiscal policies of the State and for such purposes, guidelines are provided by Reserve Bank so that a proper fiscal discipline, to conduct its affairs in carrying on its business, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in issuing a writ may arise where there may not be any non-compliance with or violation of any statutory provision by the private body. In that event a writ may not be issued at all. Other remedies, as may be available, may have to be resorted to. United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110, 42. There is another reason why the impugned order should be set aside. If Respondent 1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression any person used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. 43. Unfortunately, the High Court overlooked the settled law that the High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection. State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85, 5. We have considered the submissions on behalf of the parties. Normally this Court in exercise of jurisdiction under Article 136 of the Constitution is loath to interfere with an interim order passed in a pending proceeding before the High Court, except in special circumstances, to prevent manifest injustice or abuse of the process of the court. In the present case, the facts are not in dispute. The discretionary jurisdiction under Article 226 is not absolute but has to be exercised judiciously in the given facts of a case and in accordance with law. The normal rule is that a writ petition under Article 226 of the Constitution ought not to be entertained if alternate statutory remedies are available, except in cases falling within the well-defined exceptions as observed in CIT v. Chhabil Dass Agarwal [(2014) 1 SCC 603], as follows: (SCC p. 61 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese aspects have not been kept in mind and considered before passing the impugned order. 9. Even prior to the SARFAESI Act, considering the alternate remedy available under the DRT Act it was held in Punjab National Bank v. O.C. Krishnan [(2001) 6 SCC 569] that : (SCC p. 570, para 6) 6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order. Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir, (2022) 5 SCC 345, 18. Even otherwise, it is required to be noted that a writ petition against the private financial institution - ARC - the appellant herein under Article 226 of the Constitution of India against the proposed action/actions under Section 13(4) of the SARFAESI Act can be said to be not maintainable. In the present case, the ARC proposed to take action/actions under the SARFAESI Act to recover the borrowed amount as a secured creditor. The ARC as such cannot be said to be performing public functions which are normally expected to be performed by the State authorities. During the course of a commercial transaction and under the contract, the bank/ARC lent the money to the borrowers herein and therefore the said activity of the bank/ARC cannot be said to be as performing a public function which is normally expected to be performed by the State authorities. If proceedings are initiated under the SARFAESI Act and/or any proposed action is to be taken and the borrower is aggrieved by any of the actions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercising its discretion while granting stay in such matters. In these circumstances, the proceedings before the High Court deserve to be dismissed. Varimadugu Obi Reddy v. B. Sreenivasulu, (2023) 2 SCC 168, 36. In the instant case, although the respondent borrowers initially approached the Debts Recovery Tribunal by filing an application under Section 17 of the SARFAESI Act, 2002, but the order of the Tribunal indeed was appealable under Section 18 of the Act subject to the compliance of condition of pre-deposit and without exhausting the statutory remedy of appeal, the respondent borrowers approached the High Court by filing the writ application under Article 226 of the Constitution. We deprecate such practice of entertaining the writ application by the High Court in exercise of jurisdiction under Article 226 of the Constitution without exhausting the alternative statutory remedy available under the law. This circuitous route appears to have been adopted to avoid the condition of pre-deposit contemplated under 2nd proviso to Section 18 of the 2002 Act. 18. While doing so, we are conscious of the fact that the powers conferred under Article 226 of the Constitution of India are r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of law laid down by the Hon ble Apex Court and other High Courts in the judgments cited by the learned senior counsel appearing for the petitioners. Accordingly, it is hereby held that the proceeding of the reassessment of the Return submitted by the assessee for the Assessment Year, 2003-2004 shall be deemed to be completed only on 05-04-2007 when the assessment order was served/ communicated to the representative of the assessee and the same was not completed within the period prescribed under section 153(2) of the Act. [12] With regard to the objection raised by the learned DSGI about the maintainability of the present writ petition on ground of availability of filing a statutory appeal under section 246 of the Act, it is to be pointed out that it is a settled principle of law that availability of an alternative and effective remedy does not exclude or completely barred the High Court from entertaining a writ petition under Article 226 of the Constitution of India. The normal rule is that a writ petition under Article 226 of the Constitution ought not to be entertained if alternate statutory remedies are available, however, there are certain exceptions to this rule. Some of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he high courts holding writ petitions as not maintainable merely because the alternative remedy provided by the relevant statutes has not been pursued by the parties desirous of invocation of the writ jurisdiction. The power to issue prerogative writs under Article 226 is plenary in nature. Any limitation on the exercise of such power must be traceable in the Constitution itself. Profitable reference in this regard may be made to Article 329 and ordainments of other similarly worded articles in the Constitution. Article 226 does not, in terms, impose any limitation or restraint on the exercise of power to issue writs. While it is true that exercise of writ powers despite availability of a remedy under the very statute which has been invoked and has given rise to the action impugned in the writ petition ought not to be made in a routine manner, yet, the mere fact that the petitioner before the high court, in a given case, has not pursued the alternative remedy available to him/it cannot mechanically be construed as a ground for its dismissal. It is axiomatic that the high courts (bearing in mind the facts of each particular case) have a discretion whether to entertain a writ petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blished that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute, (Halsbury's Laws of England, 3rd Edn., Vol. 11, p. 130 and the cases cited there). The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, if any. But this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies. *** 6. At the end of the last century, this Court in paragraph 15 of the its decision reported in (1998) 8 SCC 1 (Whirlpool Corporation v. Registrar of Trade Marks, Mumbai) carved out the exceptions on the existence wher ..... 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