Amjathkhan Sharmila Siraj v. The Income Tax Officer, Income Tax Department, Office Of The Income Tax Officer, Non Corp. Ward 3 (3) Mdu

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 04.01.2022 CORAM: THE HONOURABLE MR.JUSTICE M.SUNDARW.P. No.2387 of 2020 andW.M.P(MD).No.2043 of 2020 Amjathkhan Sharmila Siraj Vs. 1. The Income Tax Officer, Income Tax Department, Office of the Income Tax Officer, Non Corp. Ward 3 (3) MDU, No.2, V.P.Rathinasamy Nadar Road, CR Building, Bibikulam, Madurai – 625 002. : Petitioner 2. The Union of India, Rep. by the Secretary to the Government, Ministry of Finance, Income Tax Department, New Delhi. : Respondents P RAYER: Writ Petitions filed under Article 226 of the Constitutionof India for issuance of Writ of Certiorari calling for the recordsrelating to the impugned Assessment Order No.ITBA/ASTS/S/144/2019-20/1021992420(1) issued by the first respondent and quash thesame.Consequential notice of demand dated 09.12.2019 in NoticeNo.ITBA/AST/S/156/2019-20/1021992539(1). ******************** In the captioned main writ petition an 'assessment order dated09.12.2019 bearing reference No.ITBA / ASTS /S /144 / 2019-20 /1021992420(1)' and a consequential 'demand notice which has alsodated 09.12.2019 bearing reference No. ITBA / AST / S / 156 / 2019-20 / 1021992539(1)' have been assailed and the same shall becollectively referred to as 'impugned orders' for the sake ofconvenience and clarity. https://hcservices.ecourts.gov.in/hcservices/ 2. Mr.V.Veerapandian, learned counsel for writ petitionernotwithstanding very many averments made in the writ affidavit andvery many grounds raised in the writ affidavit, in the hearing, madeone focussed submission qua his campaign against the impugned ordersand that one point is the writ petitioner was served with a showcause notice dated 23.11.2019 fixing hearing date and time on29.11.2019 at 10:30 AM qua assessment order 2017-18, writ petitionerwent over to the Office of the first respondent but she was informedthat the first respondent is on leave. Thereafter, the impugnedorders came to be issued and therefore it would only be appropriatethat one opportunity is given to the writ petitioner to explain herstand as the matter pertains to cash deposits made by the writpetitioner during demonetisation period. 3. In response to the aforementioned focussed submission madeby learned counsel for writ petitioner, Mr.N.Dilip Kumar, learnedRevenue counsel adverting to the counter-affidavit submitted thatthe averment of the writ petitioner that she went over to the Officeof the first respondent has been specifically denied. To be noted,the averment that the writ petitioner went over to the Office of thefirst respondent has been made in paragraph 6 of the writpetitioner's affidavit and the same has been refuted in paragraph 6of the counter-affidavit of the Revenue. A scanned reproduction of Paragraph 6 of the writ petitioner'saffidavit is as follows: A scanned reproduction of Paragraph 6 of first respondent's counter-affidavit is as follows: https://hcservices.ecourts.gov.in/hcservices/ I do not propose to enter upon the aforementioned factualdisputation in writ jurisdiction. 4. This takes us to the other submissions made by learnedRevenue counsel. Learned Revenue counsel submits that the 23.11.2019show cause notice is not the first and lone notice which the writpetitioner was served with. Adverting to typed set of papers filedalong with the counter-affidavit, learned Revenue counsel submittedthat a notice under Section 143(2) of 'the Income Tax Act, 1961'[hereinafter 'IT Act' for the sake of convenience and brevity] dated10.08.2018 was issued followed by another notice under Section 143(2) of IT Act dated 28.09.2018. Both these notices did not evoke anyreply is learned Revenue counsel's say. Thereafter, a notice dated14.01.2019 under Section 142(1) of IT Act was issued and it is onlyafter all of these that aforementioned 23.11.2019 show cause noticewas issued is learned Revenue counsel's emphatic say. 5. Learned counsel for writ petitioner, by way of replyarguments submitted that at the time of inception of captioned writpetition, an interim order was made on 07.02.2020 saying that thereshall be an order of interim stay subject to payment of 25% of theamount demanded and this payment of 25% of the amount demanded hassince been made. There is no disputation on this aspect of thematter. 6. In the light of the narrative thus far, the matter on hand,in my considered opinion now hinges on one argument of learnedRevenue counsel and that argument is alternate remedy available tothe writ petitioner by way of an appeal under Section 246A of ITAct. Learned Revenue counsel also points out that it is well open tothe writ petitioner to avail the alternate remedy and also make aprayer before the appellate authority to not to treat the writpetitioner as 'Assessee-in-default' and under normal circumstances,such an interim prayer is acceded to on condition that 20% of thedemand should be deposited. To be noted, in the case on hand 25% ofthe demand has already been paid. 7. Alternate remedy rule is no doubt not an absolute rule. Itis a rule of discretion. It is not only a rule of discretion, it isa self-imposed restraint qua writ jurisdiction. However, Hon'bleSupreme Court in a long line of authorities starting from DunlopIndia case [Assistant Collector of Central Excise, Chandan Nagar,West Bengal Vs. Dunlop India Ltd., and others reported in (1985) 1SCC 260] ; Satyawati Tandon [United Bank of India Vs. SatyawatiTondon and others reported in (2010) 8 SCC 110] and K.C.Mathew[Authorized Officer, State Bank of Travancore and another Vs. MathewK.C. reported in (2018) 3 SCC 85], has repeatedly held that when itcomes to fiscal law Statutes, alternate remedy rule has to beapplied with utmost rigour. Relevant paragraph in Dunlop case law isparagraph No.3 and relevant portion of the same reads as follows:https://hcservices.ecourts.gov.in/hcservices/ '3. ....... Article 226 is not meant to short-circuit or circumvent statutory procedures. It is onlywhere statutory remedies are entirely ill-suited to meetthe demands of extraordinary situations, as for instancewhere the very vires of the statute is in question orwhere private or public wrongs are so inextricably mixedup and the prevention of public injury and thevindication of public justice require it that recoursemay be had to Article 226 of the Constitution. But thenthe Court must have good and sufficient reason to bypassthe alternative remedy provided by statute. Surelymatters involving the revenue where statutory remediesare available are not such matters. We can also takejudicial notice of the fact that the vast majority of thepetitions under Article 226 of the Constitution are filedsolely for the purpose of obtaining interim orders andthereafter prolong the proceedings by one device or theother. The practice certainly needs to be stronglydiscouraged.' (Underlining made by this Court to supply emphasis and highlight) Relevant paragraph in K.C.Mathew case is paragraph 10 and thesame reads as follows: '10. In Satyawati Tondon the High Court hadrestrained further proceedings under Section 13(4) of theAct. Upon a detailed consideration of the statutoryscheme under the SARFAESI Act, the availability of remedyto the aggrieved under Section 17 before the Tribunal andthe appellate remedy under Section 18 before the AppellateTribunal, the object and purpose of the legislation, itwas observed that a writ petition ought not to beentertained in view of the alternate statutory remedyavailable holding: (SCC pp.123 & 128, Paras 43 & 55) “43. Unfortunately, the High Court overlookedthe settled law that the High Court will ordinarilynot entertain a petition under Article 226 of theConstitution if an effective remedy is available tothe aggrieved person and that this Rule applies withgreater rigour in matters involving recovery of “43. Unfortunately, the High Court overlookedthe settled law that the High Court will ordinarilynot entertain a petition under Article 226 of theConstitution if an effective remedy is available tothe aggrieved person and that this Rule applies withgreater rigour in matters involving recovery of taxes, cess, fees, other types of public money andthe dues of banks and other financial institutions.In our view, while dealing with the petitionsinvolving challenge to the action taken for recoveryof the public dues, etc., the High Court must keep inhttps://hcservices.ecourts.gov.in/hcservices/ mind that the legislations enacted by Parliament andState Legislatures for recovery of such dues are acode unto themselves inasmuch as they not onlycontain comprehensive procedure for recovery of thedues but also envisage constitution of quasi-judicialbodies for redressal of the grievance of anyaggrieved person. Therefore, in all such cases, theHigh Court must insist that before availing remedyunder Article 226 of the Constitution, a person mustexhaust the remedies available under the relevantstatute. 55.It is a matter of serious concern thatdespite repeated pronouncement of this Court, theHigh Courts continue to ignore the availability ofstatutory remedies under the DRT Act and the SARFAESIAct and exercise jurisdiction under Article 226 forpassing orders which have serious adverse impact onthe right of banks and other financial institutionsto recover their dues. We hope and trust that infuture the High Courts will exercise their discretionin such matters with greater caution, care andcircumspection.' (underlining made by this Court to supply emphasis highlightand for ease of reference) Paragraph 10 of K.C.Mathew case extracts Satyawati Tandonprinciple i.e., portions of case law from Satyawati Tandon and thesame has been reproduced. Therefore, I deem it appropriate to not toburden this order with extracts from Satyawati Tandon case. 8. In this regard, this Court deems it appropriate to refer toa recent judgment which was rendered by a three Member Bench of theHon'ble Supreme Court on 03.09.2021 i.e., Commercial Steel Limitedcase [The Assistant Commissioner of State Tax and others Vs.M/s.Commercial Steel Limited in Civil Appeal No.5121 of 2021] .Three Member Hon'ble Bench had culled out the exceptions to thealternate remedy rule and had clearly held that interference in writjurisdiction will arise only in exceptional cases where theexception adumbrated therein are attracted. Relevant paragraphs inCommercial Steel case law are paragraph Nos.11, 12 and the same readas follows: '11 The respondent had a statutory remedy undersection 107. Instead of availing of the remedy, therespondent instituted a petition under Article 226. Theexistence of an alternate remedy is not an absolute barto the maintainability of a writ petition under Articlehttps://hcservices.ecourts.gov.in/hcservices/ 226 of the Constitution. But a writ petition can beentertained in exceptional circumstances where there is:(i) a breach of fundamental rights; (ii) a violation ofthe principles of natural justice; (iii) an excess ofjurisdiction; or (iv) a challenge to the vires of thestatute or delegated legislation. '11 The respondent had a statutory remedy undersection 107. Instead of availing of the remedy, therespondent instituted a petition under Article 226. Theexistence of an alternate remedy is not an absolute barto the maintainability of a writ petition under Articlehttps://hcservices.ecourts.gov.in/hcservices/ 226 of the Constitution. But a writ petition can beentertained in exceptional circumstances where there is:(i) a breach of fundamental rights; (ii) a violation ofthe principles of natural justice; (iii) an excess ofjurisdiction; or (iv) a challenge to the vires of thestatute or delegated legislation. 12 In the present case, none of the above exceptionswas established. There was, in fact, no violation of theprinciples of natural justice since a notice was servedon the person in charge of the conveyance. In thisbackdrop, it was CA 5121/2021 7 not appropriate for theHigh Court to entertain a writ petition. The assessmentof facts would have to be carried out by the appellateauthority. As a matter of fact, the High Court has whiledoing this exercise proceeded on the basis of surmises.However, since we are inclined to relegate therespondent to the pursuit of the alternate statutoryremedy under Section 107, this Court makes noobservation on the merits of the case of therespondent.' 9. To be noted, the exceptions qua alternate remedy rule arewell settled vide Whirlpoolprinciple [Whirlpool Corporation Vs.Registrar of Trade Marks, Mumbai and others reported in (1998) 8 SCC1]. These exceptions are so well settled that it has come to stay as'Whirlpool exceptions' in litigation parlance. In the case on hand,the writ petitioner's case does not fall in any one of theexceptions, i.e., there is no violation of NJP (Natural JusticePrinciples) owing to the series of notices prior to 29.11.2019 showcause notice the details of which have been captured supra. 10. A careful perusal of the narrative thus far will make itclear that the writ petitioner has been given adequate and ampleopportunities but the writ petitioner has not availed the same. Theargument that the notice dated 10.08.2018 itself makes it clear thatit is a e-process also weighs in the mind of this Court. In thelight of the alternate remedy being not only efficacious andeffective but also a highly tenable option in the case on hand owingto 25% of demand having been already deposited by the writpetitioner, I deem it appropriate to relegate the writ petitioner tothe alternate remedy of an appeal under Section 246A of IT Act. 11. In the light of the narrative, discussion and dispositivereasoning set out supra, I find no reason to interfere qua impugnedorders i.e., impugned assessment order dated 09.12.2019 and impugneddemand notice dated 09.12.2019, but it is made clear that if thewrit petitioner chooses to approach the appellate authority underSection 246A of IT Act, it is well open to the appellate authorityhttps://hcservices.ecourts.gov.in/hcservices/to consider the appeal on its own merits and in accordance with law uninfluenced by any observation made in this order which may comeacross as an observation on merits or which may come across as anobservation having the trappings of an expression of opinion onmerits of the matter. 12. Captioned writ petition is disposed of on above terms.Consequently, captioned W.M.P is disposed of as closed. There shallbe no order as to costs. Sd/-Assistant Registrar (CS-II) // True Copy // / /2022Sub Assistant Registrar(CS) pkn To1. The Income Tax Officer, Income Tax Department, Office of the Income Tax Officer, Non Corp. Ward 3 (3) MDU, No.2, V.P.Rathinasamy Nadar Road, CR Building, Bibikulam, Madurai – 625 002.2. The Secretary, Union of India, Ministry of Finance, Income Tax Department, New Delhi. +1 CC to M/s.VASTLAW ASSOCIATES, Advocate ( SR-276[F] dated05/01/2022 ) +1 CC to M/s.N.DILIPKUMAR, Advocate ( SR-502[F] dated 05/01/2022 ) W.P. No.2387 of 2020 04.01.2022 12. Captioned writ petition is disposed of on above terms.Consequently, captioned W.M.P is disposed of as closed. There shallbe no order as to costs. Sd/-Assistant Registrar (CS-II) // True Copy // / /2022Sub Assistant Registrar(CS) pkn To1. The Income Tax Officer, Income Tax Department, Office of the Income Tax Officer, Non Corp. Ward 3 (3) MDU, No.2, V.P.Rathinasamy Nadar Road, CR Building, Bibikulam, Madurai – 625 002.2. The Secretary, Union of India, Ministry of Finance, Income Tax Department, New Delhi. +1 CC to M/s.VASTLAW ASSOCIATES, Advocate ( SR-276[F] dated05/01/2022 ) +1 CC to M/s.N.DILIPKUMAR, Advocate ( SR-502[F] dated 05/01/2022 ) W.P. No.2387 of 2020 04.01.2022 https://hcservices.ecourts.gov.in/hcservices/