British Agro Products (India) P Ltd(Rep By Its Managing Director) v. Prayer

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE M.SUNDAR W.P.NO.22071 OF 2021 &WMP.NOS.23287,23292, 23289, 23293 OF 2021 British Agro Products (India) P Ltd(Rep by its Managing Director)No.9, State Bank Officers ColonyShastri Nagar, AdyarChennai - 600 020PAN: AAFCB8238H. ... Petitioner Vs 1. The Assistant Commissioner of Income Tax National Faceless Assessment Centre, Delhi E-Ramp, Jawaharlal Nehru Stadium, Delhi - 110 003.2. The Income Tax Officer, Corporate Ward -1(3), Income Tax Department, 121, Nungambakkam High Road Chennai - 600 034.3. The Principal Commissioner of Income Tax -1 Income Tax Department, 121, Nungambakkam High Road Chennai - 600 034. ...Respondents Prayer: Petition filed under Article 226 of the Constitution ofIndia to issue a Writ of Certiorarified Mandamus to call for therecords of the writ petitioner company on the file of the firstrespondent to quash the impugned order dated 23.09.2021 passedu/s 143 (3) r/w Section 144B of the Act for the Assesment Year2018-19inITBA/AST/143(3)/2021-22/1035833472(1)andconsequently direct the First Respondent to complete the freshassessment for the assessment year 2018-19 after grantingreasonable/sufficient opportunity of hearing and pass such other/further order or orders. For Petitioner : Mr.S.Sridhar For Respondents : Mr.Prabhu Mukunth Arunkumar Junior Standing Counsel (IT) ORDER In the captioned main writ petition, an 'assessment orderdated 23.09.2021 bearing reference no.ITBA/AST/143(3)/2021-22/1035833472(1) pertaining to Assessment Year 2018-19 qua writpetitioner company' (hereinafter 'impugned order' for the sakeof convenience and clarity) has been assailed. 2. A perusal of the impugned order reveals that it has beenmade under Section 143(3) of the 'The Income-tax Act, 1961 (43of 1961)' [hereinafter 'IT Act' for the sake of brevity] readwith Section 144B of IT Act. To be noted, Section 144B of IT Actis captioned 'Faceless Assessment'. 3. Notwithstanding very many averments in the writaffidavit, notwithstanding several grounds raised in the writaffidavit, Mr. Sridhar, learned counsel for writ petitionerprojects his case qua challenge to impugned order on two pointsand they are as follows: (a) The impugned order was preceded by a show causenotice (SCN) dated 21.09.2021 and the SCN is captioned'Show cause Notice as to why the proposed variationshould not be made', this SCN has been digitally signedon 21.09.2021 and time has been given to the writpetitioner (to show cause) upto 59 minutes past 23 hourson 22.09.2021. In other words, just one day time wasgiven for showing cause and this is too short more soconsidering the proposed variation. b) Owing to the requirement under Section 144B(1)(xvi)(c), the draft assessment order should have beenassigned to a review unit in any one Regional FacelessAssessment Centres through an automated allocationsystem and a review of the order should have been doneand it is quite unlikely that this has been done as theimpugned order has been made on 23.09.2021, one dayafter writ petitioner's reply to SCN. 4. Mr.Prabhu Mukunth Arunkumar, learned junior StandingCounsel, accepts notice on behalf of all the three respondents. 5. Owing to the narrow legal compass on which captioned mainrevision turns, with the consent of learned counsel on bothsides, main writ petition is taken up. https://hcservices.ecourts.gov.in/hcservices/ 6. Responding to the aforementioned two points urged bylearned counsel for writ petitioner, learned Revenue counselmade submissions, a summation of which is as follows: (a) It cannot be gainsaid that one day time givenqua SCN is too short as the writ petitioner has chosento reply the very next day i.e., 22.09.2021 and it hasalso not chosen to ask for a personal hearing, thoughthere is an option to ask for personal hearing videsub-paragraph (c) of Paragraph 3 of SCN. 5. Owing to the narrow legal compass on which captioned mainrevision turns, with the consent of learned counsel on bothsides, main writ petition is taken up. https://hcservices.ecourts.gov.in/hcservices/ 6. Responding to the aforementioned two points urged bylearned counsel for writ petitioner, learned Revenue counselmade submissions, a summation of which is as follows: (a) It cannot be gainsaid that one day time givenqua SCN is too short as the writ petitioner has chosento reply the very next day i.e., 22.09.2021 and it hasalso not chosen to ask for a personal hearing, thoughthere is an option to ask for personal hearing videsub-paragraph (c) of Paragraph 3 of SCN. (b) Adverting to the argument predicated onSection 144B(1)(xvi)(c) of IT Act, learned counselsubmitted that in the light of automation it is quitefeasible. Be that as it may, learned Revenue counselpointed out that there is an alternate remedyavailable to the writ petitioner vide a statutoryappeal under Section 246A of IT Act. 7. This Court now embarks upon the exercise of consideringthe rival submissions, setting out its discussion on the sameand giving its dispositive reasoning qua conclusion. 8. The first point urged i.e., a mere one day time qua SCNunder the normal circumstances would have certainly been aformidable argument, but not in this case qua writ petitioner aswrit petitioner has a) chosen to reply on the very next dayi.e., 22.09.2021 and has also not chosen to ask for a personalhearing vide sub-paragraph (c) of Paragraph 3 of SCN. This drawsthe curtains on the first point. 9. As regards the second point, this Court is of theconsidered view that it is dovetailed with the alternate remedyargument as that may well qualify as a ground of appeal ratherthan a ground compelling interference in writ jurisdiction. 10. Therefore, the second point is left open to be decidedby the Appellate Authority if the writ petitioner chooses tofile a statutory appeal under Section 246A. 11. This takes this Court to the alternate remedy rule.Alternate remedy rule no doubt is a rule of discretion. Inother words, alternate remedy rule is not an absolute rule. Itis a self-imposed restraint qua writ jurisdiction. However,Hon'ble Supreme Court in a long line of authorities/case lawsstarting from Dunlop India case [Assistant Collector of CentralExcise, Chandan Nagar, West Bengal Vs. Dunlop India Ltd. andothers reported in (1985) 1 SCC 260], Satyawati Tandon case[United Bank of India Vs. Satyawati Tondon and others reportedin (2010) 8 SCC 110] and K.C.Mathew case [Authorized Officer, State Bank of Travancore Vs. Mathew K.C. reported in (2018) 3SCC 85] has repeatedly held that when it comes to fiscalstatutes matters, the alternate remedy rule has to be appliedwith utmost rigour. To be noted, these three case laws do notconstitute a exhaustive list, but are only some amongst theseveral celebrated judgments on this alternate remedy ruletouching upon fiscal laws. On alternate remedy, relevantparagraph in Dunlop India case is paragraph 3 and relevantparagraph in K.C.Mathew case is paragraph 10, which read asfollows: Paragraph 3 of Dunlop India case State Bank of Travancore Vs. Mathew K.C. reported in (2018) 3SCC 85] has repeatedly held that when it comes to fiscalstatutes matters, the alternate remedy rule has to be appliedwith utmost rigour. To be noted, these three case laws do notconstitute a exhaustive list, but are only some amongst theseveral celebrated judgments on this alternate remedy ruletouching upon fiscal laws. On alternate remedy, relevantparagraph in Dunlop India case is paragraph 3 and relevantparagraph in K.C.Mathew case is paragraph 10, which read asfollows: Paragraph 3 of Dunlop India case '3. ....... Article 226 is not meant to short-circuit or circumvent statutory procedures. It isonly where statutory remedies are entirely ill-suited to meet the demands of extraordinarysituations, as for instance where the very vires ofthe statute is in question or where private orpublic wrongs are so inextricably mixed up and theprevention of public injury and the vindication ofpublic justice require it that recourse may be hadto Article 226 of the Constitution. But then theCourt must have good and sufficient reason to bypassthe alternative remedy provided by statute. Surelymatters involving the revenue where statutoryremedies are available are not such matters. We canalso take judicial notice of the fact that the vastmajority of the petitions under Article 226 of theConstitution are filed solely for the purpose ofobtaining interim orders and thereafter prolong theproceedings by one device or the other. The practicecertainly needs to be strongly discouraged.' (Underlining made by this Court to supply emphasis and highlight) Paragraph 10 of K.C.Mathew case '10. In Satyawati Tondon the High Court hadrestrained further proceedings under Section 13(4)of the Act. Upon a detailed consideration of thestatutory scheme under the SARFAESI Act, theavailability of remedy to the aggrieved underSection 17 before the Tribunal and the appellateremedy under Section 18 before the AppellateTribunal, the object and purpose of the legislation,it was observed that a writ petition ought not to beentertained in view of the alternate statutoryremedy available holding: (SCC pp.123 & 128, Paras43 & 55) the 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 oftaxes, 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 keepin mind that the legislations enacted by Parliamentand State Legislatures for recovery of such dues area code unto themselves inasmuch as they not onlycontain comprehensive procedure for recovery of thedues but also envisage constitution of quasi-judicial bodies for redressal of the grievance ofany aggrieved person. Therefore, in all such cases,the High Court must insist that before availingremedy under Article 226 of the Constitution, aperson must exhaust the remedies available under therelevant statute. 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 theSARFAESI Act and exercise jurisdiction under Article226 for passing orders which have serious adverseimpact on the right of banks and other financialinstitutions to recover their dues. We hope andtrust that in future the High Courts will exercisetheir discretion in such matters with greatercaution, care and circumspection.' (underlining made by this Court to supply emphasis and highlight) 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 theSARFAESI Act and exercise jurisdiction under Article226 for passing orders which have serious adverseimpact on the right of banks and other financialinstitutions to recover their dues. We hope andtrust that in future the High Courts will exercisetheir discretion in such matters with greatercaution, care and circumspection.' (underlining made by this Court to supply emphasis and highlight) 12. To be noted, in aforementioned paragraph 10 inK.C.Mathew's case, Satyawati Tondon principle has beenreiterated and therefore, this Court refrains itself fromextracting and reproducing relevant paragraphs from SatyawatiTondon case law. 13. Be that as it may, very recently a three member Hon'bleBench of Hon'ble Supreme Court speaking through Hon'ble Dr.Dhananjaya Y Chandrachud in Commercial Steel case law [TheAssistant Commissioner of State Tax Appellant(s) and OthersVs.M/s Commercial Steel Limited], culled out the exceptions toalternate remedy rule and reiterated principle qua ration inDunlop India, Satyawati Tandon and K.C.Mathew principles i.e., https://hcservices.ecourts.gov.in/hcservices/ principle that interference qua writ jurisdiction should be anexception or in other words, only under exceptionalcircumstances where exception adumbrated therein attracted. Tobe noted, Commercial Steel case law was rendered by Hon'bleSupreme Court very recently i.e., as recently as on 03.09.2021.Relevant paragraphs in Commercial Steel case law are Paragraphs11 and 12, which read as follows: '11 The respondent had a statutory remedy undersection 107. Instead of availing of the remedy, therespondent instituted a petition under Article 226.The existence of an alternate remedy is not anabsolute bar to the maintainability of a writpetition under Article 226 of the Constitution. Buta writ petition can be entertained in exceptionalcircumstances where there is: (i) a breach offundamental rights; (ii) a violation of theprinciples of natural justice; (iii) an excess ofjurisdiction; or (iv) a challenge to the vires ofthe statute or delegated legislation. 12 In the present case, none of the aboveexceptions was established. There was, in fact, noviolation of the principles of natural justice sincea notice was served on the person in charge of theconveyance. In this backdrop, it was CA 5121/2021 7not appropriate for the High Court to entertain awrit petition. The assessment of facts would have tobe carried out by the appellate authority. As amatter of fact, the High Court has while doing thisexercise 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.' 14. A perusal of adumbration of the exceptions read in thecontext of narrative, discussion and dispositive reasoning suprabrings to light that none of the exceptions set out by Hon'bleSupreme Court qua Commercial Steel case law is attracted in thecase on hand. 15. The sequitur to the discussion and dispositivereasoning thus far is, this is a fit case to relegate the writpetitioner to alternate remedy of statutory appeal inter aliaunder Section 246 A of IT Act subject of course to pre-depositcondition, if any and limitation. If the writ petitioner choosesto take the alternate remedy rule and file a statutory appeal,the Appellate Authority shall consider all the arguments/ https://hcservices.ecourts.gov.in/hcservices/ 14. A perusal of adumbration of the exceptions read in thecontext of narrative, discussion and dispositive reasoning suprabrings to light that none of the exceptions set out by Hon'bleSupreme Court qua Commercial Steel case law is attracted in thecase on hand. 15. The sequitur to the discussion and dispositivereasoning thus far is, this is a fit case to relegate the writpetitioner to alternate remedy of statutory appeal inter aliaunder Section 246 A of IT Act subject of course to pre-depositcondition, if any and limitation. If the writ petitioner choosesto take the alternate remedy rule and file a statutory appeal,the Appellate Authority shall consider all the arguments/ https://hcservices.ecourts.gov.in/hcservices/ grounds of appeal of the writ petitioner (including those raisedin the instant writ petition) uninfluenced / untrammelled byobservations made in this writ petition order. In other words,the appeal shall be considered and decided on its own merits andin accordance with law untrammelled by this order. 16. Owing to all that have been set out supra, the campaignof the writ petitioner against the impugned order comes to aconclusion, it fails and the sequitur is captioned main writpetition is dismissed albeit preserving the rights of the writpetitioner to prefer a statutory appeal, if so advised and if sodesired. Consequently, the aforementioned WMPs also aredismissed. There shall be no order as to costs. Sd/- Assistant Registrar(CS IV) //True Copy// gpa/nst Sub Assistant Registrar To 1. The Assistant Commissioner of Income Tax National Faceless Assessment Centre, Delhi E-Ramp, Jawaharlal Nehru Stadium, Delhi - 110 003.2. The Income Tax Officer, Corporate Ward -1(3), Income Tax Department, 121, Nungambakkam High Road Chennai - 600 034.3. The Principal Commissioner of Income Tax -1 Income Tax Department, 121, Nungambakkam High Road, Chennai - 600 034. +1cc to M/s.Hema Muralikrishnan, Advocate, S.R.No.54443 AKII(CO)PM/22/11/2021 W.P.No.22071 of 2021 &WMP.Nos.23287,23292, 23289, 23293 of 2021