Natural justice and admitted tax: writ jurisdiction survived, and ex parte assessment relief could not be denied without actual admission of liability.
Availability of an alternative appellate remedy does not bar a writ petition under Article 226 where a quasi-judicial order is passed in breach of natural justice without hearing the affected party. The High Court treated the writ as maintainable and rejected the preliminary objection. It further held that, for an application to set aside an ex parte assessment under section 30 of the U.P. Sales Tax Act, the requirement of depositing "tax admitted to be due" depends on an actual admission of liability; where no return was filed and liability was denied, the authority could not insist on deposit of assessed tax as admitted tax. The refusal to entertain the application was therefore unsustainable, and the matter was remitted for fresh decision after hearing.
Issues: (i) Whether the existence of an appellate remedy barred the writ petition under Article 226 of the Constitution of India where the impugned order was passed in violation of natural justice; (ii) whether, for an application under section 30 of the U.P. Sales Tax Act to set aside an ex parte assessment, the condition of depositing the "tax admitted to be due" could be treated as satisfied only when the assessee had filed a return or otherwise admitted liability.
Issue (i): Whether the existence of an appellate remedy barred the writ petition under Article 226 of the Constitution of India where the impugned order was passed in violation of natural justice.
Analysis: The availability of an alternative remedy is a rule of discretion and not an absolute bar to writ jurisdiction. Where the authority acts in a quasi-judicial manner and passes an order prejudicial to the party without affording a hearing, the order is vitiated by a breach of natural justice. In such a situation, the High Court can entertain the writ petition despite the appellate remedy.
Conclusion: The writ petition was maintainable and the preliminary objection based on alternative remedy failed, in favour of the assessee.
Issue (ii): Whether, for an application under section 30 of the U.P. Sales Tax Act to set aside an ex parte assessment, the condition of depositing the "tax admitted to be due" could be treated as satisfied only when the assessee had filed a return or otherwise admitted liability.
Analysis: The expression "tax admitted to be due" was held to depend on what the assessee had in fact admitted. Where no return had been filed and the assessee denied any taxable liability altogether, the assessing authority could not treat the tax determined by itself as admitted tax and refuse to entertain the application on that basis. The authority also erred in deciding the application on merits without hearing the assessee.
Conclusion: The refusal to entertain the application under section 30 on the ground of non-deposit of admitted tax was in law and, in favour of the assessee.
Final Conclusion: The impugned order was quashed and the matter was sent back for fresh disposal in accordance with law after due hearing.
Ratio Decidendi: An assessee cannot be denied consideration of a statutory application on the basis of "admitted tax" when no tax liability has been admitted at all, and a quasi-judicial order prejudicial to a party cannot stand if passed without observance of natural justice.
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