Retrospective tax clarification cannot increase liability after completed assessment; writ remedy remains available where appeal is futile.

A statutory appeal was treated as an inefficacious remedy where the challenged fiscal clarification already bound subordinate authorities, so writ jurisdiction under Article 226 remained available. A later clarification could not retrospectively enhance sales tax on bajji mix, bonda mix and ginger coriander mix after the assessment had been completed on the earlier 4% basis. The enhanced 16% demand was therefore unsustainable, and the assessment position for the relevant period was restored to 4%.

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Issues: (i) Whether writ petitions were maintainable under Article 226 of the Constitution of India despite the availability of a statutory appeal; (ii) whether the sales tax on bajji mix, bonda mix and ginger coriander mix could be enhanced to 16% by a subsequent clarification after the assessment had already been completed.

Issue (i): Whether writ petitions were maintainable under Article 226 of the Constitution of India despite the availability of a statutory appeal.

Analysis: The governing principle is that the existence of an alternate statutory remedy does not bar writ jurisdiction where the superior taxing authority has already issued a clarification binding on subordinate authorities, making a departmental appeal an exercise in futility. A remedy is not efficacious if the authority deciding the appeal is administratively bound by the very clarification under challenge.

Conclusion: The writ petitions were maintainable and the objection based on alternative remedy was rejected.

Issue (ii): Whether the sales tax on bajji mix, bonda mix and ginger coriander mix could be enhanced to 16% by a subsequent clarification after the assessment had already been completed.

Analysis: The materials showed that the items had earlier been treated as taxable at 4% under the relevant schedule entry and the assessment for the year in question had already been completed on that basis. A later clarification could not be used to fasten a higher rate retrospectively, because a departmental clarification that confers or recognises a tax treatment operates prospectively when withdrawn or altered, and it cannot impose an additional tax burden for a closed assessment period.

Conclusion: The enhanced demand at 16% was not sustainable and the assessee succeeded on this issue.

Final Conclusion: The common orders were set aside and the writ appeals were allowed, with the assessment position at 4% restored for the relevant period.

Ratio Decidendi: A binding fiscal clarification issued by a superior authority cannot be overridden retrospectively to increase tax liability after assessment is completed, and where such clarification controls the subordinate authorities, the alternative statutory remedy is not efficacious so writ jurisdiction remains available.

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