Alternative remedy and tax immunity principles: writ jurisdiction survived, and a statutory transport corporation remained taxable.

A writ petition challenging income-tax assessments on jurisdictional grounds was treated as maintainable despite the availability of statutory appeals, because an alternative remedy does not bar article 226 review where excess jurisdiction is alleged. A Road Transport Corporation was discussed as a separate juristic entity taxable under the Indian Income-tax Act, not as an association of persons or local authority, and its income was not protected as State property or State income under article 289 merely because of governmental control or profit disposition. The Road Transport Corporations Act was also found not to displace the income-tax law, as the two enactments operated in different fields and could be read consistently. The assessments were therefore sustained.

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Issues: (i) Whether the existence of an alternative statutory remedy barred the exercise of writ jurisdiction in a case raising a jurisdictional challenge to income-tax assessments; (ii) whether the Road Transport Corporation was exempt from income-tax on the grounds that it was not taxable under the definition of assessee, was a local authority, or was immune as State property or income under the Constitution; and (iii) whether the Road Transport Corporations Act displaced the Indian Income-tax Act by reason of repugnancy or inconsistency.

Issue (i): Whether the existence of an alternative statutory remedy barred the exercise of writ jurisdiction in a case raising a jurisdictional challenge to income-tax assessments.

Analysis: The availability of an appellate hierarchy under the taxing statute does not by itself oust writ jurisdiction. Where the challenge goes to the very jurisdiction of the assessing authority, and the grievance concerns a possible excess of jurisdiction causing unnecessary harassment, the High Court may entertain a petition under article 226. The existence of an alternative remedy is ordinarily a factor of discretion, not an absolute bar.

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

Issue (ii): Whether the Road Transport Corporation was exempt from income-tax on the grounds that it was not taxable under the definition of assessee, was a local authority, or was immune as State property or income under the Constitution.

Analysis: A statutory corporation created under the Road Transport Corporations Act is a separate juristic entity. It was held not to be an association of persons, but it fell within the wider concept of an individual for purposes of section 3 of the Indian Income-tax Act. It was not a local authority, since its operations extended throughout the State and it did not answer the statutory conception of a local fund or municipal authority. Nor was its income the income of the State merely because the Government appointed officers, regulated the capital structure, or received the ultimate balance of profits. Article 289 protects the property and income of the State itself, but it does not confer immunity on a separate corporation carrying on business in its own name and for its own account.

Conclusion: The Corporation was held taxable under the Indian Income-tax Act and was not entitled to constitutional or statutory exemption.

Issue (iii): Whether the Road Transport Corporations Act displaced the Indian Income-tax Act by reason of repugnancy or inconsistency.

Analysis: Repugnancy in the constitutional sense arises only where enactments made by different legislative authorities occupy the same field in a manner that creates inconsistency. Here, both enactments were Central laws, and in any event they dealt with different subjects. The Road Transport Corporations Act regulated the internal financial and administrative structure of the Corporation, while the Income-tax Act governed taxation of income. The provisions concerning depreciation, reserves, interest, dividends, and disposal of profits could operate consistently with income-tax liability and did not impliedly repeal or exclude the tax law.

Conclusion: No repugnancy or implied exclusion was found, and the Income-tax Act continued to apply.

Final Conclusion: The assessments on the Corporation were upheld, and the petitions failed in their challenge to the jurisdiction and validity of the tax demands. The question relating to deduction of interest on Government capital was left open for decision by the appellate income-tax authorities on the facts and materials on record.

Ratio Decidendi: A statutory corporation is separately taxable where it is a distinct juristic person carrying on business in its own name, and neither governmental control nor the disposition of profits makes its income the income of the State for the purpose of constitutional immunity.

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