Right to hearing before final disposal of an income-tax application, but writ relief declined due to adequate statutory remedy.

An application under section 254 of the Income-tax Act must be finally disposed of only after affording the applicant an opportunity of hearing; dismissal without hearing is inconsistent with the requirement to deal with the matter in accordance with law. However, the High Court will ordinarily decline writ interference where an adequate statutory alternative remedy is available, and the availability of an application under section 256(1) and, if needed, section 256(2), justified refusal to entertain the writ petition. On that basis, the challenge to the Tribunal's orders failed and the petition was dismissed.

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Issues: (i) whether an opportunity of hearing is required before an application under section 254 of the Income-tax Act, 1961 is finally disposed of; (ii) whether the writ petition should be entertained when an adequate alternative remedy under section 256 of the Income-tax Act, 1961 was available.

Issue (i): Whether an opportunity of hearing is required before an application under section 254 of the Income-tax Act, 1961 is finally disposed of.

Analysis: The applications under section 254 had been dismissed without affording a hearing. The Court followed the Full Bench view that a person filing such an application is entitled to be heard before final disposal. It rejected the contrary submission based on section 220(2A), holding that the power under section 254 is not discretionary in the same sense and that the application must be dealt with in accordance with law after hearing the party concerned.

Conclusion: An opportunity of hearing is required before an application under section 254 of the Income-tax Act, 1961 is finally disposed of.

Issue (ii): Whether the writ petition should be entertained when an adequate alternative remedy under section 256 of the Income-tax Act, 1961 was available.

Analysis: The Court held that the petitioner had an adequate statutory remedy by moving an application under section 256(1) and, if necessary, a further application under section 256(2). The existence of that remedy furnished sufficient reason for the Court to decline interference in writ jurisdiction under Article 226 of the Constitution of India.

Conclusion: The writ petition was not entertainable in view of the alternative remedy.

Final Conclusion: The challenge to the Tribunal's orders failed, and the writ petition was dismissed on the ground of availability of an adequate statutory remedy, notwithstanding the legal position that a hearing is required before final disposal of an application under section 254.

Ratio Decidendi: Where an adequate statutory remedy is available, the High Court should ordinarily refrain from exercising writ jurisdiction, and an application under section 254 must be finally decided only after affording an opportunity of hearing.

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