1991 (5) TMI 22 - HC - Income Tax

Dismissed writ petition seeking interest under Income-tax Act; High Court emphasizes statutory remedies

The High Court of ALLAHABAD dismissed the writ petition (Writ Petition No. 1547 of 1990) filed by Cawnpore Chemical Works (P.) Ltd. and its managing ... Surtax, Writ Issues:- Claim for interest under section 244(lA) of the Income-tax Act, 1961 on refunded surtax amount.- Rejection of the claim by the Assistant Commissioner of Income-tax.- Writ petition filed by the petitioners challenging the rejection.- Consideration of alternative remedy under article 226 of the Constitution of India.Analysis:The judgment delivered by the High Court of ALLAHABAD pertained to a case involving the Cawnpore Chemical Works (P.) Ltd., a private limited company, and its managing director. The company was assessed to surtax under the Companies (Profits) Surtax Act, 1964, for the years 1978-79 and 1979-80. Following regular assessments, the company became entitled to a refund, which was duly refunded. Subsequently, the company claimed interest under section 244(lA) of the Income-tax Act, 1961, on the refunded surtax amount. However, the claim was rejected by the Assistant Commissioner of Income-tax, leading to the filing of a writ petition (Writ Petition No. 1547 of 1990) by the petitioners. The court directed the authority to communicate the order disposing of the application to the petitioners within a specified time frame.The court, in its judgment, highlighted the principle that the existence of an alternative remedy is not an absolute bar to seeking relief under article 226 of the Constitution of India. However, it emphasized that the writ jurisdiction should not be used to bypass statutory procedures unless the statutory remedies are inadequate or ineffective. The court cited the case of Assistant Collector of Central Excise v. Dunlop India Limited to underscore that statutory remedies should be exhausted unless the situation falls within exceptional circumstances where bypassing statutory remedies is justified. In the present case, the court found that the petitioners had not shown that the statutory remedies available under the Surtax Act were inadequate or that the impugned order was ultra vires or lacked jurisdiction. The court concluded that the petitioners should pursue the statutory remedies available under the Companies (Profits) Surtax Act, 1964, for seeking redress.Ultimately, the court summarily rejected the writ petition, advising the petitioners to avail themselves of the alternative remedy under the Surtax Act. The court also directed that if the petitioners opt for the alternative forum, the authority concerned should decide the case expeditiously. The judgment underscored the importance of exhausting statutory remedies before seeking relief through extraordinary writ jurisdiction under article 226 of the Constitution of India.