Statutory appeal and successor-state recovery powers can bar writ relief in disputed tax collection proceedings.

An alternative statutory appeal was available under the taxing enactment, and the writ court refused to entertain the petition because the dispute involved contested questions of fact about collection and recovery of luxury tax. The striking down of the charging provision did not displace the machinery provisions or the appellate remedy. After bifurcation, the successor State could continue recovery proceedings because the Reorganisation Act vested arrear recovery rights and provided for substitution in pending proceedings. The plea of limitation was also rejected in view of the Supreme Court's earlier liberty to proceed, and the petitioner was left to pursue the statutory appeal with interim protection for filing it.

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Issues: (i) Whether the writ petition was liable to be declined on the ground that an effective statutory appeal was available under the taxing statute; (ii) Whether the State of Telangana lacked jurisdiction after bifurcation to proceed on the basis of proceedings initiated earlier by the erstwhile State of Andhra Pradesh; (iii) Whether the demand was barred by limitation.

Issue (i): Whether the writ petition was liable to be declined on the ground that an effective statutory appeal was available under the taxing statute.

Analysis: The impugned order was held to fall within the collection machinery of the taxing enactment. The statute provided an appeal against orders of assessment and collection, and the recovery sought was only of amounts allegedly collected as luxury tax. The Court further held that striking down the charging provision did not eliminate the machinery provisions, including the appellate remedy. As there were disputed questions of fact regarding collection of tax, the writ jurisdiction under Article 226 was not the proper forum.

Conclusion: The alternative statutory remedy was available, and the writ petition was not maintainable on that ground.

Issue (ii): Whether the State of Telangana lacked jurisdiction after bifurcation to proceed on the basis of proceedings initiated earlier by the erstwhile State of Andhra Pradesh.

Analysis: The Court held that the amounts, if collected during the pendency of the challenge, continued to retain the character of tax for recovery purposes despite the later declaration of unconstitutionality. Section 50 of the Reorganisation Act vested the right to recover arrears in the successor State, and Section 104 provided for substitution in pending legal proceedings. The Court treated the successor State mechanism as analogous to substitution in amalgamation-type situations and rejected the plea that bifurcation destroyed jurisdiction.

Conclusion: The successor State had jurisdiction to continue the recovery proceedings.

Issue (iii): Whether the demand was barred by limitation.

Analysis: The Court held that the relevant starting point could not be traced back to the earlier period relied upon by the petitioner, because the liberty to proceed was granted by the Supreme Court only on 06-02-2014. The Court declined to treat the recovery as time-barred in the face of that order and held that the plea of limitation could not defeat the proceedings at that stage.

Conclusion: The plea of limitation was rejected.

Final Conclusion: The Court declined to interfere in writ jurisdiction and directed the petitioner to pursue the statutory appellate remedy, with interim protection for filing the appeal.

Ratio Decidendi: Where a taxing statute provides an appellate mechanism and the dispute involves contested questions of fact and recovery of tax allegedly collected but not remitted, the writ court may require resort to the statutory remedy, while the successor State may continue recovery proceedings under the reorganisation provisions.

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