Refund remedy exclusivity: a statutory appeal against refund refusal bars invoking equitable relief under the Specific Relief Act.

Whether a commissioner's confirmatory order that leaves an earlier officer's refusal to grant a refund unchanged constitutes an order prejudicial to the assessee for purposes of appeal was considered; the court held that Section 33 contemplates orders that alter the assessee's position, but a mere affirmation that leaves the pre-existing prejudice intact is not itself an order prejudicial to permit reference under Section 66(2). The court also held that where a statutory appeal remedy against refund refusal was available and not pursued, equitable relief under the Specific Relief Act is not an alternate route, and the petition was dismissed.

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Issues: (i) Whether an order of the Commissioner under Section 33 of the Income-tax Act, 1922 which merely affirms an Income Tax Officer's refusal to grant a refund is an order "enhancing an assessment or otherwise prejudicial to" the assessee within Section 66(2) of the Income-tax Act, 1922 permitting a reference to the High Court; (ii) Whether the petitioner, having an alternative statutory appeal under Section 50(a)(1) of the Income-tax Act, 1922 against refusal of a refund under Section 48, can seek relief under Section 45 of the Specific Relief Act, 1877.

Analysis: The Court examined the scope of Section 33 of the Income-tax Act, 1922 and concluded that Section 33 contemplates Commissioner orders that alter the assessee's position to his prejudice. In the present case the Income Tax Officer's refusal had already prejudiced the petitioner; the Commissioner's subsequent order left that position unchanged and did not itself alter the assessee's position to his prejudice within the meaning of Section 66(2). The Court further considered the statutory scheme for refund claims under Section 48 (and Sections 48-A and 49) and noted that Section 50(a)(1) of the Income-tax Act, 1922 provided the specific and available remedy of appeal to the Assistant Commissioner against a refusal to allow a refund. Given that statutory remedy was in force when the officer's order was made and was not pursued by the petitioner, equitable relief under Section 45 of the Specific Relief Act, 1877 was not available as an alternate route.

Conclusion: The petition is dismissed. The Commissioner's order under Section 33 is not an order "enhancing an assessment or otherwise prejudicial to" the assessee for the purposes of Section 66(2) of the Income-tax Act, 1922; and the petitioner cannot invoke Section 45 of the Specific Relief Act, 1877 where the statutory appeal under Section 50(a)(1) of the Income-tax Act, 1922 was available and not exercised.

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