High Court emphasizes alternative remedies over writ petitions challenging tax assessment orders

The High Court dismissed the writ petition challenging an assessment order under the Income Tax Act, 1961, emphasizing the availability of an alternative remedy through appeal. Citing legal precedents, the Court held that the existence of an alternative remedy is a rule of policy and discretion, not law. While acknowledging exceptions for fundamental rights violations or lack of jurisdiction, the Court stressed the importance of following statutory mechanisms for redressal. The judgment highlights the discretionary nature of writ jurisdiction under Articles 226/227 and directs petitioners to exhaust alternative remedies before seeking relief through the High Court.

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Issues:
Challenge to assessment order under Income Tax Act, 1961 invoking writ jurisdiction under Articles 226/227 of the Constitution of India.

Detailed Analysis:
1. Availability of Alternative Remedy: The petitioner approached the High Court seeking to quash the assessment order dated 27.12.2018 passed under Section 143 read with Section 147 of the Income Tax Act, 1961. The High Court noted that disputed questions of fact were raised in the petition and highlighted the availability of an alternative efficacious remedy of appeal against the impugned order. Referring to the decision in Commissioner of Income Tax and others vs. Chhabil Dass Agarwal, the High Court emphasized that the existence of an alternative remedy is a rule of policy, convenience, and discretion rather than a rule of law. The Court cited various precedents to establish that the High Court should not entertain a writ petition if an adequate alternative remedy is available unless exceptional circumstances warrant interference under Article 226. The High Court highlighted that the Constitution Benches have consistently held that the remedy of writ is discretionary, and the High Court should not interfere if an adequate alternative remedy exists for the petitioner.

2. Legal Precedents and Principles: The judgment extensively referred to legal precedents and principles governing the jurisdiction of the High Court under Article 226. It emphasized that the High Court should not entertain a petition under Article 226 if an effective alternative remedy is available to the aggrieved person. The Court reiterated that when a statutory forum is created for redressal of grievances, a writ petition should not be entertained, and the statutory mechanism should be followed. The judgment cited various cases to support the proposition that the High Court should not bypass the statutory machinery for redressal. The Court highlighted that the availability of an alternative remedy must be effective and not merely a formality. The judgment emphasized that the High Court should not entertain a writ petition if the statutory remedy provides substantial relief, unless the petitioner establishes that the alternative remedy is ineffectual or non-efficacious.

3. Observations on Entertaining Writ Petition: The judgment referred to a previous case, Larsen and Toubro Limited v. The State of Haryana, to outline circumstances where a writ petition can be entertained without insisting on adopting statutory remedies. The Court emphasized that a writ petition can be entertained in cases involving enforcement of fundamental rights, failure of principles of natural justice, or when orders or proceedings are without jurisdiction. However, in the present case, the High Court found no grounds to interfere in the exercise of writ jurisdiction under Articles 226/227 due to the availability of an alternative remedy of appeal against the assessment order. Consequently, the High Court disposed of the writ petition, directing the petitioner to pursue the statutory remedy in accordance with the law.

In conclusion, the judgment underscores the importance of exhausting alternative remedies before seeking relief through writ jurisdiction under Articles 226/227 of the Constitution of India. It emphasizes the discretionary nature of the High Court's power to grant relief and highlights the need to adhere to statutory mechanisms for redressal of grievances unless exceptional circumstances justify interference.

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