Court dismisses writ petition, directs statutory appeal under IT Act; emphasizes alternate remedy principle.

The court dismissed the writ petition, directing the petitioner to file a statutory appeal under Section 246A of the IT Act. The appellate authority was instructed to consider the appeal independently. The court emphasized the principle of alternate remedy, citing precedents, and noted the absence of exceptional circumstances to bypass statutory remedies. The writ petition and accompanying WMP were dismissed, with no order as to costs.

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Issues Involved:
1. Treatment of 'Inter Corporate Deposits' (ICDs) and high seas sales payment in INR.
2. Alleged excess of jurisdiction concerning FEMA violations.
3. Alleged violation of Natural Justice Principle (NJP).
4. Availability of alternate statutory remedy.

Issue-wise Detailed Analysis:

1. Treatment of 'Inter Corporate Deposits' (ICDs) and High Seas Sales Payment in INR:
The petitioner challenged the assessment order, arguing that 'Inter Corporate Deposits' (ICDs) with Xangbo Trading (India) Pvt. Ltd. were erroneously treated as non-ICD transactions and that payments made in INR for high seas sales were incorrectly classified as external commercial borrowings. The court held that these issues are matters on merit and do not warrant interference in writ jurisdiction. The assessment order concluded that the transaction with Xangbo was not in conformity with FEMA norms and that the payment in INR was not a business approved under FEMA. These arguments were deemed as matters for an appeal rather than grounds for writ jurisdiction.

2. Alleged Excess of Jurisdiction Concerning FEMA Violations:
The petitioner contended that the assessment order was based on alleged FEMA violations without issuing notice to the counterparty, constituting an excess of jurisdiction. The court disagreed, stating that the impugned order did not impose consequences under FEMA but only levied income tax within the IT Act's statutory perimeter. Any errors regarding FEMA compliance could be corrected in an appeal, and thus, this did not qualify as an excess of jurisdiction.

3. Alleged Violation of Natural Justice Principle (NJP):
The petitioner claimed a violation of NJP, arguing that the notice and draft assessment order process was flawed. The court reviewed the chronology, noting that the petitioner had responded to the notices and show cause notice within the given timeframe. The court found no evidence that the time granted was unreasonable or inadequate, as the petitioner did not raise this issue during the proceedings. Therefore, the court concluded that there was no NJP violation.

4. Availability of Alternate Statutory Remedy:
The court emphasized the principle of alternate remedy, stating that the petitioner had a statutory appeal available under Section 246A of the IT Act. The court cited several precedents, including Dunlop India, Satyawati Tondon, and K.C. Mathew cases, to highlight that writ jurisdiction should not bypass statutory remedies, especially in fiscal law matters. The court noted that none of the exceptional circumstances for bypassing the alternate remedy rule were present in this case. Consequently, the petitioner was directed to pursue the statutory appeal route, with the appellate authority considering the appeal on its merits and in accordance with the law.

Conclusion:
The court dismissed the writ petition, directing the petitioner to file a statutory appeal under Section 246A of the IT Act. The appellate authority was instructed to consider the appeal independently of the observations made in this order. The court also clarified that the time limit for filing the appeal could be computed by excluding the time spent in the writ petition proceedings, subject to the appellate authority's discretion. The writ petition and the accompanying WMP were dismissed, with no order as to costs.

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