TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 974
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....st respectfully prayed that this Hon'ble Court may graciously be pleased to: a) Admit the writ application; b) Issue a writ of certiorari or in the nature of certiorari or any other appropriate writ, order or direction for quashing the notice dated 29.04.2025 issued under Section 148 and the Order dated 29.04.2025 passed under Section 148A(3) pursuant to notice dated 20.03.2025 issued under Section 148A(1) of the Income Tax Act, 1961, by the opposite party No.3 for the Assessment Year 2020-21 under Annexure-1 and 3 respectively; c) And if the opposite parties fail to show cause or sufficient cause, then the rule may be made absolute; d) And further your Lordships may please to pass such other order/orders as your Lordships may deemed fit and proper; And for this act of kindness, the petitioner as in duty bound shall ever pray." Facts as pleaded and submissions made by learned counsel for the petitioner: 2. The petitioner, a private limited company carrying on business in trading of sponge iron, billets and mild steel scraps, etc., is stated to have filed e-returns on 08.12.2020 pertaining to Assessment Year 2020-21 [Financial Year 2019-20] reflecting facts and figures i....
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....nt writ petition challenging the Notice under Section 148 as well as the Order under Section 148(3). Hearing: 3. The matter is listed for possibility of entertainment of writ petition questioning the Notice under Section 148 of the IT Act issued on being satisfied to initiate proceeding by Order under Section 148A(3). 3.1. As short point has been raised whether the ITO is competent to issue Notice under Section 148 inasmuch as the amount of escapement of income from assessment being quantified at less than Rs. 50,00,000/- in view of interdiction contained in Section 149(1) of the IT Act, on consent, the counsel for respective parties final hearing is conducted today. 3.2. Heard Sri Chitrasen Parida, learned Advocate for the petitioner and Sri Avinash Kedia, learned Junior Standing Counsel for the opposite parties. Arguments: 4. Sri Chitrasen Parida, learned Advocate appearing for the petitioner advanced following submissions: (i) After expiry of three years and three months from the end of the relevant Assessment Year 2020-21, Notice dated 29.04.2025 being issued under Section 148, the same is hit by law for the income alleged to have escaped assessment has been quantified ....
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....onths from the end of the month in which such notice is issued, or such further period as may be allowed by the Assessing Officer on the basis of an application made in this regard by the assessee, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice: Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of Section 148A to....
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....ed assessment in the case of the assessee where the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation-3.- For the purposes of this section, specified authority means the specified authority referred to in Section 151. 148A. Conducting inquiry, providing opportunity before issue of notice under Section 148.- The Assessing Officer shall, before issuing any notice under Section 148,- (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why ....
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....ficer shall, subject to the provisions of Section 148A, issue a notice to the assessee, along with a copy of the order passed under sub-section (3) of Section 148A, requiring him to furnish, within such period as may be specified in the notice, not exceeding three months from the end of the month in which such notice is issued, a return of his income or income of any other person in respect of whom he is assessable under this Act during the previous year corresponding to the relevant assessment year. Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year: Provided further that where the Assessing Officer has received information under the scheme notified under Section 135A, no notice under this section shall be issued without prior approval of the specified authority. (2) The return of income required under sub-section (1) shall be furnished in such form and verified in such manner and setting forth such other particulars, as may be prescribed, and the provisions of this Act shall, apply ....
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....mining whether or not it is a fit case to issue notice under Section 148. (4) The provisions of this section shall not apply to income chargeable to tax escaping assessment for any assessment year in the case of an assessee where the Assessing Officer has received information under the scheme notified under Section 135A. Explanation.- For the purposes of this section and Section 148, "specified authority" means the specified authority referred to in Section 151. Analysis and discussions: 7. The facts are undisputed that alleging bogus purchases to the tune of Rs. 34,99,247/- effected from M/s. Madhumita Steel Industries during the Financial Year 2019-20 [related to Assessment Year 2020-21] which is stated to have escaped assessment of tax, the petitioner was issued with Notice dated 12.03.2024 under Section 148A(b) [pre-amended provision] by the ITO and an Order dated 23.03.2024 under Section 148(d) was passed, consequent upon which a Notice dated 23.03.3024 was issued under Section 148 contemplating assessment of tax under the IT Act. 7.1. Such Notice under Section 148 and the Order under Section 148A(d) was quashed by this Court in Order dated 15.04.2024 on the conceded pos....
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.... "information" which triggers action by the Assessing Officer. The connotation of "information" in the context of reopening of assessment has succinctly been laid down in the case of Larsen & Toubro Limited Vrs. State of Jharkhand, (2017) 103 VST 1 (SC) (Paragraphs 21, 22 & 27) = (2017) 13 SCC 780 which may be reproduced herein below: "21. It is also pertinent to understand the meaning of the word 'information' in its true sense. According to the Oxford Dictionary, 'information' means facts told, heard or discovered about somebody/something. The Law Lexicon describes the term 'information' as the act or process of informing, communication or reception of knowledge. The expression 'information' means instruction or knowledge derived from an external source concerning facts or parties or as to law relating to and/or having a bearing on the assessment. We agree that a mere change of opinion or having second thought about it by the competent authority on the same set of facts and materials on the record does not constitute 'information' for the purposes of the State Act. But the word "information" used in the aforesaid Section is of the widest amplitude and should not be construed na....
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....d out the existence of the facts or circumstances on the basis of which the authority is alleged to have formed the opinion. It is true that ordinarily the Court should not inquire into the correctness or otherwise of the facts found except in a case where it is alleged that the facts which have been found existing were not supported by any evidence at all or that the finding in regard to circumstances or material is so perverse that no reasonable man would say that the facts and circumstances exist. The Courts will not readily defer to the conclusiveness of the authority's opinion as to the existence of matter of law or fact upon which the validity of the exercise of the power is predicated. The doctrine of reasonableness thus may be invoked. Where there are no reasonable grounds for the formation of the authority's opinion, judicial review in such a case is permissible. Where the circumstances or material or state of affairs does not at all exist to form an opinion and the action based on such opinion can be quashed by the Courts. Hence, in effect there is no evidence whatsoever to form or support the opinion. The distinction between insufficiency or inadequacy of evidence and no....
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....n order is based on such grounds, then the order can be attacked as invalid and illegal. On the same principle, the administrative action will be invalidated if it can be established that the authority was satisfied on the wrong question. The aforesaid principles of exercise of power vis-à-vis validity of exercising power has been discussed elaborately by the Hon'ble Supreme Court of India in Amarendra Kumar Pandey Vrs. Union of India, 2022 SCC OnLine SC 881. 7.6. "Proceeding" is frequently used to denote a step in an action and obviously it has that meaning in such phrases as proceeding in any cause or matter. When used alone, however, it is in certain statutes to be construed as synonymous with or including action. Reference may be had to Halsbury's Laws of England, Vol. 1, 3rd Edition, page 6. 7.7. The term "proceeding" is a very comprehensive term and generally speaking means a prescribed course of action for enforcing a legal right. It is not a technical expression with a definite meaning attached to it, but the one, the ambit of whose meaning, will be governed by the statute. It indicates a prescribed mode in which judicial business is conducted. Refer: Babu Lal Vrs.....
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....ent. Term also refers to administrative proceedings before agencies, tribunals, bureaus or the like. See: Most Rev. P.M.A. Metropolitan Vrs. Moran Mar Marthoma, 1995 Supp (4) SCC 286 = AIR 1995 SC 2001. In P.L. Kantha Rao Vrs. State of AP, AIR 1995 SC 807 = (1995) 2 SCC 471, it is stated that the word 'proceeding' would depend upon the scope of the enactment wherein the expression is used with reference to a particular context where it occurs. It may mean a course of action for enforcing legal right. In the journey of litigation, there are several stages, one of which is the realisation of the judicial adjudication which attained finality. The expression "proceeding" is not a term of art, which has acquired a definite meaning. What its meaning is when it occurs in a particular statute or a provision of a statute will have to be ascertained by looking at the relevant statute. Bearing in mind that the term "proceeding" indicates something in which, business is conducted according to a prescribed mode it would be only right to give it a comprehensive meaning so as to include within it all matters coming up for judicial adjudication and not to confine it to a civil proceeding alone. V....
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.... contempt is alleged to have been committed. In Kishan Lal & Co. Vrs. Additional Commissioner of Commercial Tax, (2017) 102 VST 343 (Chhatisgarh) = 2017 SCC OnLine Chh 584 the initiation of proceeding has been described in the following manner: "11. The word 'initiate' or 'initiation' has not been defined in the Act. Since it has not been defined in the Act, it would be appropriate to refer to the dictionary meaning of the word 'initiate'. In Webster's Third New International Dictionary, the word 'initiate' has been defined as to begin or set going; make a beginning of; perform or facilitate the first actions, steps or stages of. Likewise, in Shorter Oxford English Dictionary, the word 'initiate' has been defined as to begin, commence, enter upon; to introduce, set going, originate. 12. Black's Law Dictionary, 6th Edition, defines the words 'initiate' and 'initiative' as: "Initiate: Commence; start; originate; introduce; inchoate. Courtesy, initiate is the interest which a husband has in the wife's lands after a child is born who may inherit, but before the wife dies. To propose for approval - as schedule of rates. Idaho Power Co. Vrs. Thompson, D.C. Idaho, 19 F. 2d 547, 579....
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....ing to Assessment Year 2020-21, the petitioner has participated in the proceeding and can avail further opportunities not only before the Assessing Officer but also before the other statutory Authorities, if circumstances so warrant. In the above premises, it is unwarranted to show indulgence in matter pertaining to Order dated 29.04.2025 passed under Section 148A(3) and Notice dated 29.04.2025 issued under Section 148 of the IT Act in exercise of extraordinary jurisdiction under Article 226/227 of the Constitution of India. Acceding to the contention of the petitioner would tantamount to rendering violence to the provisions of Section 148. 8. The above narration of factual matrix read juxtaposition with the Order dated 15.04.2024 passed in W.P.(C) No. 8865 of 2024 makes it abundantly clear that this Court, in effect, relegated the petitioner to avail the opportunity of hearing and participation in the proceeding sought to be initiated by the ITO and the ITO was required to proceed with the matter post-service of Notice dated 12.03.2024 invoking provisions of Section 148A(b) of the IT Act. It is significant to take note that while disposing of the first writ application, this Cour....
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....in not taking back the appellant into service after the order dated 20.04.2022. No decision was taken either by the High Court or by the State of taking back the appellant into service and no decision was made regarding the back wages from the date the termination order had been passed till the date of reinstatement which should be the date of the judgment of this Court. In any case, the appellant was entitled to salary from the date of judgment dated 20.04.2022 till fresh termination order was passed on 02.04.2024. The appellant would thus be entitled to full salary for the above period to be calculated with all benefits admissible treating the appellant to be in continuous service." 8.3. The ITO in Notice dated 20.03.2025 under Section 148A recorded the following: "It is to be mentioned that an Order under Section 148A(d) was passed on 23.03.2024 in your case after giving you opportunity of being heard vide this office notice under Section 148A(b) dated 12.03.2024. But, being aggrieved with the order and basing upon the fact that you were not able to see your e-mail on account of some personal matters, you filed a writ petition on 08.04.2024 before Hon'ble High Court of Orissa....
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....for the Financial Year 2019-20 relevant to Assessment Year 2020-21. 8. In view of the above facts and circumstances, on the basis of material available on record and considering the reply of the assessee, it is considered that it is a fit case for issue of notice under Section 148 of the Act in the case of M/s. Utkal Trading Company Pvt. Ltd., PAN: AAACU3980G for the Financial Year 2019-20 relevant to Assessment Year 2020-21." 9.2. The Notice dated 29.04.2025 under Section 148 reveals thus: "2. I, therefore, propose to assess or reassess such income or recomputed the loss or the depreciation allowance or any other allowance or deduction for the Assessment Year 2020-21 and I, hereby, require you to furnish within 30 days from the service of this notice, a return in the prescribed form for the Assessment Year 2020-21." 9.3. Conjoint reading of Order under Section 148A and the Notice under Section 148, both dated 29.04.2025 clarifies that the ITO requires further reply from the assessee, who is competent to adjudicate not only the factual position whether the escaped assessment amounts to or likely to amount to Rs. 50,00,000/- or more so as to proceed with the matter pursuant to....
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.... of notice under Section 148 expires on the 31st day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under Section 148 in such case shall be deemed to have been issued on the 31st day of March of such financial year: Provided also that where the information as referred to in Explanation I to Section 148 emanates from a statement recorded or documents impounded under Section 131 or Section 133A, as the case may be, on or before the 31st day of March of a financial year, in consequence of, - (a) a search under Section 132 which is initiated; or (b) a search under Section 132 for which the last of authorisations is executed; or (c) a requisition made under Section 132A, after the 15th day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under clause (b) of Section 148A in such case shall be deemed to have been issued on the 31st day of March of such financial year. Provided also that for the purposes of computing the period of lim....
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....notice to show cause under Section 148A shall be issued for the relevant assessment year,- (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than five years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment, as per the information with the Assessing Officer, amounts to or is likely to amount to fifty lakh rupees or more. 9.5. In the context of challenge made to Order passed under Section 148A of the IT Act by way of writ petition, this Court in the case of Shiv Mettalicks Pvt. Ltd. Vrs. Pr. CIT, (2023) 453 ITR 544 = 2023 SCC OnLine Ori 6971 held as follows: "2. As regards the challenge to an order passed under Section 148A(d) of the Income-tax Act, 1961 (Act) at an intermediate stage, this court has in its order dated December 1, 2022 in a batch of writ petitions of which W.P.(C) No. 9191 of 2022 [Kailash Kedia Vrs. ITO, (2023) 453 ITR 540 (Orissa)] was a lead matter, declined to interfere relegating the parties to a stage of passing of assessment orders under Section 147 of the Act. In doing so, this c....
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....ts of the case. Pending application(s), if any, shall stand disposed of.' 4. As the court views it although the aforementioned order did not take note of the order of the co-ordinate Bench of the Supreme Court of India in Anshul Jain (supra), the net result is that the Supreme Court of India declined to interfere with the order of the Punjab and Haryana High Court in Red Chilli International Sales (supra) matter. 5. Consequently, this court is not persuaded that it should interfere with the impugned order dated November 24, 2022 in the present case under Section 148A(d) of the Act." 9.6. It is seen that in the case of Anshul (supra) the grievance of the petitioner was that his objection raised against Notice under Section 148A was not taken care of. Yet, the Hon'ble Supreme Court did not interfere with the order of dismissal of writ petition by the High Court of Punjab & Haryana. Per advocate for the petitioner, similar stance is taken in the instant case. Therefore, this Court finds that no case is made out by the petitioner to interfere with the issue of Notice under Section 148 by the Assessing Officer after taking decision to initiate proceeding on passing order under Se....
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....ed Advocate for the petitioner to a query from the Bench during the course of hearing of the present matter that the point at issue raised herein this second round of litigation is not raised before the Assessing Officer appearing before him in pursuance of direction vide Order dated 15.04.2024 passed in W.P.(C) No.8865 of 2024. The petitioner for the purpose of assessment may participate in the proceeding initiated under Section 148 of the IT Act. Interference in writ jurisdiction at the stage of Notice for assessment/reassessment: 10. This Court may take into account the rulings through which the scope of "entertainment of writ petition" as contradistinguished from "maintainability of writ petition" [Reference may be had to Godrej Sara Lee Ltd. Vrs. Excise and Taxation Officer-cum-Assessing Authority, (2023) 3 SCR 871, for the distinctive feature in "entertainmentability" and "maintainability" of writ petition when effective and efficacious alternative remedy is available.] has been laid down with reference to self-restrained exercise of discretionary power qua notice for assessment or assessment order. 10.1. In Income Tax Officer, Calcutta Vrs. Selected Dalurband Coal Company....
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.... the High Court should not interfere if there is an adequate efficacious alternative remedy. If somebody approaches the High Court without availing the alternative remedy provided, the High Court should ensure that he has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction. 12. Constitution Benches of this Court in K.S. Rashid and Son Vrs. Income Tax Investigation Commission, 1954 SCR 738 = AIR 1954 SC 207, Sangram Singh Vrs. Election Tribunal, Kotah, (1955) 2 SCR 1 = AIR 1955 SC 425, Union of India Vrs. T.R. Varma, 1958 SCR 499 = AIR 1957 SC 882, State of U.P. Vrs. Mohd. Nooh, 1958 SCR 595 = AIR 1958 SC 86 and Venkataraman and Co. Vrs. State of Madras, (1966) 2 SCR 229 = AIR 1966 SC 1089 held that Article 226 of the Constitution confers on all the High Courts a very wide power in the matter of issuing writs. However, the remedy of writ is an absolutely discretionary remedy and the High Court has always the discretion to refuse to grant any writ if it is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere. The Court, in extraordinary circumstances, may exercise the power if it comes to the conclusion th....
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.... AIR 1983 SC 603, H.B. Gandhi Vrs. Gopi Nath & Sons, 1992 Supp (2) SCC 312, Whirlpool Corporation Vrs. Registrar of Trade Marks, (1998) 8 SCC 1 = AIR 1999 SC 22, Tin Plate Co. of India Ltd. Vrs. State of Bihar, (1998) 8 SCC 272 = AIR 1999 SC 74, Sheela Devi Vrs. Jaspal Singh, (1999) 1 SCC 209 and Punjab National Bank Vrs. O.C. Krishnan, (2001) 6 SCC 569 this Court held that where hierarchy of appeals is provided by the statute, the party must exhaust the statutory remedies before resorting to writ jurisdiction. 16. If, as was noted in Ram and Shyam Co. Vrs. State of Haryana, (1985) 3 SCC 267 = AIR 1985 SC 1147 the appeal is from 'Caesar to Caesar's wife' the existence of alternative remedy would be a mirage and an exercise in futility. ... There are two well recognized exceptions to the doctrine of exhaustion of statutory remedies. First is when the proceedings are taken before the forum under a provision of law which is ultra vires, it is open to a party aggrieved thereby to move the High Court for quashing the proceedings on the ground that they are incompetent without a party being obliged to wait until those proceedings run their full course. Secondly, the doctrine has no app....
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....Haryana, (2002) 7 SCC 484 and GKN Driveshafts (India) Ltd. Vrs. ITO, (2003) 1 SCC 72.] *** 15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal case, AIR 1964 SC 1419, Titaghur Paper Mills Co. Ltd. Vrs. State of Orissa, (1983) 2 SCC 433 and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation." 10.5. This Court in the ca....
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....sponded to the show cause notices by placing material in support of their stand but at the same time, there is no reason to approach the High Court questioning the very show cause notices. Further, as held by the High Court, it cannot be said that even from the contents of show cause notices there are no factual disputes. Further, the judgment of this Court in the case of Malladi Drugs & Pharma Ltd. Vrs. Union of India, (2020) 12 SCC 808 = 2004 SCC OnLine SC 358, relied on by the learned senior counsel for the appellants also supports their case where this Court has upheld the judgment of the High Court which refused to interfere at show cause notice stage." 10.7. The Supreme Court of India in South India Tanners & Dealers Association Vrs. Deputy Commissioner of Commercial Taxes, (2008) 23 VST 8 (SC) expressed displeasure in entertainment of writ petition against the Show Cause Notice. It has been laid down in the said case the modality for the Authority in the following terms: "2. We have repeatedly stated that as far as possible the High Courts should not interfere in matters at show cause notice stage. 3. Without reply to the show cause notice the appellants herein preferre....
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....onths and up to a period of 5 years in view of the proviso to sub-section (1) of Section 11-A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before (sic beyond) the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case.' 6. Hon'ble Single Judge of Calcutta High Court in the case of Infinity Infotech Parks Ltd., (2015) 85 VST 465 (Cal) appears to have placed reliance on the judgment of Hon'ble Supreme Court as noted hereinabove in P....
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....t particulars of his sale in the return. A Show Cause Notice is issued to the dealer with the purpose of informing him that the Department proposes to reopen the assessment because the Commissioner himself is satisfied that the dealer has furnished incorrect statement of his turnover or incorrect particulars of his sales in the return submitted, so as to enable the dealer to reply to the show-cause notice as to why the said power vested in the Commissioner should not be exercised. 15. A notice was issued in order to provide an opportunity of natural justice to the dealer. There is nothing in the language of the aforesaid provision which either expressly or impliedly mandates the recording of any reasons. The provision of the Act nowhere postulates that the reasons which led to the issue of the said notice should be incorporated in the notice itself, and that in case of failure to do so, the same would invalidate the notice. 16. The aforesaid provision is clear and explicit and there is no ambiguity in it. If the legislature had intended to give any other meaning as suggested by the counsel appearing for the appellant it would have made specific provision laying down such condit....
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....ice is issued. The determination comes only after a response or representation is preferred by the person to whom the show-cause notice is addressed. As a part of his response, the person concerned may present his view point on all possible issues and only thereafter the determination or decision is arrived at. In the present case even before the response could be made by the respondent and the determination could be arrived at, the matter was carried in appeal against the said internal order. The appellant was therefore, justified in submitting that the appeal itself was premature." 10.11. In Union of India Vrs. Bajaj Tempo Ltd., (1998) 9 SCC 281 it is advised that the appropriate course for the assessee was to reply to the show cause notice enabling the authorities to record their findings of fact in each case and then, if necessary, the matter could be proceeded to the Tribunal and thereafter to the High Court. 10.12. The Hon'ble Supreme Court in Union of India Vrs. Guwahati Carbon Ltd., (2012) 11 SCC 651 has held as under: "8. Before we discuss the correctness of the impugned order, we intend to remind ourselves the observations made by this Court in Munshi Ram vs. Municipa....
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....the outset, it is required to be noted that against the assessment order passed by the Assessing Officer under the provisions of the MVAT Act and CST Act, the assessee straightway preferred writ petition under Article 226 of the Constitution of India. It is not in dispute that the statutes provide for the right of appeal against the assessment order passed by the Assessing Officer and against the order passed by the first appellate authority, an appeal/revision before the Tribunal. In that view of the matter, the High Court ought not to have entertained the writ petition under Article 226 of the Constitution of India challenging the assessment order in view of the availability of statutory remedy under the Act. At this stage, the decision of this Court in the case of United Bank of India Vrs. Satyawati Tondon, (2010) 8 SCC 110 in which this Court had an occasion to consider the entertainability of a writ petition under Article 226 of the Constitution of India by by-passing the statutory remedies, is required to be referred to. After considering the earlier decisions of this Court, in paragraphs 49 to 52, it was observed and held as under: '49. The views expressed in Titaghur Pape....
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.... or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the Court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act.' 51. In CCT Vrs. Indian Explosives Ltd., (2008) 3 SCC 688 the Court reversed an order passed by the Division Bench of the Orissa High Court quashing the show-cause notice issued to the respondent under the Orissa Sales Tax Act by observing that the High Court had completely ignored the parameters laid down by this Court in a large number of cases relating to exhaustion of alternative remedy. 52. In City and Industrial Development Corpn. Vrs. Dosu Aardeshir Bhiwandiwala, (2009) 1 SCC 168 the Court highlighted the parameters which are required to be kept in view by the High Court while exercisin....
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....e Vrs. Directorate of Enforcement, (2010) 4 SCC 772 the Court was dealing with the issue whether the alternative statutory remedy available under the Foreign Exchange Management Act, 1999 can be by-passed and jurisdiction under Article 226 of the Constitution could be invoked. After examining the scheme of the Act, the Court observed: '31. When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go-by by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating this aspect of the matter. It has however dismissed the writ petition on the ground of lack of territorial jurisdiction. 32. No reason could be assigned by the appellant's counsel to demonstrate why the appellate jurisdiction of the High Court under Section 35 of FEMA does not provide an efficacious remedy. In fact there could hardly be any reason since the Hig....
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....aw on the issue laid down under the civil law may not stricto sensu apply to assessment proceedings. Nevertheless, in order to appreciate the distinction between a null and void order and an illegal or irregular order, it would be profitable to notice a few decisions of this Court on the point. 19. In Rafique Bibi Vrs. Sayed Waliuddin, (2004) 1 SCC 287 explaining the distinction between null and void decree and illegal decree, this Court has said that a decree can be said to be without jurisdiction, and hence a nullity, if the court passing the decree has usurped a jurisdiction which it did not have; a mere wrong exercise of jurisdiction does not result in a nullity. The lack of jurisdiction in the court passing the decree must be patent on its face in order to enable the executing court to take cognizance of such a nullity based on want of jurisdiction. The Court further held that a distinction exists between a decree passed by a court having no jurisdiction and consequently being a nullity and not executable and a decree of the court which is merely illegal or not passed in accordance with the procedure laid down by law. A decree suffering from illegality or irregularity of pro....
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....11 = 1967 SCC OnLine SC 49 = (1968) 1 SCR 10 = AIR 1968 SC 49: "The High Court was also of the view that the inference raised by the Income-tax Officer that the Hindu undivided families of the assessees had made profit by sale of articles purchased from the assessees larger than the profit which the assessees had made, was not justified, since there was no evidence on the record about the price at which similar goods were sold by the assessees to other merchants and about the profit which those other merchants made by sale of those goods. But in a petition under Article 226 of the Constitution the taxpayer may challenge the validity of a Notice under Section 147 of the Income-tax Act, 1961, on the ground that either branch of the condition precedent does not exist, but an investigation whether the inferences raised by the Income-tax Officer from the information are correct or proper cannot be made. Counsel for the Commissioner is, therefore, right in contending that the High Court entered upon an investigation of matters which were not within their competence. *** Avoidance of tax liability by so arranging commercial affairs that charge of tax is distributed is not prohibited....
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.... 149 as they stand as of now, suggest that proceeding under Section 148 cannot be lightly resorted to for re-opening assessment. The information may not be a ground to give unbridled powers to the Revenue. While the expression "information to suggest" under amended law bears importance, the expression "escapement of income chargeable to tax" still remains the primary condition to be satisfied before invoking powers under Section 147 of the Act. Nevertheless, escapement of income is a sine qua non for initiation of proceeding under Section 147. Thus, availability of information which suggests that there is an escapement of income is a prerequisite for issue of notice under Section 148. Record reveals bogus purchase to the tune of Rs. 34,99,247/-, but the income generated out of it requiring thorough examination of books of account or other documents that may be made available during the course of assessment may shoot up beyond the specified pecuniary limit under Section 148. It is reiterated that it is for the adjudicating authority to consider on the basis of material placed and explanation proffered before him during the course of proceeding for assessment. The contention of the p....