2025 (6) TMI 924 - HC - Indian Laws

Maintainability of petition - availability of alternate and efficacious remedy of appeal - challenge to assessment order - pendency of appeal - petitioner now accepts that the petitioner has also applied for the stay of the demands before the assessing officer - HELD THAT - The petitioner stated that it had not withheld any material information from this Court. The fact that a stay was already applied before the assessing officer constituted material information . This has been deliberately suppressed. The delay in instituting this petition is also not explained. This petition is filed to take chances with the judicial process. Due to such petitions the judicial time that could otherwise be utilised to deal with genuine and old matters is severely curtailed. Petition dismissed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this matter are:

• Whether the petitioner can maintain a writ petition challenging the assessment order despite having an alternate and efficacious remedy available in the form of an appeal against the same order.
• Whether the petitioner's contention that the assessment order was wholly without jurisdiction justifies entertaining the writ petition despite the availability and pendency of the appeal.
• Whether a stay of demands pending appeal should be granted by this Court in the absence of an application for stay before the assessing officer.
• The propriety of entertaining parallel remedies simultaneously, especially when the petitioner has already invoked the appellate remedy and applied for a stay before the assessing officer.
• The consequences of suppression or non-disclosure of material facts relating to the alternate remedy and stay application by the petitioner in the writ petition.
• The imposition of exemplary costs to deter the misuse of the judicial process by filing petitions that take chances despite the availability of alternate remedies.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Maintainability of the writ petition despite alternate remedy

Legal framework and precedents: It is a settled principle that when an alternate and efficacious remedy is available under the statute, a writ petition challenging an order is generally not maintainable. The statutory appellate remedy is preferred and must be exhausted before approaching the Court by extraordinary writ jurisdiction.

Court's interpretation and reasoning: The Court observed that the petitioner admitted the availability of an alternate remedy in the form of an appeal filed within the prescribed limitation period against the impugned assessment order dated 20 April 2023. The appeal was pending at the time of filing the writ petition. The Court emphasized that the petitioner cannot treat the extraordinary remedy of a writ petition as an alternate or substitute remedy to the statutory appeal. The petitioner's attempt to pursue parallel remedies was held to be misconceived and an abuse of the judicial process.

Key evidence and findings: The petitioner's counsel acknowledged the pendency of the appeal and the availability of the alternate remedy. However, the writ petition did not disclose this fact clearly, especially in paragraph 11, which dealt with the alternate remedy. The fact that the appeal was filed and a stay application was pending before the assessing officer was suppressed and only revealed after Court's queries.

Application of law to facts: Given the admitted availability and pendency of the appeal, the writ petition was held not maintainable. The Court reiterated that the existence of an alternate remedy bars the exercise of extraordinary writ jurisdiction unless exceptional circumstances are shown, which were absent here.

Treatment of competing arguments: The petitioner contended that the assessment order was wholly without jurisdiction, which could justify entertaining the writ petition despite the alternate remedy. The Court rejected this argument, noting that the position in the cited coordinate bench orders was different and that no exceptional circumstances were demonstrated here.

Conclusion: The writ petition was dismissed as barred by the availability of an alternate efficacious remedy in the form of a pending appeal.

Issue 2: Grant of stay of demands pending appeal

Legal framework and precedents: The routine procedure in such matters requires an application for stay of demands to be made before the assessing officer, who is the appropriate authority to decide such interim relief.

Court's interpretation and reasoning: The Court noted that the petitioner did not explain why no stay was applied for before the assessing officer initially. It was only later accepted that a stay application was pending before the assessing officer. The Court held that this was a procedural lapse and that the petitioner must follow the prescribed procedure rather than seek stay from the Court prematurely.

Key evidence and findings: The petitioner's counsel admitted the pendency of the stay application before the assessing officer, but this was not disclosed in the writ petition. The Court considered this suppression material.

Application of law to facts: The Court declined to grant any stay of demands, emphasizing that the petitioner must exhaust the remedy before the assessing officer first.

Treatment of competing arguments: The petitioner relied on orders of coordinate benches granting stay in other matters, but the Court distinguished those facts and held that the present case was different due to the availability of alternate remedy and procedural non-compliance.

Conclusion: No stay was granted by the Court; the petitioner must pursue the stay application before the assessing officer.

Issue 3: Abuse of process and suppression of material facts

Legal framework and precedents: Courts frown upon suppression of material facts and abuse of judicial process by filing petitions with incomplete or misleading disclosures. Full and frank disclosure is mandatory, especially regarding alternate remedies and pending proceedings.

Court's interpretation and reasoning: The Court found that the petitioner deliberately suppressed the fact of the appeal having been filed and the stay application pending before the assessing officer. Paragraph 11 of the petition did not disclose these facts, and paragraph 9 was couched ambiguously. The Court considered this suppression material and a serious breach of duty to the Court.

Key evidence and findings: The Court's queries revealed the suppressed facts, contradicting the petitioner's averment in paragraph 10 that no material information was withheld.

Application of law to facts: The suppression of material facts was held to be deliberate and amounted to an abuse of the judicial process. This justified dismissal with exemplary costs.

Treatment of competing arguments: The petitioner's counsel did not provide any satisfactory explanation for the suppression or delay in filing the petition.

Conclusion: The petition was dismissed with exemplary costs to deter such conduct in future.

Issue 4: Imposition of exemplary costs

Legal framework and precedents: Courts have the inherent power to impose costs to discourage frivolous or vexatious litigation that burdens the judicial system and wastes judicial time.

Court's interpretation and reasoning: The Court observed that the petitioner was taking chances with the judicial process by filing a petition despite the availability of an alternate remedy and the pendency of an appeal and stay application. Such conduct was held to be an abuse and warranted exemplary costs to deter repetition.

Key evidence and findings: The petitioner's conduct was characterized as classic parallel pursuit of remedies without justification.

Application of law to facts: The Court imposed costs of Rs. 1,00,000, directing payment partly to a hospital and partly to the High Court Employees Medical Welfare Fund, with strict timelines and compliance requirements.

Treatment of competing arguments: No mitigating factors were found to reduce or waive costs.

Conclusion: The petitioner was ordered to pay exemplary costs to deter misuse of judicial process.

3. SIGNIFICANT HOLDINGS

The Court held that:

"This is a classic case where the petitioner is pursuing parallel remedies at the same time. The position in the orders relied upon by the learned counsel for the petitioner was entirely different. This petition is misconceived and amounts to taking chances with the judicial process. It virtually amounts to treating the extraordinary remedy as an alternate remedy to the appellate remedy provided in the statute. This cannot be encouraged."

"The fact that an appeal was already filed as of the date of the institution of this petition is suppressed... The fact that a stay was already applied before the assessing officer constituted 'material information'. This has been deliberately suppressed."

"Due to such petitions, the judicial time that could otherwise be utilised to deal with genuine and old matters is severely curtailed."

Core principles established include:

• Extraordinary writ jurisdiction will not be exercised when an alternate and efficacious statutory remedy is available and has been invoked.
• Full disclosure of material facts, including pendency of alternate remedies and stay applications, is mandatory in petitions invoking extraordinary jurisdiction.
• Parallel pursuit of remedies without justification amounts to abuse of the judicial process and warrants dismissal with exemplary costs.
• The proper forum for interim relief such as stay of demands is the assessing officer before whom the appeal lies.

Final determinations on each issue were:

• The writ petition was dismissed as barred by the availability of an alternate remedy in the form of a pending appeal.
• No stay of demands was granted by the Court; the petitioner must seek stay before the assessing officer.
• The petitioner was found to have suppressed material facts and abused the judicial process.
• Exemplary costs of Rs. 1,00,000 were imposed to deter similar conduct.