INVOKING OF WRIT JURISDICTION FOR TAX MATTERS

[Mr. M. GOVINDARAJAN]

     The taxation law does not require an assessee to file a suit before civil courts for redressal of his grievance.   The tax laws, either direct tax laws or indirect tax laws, provide separate hierarchy of grievance redressal procedure by means quasi judicial forum. The Adjudicating Authority is the first in the hierarchy and next to him the Commissioner (Appeals).  Appeal against the order of Commissioner (Appeals) may be filed by the aggrieved party either by the assessee or by the department before the Appellate tribunal. Reference may be made to High Court in certain cases for the decision of High Court. 

     Writ jurisdiction is invoked when the rights guaranteed in the Constitution are violated. In some cases writ jurisdiction is invoked when there is no alternative remedy is available. In respect of tax matters alternative remedy is available for the assessees as well as for the Department.   In certain circumstances the writ jurisdiction may be invoked. In this article the invoking of writ jurisdiction is discussed with reference to decided case laws.

1.      Isha Chemicals &  Micronutrients Private Limited V. Commissioner of Central Excise - 2008 -TMI - 31831 - HIGH COURT JAMMU & KASHMIR

Petitioner has not made reference to High Court from tribunal and file writ petition directly.   Writ petition is not invocable when equally efficacious remedy of seeking reference is available.   Impugned writ petition is not maintainable under Article 226 of the Constitution.

2.      Nivaram Pharma Private Limited V. CEGAT, Madras - 2006 -TMI - 710 - HIGH COURT OF JUDICATURE (MADRAS)

In tax matters the High Court held that there should be no short circuiting of statutory remedies of appeal, revision etc.,   When there is alternative remedy under Sec. 35G is available the High Court should not have gone into the merits of the writ petition and should have dismissed the petition straight away on the ground of alternative remedy under Art. 226 of the Constitution.

3.      Enchanted Woods Club Limited V. Union of India - 2008 -TMI - 30635 - HIGH COURT PUNJAB AND HARYANA

The petitioner has invoked the extra ordinary jurisdiction for quashing the order passed by the CESTAT, New Delhi directing the petitioner to deposit Rs.15 lakhs out of service tax Rs.70,47,618/- , as confirmed by the Commissioner (Appeals).  The High Court held that once the tribunal has passed the order by application of mind then such order does not require any interference by the High Court in exercise of writ jurisdiction.   In the opinion of the High Court, that keeping in view the total demand against the petitioner and in safeguarding the interest of revenue, the Tribunal has rightly waived the pre deposit of remaining amount of service tax and penalties subject to the payment of the aforesaid amount.   The court did not find any merit in the petition and the same is dismissed.

4.      Taha Wire Private Limited V. Union of India - 2008 -TMI - 2613 - HIGH COURT, GUJARAT

The petitioner filed this writ petition that on the pretext of evasion of duty to the tune of Rs.16677194/-.  The Department procured seven cheques under coercion, which were given by the petitioner under protest.  The petitioner submitted that he is not liable for any duty and therefore prayed the Court to direct the Department to refund the amount which was encahsed and return the remaining cheques to him.

The High Court held that the petitioner did not place any evidence on record that the cheques were obtained/procured from petitioner under coercion, except the fact that he has retracted his statements given earlier.   That is not enough that the cheques were procured under coercion.  Even assuming without admitting the cheques were obtained under coercion then the petitioner can file a police complaint if he has any genuine grievance.   In the aforesaid fact, the court did not grant any relief under Article 226 of the Constitution.

5.       Max India Limited V. Commissioner of Central Excise, Jalander - 2008 -TMI - 31822 - HIGH COURT PUNJAB AND HARYANA

The petitioner has filed this writ petition under Article 226/227 of the Constitution of India for quashing the order dated 29.11.2006 passed by the Commissioner of Central Excise, Range Rail Maira in exercise of the power under Sec. 84 of the Finance Act, 1994, by revising the order dated 30.11.2006 passed by the Assistant Commissioner, Central Excise Division Phagwara.

An objection has been raised by the Department regarding non availing the alternative remedy by the petitioner.   However it was submitted that even if now the petitioner avails the remedy of appeal, the department will not raise any objection of limitation or pre deposit.  In view of the stand taken by the department the petitioner withdrew the petitioner.

6.      Shanti Fragrances V. Union of India - 2008 (12) STR 680 (SC)

The Supreme Court mentioned that as matters after matters, particularly involving revenue the court found suppression of the relevant fact before the High Court as well as before the Supreme court as to whether the assessee has invoked statutory remedy.   Apart from suppression of facts, even misleading statements are sometimes made in this regard.  The Court wished to clarify that in every matter, be if the assessee or the department, it would be necessary to state specifically in the writ petition/ special leave petition whether proceedings are pending before the departmental authorities.   Similarly if the assessee/department shall say so by way of a counter affidavit or additional affidavit pending such writ petition.   The object underlying the direction is that the High Court should be told as to whether the assessee has exhausted the statutory remedy under the respective tax laws as non disclosure of such relevant facts may warrant the dismissal of the writ petition before the High Court.

7.      Oriental Bank of Commerce V. State of U.P. - 2008 -TMI - 31600 - HIGH COURT ALLAHABAD

In dealing with the preliminary objections raised by the respondent that the petitioners have a statutory alternative remedy of appeal and, therefore, the writ petition is liable to be dismissed on the ground of availability of alternative remedy.  From the pleadings of the parties, it is evident that the pure and simple question of the law involved in this case is whether renting out a locker amounts to transfer of right to use goods and is taxable under the Act.   If it is not taxable under the Act, the entire proceedings are wholly without jurisdiction.   One of the exceptions to the principle of exclusion of alternative remedy is whether the order impugned is wholly without jurisdiction.   Since there are not disputed questions of fact involve in this case and pure legal question has been raised which if decided in favor of the petitioner the entire proceedings and the impugned orders would be wholly without jurisdiction.   The court is of the view that the matter deserved to be considered on merits and it is not a case whether the petitioner should be non suited on the round of alternative remedy.