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2019 (11) TMI 1118 - SC - Income TaxTax on distributed income to shareholders u/s 115QA - Buy back of shares - availability of appellate remedy - HC refused to exercise Jurisdiction under Article 226 because of availability of an alternate efficacious remedy - Dividend distribution tax (DDT) - HELD THAT:- The computation and extent of liability is determined under the provisions of Section 115QA of the Act. Such determination under the Act would squarely get covered under said expression. There is no reason why the scope of the such expression be restricted and confined to issues arising out of or touching upon assessment proceedings either under Section 143 or Section 144 of the Act. If the submission of the appellant is accepted and the concerned expression as stated hereinabove in Section 246(1)(a) or in Section 246A(1)(a) is to be considered as relatable to the liability of an assessee to be assessed under Section 143(3) as contended, there would be no appellate remedy in case of any determination under Section 115QA. The issues may arise not just confined to the question whether the company is liable at all but may also relate to other facets including the extent of liability and also with regard to computation. If the submission is accepted, every time the dispute will be required to be taken up in proceedings such as a petition under Article 226 of the Constitution, which normally would not be entertained in case of any disputed questions of fact or concerning factual aspects of the matter. The assessee may thus, not only lose a remedy of having the matter considered on factual facets of the matter but would also stand deprived of regular channels of challenges available to it under the hierarchy of fora available under the Act. We, therefore, reject the submissions advanced by the appellant and hold that an appeal would be maintainable against the determination of liability under Section 115QA of the Act. Whether the High Court was justified in refusing to entertain the writ petition because of availability of adequate appellate remedy ? - No infirmity in the approach adopted by the High Court in refusing to entertain the Writ Petition. The submission that once the threshold was crossed despite the preliminary objection being raised, the High Court ought not to have considered the issue regarding alternate remedy, may not be correct. The first order dated 25.01.2017 passed by the High Court did record the preliminary objection but was prima facie of the view that the transactions defined in Section 115QA were initially confined only to those covered by Section 77A of the Companies Act. Therefore, without rejecting the preliminary objection, notice was issued in the matter. The subsequent order undoubtedly made the earlier interim order absolute. However, the preliminary objection having not been dealt with and disposed of, the matter was still at large. No error in the approach of and conclusion arrived at by the High Court. It is relevant to mention that the concessions given on behalf of the Revenue as recorded in the directions issued by the High Court also take care of matters of prejudice, if any. Consequently, the appellant, as a matter of fact, will have a fuller, adequate and efficacious remedy by way of appeal before the appellate authority. It has been so held even by this Court in several cases that even if alternative remedy is available, it cannot be held that a writ petition is not maintainable. In our judgment, however, it cannot be laid down as a proposition of law that once a petition is admitted, it could never be dismissed on the ground of alternative remedy. If such bald contention is upheld, even this Court cannot order dismissal of a writ petition which ought not to have been entertained by the High Court under Article 226 of the Constitution in view of availability of alternative and equally efficacious remedy to the aggrieved party, once the High Court has entertained a writ petition albeit wrongly and granted the relief to the petitioner. Certain issues raised during the course of hearing touching upon the aspects whether the appellant is liable under Section 115QA of the Act or whether the transaction of buy back of shares in the present matter would come within the statutory contours of said Section 115QA or not, are issues which will be gone into at the appropriate stages by the concerned authorities; and as such we have refrained from dealing with those issues.
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