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TMI Blog2021 (11) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... ows: 1) Two additions namely 'Inter Corporate Deposits' ['ICDs'] qua an entity, which goes by the name Xangbo Trading (India) Pvt. Ltd., [hereinafter 'Xangbo' for the sake of brevity] has been erroneously treated to be not an ICD and a payment made regarding high seas sales in 'Indian Currency' ['INR' for the sake of convenience] has been treated as external commercial borrowing both of which are incorrect; 2) The above is clearly excess of jurisdiction as the impugned order proceeds on the basis that there is a violation of 'Foreign Exchange Management Act, 1999' ('FEMA') without even issuing notice to the counter party; 3) There is a violation of 'Natural Justice Principle' (NJP) and the trajectory of the notice under Section 142(1) of IT Act and draft assessment order culminating in the impugned order will bring to light NJP violation; 3. Ms.Hema Muralikrishnan, learned Senior standing counsel accepted notice on behalf of both the respondents. 4. Owing to the nature of the matter, with the consent of learned counsel on both sides, main writ petition is taken up. 5. Learned Revenue counsel on instructions ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat turns on FEMA norms. The norms of FEMA not being set out with specificity or a conclusion being arrived at qua alleged FEMA violation without issuing notice to the counter party, cannot be construed as excess jurisdiction. The reason is, impugned order does not mulct the writ petitioner with consequences of alleged FEMA violations (under FEMA) in the impugned order. All that the impugned order does is, it levies income tax and consequences within the Statutory perimeter of IT Act. If there is an error in holding that FEMA norms have not been followed or that the business is not approved under FEMA, these are matters which can be corrected in an appeal. All this turns heavily on facts and on merits of the matter. Excess jurisdiction as an illustration is a case/situation where an Authority exercises jurisdiction which is not vested in it. In this case, if the respondents have levied any fine or have mulcted the writ petitioner with any of the consequences for FEMA violation under FEMA that may well qualify as a case of excess jurisdiction. The consequences under FEMA do not form subject matter of impugned order. If there is no violation of FEMA, it is well open to the writ petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itable sequitur that limitation and pre deposit conditions if any, will operate. 11. On alternate remedy rule, this Court is clear in its mind that alternate remedy rule is not an absolute rule and it is only a discretionary rule. Alternate remedy rule is self imposed restraint qua writ jurisdiction. However, in a long line of case laws i.e., catena of case laws starting from Dunlop India case, Hon'ble Supreme Court has repeatedly held that when it comes to fiscal law statutes, alternate remedy rule has to be applied with utmost rigour. The long line of authorities will include Dunlop India case [Assistant Collector of Central Excise, Chandan Nagar, West Bengal Vs. Dunlop India Ltd. and others reported in (1985) 1 SCC 260], Satyawati Tandon case [United Bank of India Vs. Satyawati Tondon and others reported in (2010) 8 SCC 110] and K.C.Mathew case [Authorized Officer, State Bank of Travancore Vs. Mathew K.C. reported in (2018) 3 SCC 85]. To be noted, this is not an exhaustive list of case laws for the principle that alternate remedy rule qua fiscal law will be applied with utmost rigor is attracted, but it is only an illustration. In Dunlop India case, relevant paragraph is pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. 55.It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection.' (underlining made by this Court to supply emphasis and highlight) 13. To be noted, in K.C.Mathew's case more particularly, paragraph 10, which has been extracted and reproduced supra, Satyawati Tondon principle has been captured. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he conclusion that this is a fit case to relegate the writ petitioner to file statutory appeal under Section 246A of IT Act. In other words, there is no ground warranting interference in writ jurisdiction qua impugned order. Though obvious, it is made clear that if the writ petitioner chooses to take the alternate remedy route and file a statutory appeal under Section 246A of IT Act, Appellate Authority shall consider the appeal on its own merits and in accordance with law de hors any observation made in this order. Observations in this order which may have the trappings of some expression touching upon merits is for the limited purpose of disposal of captioned writ petition and therefore, if writ petitioner chooses to avail alternate remedy, statutory appeal shall be dealt with by Appellate Authority untrammelled by any observation made in this order. Though obvious, it is also made clear that alternate remedy if availed by the writ petitioner will be subject to pre deposit [either direct or indirect as contended] and limitation. 17. This Court is informed that the time limit for preferring the statutory appeal is 30 days. If the writ petitioner chooses to seek exclusion of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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