Worldpart Ltd. v. Assistant Commissioner of Income-tax, International Taxation 2(2), Chennai
[Citation -2019-LL-0830-53]

Citation 2019-LL-0830-53
Appellant Name Worldpart Ltd.
Respondent Name Assistant Commissioner of Income-tax, International Taxation 2(2), Chennai
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 30/08/2019
Assessment Year 2015-16
Judgment View Judgment
Keyword Tags exchange of information • unabsorbed depreciation • tax deducted at source • alternative remedy • beneficial owner • draft assessment • double taxation • foreign company • revised return • carry forward • business loss • refund • dtaa • tds
Bot Summary: 3 Assessment under IT Act for writ petitioner company for the assessment year 2015-16 is the subject matter of instant writ petitions. 5 The case of writ petitioner Assessee was selected for scrutiny and a notice under section 143(2) of IT Act being notice dated 28.7.2016 was issued to writ petitioner assessee. Writ petitioner assessee while submitting returns for said AY, has computed tax at 10 of the gross total income, but vide impugned draft assessment order and impugned final assessment order, writ petitioner now has to pay tax at 20. Learned counsel for writ petitioner pressed into service Southern Petrochemical Industries Corporation Ltd. Vs. Income tax Officer reported in 2009 224 CTR 90 judgment and submitted that respondent cannot resort to section 144C when there is no variation in income returned by writ petitioner assessee. While the Petitioner had requested for copy of order sheet to verify the application of the aforementioned provisions on limitation in the present case and the same has not been provided to the Petitioner, it is submitted that, without prejudice, even if it is presumed that the reference was made by the Respondent on 15.12.2017, i.e. the date on which the Petitioner was intimated, after excluding the outer limit of one year, the period available to the Respondent was merely 15 days from 15.12.2018 which gets extended to 60 days by the application of the first proviso to Explanation 1 to Section 153 of the Act. Learned Revenue counsel pointed out that with regard to previous assessment year, namely 2014-15, the same procedure of passing a draft assessment under section 144C was adopted with regard to writ petitioner assessee, writ petitioner asseessee did not assail the said procedure much less raise the jurisdictional fact issue, on the contrary, filed a regular statutory appeal to appellate authority and the appellate authority also passed a detailed order on 25.6.2018 dismissing the writ petitioner assessee s appeal. Suffice to say that the basis on which Revenue is taking the stand that writ petitioner assessee is liable to pay tax at the rate of 20 and not at beneficial rate of 10 based on Indian Cyprus DTAA is after enquiry into the holding structure of writ petitioner assessee company and after enquiry into the benefiticial owner aspect qua writ petitioner company.


W.P.Nos.7135 and 7138 of 2019 IN HIGH COURT OF JUDICATURE AT MADRAS RESERVED ON : 14.08.2019 DATE OF DECISION : 30.08.2019 CORAM HON'BLE MR.JUSTICE M.SUNDAR W.P.Nos.7135 and 7138 of 2019 and W.M.P.Nos.15658, 7859, 7860, 7861 and 7862 of 2019 Worldpart Ltd., Julia House, 3 Themistocles Dervis Street, CY-1066, Nicosia, Cyprus, represented by its Authorized Signatory Mr.Zulfikar Mustaqbhai Trivedi ..Petitioner in both writ petitions Vs. Assistant Commissioner of Income-tax, International Taxation 2(2), 4th Floor, BSNL Bhavan, Tower-I, No.16, Greams Road, Chennai-600 006. .. Respondent in both writ petitions W.P.No.7135 of 2019 is filed under Article 226 of Constitution of India praying to issue Writ of Certiorarified Mandamus calling for records of respondent contained in its impugned final assessment order dated 25.2.2019 bearing Order No.ITBA/AST/S/143(3)/2018-19/1015158673(1) passed under sub-section (3) of section 144C read with section 143(3) of Income Tax Act, 1961 for Assessment Year 2015-16 and to quash same as being without jurisdiction and void ab initio and to consequently 1/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 direct respondent to accept return of income as filed by petitioner for assessment year 2015-16 and process refunds accordingly and pass such other or further orders as this Hon'ble Court may deem fit in facts and circumstances of case. W.P.No.7138 of 2019 is filed under Article 226 of Constitution of India praying to issue Writ of Certiorarified Mandamus calling for records of respondent contained in its impugned draft assessment order dated 24.12.2018 bearing Order No.ITBA/AST/F/144C/2018-19/1014525544(1) passed under section 144C read with section 143(3) of Income Tax Act, 1961 for Assessment year 2015-16 and to quash same as being without jurisdiction and void ab initio and to consequently direct respondent to accept return of income as filed by petitioner for Assessment year 2015-16 and process refunds accordingly and pass such other or further orders as this Hon'ble Court may deem fit in facts and circumstances of case. For Petitioner : Mr.Kamal Sawhney for Mr.Arun Karthik Mohan For Respondent : Ms.Hema Muralikrishnan, Senior Standing Counsel ---- COMMON ORDER This common order will dispose of both these writ petitions. Writ petitioner is company incorporated in Cyprus and is therefore, foreign company, but inter-alia has made investments in India and is Assessee qua Income Tax Act, 1961 ( IT Act for brevity). 2/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 2 This case was originally reserved on 8.8.2019 and thereafter, it was listed again for clarification on 14.8.2019 on request made by learned counsel for writ petitioner. After hearing both learned counsel, matter was reserved on that day. 3 Assessment under IT Act for writ petitioner company for assessment year 2015-16 (hereinafter said AY for clarity) is subject matter of instant writ petitions. 4 For said AY, writ petitioner company filed returns on 10.02.2016 showing gross total income of Rs.22,89,76,090.00, admitted that it is liable to pay income tax at 10% of gross total income, but vide return, claimed refund of Rs.4,57,95,220.00 on ground that writ petitioner company is deductee qua Tax Deducted at Source ( TDS for brevity) to tune of Rs.6,86,92,827.00. 5 case of writ petitioner Assessee was selected for scrutiny and notice under section 143(2) of IT Act being notice dated 28.7.2016 was issued to writ petitioner assessee. Thereafter, on 26.11.2018, notice under section 142(1) of IT Act calling for details was also sent. Writ petitioner assessee submitted details called for. Personal hearings were also held on 3.8.2016, 3.12.2018 and 19.12.2018. After considering returns, replies and submissions made in personal hearings, respondent passed 3/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 order dated 24.12.2018 being order No.ITBA/AST/F/144C/2018- 19/1014525544(1) (this order shall hereinafter be referred to as impugned draft assessment order for sake of convenience and clarity). 6 Post impugned draft assessment order, petitioner company sent communications dated 21.1.2019 and 19.2.2019 raising certain objections, but final assessment order being order dated 25.2.2019 bearing order No.ITBA/AST/S/143(3)/2018-19/1015158673(1) (hereinafter impugned final assessment order for sake of convenience and clarity) came to be passed. 7 To be noted, in W.P.No.7138 of 2019, impugned draft assessment order has been assailed and in W.P.No.7135 of 2019, impugned final assessment order has been assailed. 8 Notwithstanding very many contentions raised in affidavits filed in support of writ petitions, counter affidavit filed by respondent Revenue in W.P.No.7135 of 2019 and common rejoinder affidavit filed by writ petitioner, submissions made by learned counsel on both sides in hearing turns on one pivotal point and that is jurisdictional fact qua impugned draft and final assessment orders. 9 It is specific submission of learned counsel for writ petitioner that impugned draft assessment order has been made under section 144C of 4/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 IT Act, that for invoking powers under section 144C of IT Act, it is imperative that respondent should propose to make variations in income or loss returned by Assessee and that such variations in income or loss should be prejudicial to interest of Assessee. 10 In instant case, there is no disputation or disagreement that respondent has not made any variation in income returned by writ petitioner Assessee. 11 In response to this lone and pivotal submission, learned counsel for Revenue submitted that while no variation has been made by respondent qua income returned by writ petitioner Assessee, variation has been made qua tax payable by writ petitioner assessee. Writ petitioner assessee while submitting returns for said AY, has computed tax at 10% of gross total income, but vide impugned draft assessment order and impugned final assessment order, writ petitioner now has to pay tax at 20%. Saying so, learned Revenue counsel submitted that as assessee has to pay tax at higher rate, it is prejudicial to interest of assessee and therefore, Revenue had thought it fit to give opportunity to writ petitioner assessee by sending impugned draft assessment order. It was also pointed out that alternate remedy is available to writ petitioner assessee by way of appeal under section 246A of IT Act and writ petitioner could have taken dispute resolution route and gone to DRP. 5/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 12 This court now first embarks upon exercise of examining whether there is any jurisdictional fact qua Section 144C being invoked by respondent. Learned counsel for writ petitioner pressed into service Southern Petrochemical Industries Corporation Ltd. Vs. Income tax Officer reported in [2009] 224 CTR 90 (Madras) judgment and submitted that respondent cannot resort to section 144C when there is no variation in income returned by writ petitioner assessee. 13 Per contra, learned Revenue counsel emphatically submitted that Southern Petrochemical case is clearly distinguishable. It was submitted by learned Revenue counsel that Southern Petrochemical case was in regular tax case appeal under section 260A of IT Act and perusal of substantial question of law on which appeal was decided will reveal that issue before Court was whether Tribunal was right in holding that provisions of section 144B of IT Act are attracted and as to whether reference to IAC was in accordance with section 144B of IT Act on facts and circumstances of case. It was further submitted by learned Revenue counsel that facts and circumstances of Southern Petrochemical case is completely different and distinguishable. It was submitted that, it was case where Assessee declared total assessable income as nil, after adjusting carry forward business loss, unabsorbed depreciation that was carried forward subject to disallowances and claim under section 80J of IT Act. 6/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 Saying so, it was argued that Southern Petrochemical case turned on principle that depreciation cannot be thrust on any assessee. 14 This Court carefully considered rival submissions in this regard. perusal of Southern Petrochemical case reveals that relevant substantial question of law as can be culled out from CTR case journal placed before this Court reads as follows : (i)Whether on facts and in circumstances of case, Tribunal was right in holding that provisions of section 144B of IT Act, 1961 are attracted and reference to IAC was in accordance with provisions of section 144B? (Underlining made by this Court to supply emphasis and highlight) 15 Paragraph 2 of Southern Petrochemical case which gives facts in nutshell reads as follows : 2.The assessee is engaged in manufacture and marketing of fertilizers etc. return of income for assessment year, 1980-81 was filed on 27th June, 1980 showing income of Rs.10,91,22,540 subject to disallowances and claim under s.80J of IT Act, and after adjusting carry forward business loss to extent of Rs.10,86,03,271 and unabsorbed depreciation carried forward to extent of Rs.5,19,269, declared its total assessable income as 'nil'. Subsequently, on 11th Dec, 1980, it filed revised return, again showing 'nil' income, but difference between original return filed and revised return filed on 11th Dec, 1980 related 7/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 to withdrawal of depreciation claimed under various heads and by carrying forward loss of earlier years to greater extent. 16 principle that depreciation cannot be thrust on any assessee is contained in paragraph 5 and relevant portion of paragraph 5 is as follows : 5.Mrs.Pushya Sitaraman, learned senior standing counsel appearing for Revenue, while conceding that depreciation cannot be thrust on any assessee would submit that at time when assessment order was passed and proposal was made which is dated 29th Aug, 1982, law had not been settled and therefore, there is nothing wrong in reference made under section 144B and it was always subject to IAC accepting explanation given by assessee. .... 17 This court after careful analyse of rival submissions and case law is convinced that submission of learned Revenue counsel that Southern Petrochemical case is distinguishable deserves to be accepted for more than one reason, as Southern Petrochemical case turns on section 144B which is different from section 144C which we are now concerned with, more importantly facts scenario is completely different and substantial question of law itself makes it clear that answer to substantial question of law is on facts and circumstances of case. In this regard, this court reminds itself of celebrated Padma Sundara Rao case being Padma Sundara Rao Vs. State of Tamil Nadu reported in (2002) 3 SCC 533, 8/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 relevant paragraph is paragraph 9 and same reads as follows : 9......... There is always peril in treating words of speech or judgment as though they are words in legislative enactment, and it is to be remembered that judicial utterances are made in setting of facts of particular case, said Lord Morris in Herrington v. British Railways Board [(1972) 2 WLR 537 : 1972 AC 877 (HL) [Sub nom British Railways Board v. Herrington, (1972) 1 All ER 749 (HL)]]. Circumstantial flexibility, one additional or different fact may make world of difference between conclusions in two cases. 18 Further more, Southern Petrochemical case is matter where Revenue counsel conceded that depreciation cannot be thrust on any assessee. There is no such scenario in instant case. 19 As far as argument predicated on jurisdictional fact is concerned, jurisdictional fact should be such that, absent particular fact, authority should be completely denuded of its powers to make impugned proceedings. This court reminds itself that unlike Southern Petrochemical case which is regular tax case appeal, this is case under writ jurisdiction wherein there is no disputation that writ petitioner has alternate remedy. Therefore, jurisdictional fact should be so striking that it strikes at very root of exercise of power by authority making impugned order. To be noted, there is further discussion regarding alternate remedy in latter part of this order infra. Be that as it may, suffice to say that this court is unable to convince itself that (from reading of language in which section 9/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 144C of IT Act is couched) respondent is completely denuded of powers to make draft and final assessment orders in cases where rate at which tax is to be paid by assessee is put in issue. In any event, as this court agrees with submission of learned Revenue counsel that Southern Petrochemical case is clearly distinguishable on facts, it may not be necessary to delve further into this aspect of matter. 20 This takes us to next limb of argument which is predicated on limitation. It was submitted by learned counsel for writ petitioner that proper course for respondent would have been to pass assessment order under section 143(3) of IT Act, limitation for same had elapsed and therefore, section 144C route has been taken to circumnavigate limitation. Responding to this, learned Revenue counsel pointed out that said AY being 2015-16, it is prior to 01.06.2016 when limitation was two years. Thereafter, in clarificatory hearing on 14.08.2019, by placing reliance on section 153(1) of IT Act, it was argued by learned counsel for writ petitioner that it is 21 months. This makes it important to look into manner in which writ petitioner has projected / articulated limitation ground in affidavit filed in support of writ petition. Relevant paragraph is paragraph 20(M) and same reads as follows : M.That no further action shall be taken in case of Petitioner since limitation to pass order under sub- section (3) of Section 143 of Act has already expired. Since Section 144C of Act is not applicable in Petitioner's case, limitation to pass assessment order 10/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 under sub-section (3) of Section 143 of Act for concerned AY 2015-16 was 21 months as per Section 153 of Act and same expired on 31.12.2017. However, Respondent had intimated Petitioner vide email dated 15.12.2017 that reference has been sent to Foreign Authorities under Exchange of Information. It is submitted that in case of such reference, as per clause (x) of Explanation 1 to Section 153 of Act, period from date of making reference for exchange of information to date of receipt of such information by Department or one year whichever is less is excluded from limitation period. Further as per first proviso to explanation 1 to Section 153 of Act, if after exclusion of above period, Department is left with less than 60 days to pass assessment order, such limitation is extended to 60 days. While Petitioner had requested for copy of order sheet to verify application of aforementioned provisions on limitation in present case and same has not been provided to Petitioner, it is submitted that, without prejudice, even if it is presumed that reference was made by Respondent on 15.12.2017, i.e. date on which Petitioner was intimated, after excluding outer limit of one year, period available to Respondent was merely 15 days from 15.12.2018 which gets extended to 60 days by application of first proviso to Explanation 1 to Section 153 of Act. Therefore, counting from 15.12.2018, limitation to pass final assessment order comes to 13.02.2019 which has already expired. Hence, Respondent ought not to take any further action in present case and any such further action taken shall be void for being barred by limitation. 11/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 21 perusal of manner in which limitation plea has been projected or in other words, challenge to impugned draft and final assessment orders insofar as it is predicated on limitation plea is concerned, it comes out clearly that it is mixed question of fact and law. It is not pristine question of law. aforesaid manner in which limitation plea has been articulated by writ petitioner in affidavit filed in support of writ petition is clearly subjected to disputation and disagreement by revenue. Therefore, this court has no hesitation in holding that on facts and circumstances of instant case, as plea of limitation turns on facts and as it is clearly not pristine question of law and as it at best qualifies as mixed question of law and facts, it would be appropriate to not to decide facts in writ petition and leave it to appellate authority to decide on facts. 22 This takes us to another limb of same argument. Learned Revenue counsel pointed out that with regard to previous assessment year, namely 2014-15, same procedure of passing draft assessment under section 144C was adopted with regard to writ petitioner assessee, writ petitioner asseessee did not assail said procedure much less raise jurisdictional fact issue, on contrary, filed regular statutory appeal to appellate authority and appellate authority also passed detailed order on 25.6.2018 dismissing writ petitioner assessee s appeal. 23 It was pointed out by learned Revenue counsel before first appellate court that writ petitioner Assessee did not appear and though writ 12/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 petitioner assessee did not appear in its capacity as appellant, appellate authority has passed order on merits. In other words, order dated 25.6.2018 was on merits, is learned Revenue counsel s say. This was contested by learned counsel for writ petitioner by saying that writ petitioner has not given legal quietus to this order and that same is being contested in Tribunal. It may not be necessary to delve further into this controversy, because in considered view of this court, it is fairly well settled legal principle that assessee cannot be precluded from raising particular issue merely because it has not raised issue in previous assessment years. In this regard, this Court reminds itself of Devilal Modi case. In Devilal Modi Vs. Sales Tax Officer, Ratlam and others [AIR 1965 SC 1150] case, Hon'ble Mr.Justice Gajendragadkar, speaking for Constitution Bench of Hon'ble Supreme Court, held that assessment orders passed under Sales Tax Act for successive assessment years can be assailed on new points, though all assessment orders are passed under same provision of law. In this very judgment, Constitution Bench of Hon'ble Supreme Court also held that in cases of this nature, doctrine of res judicata and constructive res judicata are not to be applied strictly to proceedings under Articles 226 and 32 of Constitution of India. 24 Therefore, it cannot be gainsaid by Revenue counsel that argument, more so argument pertaining to jurisdictional facts cannot be raised by assessee merely because assessee had not raised it in previous assessment year. 13/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 25 Before proceeding further with discussion and dispositive reasoning in this regard, this court deems it appropriate to have brief over view of what is basis on which Revenue is contending that rate of tax payable by writ petitioner assessee is 20% and not 10%. Writ petitioner assessee has paid tax at rate of 10% on gross total income by placing reliance on Treaty between India and Cyprus. To state with specificity, by placing reliance on Article 11 of India Cyprus Treaty. By going into holding structure of writ petitioner assessee company and examining who beneficial owner is, in light of India Cyprus Treaty which is Double Taxation Avoidance Agreement ( DTAA for brevity), Revenue's case is, beneficial owners and holding structure of writ petitioner company is such that Indian company in which investment was made is only company which acted as conduit or intermediary for purpose of obtaining tax benefits which according to Revenue is unjustified benefits. 26 It may not be necessary to delve into these aspects of matter any further. Suffice to say that basis on which Revenue is taking stand that writ petitioner assessee is liable to pay tax at rate of 20% and not at beneficial rate of 10% based on Indian Cyprus DTAA is after enquiry into holding structure of writ petitioner assessee company and after enquiry into benefiticial owner aspect qua writ petitioner company. 14/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 27 Having answered jurisdiction fact plea, trajectory of discussion now should necessarily move towards alternate remedy. There is no disputation or disagreement that alternate remedy is available to writ petitioner Assessee under section 246A of IT Act. In this regard, judgment of this Hon ble Court made in Martech Peripherals (P.) Ltd. Vs. Deputy Commissioner of Income-tax, Company Circle IV(1), Chennai reported in [2017] 81 taxmann.com 73 (Madras) was pressed into service by learned counsel for writ petitioner. Hon ble Single Judge of this court had held that not entertaining writ petition when there is alternate remedy is only matter of self restraint employed by Courts. Hon ble Single Judge held that alternate remedy by itself does not exclude jurisdiction or power of this court to entertain writ petition. This court cannot have any disagreement on this proposition. However, this Martech case does not come to aid of writ petitioner, because ground of absence of jurisdiction or jurisdictional fact has been negatived by this court in this case. In Martech case, Hon ble Single Judge had held that writ petition can be entertained even when there is alternate remedy when challenge is on ground of absence of jurisdiction and / or breach of principles of natural justice. There can absolutely be no disagreement on this proposition. In this case, there is no complaint of violation of principles of natural justice. complaint is only with regard to absence of jurisdiction, i.e., jurisdictional fact, but that has been negatived as alluded to supra. This therefore leads us to conclusion that while principle 15/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 in Martech case is clearly indisputable, it does not help writ petitioner in instant case. 28 While on alternate remedy, this court deems it appropriate to make short elucidation on alternate remedy and exercise of writ jurisdiction. This court is clear in its mind that rule of alternate remedy being self imposed restraint qua writ courts, is clearly not rule of compulsion, but only rule of discretion. In other words, alternate remedy rule is not absolute rule. Though alternate remedy rule is not absolute rule, in long line of authorities, Hon ble Supreme Court has repeatedly held that alternate remedy shall be exercised in cases of (a) absence of jurisdiction, (b) violation of principles of natural justice, and (c) order being passed disregarding well settled laws of land, etc., To be noted, this is not comprehensive list, but only illustrative list which is set out only for limited purpose of appreciating this instant order. 29 This court reminds itself of leading judgment of Hon ble Supreme Court in Dunlop case being Assistant Collector of Central Excise Vs. Dunlop India Ltd. reported in (1985) 1 SCC 260. Relevant paragraph is paragraph 3 and same reads as follows : 3.In Titaghur Paper Mills Co. Ltd. v. State of Orissa [(1983) 2 SCC 433 : 1983 SCC (Tax) 131 : 1983 Tax LR 2905 : (1983) 142 ITR 663 : (1983) 53 STC 315] A.P. Sen, E.S. 16/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 Venkataramiah and R.B. Misra, JJ. held that where statute itself provided petitioners with efficacious alternative remedy by way of appeal to Prescribed Authority, second appeal to tribunal and thereafter to have case stated to High Court, it was not for High Court to exercise its extraordinary jurisdiction under Article 226 of Constitution ignoring as it were, complete statutory machinery. That it has become necessary, even now, for us to repeat this admonition is indeed matter of tragic concern to us. Article 226 is not meant to short-circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill-suited to meet demands of extraordinary situations, as for instance where very vires of statute is in question or where private or public wrongs are so inextricably mixed up and prevention of public injury and vindication of public justice require it that recourse may be had to Article 226 of Constitution. But then Court must have good and sufficient reason to bypass alternative remedy provided by statute. Surely matters involving revenue where statutory remedies are available are not such matters. We can also take judicial notice of fact that vast majority of petitions under Article 226 of Constitution are filed solely for purpose of obtaining interim orders and thereafter prolong proceedings by one device or other. practice certainly needs to be strongly discouraged. (Underlining made by this court to supply emphasis and highlight) 30 This court also reminds itself of Satyawati Tandon case rendered quarter of century later being United Bank of India Vs. Satyawati Tondon and others reported in (2010) 8 SCC 110. 17/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 31 Satyawati Tondon principle is to effect that when it comes to matters pertaining to Tax, Cess, revenue, etc., rule of alternate remedy should be applied with utmost rigour. To be noted, Satyawati Tandon principle was reiterated by Hon ble Supreme Court in K.C.Mathew case being Authorized Officer, State Bank of Travancore Vs. Mathew K.C. reported in (2018) 3 SCC 85. Relevant paragraph in K.C.Mathew case is paragraph 10 and same reads as follows : 10.In Satyawati Tondon [United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260] High Court had restrained [Satyawati Tondon v. State of U.P., 2009 SCC OnLine All 2608] further proceedings under Section 13(4) of Act. Upon detailed consideration of statutory scheme under SARFAESI Act, availability of remedy to aggrieved under Section 17 before Tribunal and appellate remedy under Section 18 before Appellate Tribunal, object and purpose of legislation, it was observed that writ petition ought not to be entertained in view of alternate statutory remedy available holding: (SCC pp. 123 & 128, paras 43 & 55) 43. Unfortunately, High Court overlooked settled law that High Court will ordinarily not entertain petition under Article 226 of Constitution if effective remedy is available to aggrieved person and that this Rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and dues of banks and other financial institutions. In our view, while dealing with petitions involving challenge to action taken for recovery of public dues, etc. High Court must keep in mind that 18/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 legislations enacted by Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of dues but also envisage constitution of quasi-judicial bodies for redressal of grievance of any aggrieved person. Therefore, in all such cases, High Court must insist that before availing remedy under Article 226 of Constitution, person must exhaust remedies available under relevant statute. *** 55. It is matter of serious concern that despite repeated pronouncement of this Court, High Courts continue to ignore availability of statutory remedies under DRT Act and SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on right of banks and other financial institutions to recover their dues. We hope and trust that in future High Courts will exercise their discretion in such matters with greater caution, care and circumspection. 32 It comes out clearly from aforesaid judgment of Hon ble Supreme Court that when it comes to fiscal law, rule of alternate remedy should be applied with utmost rigour. 33 Owing to all that have been set out thus far, this court does not find any ground to interfere with impugned orders in writ jurisdiction. Both writ petitions fail and same are dismissed, albeit preserving rights of writ petitioner to pursue case by resorting section 246A of IT Act. If 19/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 such course is adopted, it is made clear that all questions in instant writ petitions are left open. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed. 30.08.2019 vvk Index:Yes/No Speaking order To Assistant Commissioner of Income-tax, International Taxation 2(2), 4th Floor, BSNL Bhavan, Tower-I, No.16, Greams Road, Chennai-600 006. 20/21 http://www.judis.nic.in W.P.Nos.7135 and 7138 of 2019 M.SUNDAR, J. vvk order in W.P.Nos.7135 and 7138 of 2019 30.08.2019 21/21 http://www.judis.nic.in Worldpart Ltd. v. Assistant Commissioner of Income-tax, International Taxation 2(2), Chennai
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