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2022 SCC OnLine SC 1425

In the Supreme Court of India

(BEFORE M.R. SHAH AND KRISHNA MURARI, JJ.)

State of Madhya Pradesh and Another … Appellants;

Versus
Commercial Engineers and Body Building Company Limited …
Respondent.
Civil Appeal No. 7170 of 2022
Decided on October 14, 2022
The Judgment of the Court was delivered by
M.R. SHAH, J.:— Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 05.08.2015 passed by the High Court of Madhya Pradesh, Principal
Seat at Jabalpur in Writ Petition No. 7628/2015, by which the Division Bench of the
High Court has entertained the writ petition under Article 226 of the Constitution of
India and has quashed and set aside the Assessment Order passed by the Divisional
Deputy Commissioner, Commercial Tax, Jabalpur, the State of Madhya Pradesh has
preferred the present appeal.
2. By an Assessment Order dated 28.02.2015, the Assessing Officer denied the
Input rebate under Section 14 of the Madhya Pradesh Value Added Tax Act, 2002
(hereinafter referred to as the ‘MP VAT Act, 2002’) to the respondent. Without
preferring an appeal against the Assessment Order denying the Input rebate under
Section 46(1) of the MP VAT Act, 2002, the respondent preferred the writ petition
before the High Court. Despite the specific objection raised on behalf of the State not
to entertain the writ petition against the Assessment Order denying the Input rebate
in view of the availability of the statutory remedy of appeal under Section 46(1) of the
MP VAT Act, 2002, the High Court entertained the writ petition by observing that there
are no disputed questions of facts involved in the matter and it is a question to be
decided on admitted facts for which no dispute or enquiry into factual aspects of the
matter is called for. That thereafter by the impugned judgment and order, the High
Court has set aside the Assessment Order denying the Input rebate and consequently
has allowed the Input rebate in favour of the respondent - assessee - original writ
petitioner. The impugned judgment and order passed by the High Court is the subject
matter of present appeal.
3. Number of submissions have been made by the learned counsel appearing on
behalf of the respective parties on merits including the entertainability of the writ
petition by the High Court under Article 226 of the Constitution of India challenging
the Assessment Order denying the Input rebate. However, for the reasons stated
hereinbelow, we propose to dismiss the writ petition preferred before the High Court
and relegate the respondent - assessee - original writ petition to prefer a statutory
appeal against the Assessment Order, we are not considering any other submission on
merits on whether the High Court is justified in allowing the Input rebate or not.
4. Having heard learned counsel for the respective parties at length on the
entertainability of the writ petition under Article 226 of the Constitution of India by the
High Court against the Assessment Order and the reasoning given by the High Court
while entertaining the writ petition against the Assessment Order despite the statutory
remedy by way of an appeal available, we are of the opinion that the High Court ought
not to have entertained the writ petition under Article 226 of the Constitution of India
challenging the Assessment Order denying the Input rebate against which a statutory
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appeal would be available under Section 46(1) of the MP VAT Act, 2002.
5. While entertaining the writ petition under Article 226 of the Constitution of India
challenging the Assessment Order denying the Input rebate, the High Court has
observed that there are no disputed question of facts arise and it is a question to be
decided on admitted facts for which no dispute or enquiry into factual aspects of the
matter is called for. The aforesaid can hardly be a good/valid ground to entertain the
writ petition under Article 226 of the Constitution of India challenging the Assessment
Order denying the Input rebate against which a statutory remedy of appeal was
available.
6. At this stage, a recent decision of this Court in the case of The State of
Maharashtra v. Greatship (India) Limited (Civil Appeal No. 4956 of 2022, decided
on 20.09.2022) is required to be referred to. After taking into consideration the
earlier decision of this Court in the case of United Bank of India v. Satyawati Tondon,
reported in (2010) 8 SCC 110, it is observed and held that in a tax matter when a
statutory remedy of appeal is available, the High Court ought not to have entertained
the writ petition under Article 226 of the Constitution of India against the Assessment
Order by-passing the statutory remedy of appeal. While holding so, this Court
considered the observations made by this Court in paragraphs 49 to 53 in Satyawati
Tondon (supra), which read as under:
“49. The views expressed in Titaghur Paper Mills Co. Ltd. v. State of Orissa,
(1983) 2 SCC 433 were echoed in CCE v. Dunlop India Ltd., (1985) 1 SCC 260 in
the following words : (SCC p. 264, para 3)
“3. … Article 226 is not meant to short-circuit or circumvent statutory
procedures. It is only where statutory remedies are entirely ill-suited to meet the
demands of extraordinary situations, as for instance where the very vires of the
statute is in question or where private or public wrongs are so inextricably mixed
up and the prevention of public injury and the vindication of public justice
require it that recourse may be had to Article 226 of the Constitution. But then
the Court must have good and sufficient reason to bypass the alternative remedy
provided by statute. Surely matters involving the revenue where statutory
remedies are available are not such matters. We can also take judicial notice of
the fact that the vast majority of the petitions under Article 226 of the
Constitution are filed solely for the purpose of obtaining interim orders and
thereafter prolong the proceedings by one device or the other. The practice
certainly needs to be strongly discouraged.”
50. In Punjab National Bank v. O.C. Krishnan, (2001) 6 SCC 569 this Court
considered the question whether a petition under Article 227 of the Constitution
was maintainable against an order passed by the Tribunal under Section 19 of the
DRT Act and observed : (SCC p. 570, paras 5-6)
“5. In our opinion, the order which was passed by the Tribunal directing sale
of mortgaged property was appealable under Section 20 of the Recovery of Debts
Due to Banks and Financial Institutions Act, 1993 (for short ‘the Act’). The High
Court ought not to have exercised its jurisdiction under Article 227 in view of the
provision for alternative remedy contained in the Act. We do not propose to go
into the correctness of the decision of the High Court and whether the order
passed by the Tribunal was correct or not has to be decided before an
appropriate forum.
6. The Act has been enacted with a view to provide a special procedure for
recovery of debts due to the banks and the financial institutions. There is a
hierarchy of appeal provided in the Act, namely, filing of an appeal under Section
20 and this fast-track procedure cannot be allowed to be derailed either by
taking recourse to proceedings under Articles 226 and 227 of the Constitution or
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by filing a civil suit, which is expressly barred. Even though a provision under an
Act cannot expressly oust the jurisdiction of the Court under Articles 226 and
227 of the Constitution, nevertheless, when there is an alternative remedy
available, judicial prudence demands that the Court refrains from exercising its
jurisdiction under the said constitutional provisions. This was a case where the
High Court should not have entertained the petition under Article 227 of the
Constitution and should have directed the respondent to take recourse to the
appeal mechanism provided by the Act.”
51. In CCT v. Indian Explosives Ltd. [(2008) 3 SCC 688] the Court reversed an
order passed by the Division Bench of the Orissa High Court quashing the show-
cause notice issued to the respondent under the Orissa Sales Tax Act by observing
that the High Court had completely ignored the parameters laid down by this Court
in a large number of cases relating to exhaustion of alternative remedy.
52. In City and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala
[(2009) 1 SCC 168] the Court highlighted the parameters which are required to be
kept in view by the High Court while exercising jurisdiction under Article 226 of the
Constitution. Paras 29 and 30 of that judgment which contain the views of this
Court read as under : (SCC pp. 175-76)
“29. In our opinion, the High Court while exercising its extraordinary
jurisdiction under Article 226 of the Constitution is duty-bound to take all the
relevant facts and circumstances into consideration and decide for itself even in
the absence of proper affidavits from the State and its instrumentalities as to
whether any case at all is made out requiring its interference on the basis of the
material made available on record. There is nothing like issuing an ex parte writ
of mandamus, order or direction in a public law remedy. Further, while
considering the validity of impugned action or inaction the Court will not consider
itself restricted to the pleadings of the State but would be free to satisfy itself
whether any case as such is made out by a person invoking its extraordinary
jurisdiction under Article 226 of the Constitution.
30. The Court while exercising its jurisdiction under Article 226 is duty-bound
to consider whether:
(a) adjudication of writ petition involves any complex and disputed questions of
facts and whether they can be satisfactorily resolved;
(b) the petition reveals all material facts;
(c) the petitioner has any alternative or effective remedy for the resolution of the
dispute;
(d) person invoking the jurisdiction is guilty of unexplained delay and laches;
(e) ex facie barred by any laws of limitation;
(f) grant of relief is against public policy or barred by any valid law; and host of
other factors.
The Court in appropriate cases in its discretion may direct the State or its
instrumentalities as the case may be to file proper affidavits placing all the relevant
facts truly and accurately for the consideration of the Court and particularly in cases
where public revenue and public interest are involved. Such directions are always
required to be complied with by the State. No relief could be granted in a public law
remedy as a matter of course only on the ground that the State did not file its
counter-affidavit opposing the writ petition. Further, empty and self-defeating
affidavits or statements of Government spokesmen by themselves do not form basis
to grant any relief to a person in a public law remedy to which he is not otherwise
entitled to in law.”
53. In Raj Kumar Shivhare v. Directorate of Enforcement [(2010) 4 SCC 772] the
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Court was dealing with the issue whether the alternative statutory remedy available
under the Foreign Exchange Management Act, 1999 can be bypassed and
jurisdiction under Article 226 of the Constitution could be invoked. After examining
the scheme of the Act, the Court observed : (SCC p. 781, paras 31-32)
“31. When a statutory forum is created by law for redressal of grievance and
that too in a fiscal statute, a writ petition should not be entertained ignoring the
statutory dispensation. In this case the High Court is a statutory forum of appeal
on a question of law. That should not be abdicated and given a go-by by a
litigant for invoking the forum of judicial review of the High Court under writ
jurisdiction. The High Court, with great respect, fell into a manifest error by not
appreciating this aspect of the matter. It has however dismissed the writ petition
on the ground of lack of territorial jurisdiction.
32. No reason could be assigned by the appellant's counsel to demonstrate
why the appellate jurisdiction of the High Court under Section 35 of FEMA does
not provide an efficacious remedy. In fact there could hardly be any reason since
the High Court itself is the appellate forum.”
7. In view of the above, the impugned judgment and order passed by the High
Court entertaining the writ petition under Article 226 of the Constitution of India
against the Assessment Order denying the benefit of Input rebate is unsustainable
and the same deserves to be quashed and set aside and the original writ petitioner is
to be relegated to prefer an appeal against the Assessment Order dated 28.02.2015
passed by the Divisional Deputy Commissioner, Commercial Tax, Jabalpur, which may
be available under Section 46(1) of the MP VAT Act, 2002.
8. In view of the above and for the reasons stated above and without expressing
anything on merits in favour of either of the parties on the Input rebate claimed by the
respondent - original writ petitioner, the impugned judgment and order passed by the
High Court is hereby quashed and set aside. The writ petition preferred by the
respondent herein - original writ petitioner - assessee is hereby dismissed on the
ground of alternative efficacious statutory remedy of appeal available to the
respondent. The respondent is relegated to prefer an appeal before the appellate
authority under Section 46(1) of the MP VAT Act, 2002. If such an appeal is preferred
within a period of four weeks from today, the same be entertained and decided and
disposed of on merits without raising an issue with respect to limitation, however,
subject to compliance of the statutory requirements, if any, for preferring an appeal
under Section 46(1) of the MP VAT Act, 2002. The appellate authority to decide and
dispose of the appeal and the issue without in any way being influenced by any of the
observations made by the High Court which as such is hereby quashed and set aside
by the present judgment and order.
9. The present appeal is allowed to the aforesaid extent. However, there shall be no
order as to costs.
———
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