(Judgment of the Court was delivered by The Hon'ble The Chief Justice)
This writ appeal has been filed against the impugned order of the
learned single Judge dated 15.10.2004.
2. Heard the learned counsel for the parties and perused the record.
3. The writ petition had been filed before the learned single Judge
against the order of the CEGAT dated 09.07.1997.
4. We are surprised that this writ petition was entertained at all.
There was a clear alternative remedy against the order of the CEGAT dated
09.07.1997 by means of filing a Reference Application before the CEGAT under
Section 35G(1) of the Central Excise Act (hereinafter referred to as the
Act) and if that application was rejected by the CEGAT there was a second
alternative remedy of approaching this Court under Section 35G(3) of the Act
seeking a direction to the CEGAT to make a reference to this Court.
5. It is well settled by a series of decisions of the Supreme Court
that particularly in tax matters there should be no short circuiting of the
statutory remedies, vide Titaghur Paper Mills Co. Ltd. Vs. State of Orissa,
AIR 1983 SC 603, Assistant Collector of Central Excise, Chandan Nagar Vs.
Dunlop India Limited, AIR 1985 SC 330, etc.
6. It is well settled that when there is an alternative remedy
ordinarily writ jurisdiction of this Court under Article 226 of the
constitution should not be invoked. This principle applies with greater force
regarding tax proceedings. As observed by the Supreme Court in Titaghur Paper
Mills Co. Ltd. Vs. State of Orissa, AIR 1983 SC 603:
Where a right or liability is created by a statute which
gives a special remedy for enforcing it, the remedy provided by that statute
only must be availed of.
7. A Constitution Bench of the Supreme Court in G.Veerappa Pillai Vs.
Raman and Raman Ltd., AIR 1952 SC 192 held that as the Motor Vehicles Act is a
self contained code and itself provides for a forum for appeal/revision, the
writ jurisdiction should not be invoked in matters relating to its provisions.
A similar view was taken in Assistant Collector of Central Excise Chandan
Nagar Vs. Dunlop India Limited, AIR 1985 SC 330.
8. In Assistant Collector of Central Excise, Chandan Nagar Vs.
Dunlop India Limited (Supra) the Supreme Court observed:
In Titaghur Paper Mills Co. Ltd. Vs. State of Orissa, AIR 1983 SC
6 03 A.P.Sen, E.S.Venkataramiah and R.B.Misra, JJ. held that where the
statute itself provided the petitioners with an efficacious alternative remedy
by way of an appeal to the Prescribed Authority, a second appeal to the
Tribunal and thereafter to have the case stated to the High Court, it was not
for the High Court to exercise its extraordinary jurisdiction under Article
226 of the Constitution ignoring as it were, the complete statutory machinery.
That it has become necessary, even now, for us to repeat this admonition is
indeed a 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 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 Art. 226 of the Constitution. But, then the
Court must have good and sufficient reason to by pass 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 Art.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.
9. In C.A.Ibraham Vs. ITO, AIR 1961 SC 609, H.B.Gandhi Vs. M/s.
Gopinath & Sons, 1992 (Suppl) 2 SCC 312 and in Karnatak Chemical Industries
Vs. Union of India, 2000 (10) SCC 13 the Supreme Court held that where there
is a hierarchy of appeals provided by the statute the party must exhaust the
statutory remedies before resorting to writ jurisdiction. All these decisions
are related to taxing statutes, and are hence apposite to the present context.
10. In Sheela Devi Vs. Jaspal Singh, AIR 1999 SC 2859 and Punjab
National Bank Vs. D.C.Krishna, 2001 (6) SCC 569 the Supreme Court held that
if the statute provides for remedy of revision or appeal, writ jurisdiction
should not be invoked.
11. In Union of India Vs. T.R. Verma, AIR 1957 SC 882 the Supreme
Court held that it is well settled that when an alternative and equally
efficacious remedy is open to a litigant, he should be required to pursue that
remedy and not invoke the special jurisdiction of the High Court to issue a
prerogative writ. It will be a sound exercise of discretion to refuse to
interfere in a petition under Article 226 of the Constitution unless there are
good grounds to do otherwise.
12. In A.Venkatasubbiah Naidu Vs. S.Chellappan, 2000 (7) SCC 695 (
vide para-22) the Supreme Court deprecated the practice of exercising the writ
jurisdiction when an efficacious alternative remedy is available.
13. In W.P.No.981 of 2003 (Tax) (M/s.Khandelwal Soya Industries Ltd.
Vs. State of U.P. and others) decided on 27.08.2003 a Division Bench of the
Allahabad High Court dismissed a writ petition challenging the provisional
assessment orders under the U.P. Trade Tax Act on the ground of alternative
remedy under section 9 of that act. Against the aforesaid judgment, Special
Leave Petition was filed before the Supreme Court which has been dismissed.
We respectfully agree with the view taken by the Allahabad High Court in the
aforesaid decision.
14. We are therefore surprised that the writ petition was entertained
at all by this Court.
15. There are well settled principles of writ jurisdiction and Judges
also must exercise self-discipline. It has been repeatedly held by the
Supreme Court that in tax matters there should be no short circuiting the
statutory remedies of appeal, revision, etc. We are therefore surprised that
in this case the learned single Judge did not observe this well settled
principle of self-discipline and entertained the writ petition despite
existence of statutory remedies.
16. The learned single Judge no doubt dismissed the writ petition on
merits but in our opinion he should not have gone into the merits at all and
he should have dismissed the writ petition straightaway on the ground of
alternative remedy. Hence, this writ appeal as well as the writ petition are
dismissed on the ground of alternative remedy under the Central Excise Act.
Consequently, W.A.M.P.No.669 of 2005 for stay is also dismissed. However, we
make it clear that the observations made by the learned single Judge will not
influence the statutory authorities if the assessee/appellant chooses to
exercise its alternative remedies under the Act.
Index: Yes
Internet: Yes
vu/sm
Copy to:-
1. The customs, Excise and Gold (Control)
Appellate Tribunal,
South Regional Bench,
Madras.
2. The Commissioner of Central Excise (Appeals),
Nungambakkam High Road,
Madras 34.
3. The Assistant Commissioner of Central Excise,
Madras IV Division, Madras.