Citation Codes

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citation codes

Case Number

S.B Civil Writ Petition No. 161 of 2004

Attorney(S)

Vineet Kothari,
K.K Bissa,

Judges

Sunil Kumar Garg, J.

Acts

Section 8(5) of the Taxation of Income (Investigation Commission) Act
ARTICLE 226 A CONSTITUTION OF INDIA
Section 80IA/80IB of the Income Tax Act.d)
ARTICLE 226 CONSTITUTION OF INDIA
INCOME TAX ACT 1961
Section 80IB of the Income Tax Act.vii)
SECTION 80 IB INCOME TAX ACT
INCOME TAX ACT
Sales Tax Act

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Smart Summary

Structured Summary of the Opinion delivered by Sunil Kumar Garg, J.

Factual and Procedural Background

The writ petition under Article 226 of the Constitution of India was filed on 8.1.2004 by a petitioner-firm engaged in blending various types of tea leaves. The petitioner claimed it was a manufacturing unit registered with the District Industries Centre, Banswara and relied on a Central Government Department of Industries circular (20.11.1996) and a judgment in Dhunseri Tea Industries v. State of Rajasthan to support the submission that the blending process amounted to manufacture.

The petitioner sought quashing of an assessment order dated 4.12.2003 passed by the Income Tax Officer, Banswara (respondent No. 2) for the assessment year 2001-2002, by which a deduction under Section 80IB of the Income Tax Act, 1961 (claimed at Rs. 2,46,943/-) was disallowed and the entire business income was brought to tax.

The assessment order rejected the applicability of the Dhunseri judgment (on the ground that it concerned the Sales Tax Act), distinguished the language of the Sales Tax Act and the Income Tax Act, and relied on the Calcutta High Court judgment in Appeejay Pvt. Ltd. v. Commissioner of Income-Tax which held that mixing/blending tea did not involve manufacturing for the purposes of Section 80-I.

The petitioner filed an appeal under Section 246(1) before the Commissioner of Income Tax (Appeals), Udaipur (Annex. R/1), which was pending at the time the writ petition was heard. The respondents contended that because an alternative statutory appeal remedy existed and had been availed, the writ petition was not maintainable.

Legal Issues Presented

Whether the writ petition under Article 226 is maintainable in view of the alternative and equally efficacious statutory remedy of appeal under Section 246 of the Income Tax Act, which the petitioner had already availed and which was pending.
Whether the facts of the present case are covered by the judgment in Dhunseri Tea Industries (that blending of tea amounts to manufacture) or whether that judgment is distinguishable.
Whether the Calcutta High Court decision in Appeejay Pvt. Ltd. (holding blending/mixing tea did not constitute manufacturing for purposes of Section 80-I) correctly applies to the facts of the present case.
Whether the process undertaken by the petitioner amounts to "manufacture" for the purposes of Section 80IA/80IB of the Income Tax Act.
Whether the Income Tax Officer, in passing the assessment order dated 4.12.2003, correctly applied relevant law and whether any error was such as to render the order without jurisdiction or vitiate it by an error apparent on the face of the record.

Arguments of the Parties

Petitioner's Arguments

The petitioner-firm engaged in blending of tea leaves is a manufacturing unit (registered with District Industries Centre, Banswara) and the blending process amounts to manufacture.
The Department of Industries circular dated 20.11.1996 confirmed that blending of tea amounts to manufacture and such units should be registered as manufacturing units.
The petitioner performs continuous blending under instructions of a blend master, packs the blended tea in its own brand and supplies it for marketing—facts consistent with manufacturing activity.
The judgment of this Court in Dhunseri Tea Industries v. State of Rajasthan held that blending amounted to manufacture and therefore should govern the respondent's assessment; accordingly, the disallowance of deduction under Section 80IB was alleged to be per se illegal and without jurisdiction.

Respondents' Arguments

The impugned assessment order dated 4.12.2003 is appealable and the petitioner had already filed an appeal under Section 246(1) which was pending before the Commissioner (Appeals); hence, the writ petition is not maintainable because an alternative statutory remedy exists and has been availed.
The Income Tax Officer considered the petitioner's contentions, distinguished the Dhunseri judgment (which related to the Sales Tax Act), and relied on the Calcutta High Court judgment in Appeejay Pvt. Ltd. which treated blending as not manufacturing for the purposes of Section 80-I; after consideration the Income Tax Officer concluded that blending was not manufacturing and disallowed the Section 80IB deduction.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Dhunseri Tea Industries v. State of Rajasthan	Held (under Sales Tax Act) that the blending of tea amounted to manufacture (relevant for Sales Tax exemption).	The petitioner relied on this judgment; the Income Tax Officer distinguished it as relating to the Sales Tax Act and the Court treated the distinction as a matter to be examined by the appellate forum rather than in writ jurisdiction.
Appeejay Pvt. Ltd. v. Commissioner Of Income-Tax (Calcutta High Court, (1994) 206 ITR 367)	Held that mixing/blending tea did not constitute manufacturing of an article or thing for the purposes of Section 80-I (Income Tax).	The Income Tax Officer relied on this decision in disallowing Section 80IB deduction; the Court noted that the ITO had placed reliance on this authority.
Than Singh v. Superintendent Taxes	Cited as authority relating to the principle that Article 226 is discretionary and may be refused where an alternative remedy exists.	Listed among authorities supporting the proposition that where an alternative efficacious remedy is available, writ jurisdiction may be declined.
Kerala State Electricity Board v. Kurien E. Kalathil	Authority on the discretionary nature of Article 226 and the availability of alternative remedies.	Referred to as supporting authority for refusal of writ where alternative remedy exists.
United India Insurance Co. Ltd. v. Rajendra Singh	Authority on discretionary exercise of writ jurisdiction when alternative remedies exist.	Referred to by the Court as one of the authorities on the rule.
Rashid K.S v. ITI Commission	Listed among authorities that illustrate the discretionary refusal of writ where alternate remedies are available.	Included by the Court as supporting the general principle on alternative remedies.
K.S. Rashid and sons v. Income tax Investigation Commission	Explained that Article 226 is discretionary and High Court should not entertain writ where adequate remedy exists and has been availed (reference to Section 8(5) of the Taxation of Income (Investigation Commission) Act).	Cited by the Court as directly covering the point that the petitioner had already availed the appeal remedy and thus Article 226 jurisdiction should not be exercised.
Shri Ram Refrigeration Industries Ltd. v. Commercial Taxes Officer	Authority that when an appeal is pending before the Appellate Authority on the same issue by the same party, the writ petition cannot be entertained.	Relied on by the Court to support non-maintainability where appeal is pending.
Basant Kumar v. The Eagle Rolling Mills Ltd.	Held that when an alternative remedy is available, the matter cannot be considered under Article 226.	Referred to by the Court as supporting the position that alternative remedies preclude writ jurisdiction.
R.K. Panda v. Steel Authority of India	Cited among authorities concerning the rule that alternative remedies should be pursued.	Listed by the Court as additional supporting authority.
Gopichand Teli v. State	Listed as an authority on resort to alternative remedies.	Mentioned by the Court as further supporting precedent.
Laxman Singh Verma v. State of Rajasthan	Authority reinforcing that alternative remedies should be pursued before invoking writ jurisdiction.	Referred to by the Court among similar authorities.
Sheela Devi v. Jaspal Singh	Recent authority cited to the same effect about alternative remedies and writ jurisdiction.	Noted by the Court as consistent with its conclusion on alternative remedies.
Sadhana Lodh v. National Insurance Company Ltd.	Recent authority cited concerning the limited exercise of writ jurisdiction where alternative remedies exist.	Referred to by the Court in support of its approach.
Bhopal Sugar Industries Ltd. v. D.P. Dube, Sales Tax Officer	Authority cited for the proposition that a right to appeal may be an "adequate remedy" to bar the issue of a writ.	Referred to by the Court to show that appeal may constitute an adequate alternative remedy.
Union of India v. S.J. Thauawallla	Authority that where appeal against impugned order is pending, the High Court may legitimately refrain from entertaining the writ and may relegate parties to the appellate tribunal.	Cited in support of the Court's direction to leave dispute to the statutory appellate process when an appeal is pending.
SBBJ v. Union of India	Division Bench judgment of the same High Court holding that when an appeal against an assessment order has been preferred, a writ petition is not maintainable.	The Court held the present case to be squarely covered by this decision and relied on it to find the writ not maintainable.
Guljag Industries Limited, Jodhpur v. State of Rajasthan	Referenced in the opinion (context: earlier authority of the Court) and discussed under the heading when alternative remedy does not bar relief.	The Court observed that Guljag Industries would not assist the petitioner in the present posture, because the present case did not exhibit exceptional circumstances permitting departure from the rule to exhaust appeal remedies.

Court's Reasoning and Analysis

The Court first recorded undisputed facts: the impugned assessment order dated 4.12.2003 is an appealable order and the petitioner had already filed an appeal under Section 246, which was pending before the Commissioner (Appeals). The Income Tax Officer had considered the petitioner's contentions, distinguished the Dhunseri judgment (a Sales Tax decision) with cogent reasons and relied upon the Calcutta High Court decision in Appeejay Pvt. Ltd.

The Court emphasized the discretionary nature of Article 226 and reiterated the established principle that where an alternative and equally efficacious remedy is available, a litigant should ordinarily pursue that remedy rather than invoke writ jurisdiction. The Court referred to several precedents (including K.S. Rashid and others) to demonstrate that the High Court should normally decline to entertain writ petitions where statutory appeals are available and have been availed.

The Court identified that the central questions in the dispute—whether the facts match Dhunseri, whether Appeejay was correctly decided and applicable, whether the petitioner's process amounts to manufacture, and whether the Income Tax Officer correctly applied the law—are factual or mixed questions of fact and law. The Court held that these are not appropriate for the first determination in writ jurisdiction and should be left to the statutory appellate fora.

The Court further explained the distinction between an order being wrong and an order being without jurisdiction: if the statutory authority has jurisdiction in respect of the subject-matter, an erroneous decision does not ipso facto render the order bereft of jurisdiction or amenable to immediate writ relief. Thus, the presence of an error in the assessment order, if any, did not demonstrate the kind of “error apparent on the face of the record” or excess of jurisdiction that would justify bypassing the appellate process.

The Court also set out the appellate hierarchy under the Income Tax Act (appeal first to Commissioner (Appeals), then Appellate Tribunal, then High Court on substantial question of law, and then Supreme Court) to show that the petitioner had not exhausted statutory remedies and had prematurely approached the High Court by way of writ.

Finally, the Court considered the exceptions to the rule (error apparent on face of record, lack or excess of jurisdiction, violation of natural justice, contravention of fundamental rights, ultra vires action) and found that none of those exceptional circumstances were present in the case. On these bases the Court concluded that the exercise of writ jurisdiction was not warranted.

Holding and Implications

Holding: The Court's final decision was that the writ petition is not maintainable and is therefore dismissed.

Implications:

The direct effect is that the petitioner must pursue the statutory appellate remedy it has already initiated (appeal before the Commissioner of Income Tax (Appeals)), and cannot obtain relief in this High Court under Article 226 until the statutory appellate process is exhausted or unless exceptional circumstances arise that justify writ relief.
The Court did not find any error of law or jurisdictional defect on the face of the assessment order that would justify bypassing the appeal process; accordingly the assessment order dated 4.12.2003 is left intact for adjudication in the appellate forum.
The opinion applies established principles on the discretionary nature of Article 226 and the requirement ordinarily to exhaust alternative remedies; it does not purport to lay down a new precedent beyond following and applying existing authorities.

Disposition: For the reasons stated, the writ petition is dismissed; costs were made easy.

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D.D Shah (M/S.) & Brothers v. The Union Of India And Anr.

The Judgment of the Court was delivered by

Sunil Kumar Garg, J.:— This writ petition under Article 226 of the Constitution of India has been filed by the petitioner on 8.1.2004 against the respondents with a prayer that by an appropriate writ order or direction the assessment order dtd. 4.12.2003 (Annex. 4) passed by the Income Tax Officer, Banswara (respondent No. 2) for the assessment year 2001-2002 by which the respondent No. 2 (Income Tax Officer, Banswara) dis-allowed the deduction under Section 80IB of the Income Tax Act, 1961 and brought entire business income to tax be quashed and set aside.

2. The facts of the case us put forward by the petitioner are as under:—

i) The petitioner - firm was engaged in the business of running an industrial undertaking of blending of various types of tea leaves as per the procedure and is duly registered as a manufacturing unit with the District Industries Centre, Banswara vide certificate (Annex. 1).

ii) Further case of the petitioner is that even the Department of Industries in Central Government vide its circular dtd. 20.11.1996 (Annex. 2) clarified that the process of blending tea leaves amounts to manufacture and therefore, such units should be so registered.

iii) Further case of the petitioner is that the petitionerfirm prepares samples of tea as suggested by blend master and mixing process is also instructed by the blend master and this blending process is a continuous process and it is an important function as to maintain the similar blend of tea.

iv) Further case of the petitioner is that tea leaf is not perfect for consumption independently and after preparation, the blended tea is packed in own brand name in pouches, bags and containers for marketing and thereafter the unit supplies the packet for marketing through marketers.

v) Further case of the petitioner is that process of blending of tea amounts to manufacture and under the Sales Tax law, this Court in the case of Dhunseri Tea Industries v. State of Rajasthan (1), has held that process of blending of tea amounted to manufacture and thus, benefit of exemption under the new Sales Tax Incentive Scheme, 1989 under the Sales Tax Act was granted.

vi) Further case of the petitioner is that since this judgment of this Court in the case of Dhunseri Tea Industries (supra) was binding on the authorities, the respondent No. 2 (Income Tax Officer, Banswara) should have also followed the judgment while passing the impugned assessment order dtd. 4.12.2003 (Annex. 4) and the respondent No. 2 (Income Tax Officer, Banswara) should have allowed the claim of deduction of the petitioner - assessee under Section 80IB of the Income Tax Act.

vii) Further case of the petitioner is that through impugned order dtd. 4.12.2003 (Annex. 4), the respondent No. 2 (Income Tax Officer, Banswara) disallowed the said deduction under Section 80 IB of the Income Tax Act and brought entire business income to tax, inter alia holding that

a) That the petitioner claimed deduction under Section 80IB of the Income Tax Act to the tune of Rs. 2,46,943/- i.e 100% of the profit earned from the industrial undertaking.

b) That the case law in the case of Dhunseri Tea Industries (supra) was not applicable in the present case as the said judgment relates to exemption under the Sales Tax Act.

c) The language in the Sales Tax Act is different from the Income Tax act and they are not akin to the language in Section 80IA/80IB of the Income Tax Act.

d) That deduction under Section 80IA/80IB is available only when the industry is engaged in manufacturing of producing article or thing, but under the Sales Tax Act, the proceeding has also been treated as manufacturing.

e) The respondent No. 2 (Income Tax Officer, Banswara) has placed reliance on judgment of Calcutta High Court in the case of Appeejay Pvt. Ltd. v. Commissioner Of Income-Tax., (1994) 206 ITR 367 which specifically dealt with Section 80-I and the Calcutta High Court observed that assessee of the case was merely mixing up and blending tea and sold them in the market and that processing of tea did not involve manufacturing of any article or thing and the Calcutta High Court did not allow deduction as claimed by the assessee of that case under Section 80-I.

viii) Aggrieved from the assessment order dtd. 4.12.2003 (Annex. 4) passed by respondent No. 2 (Income Tax Officer, Banswara), this writ petition has been filed by the petitioner.

3. In this writ petition, the main submission of the learned counsel for the petitioner is that when this Court in the case of Dhunseri Tea Industries (supra) has held that process of blending of tea amounts to manufacture and therefore, the impugned assessment order dtd. 4.12.2003 (Annex. 4) passed by the respondent No. 2 (Income Tax Officer, Banswara) is perse illegal and without jurisdiction and deserves to be set aside.

4. Reply to the writ petition was filed by the respondents and their case is that since the impugned assessment order dated 4.12.2003 (Annex. 4) is applicable order and appeal lies under Section 246(1) of the Act of 1961 before the Income Tax Commissioner (Appeals) and the petitioner has already filed and appeal (Annex. R/1) which is pending before the Income Tax Commissioner (Appeals), Udaipur and therefore, when the petitioner has already availed the alternative remedy of appeal, the present writ petition filed by the petitioner is not maintainable and should be dismissed on this ground alone.

5. Heard and perused the record.

6. There is no dispute on the point that the impugned assessment order dtd. 4.12.2003 (annex. 4) passed by the respondent No. 2 (Income Tax Officer, Banswara) is an appealable order and the petitioner has already filed appeal (Annex. R/1) under Section 246 of the Act of 1961 and same is pending before the Commissioner of Income Tax (appeals), Udaipur.

7. There is also no dispute on the point that in the assessment order (Annex. 4) dtd. 4.12.2003, the Income Tax Officer, Banswara (respondent No. 2) considered all the contentions raised by the petitioner and had answered the same in the impugned assessment order dtd. 4.12.2003 (Annex. 4) and even he had distinguished the judgment (Annex. 3) delivered in the case of Dhunseri Tea Industries (supra) from the fact of the present case by giving cogent reasons.

8. Not only this, the learned Income Tax Officer (respondent No. 2) has placed reliance on judgment of Calcutta High Court in the case of Appeejay (P) Ltd. (supra) and after considering all the points, he came to the conclusion that the blending of tea is not a manufacturing process and thus he disallowed the claim of the petitioner claimed by him under Section 80IB of the Income Tax Act.

9. In the facts and circumstances just mentioned above, the question that arises for consideration is whether in view of the fact that there is alternative remedy of appeal available to the petitioner and the same has been availed by the petitioner through no final adjudication has taken place in that appeal, the present writ petition is maintainable or not.

10. In my opinion where an alternative and equally efficacious remedy is available to a litigant, he should pursue that remedy and may not invoke special jurisdiction of the High Court to issue a prerogative writ.

11. The remedy under Article 226 being, in general, discretionary, the High Court may refuse to grant it where there exists and alternative remedy, equally efficient and adequate, unless there are good grounds therefor, but where a party complaining of fraud had no other alternative remedy available, he could avail writ remedy and for that following authorities may be referred to:

i) Than Singh v. Superintendent Taxes (2)

ii) Kerala State Electricity Board v. Kurien E. Kalathil (3)

iii) United India Insurance Co. Ltd. v. Rajendra Singh (4)

iv) Rashid K.S v. ITI Commission (5)

12. The question whether the alternative remedy is equally efficacious or adequate or not is a question of fact to be decided in each case and the onus lies on the petitioner to show that it is not adequate.

13. Where the petitioner had already availed remedy of appeal under the ordinary law, no petition under Article 226, will ordinarily be entertained on the same questions, atleast so long as those proceedings of appeal are not disposed of.

14. In my opinion, the petitioner cannot be allowed to pursue two parallel remedies at the same time as in the present case not only that the alternative remedy is available to the petitioner, the petitioner had already availed that remedy by filing appeal before the Income Tax Commissioner and that appeal is still pending and simply because the appeal has not been decided, it would not give a cause to the petitioner to file writ petition under Article 226 of the Constitution of India.

15. The High Court does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not, therefore, act as a court of Appeal against the decision of a Court of Tribunal, to correct errors of fact and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move anther tribunal, or even itself in anther jurisdiction for obtaining redress in the manner provided by a statute, the high Court normally will not permit by entertaining a petition under Article 226 of the Constitution, the machinery created under the statute to be bypassed, and will leave the party applying to it is seek resort to the machinery so set up.

16. In the present case, following questions of facts including mixed questions of facts and law may arise:

i) whether the facts of the present case are covered by the judgment (annex. 3) delivered in the case of Dhunseri Tea Industries (supra) or not?

ii) Whether law laid down in calcutta High Court in the case of Appeejay Pvt. Ltd. (supra) was correctly laid down or not and whether the same is applicable to the facts of the present case or not.

iii) Whether process undertaken by the petitioner comes within the manufacture or not?

iv) Whether while passing the impugned assessment order dtd. 4.12.2003 (Annex. 4), the Income Tax Officer, Banswara (respondent No. 2) has correctly followed the relevant laws or not?

17. In my opinion, the above question are question of facts or mixed question of facts and law which should not be decided for the first time in writ jurisdiction under Article 226 of the Constitution of India and they should be left to be decided by the statutory forum. From this point of view also, the writ petition is not maintainable.

18. The Hon'ble Supreme Court in the case of K.S Rashid and sons v. Income tax Investigation Commission (6) has observed as under:—

“The remedy provided for in Article 226 of the Constitution is a discretionary remedy and the High Court has always the discretion to refuse to grant any writ if it is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere. Where the petitioners have already availed themselves of the remedy provided for in Section 8(5) of the Taxation of Income (Investigation Commission) Act and a reference has been made to the High Court in terms of That Provision which is awaiting decision, it Would not be proper to allow the petitioners to invoke the discretionary jurisdiction under Article 226 of the Constitution at this stage.”

19. The case of K.S Rashid (supra) clearly covers the point in dispute as the petitioner has already availed the remedy of appeal by filing appeal before the Appellate Authority. Hence, jurisdiction under Article 226 of the Constitution of India should not be exercised in favour of the petitioner.

20. Similarly, in the case of Shri Ram Refrigeration Industries Ltd. v. Commercial Taxes Officer (7), the Hon'ble Supreme Court has held that when the appeal is pending before the Appellate Authority on the similar issue by same party, the writ petition cannot be entertained. This authority also goes to the very root of the maintainability of the present writ petition.

21. The Hon'ble Supreme Court in the case of Basant Kumar v. The Eagle Rolling Mills Ltd. (8), has held that when alternative remedy is available, the matter cannot be considered under Article 226 of the Constitution of India. In this regard, the following authorities may also be referred to:

i) R.K Panda v. Steel Authority of India (9),

ii) Gopichand Teli v. State (10),

iii) Laxman Singh Verma v. State of Rajasthan (11).

22. Similar view has been taken by the Hon'ble Supreme Court in the recent judgments Sheela Devi v. Jaspal Singh (12) and Sadhana Lodh v. National Insurance Company Ltd. (13).

23. It is well settled that when an alternative and equally efficacious remedy is open to a litigant, he should be required to purse that remedy and not invoke the special jurisdiction of the High Court to issue a prerogative writ.

24. When an alternative and equally efficacious remedy exists, it will be sound exercise of discretion to refuse to interfere in a petition under Article 226 of the Constitution of India, unless there are good grounds therefor.

25. It may further be stated that the right of appeal is substantive right and not a matter of mere procedure.

26. In my considered opinion, a right to appeal may be an “adequate remedy” to bar the issue of a writ. In this regard, the following authority of Hon'ble Supreme Court Court may be referred to:—

Bhopal Sugar Industries Ltd. v. D.P Dube, Sales Tax Officer (14).

27. In the case of Union of India v. S.J Thauawallla (15), the Hon'ble Supreme Court has held that when the appeal against the impugned order was pending, the High Court was justified in not going into that question and relegating the parties to the decision of the appellate Tribunal.

WHEN ALTERNATIVE REMEDY DOES NOT BAR RELIEF

28. It should not, however, be forgotten that the existence of an alternative remedy is not an absolute bar to the granting of a writ under Article 226 but “is a thing to be taken into consideration in the matter of granting writs.” other words, the existence of an alternative remedy is a rule of policy, practice and discretion and not a rule of law. It is a self imposed limitation and cannot oust the jurisdiction of the Court. In exceptional circumstances, the High Court may grant relief under Article 226, even if an alternative remedy is available to the aggrieved person.

29. The existence of an alternative remedy is no ground for refusing prohibition or certiorari where—

(a) the absence or excess of jurisdiction is patent and the application in is made by the party aggrieved, or

(b) there is an error apparent on the face of record,

(d) where there has been a contravention of fundamental rights,

(e) where the tribunal acted under a provision of law which is ultra vires.

30. Apart from this, when there is infringement of fundamental rights, where remedy cannot be said to be alternative and where remedy cannot be said to be adequate or equally efficacious and where the order is ultra vires, without jurisdiction or violative of natural justice, writ petition under Article 226 of the Constitution of India can be entertained.

31. The rule requiring the exhaustion of alternative remedies before the grant of writ is a rule of policy, convenience and discretion for the guidance of Court rather than a rule of law meaning thereby that in exceptional cases, though there is alternative remedy, still the writ jurisdiction lies.

32. In the present case, none of the above-mentioned conditions are present and there is remedy available to the petitioner which is not only alternative but same is adequate and equally efficacious. Apart from this, this remedy has been availed by the petitioner by way of filing appeal before the Commissioner of Income Tax (Appeals). From this point of view also, the present case is not that case where inspite of availability of alternative remedy, relief can be granted to the petitioner under Article 226 of the Constitution of India at this stage atleast so long as the appeal is disposed of.

33. Apart from this, there is Division Bench Judgment of this Court in the case of SBBJ v. Union of India (16), which pertains to the Income Tax act and it has been held by this Court that when the petitioner of that case had already preferred an appeal against the assessment order, the writ petition is not maintainable. The present case is squarely covered by the Judgment of this Court in the case of SBBJ (supra) and from this point of view also, the present writ petition is not maintainable.

34. On hierarchy of appeal, it may be stated here that under the Act of 1961 appellate hierarchy is as under:—

i) The appeal against the order of the Assessing Officer lies with the Commissioner (Appeals) (Sec. 246A to Sec. 251)

ii) Appeal against the order of the Commissioner (appeals) can be preferred by the assessee or the Income Tax Department and such appeal lies with the Appellate Tribunal which is the final fact finding authority (Sec. 252 to Sec. 255)

iii) Appeal against the order of the Appellate Tribunal can be preferred by the assessee or the Income Tax Department and such appeal lies to the High Court on a substantial question of law (Section 260A and 260B).

iv) Appeal can be preferred against the order of the High Court either by the assessee or by the Income Tax Department to the Supreme Court which is the final Appellate Authority (Sec. 261 & Sec. 262).

35. Thus, against the assessment order, the appeal lies to the Commissioner (appeals) and against the order of Commissioner (Appeals), the appeal lies to the appellate Tribunal and against the order of the appellate Tribunal, appeal lies to this Court on question of law and thus, still the petitioner has to cross two stages and without exhausting the above two stages, the petitioner has directly approached this court under Article 226 of the Constitution of India. For the above reason also, the petitioner would not be permitted to approach the High Court without exhausting the other alternative remedies available to it.

36. Hence, it is held that the present writ petition is not maintainable as the petitioner has already availed alternative remedy before the Commissioner (Appeal) by way of filing appeal and the same is still pending.

37. That apart, if the respondent No. 2 (Income Tax Officer, Banswara) in passing the order dtd. 4.12.2003 (Annex. 4) has distinguished the law laid down in the judgment (Annex. 3) in the case of Dhunseri Tea Industries (supra), it cannot be said that there was error apparent on the face of record and therefore, the argument of the learned counsel for the petitioner by not following the judgment (Annex. 3) in the case of Dhunseri Tea Industries (supra) illegality has been committed by the respondent No. 2 (Income Tax Officer, Banswara), cannot be accepted at this stage because this aspect has to be thrashed out first by the Appellate forum and other forum available and thereafter if the matter comes to this Court this Court would consider that matter under Article 226 of the Constitution of India and at this stage, it is premature to say that the respondent No. 2 (Income Tax Officer, Banswara) has committed illegality in not following the judgment (Annex. 3) delivered in the case of Dhunseri Tea Industries (supra).

38. The argument raised by the learned counsel for the petitioner the impugned assessment order dtd. 4.12.2003 (Annex. 4) passed by the respondent No. 2 (Income Tax Officer, Banswara) is without jurisdiction cannot be appreciated and hence, the impugned assessment order dtd. 4.12.2003 (Annex. 4) which is an appealable order, cannot be interfered by this Court under Article 226 of the Constitution of India. In this respect, it is made clear that if the statutory authority has jurisdiction to decide a particular question and if the same is decided by the statutory authority, in such a situation if the order is even wrong one, it cannot be said that the statutory authority had no jurisdiction and proprietory and legality of that wrong decision can be adjudged by appropriate forum. The question of jurisdiction gets importance only when statutory authority passes an order for which he had no jurisdiction, but if he passes wrong order, it does not mean that it lacks jurisdiction. From this point of view also, it cannot be sad that the impugned assessment order dtd. 4.12.2003 (Annex. 4) passed by the respondent No. 2 (Income Tax Officer, Banswara) is without jurisdiction and this argument raised by the learned counsel for the petitioner stands rejected.

39. In view of the law just discussed above, the authority of this Court in the case of Guljag Industries Limited, Jodhpur v. State of Rajasthan (17), would not be helpful to the learned counsel for the petitioner and this aspect has already been considered by this Court under the heading “when alternative remedy does not bar relief”

40. For the reasons mentioned above, the present writ petition is treated as not maintainable as the petitioner has alternative remedy and the petitioner has already availed that remedy by way of filing appeal before the Commissioner (Appeals) which is still pending and, hence the writ petition is liable to be dismissed as not maintainable. Thus, it is held that the present writ will not be entertained straightway against the assessment order until all avenues of appeal under the Income Tax Act, 1961 are availed.

For the reasons mentioned above, the present writ petition is dismissed.

Cost made easy.

D.D Shah (M/S.) & Brothers v. The Union Of India And Anr.

Structured Summary of the Opinion delivered by Sunil Kumar Garg, J.

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioner's Arguments

Respondents' Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

D.D Shah (M/S.) & Brothers v. The Union Of India And Anr.

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