The State of Maharashtra and Others Versus Greatship (India) Limited

The State of Maharashtra and Others Versus Greatship (India) Limited

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4956 OF 2022
The State of Maharashtra and Others …Appellants
Versus
Greatship (India) Limited …Respondent
J U D G M E N T
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 30.04.2021 passed by the High Court of Judicature at
Bombay in Writ Petition (Stamp) No. 92630 of 2020, by which the High
Court has, in exercise of powers under Article 226 of the Constitution of
India, set aside the assessment order passed by the assessing authority
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and also the belated notice of demand, the State of Maharashtra and
others have preferred the present appeal.
2. That the respondent – original writ petitioner was subjected to
proceedings under the Maharashtra Value Added Tax, 2002 (hereinafter
referred to as the ‘MVAT Act’) and Central Sales Tax Act, 1956
(hereinafter referred to as the ‘CST Act’). The Assessing Officer issued
notice of assessment dated 01.02.2018 calling upon the assessee to
produce relevant documents and also to show cause as to why it should
not be assessed under the relevant provisions of Section 23 of the MVAT
Act.
2.1 According to the writ petitioner, the writ petitioner submitted the
required documents and also showed cause vide letter dated
03.05.2018. That a personal hearing was fixed on 16.03.2020.
However, on 16.03.2020 the Assessing Officer was not available and
therefore no hearing took place. According to the writ petitioner, multiple
telephone calls were made to the Assessing Officer on 17.03.2020,
18.03.2020 and 19.03.2020 for personal hearing, but no such hearing
materialised. According to the writ petitioner, vide letter dated
20.03.2020 it was submitted before the Assessing Officer that for the
financial year under consideration the relevant documents had already
been submitted and personal hearing was requested. The Assessing
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Officer passed an order on 20.03.2020 determining the tax liability along
with interest and penalty under the MVAT Act and CST Act.
2.2 That without preferring any appeal before the first appellate
authority, the respondent – assessee – original writ petitioner filed a writ
petition before the High Court challenging the assessment order passed
under the provisions of the MVAT Act and CST Act alleging inter alia that
no order was passed on 20.03.2020 and it was passed in the month of
July, 2020, which was beyond the period of limitation. The High Court
has entertained the said writ petition against the assessment order under
Article 226 of the Constitution of India and has passed the impugned
judgment and order quashing and setting aside the assessment order
and the demand notice.
2.3 Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court, the State of Maharashtra and
others have preferred the present appeal.
3. Number of submissions have been made by the counsel appearing
for the respective parties on merits and on the assessment order passed
by the Assessing Officer. However, for the reasons given hereinbelow,
we are of the opinion that against the assessment order, the High Court
ought not to have entertained the writ petition and ought to have
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relegated the assessee to prefer a first appeal before the first appellate
authority. Therefore, we are not elaborating the submissions on merits.
4. Shri Sachin Patil, learned counsel appearing on behalf of the
appellants has vehemently submitted that against the assessment order
passed by the Assessing Officer under the provisions of the MVAT Act
and CST Act, the High Court ought not to have entertained the writ
petition under Article 226 of the Constitution of India.
4.1 It is next submitted by the learned counsel appearing on behalf of
the appellants that the assessee had a statutory alternative remedy
available by way of appeal before the first appellate authority and the
said remedy ought to have been pursued, more so because, there were
very serious disputed facts as to whether the assessment order was
passed on 20.03.2020 or on 14.07.2020 (as alleged by the assessee).
4.2 Making the above submissions and relying upon the decisions of
this Court in the case of Titaghur Paper Mills Co. Ltd. v. State of
Orissa (1983) 2 SCC 433; Punjab National Bank v. O.C. Krishnan
(2001) 6 SCC 569; Raj Kumar Shivhare v. Directorate of
Enforcement (2010) 4 SCC 772; and United Bank of India v.
Satyawati Tondon and others (2010) 8 SCC 110, it is prayed to allow
the present appeal.
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5. Shri Rafique Dada, learned Senior Advocate appearing on behalf
of the respondent has submitted that considering the material on record,
the High Court has observed that the assessment order was not passed
on 20.03.2020 and must have been passed subsequently, i.e., beyond
31.03.2020 and therefore as the assessment order was passed beyond
the period of limitation prescribed under the Act, the High Court was
justified in entertaining the writ petition and quashing and setting aside
the assessment order.
5.1 Shri Rafique Dada, learned Senior Advocate appearing on behalf
of the respondent – assessee has relied upon the following decisions of
this Court in support of his submission that the High Court has rightly
entertained the writ petition against the order of assessment,
1. M/s Filterco & Another v. Commissioner of Sales Tax, Madhya
Pradesh and Another, (1986) 2 SCC 103;
2. Assistant Commissioner (CT) LTU & Another v. Amara Raja
Batteries Limited, (2009) 8 SCC 209; and
3. Whirlpool Corporation v. Registrar of Trademarks, Mumbai,
(1998) 8 SCC 1
5.2 Learned Senior Advocate appearing on behalf of the original writ
petitioner has further submitted that in the present case for an earlier
assessment order, there was a decision against the assessee by the first
appellate authority on merits and therefore it may be a formality to prefer
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an appeal before the first appellate authority and hence the original writ
petitioner rightly filed the writ petition before the High Court.
6. We have heard the learned counsel for the respective parties at
length.
At the outset, it is required to be noted that against the assessment
order passed by the Assessing Officer under the provisions of the MVAT
Act and CST Act, the assessee straightway preferred writ petition under
Article 226 of the Constitution of India. It is not in dispute that the
statutes provide for the right of appeal against the assessment order
passed by the Assessing Officer and against the order passed by the
first appellate authority, an appeal/revision before the Tribunal. In that
view of the matter, the High Court ought not to have entertained the writ
petition under Article 226 of the Constitution of India challenging the
assessment order in view of the availability of statutory remedy under
the Act. At this stage, the decision of this Court in the case of Satyawati
Tondon (supra) in which this Court had an occasion to consider the
entertainability of a writ petition under Article 226 of the Constitution of
India by by-passing the statutory remedies, is required to be referred to.
After considering the earlier decisions of this Court, in paragraphs 49 to
52, it was observed and held as under:
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“49. The views expressed in Titaghur Paper Mills Co. Ltd. vs. 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 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.”
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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 dutybound 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.”
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53. In Raj Kumar Shivhare v. Directorate of Enforcement [(2010) 4 SCC
772] the 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. Applying the law laid down by this Court in the aforesaid decision,
the High Court has seriously erred in entertaining the writ petition under
Article 226 of the Constitution of India against the assessment order, bypassing the statutory remedies.
8. Now so far as the reliance placed upon the decisions of this Court
by the learned Senior Advocate appearing on behalf of the respondent,
referred to hereinabove, are concerned, the question is not about the
maintainability of the writ petition under Article 226 of the Constitution,
but the question is about the entertainability of the writ petition against
the order of assessment by-passing the statutory remedy of appeal.
There are serious disputes on facts as to whether the assessment order
was passed on 20.03.2020 or 14.07.2020 (as alleged by the assessee).
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No valid reasons have been shown by the assessee to by-pass the
statutory remedy of appeal. This Court has consistently taken the view
that when there is an alternate remedy available, judicial prudence
demands that the court refrains from exercising its jurisdiction under
constitutional provisions.
9. In view of the above and in the facts and circumstances of the
case, the High Court has seriously erred in entertaining the writ petition
against the assessment order. The High Court ought to have relegated
the writ petitioner – assessee to avail the statutory remedy of appeal and
thereafter to avail other remedies provided under the statute.
10. Under the circumstances, the impugned judgment and order
passed by the High Court is hereby quashed and set aside. The writ
petition filed before the High Court challenging the assessment order
and consequential notice of demand of tax is hereby dismissed. The
respondent – assessee is relegated to avail the statutory remedy of
appeal and other remedies available under the MVAT Act and CST Act.
It is directed that if such a remedy is availed within a period of four
weeks from today, the appellate authority shall decide and dispose of the
same on its own merits in accordance with law without raising any
question of limitation, however, subject to fulfilling the other conditions, if
any, under the statute. It is made clear that we have not expressed any
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opinion on the merits of the case in favour of either of the parties and it is
for the appellate authority and/or appropriate authority to consider the
appeal/proceedings on its/their own merits and without being influenced
in any way by any of the observations made by the High Court which
otherwise have been set aside by the present order. The present appeal
is allowed in the aforesaid terms. However, in the facts and
circumstances of the case, there shall be no order as to costs.
…………………………………..J.
[M.R. SHAH]
NEW DELHI; …………………………………..J.
SEPTEMBER 20, 2022. [B.V. NAGARATHNA]
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