Introduction
Unlike the erstwhile indirect tax-regime, where filing a writ petition was considered an infrequent event, the GST era has witnessed numerous writ petitions in the last seven years. The tax officials think that tax payers, at the drop of a hat, approach the court, making their works more complicated and the tax payers consider approaching the court to redress an issue is a fundamental right, guaranteed under the Constitution. The High Courts have been inundated with the writ petitions. One of the possible reasons could be the absence of Appellate Tribunal in the GST regime till now. But the controversial question that has arisen multiple times is whether a writ petition can be filed for issues where there is an alternate remedy? Can an aggrieved person go directly against the order-in-original of an adjudicating authority, without going through the other statutory forums for remedy? Should the High Court entertain and admit all such writ petitions filed, ignoring the statutorily effective mechanism? This article is an endeavour to delve into this contentious subject.
Writ denied – Some case laws
Under Article 226, the High Court may decline to entertain a writ petition if it is found to be making a claim on grounds which are frivolous, reckless, vexatious, without substance or prima facia unjust. But perhaps the most controversial ground of dismissing a writ petition is the availability of “alternate remedy”. There have been multiple cases wherein the Supreme Court and the High Courts have repeated that rule of alternate remedy cannot be surpassed and petitioners cannot reach High Courts without first exploring the alternate remedies bestowed upon them by the statute.
Recently, the Hon’ble Patna High Court in M/s. Narayani Industry v. State of Bihar [Civil Writ Jurisdiction No.11333 of 2023 dated August 11, 2023] observed that “The petitioner has not availed of the appellate remedy and has chosen to approach this Court under Article 226 of the Constitution of India after the appeal period is over and also the period within which an appeal could have been filed with a delay condonation application”. The court also held “We find that there is no jurisdictional error, violation of principles of natural justice or abuse of process of law averred or argued by the petitioner in the above writ petition. From the records produced before us… It was in this circumstance that an assessment was made and there is no ground stated in the writ petition which would enable invocation of the extraordinary remedy under Article 226… The petitioner only makes a bland assertion of violation of fundamental and legal rights guaranteed to the petitioner under Articles 14, 19(1)(g) and 300A of the Constitution of India without any substantiation.”
In the case of Hind Logistic vs. State of Uttar Pradesh [TS(DB)-GST-HC(ALL)-2018-597], the High Court dismissed the petition and directed the petitioner to prefer an equally efficacious remedy of filing an appeal under section 107 of the UPGST Act, 2017. Similarly, the Karnataka High Court in the case of L&T Hydrocarbon Engineering Limited vs. The State of Karnataka [TS(DB)-GST-HC(KAR)-2020-437], held that when the appeal is provided and the authority is notified whether the Joint Commissioner or other authority, “the matter ought to have been agitated before the appellate authority as per law” while finding “no necessity to examine and adjudicate entitlement of the relief”.
Further, in the case of Krishna International vs. Commissioner of Delhi Goods and Services Tax [TS(DB)-GST-HC(DEL)-2020-491], the Delhi High Court disposed of the writ petition against rejection of refund claim by granting the liberty to appeal to the appropriate forum on account of alternative remedy being available to petitioner.
In the matter of Thiruchy Royal Steels v. Deputy State Tax Officer [W.P.NO. 15338 of2023, W.M.P. NOS. 14861 & 14863 of 2023 dated May 11, 2023], where the disputed matter was the imposition of penalty by the proper officer u/s 129 of the GST Act, 2017, the Hon’ble Madras High Court rejected the writ filed by the petitioner and instructed the assessee to pursue an appeal before the Appellate Authority.
Recently, in the case of The Assistant Commissioner of State Tax & Ors. Vs. M/s Commercial Steel Ltd. [Civil Appeal No. 5121 of 2021; 03.09.2021], The Apex Court set aside the order of the High Court and ruled that the respondent had an alternate remedy under section 107 of the CGST Act, 2017. Therefore, the respondent was not correct in filing a writ petition before the High Court when he could have explored the alternate remedy.
The Apex Court in State of Punjab v. Shiv Enterprises – [2023] (SC) has ruled “High Court erred in entertaining writ petition against SCN alleging evasion of tax” and quashing & setting aside the same. A brief fact of this case below:
A show cause notice was issued to assessee as to why the goods and the conveyance used to transport such goods shall not be confiscated under the provisions of Section 130 of the Punjab GST Act, 2017 and IGST Act, 2017 and CGST Act, 2017. The assessee approached the High Court and challenged the notice and the Court held that the notice was wrongly issued under Section 130 by alleging the wrongful claim of input tax credit. The department filed appeal against the order of the High Court. Decision of the case: The Honourable Supreme Court observed that there was a specific allegation with respect to evasion of duty, which was yet to be considered by appropriate authority who issued notice. However, in exercise of powers under Article 226 of Constitution of India, the High Court entertained writ petition against show cause notice and set aside said show cause notice under Section 130. Since, it was premature for High Court to opine anything on whether there was any evasion of the tax or not, therefore the High Court had materially erred in entertaining writ petition against show cause notice and quashing & setting aside same. Thus, it was held that the impugned judgement passed by High Court was liable to be set aside and the matter was remanded to appropriate authority.
Article 226
Before discussing further, let’s see the constitutional provision of Article 226
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Art. 226. Power of High Courts to issue certain writs.—(1) Notwithstanding anything in article 32, every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose. (2) The power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories. (3) Where any party against whom an interim order, whether by way of injunction or stay or in any other manner, is made on, or in any proceedings relating to, a petition under clause (1), without— (a) furnishing to such party copies of such petition and all documents in support of the plea for such interim order; and (b) giving such party an opportunity of being heard, makes an application to the High Court for the vacation of such order and furnishes a copy of such application to the party in whose favour such order has been made or the counsel of such party, the High Court shall dispose of the application within a period of two weeks from the date on which it is received or from the date on which the copy of such application is so furnished, whichever is later, or where the High Court is closed on the last day of that period, before the expiry of the next day afterwards on which the High Court is open; and if the application is not so disposed of, the interim order shall, on the expiry of that period, or, as the case may be, the expiry of the said next day, stand vacated. (4) The power conferred on a High Court by this article shall not be in derogation of the power conferred on the Supreme Court by clause (2) of article 32. |
Art. 226 enables the High Courts to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and “for any other purpose” i.e., for the enforcement of any other legal right. The power conferred on the high Court under Article 226(1) can, in proper case, be exercised even against the legislature. The language used in the Article 226, as also in Article 32, is very wide and does not confine the power of the High Courts to the issuing of prerogative writs only. [Rashid Ahmed v. Municipal Board, AIR 1950 SC 163: 1950SCR 566]. The power under this article extends to the issuing of “directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose.” The use of the expression “nature” indicates that the scope of the prerogative writs is couched in wide terms and the exercise thereof is not subject to any restrictions except the territorial restrictions which are expressly provided in the Articles. By clause (1) of Art. 226, a twofold territorial limitation has been placed on the power of the High Courts to issue writs. In the first place, the power is to be exercised throughout the territories in relation to which it exercises jurisdiction and secondly the person or authority to which a High Court issues a writ must be “within those territories”.
The powers under Article 226 confer discretion of a most extensive nature on the High Courts. But the very vastness of the powers conferred on the High Court imposes on it the responsibility to use them with circumspection. The High Court will necessarily exercise the jurisdiction in accordance with judicial considerations and well-established principles. Any exercise of jurisdiction based on irrelevant or extraneous considerations shall be invalid [Union of India v. W.N. Chanda, AIR 1993 SC 1082].
Basically, the power under Article 226 is the supervisory power. In the exercise of this power the High Court does not act as a Court of appeal. It only examines whether the challenged action is lawful or not. Even in respect of lawfulness a distinction is drawn between illegalities committed within the jurisdiction and those affecting or exceeding the jurisdiction. It is only with respect to the latter that the law is quite clear and well settled that the power under Art. 226 shall be exercised. As regards the former, errors apparent on the face of records are clearly within the ambit of the supervisory power under Art. 226. Position with respect to other errors of law is not clear. However, the trend is towards recognising all illegalities in the exercise of the power as jurisdictional errors affecting the jurisdiction of the authority exercising that power. In exercising this power the court cannot go into the merits of the controversy like an appellate court, though of course the merits of the controversy may influence the exercise of supervisory power. The high Courts have to keep it within the parameters of its genesis as a supervisory power instead of appellate power.
Doctrine of Alternate remedy
The remedy in Article 226 is a discretionary remedy and the High Court has always the discretion to refuse the grant of any writ if it is satisfied that the aggrieved party can have an adequate remedy elsewhere. The remedies under art. 226 should not be permitted to be utilised as substitutes for ordinary remedies. All the High Courts agree that the writs or directions under Art. 226 should ordinarily be not issued where an equally efficient and adequate alternative remedy exists, unless there is any exceptional reason for dealing with the matter under the writ jurisdiction.
But by virtue of various judicial pronouncements, it is an established law that non-entertainment of petitions under writ jurisdiction by the High Court when an efficacious alternative remedy is available is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion rather than a rule of law. Undoubtedly, it is within the discretion of the High Court to grant relief under Article 226 despite the existence of an alternative remedy. If the discretion has been exercised by the High Court not unreasonably and perversely, it is a settled practice of the Supreme Court not to interfere with the exercise of discretion by the High court.
A 2 (two)judge bench of the Hon’ble Supreme Court of India comprising of Mr. Justice Ravindra Bhat and Mr. Justice Dipankar Datta in the case of M/S. Godrej Sara Lee Ltd. vs. The Excise and Taxation Officer-cum-Assessing Authority & Ors held that Mere availability of an alternative remedy of appeal or revision, which the party invoking the jurisdiction of the high court under Article 226 has not pursued, would not oust the jurisdiction of the high court and render a writ petition “not maintainable”. Where the controversy is a purely legal one and it does not involve disputed questions of fact but only questions of law, then it should be decided by the High Court instead of dismissing the writ petition on the ground of an alternative remedy being available. The findings of the Supreme Court in this case is worthy to mention here-
1. The Supreme Court observed that the power to issue prerogative writs under Article 226 is plenary in nature. Article 226 does not cast any fetters on High Courts whilst exercising their power to issue writs. The mere fact that a petitioner before a High Court, in a given case, has not pursued an alternative efficacious remedy available to them, it cannot mechanically be construed as a ground for dismissal.
2. The Supreme Court observed that a writ petition’s “entertainability” and “maintainability” are 2 (two) distinctive principles. The objection to “maintainability” goes to the heart of the matter, and if it were upheld, the High Courts would be unable to adjudicate. The determination of “entertainability” is solely within the discretion of the High Courts.
3. This Court in paragraph 15 of the its decision reported in (1998) 8 SCC 1 (Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and Others) carved out the exceptions on the existence whereof a Writ Court would be justified in entertaining a writ petition despite the party approaching it not having availed the alternative remedy provided by the statute. The same read as under:
i. where the writ petition seeks enforcement of any of the fundamental rights;
ii. where there is violation of principles of natural justice;
iii. where the order or the proceedings are wholly without jurisdiction; or
iv. Where the validity of an act is challenged.
4. Reliance was placed on the decision in State of Uttar Pradesh vs. Mohd. Nooh to hold that availability of an alternative remedy does not operate as an absolute bar to the “maintainability” of a writ petition and that the rule, which requires a party to pursue the alternative remedy provided by a statute, is a rule of policy, convenience and discretion rather than a rule of law.
In Rajasthan State Electricity Board v. Union of India, the apex court observed that “now it is a well-settled principle of law that the availability of alternative remedy is not an absolute bar for granting relief in the exercise of power under Article 226 of the Constitution”. An appeal was filed to the Supreme Court against the order passed by the Bombay High Court dismissing the writ petition filed by the appellants, on the grounds of alternative remedies being available in the Railway Claims Tribunal. But the apex court held that since the respondent had admitted the liability, the High Court can neither dismiss the writ petition nor direct the appellants to seek an alternative remedy.
In the State of Bombay v. The United Motors India Ltd, the Hon’ble Supreme Court observed that the High Court cannot deny writ in cases where a person comes before the court with an allegation of infringement of a fundamental right, where the remedy provided by the Act is of an onerous and burdensome character. Therefore, it was held that the bar to issue writ when an adequate alternative remedy available is not absolute in nature. Further, the Apex Court in L Hirday Narain v. Income Tax Officer, held that “if the High Court had entertained a petition despite the availability of alternative remedy and heard the parties on merits it would be ordinarily unjustifiable for the High Court to dismiss the same on the ground of non-exhaustion of statutory remedies unless the High Court finds that factual disputes are involved and it would not desire to deal with them in a writ petition”
Justice Harries in Collector of Customs v. Soorajmull Nagarmul observed that “The Court can and should issue certiorari even when alternative remedies are available where a court or tribunal, which is called upon to exercise judicial or quasi-judicial functions discards all rules of natural justice and arrives at a decision contrary to all accepted principles of justice then it appears to me that the Court can and must interfere”. In Khurshed Modi v. Rent Controller, Bombay, the apex court held that “the High Court would not refuse to issue a writ of certiorari merely because there was a right of appeal. It was recognized that ordinarily, the High Court would require the petitioner to have recourse to his ordinary remedies, but if it found that there had been a breach of fundamental principles of justice, the High Court would certainly not hesitate to issue the writ of certiorari”
Conclusion
We cannot disregard that Article 226 confers a jurisdiction or a power on the High Courts. It is a power under the Constitution. While it may be true that a statute may provide for an alternate forum to which the High Court may relegate the party in an appropriate case, the existence of an alternate remedy by itself cannot exclude the jurisdiction of the High Court under the Constitution. No doubt, it has been a self-imposed restraint which is fairly faithfully adhered to by the High Courts and it is largely a matter of discretion. The rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instances are numerous where a writ has been issued in spite of the fact that the aggrieved party has other adequate legal remedies. The above-discussion has well been summarised in Harbans Lal Sahnia v. Indian Oil Corporation Ltd where the Supreme Court observed that “in an appropriate case, in spite of the availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is a failure of principles of natural justice; or (iii) where the orders or proceedings are whole without jurisdiction or the vires of an Act is challenged.”
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Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability.
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