In India’s tax system, disputes are often resolved not purely by law, rates, or numbers, but by the fairness of process, jurisdiction, and adherence to constitutional principles. Tax authorities like assessing officers, commissioners, and tribunals exercise quasi-judicial powers—they are expected to act like courts when deciding issues affecting civil consequences such as tax liability, penalties, or denial of credits. The legitimacy of their actions hinges on natural justice, including the right to be heard, absence of bias, and issuance of reasoned orders. Courts intervene primarily when procedural flaws occur, rather than disputing tax amounts. High Courts, under Article 226, act as a constitutional safeguard against jurisdictional errors, non-speaking orders, and arbitrary actions, while the Supreme Court, under Article 136, exercises discretionary review in exceptional cases. Understanding the distinction between quasi-judicial and judicial authority helps taxpayers insist on fair process, ensures respect for precedent, and prevents unrealistic expectations of Supreme Court intervention. Ultimately, tax justice depends as much on process as on law.
This article attempts to explain these ideas in a simple, practical manner, especially for professionals dealing with GST, Income Tax, Customs, and other indirect tax laws.
Page Contents
- Judicial vs Quasi-Judicial: Not just a technical distinction
- Natural Justice: The real test of tax adjudication
- The Tax adjudication ladder
- Article 226: The High Court as a constitutional safety valve
- Article 136: Why the Supreme Court is not a regular Appellate Forum
- Article 226 vs Article 136: A practical way to remember
- Why this understanding matters
- Bottom line
Judicial vs Quasi-Judicial: Not just a technical distinction
Courts established under the Constitution—High Courts and the Supreme Court—exercise judicial power. They are independent of the executive, bound by precedent, and deliver binding judgments. Their role is to interpret law, protect rights, and ensure constitutional discipline.
On the other hand, most tax disputes are first decided by authorities who are not courts yet perform adjudicatory functions. Assessing Officers, Proper Officers, Adjudicating Authorities, Commissioners (Appeals), and even Tribunals fall under the category of quasi-judicial authorities.
They belong to the executive or statutory framework, but when they decide disputes affecting civil consequences—such as tax liability, penalty, or denial of input tax credit—they are expected to act like courts.
That expectation is not optional; it is constitutional.
Natural Justice: The real test of tax adjudication
The legitimacy of quasi-judicial power rests on adherence to principles of natural justice:
- Opportunity of being heard
- Absence of bias
- Passing of reasoned (speaking) orders
Most successful tax writs do not turn on complex legal interpretations, but on simple failures—no hearing granted, replies ignored, orders passed mechanically, or binding judgments brushed aside.
When this happens, courts do not interfere with the tax, but with the process.
The Tax adjudication ladder
A typical tax dispute travels through multiple quasi-judicial stages—original adjudication, first appeal, and tribunal. Tribunals occupy a unique space. Though technically quasi-judicial, they function very close to courts and are treated as final fact-finding authorities.
Beyond this lie the constitutional courts—the High Courts and the Supreme Court—which exercise pure judicial power.
Understanding where quasi-judicial authority ends and judicial oversight begins is critical for litigation strategy.
Article 226: The High Court as a constitutional safety valve
Article 226 empowers High Courts to issue writs not only for enforcement of fundamental rights, but also for any other legal right. This makes it one of the most powerful tools available to taxpayers.
High Courts do not act as appellate authorities in tax matters. Instead, they intervene when there is:
- Lack of jurisdiction
- Violation of natural justice
- Non-speaking or perverse orders
- Ignoring binding precedents
- Arbitrary exercise of power
Though the presence of an alternate statutory remedy usually discourages writ petitions, this rule is not absolute. Where the process itself is flawed, writ jurisdiction becomes not just maintainable, but necessary.
Article 226, therefore, operates as a check on executive excess, ensuring that tax administration remains within constitutional boundaries.
Article 136: Why the Supreme Court is not a regular Appellate Forum
Article 136 gives the Supreme Court the power to grant Special Leave to Appeal from any order of any court or tribunal. Importantly, this is not a right, but a matter of discretion.
The Supreme Court has consistently held that it is not meant to correct every error. Most SLPs are dismissed at the admission stage, often without reasons. Leave is granted only in exceptional situations—where there is a substantial question of law, conflicting High Court views, constitutional interpretation, or grave miscarriage of justice.
Until leave is granted, there is no appeal—only a request to be heard.
This explains why Article 136 should be approached with restraint and realism, particularly in routine tax disputes.
Article 226 vs Article 136: A practical way to remember
A simple distinction helps:
- Article 226 gives a taxpayer the right to knock on the High Court’s door.
- Article 136 merely allows a taxpayer to request the Supreme Court to open its door.
The High Court acts as the first constitutional corrector. The Supreme Court acts as the final constitutional conscience.
Why this understanding matters
Many tax demands collapse not because the levy is wrong, but because the adjudication is flawed. Appreciating the quasi-judicial nature of tax authorities empowers taxpayers to insist on fairness, reasoned orders, and respect for precedent.
At the same time, knowing the limited scope of Article 136 prevents unrealistic litigation expectations.
Tax litigation is not only about what the law says—it is equally about how power is exercised.
Bottom line
In a constitutional democracy, taxation is not merely a fiscal exercise; it is an exercise of State power. Articles 226 and 136 ensure that this power is exercised within the discipline of law, reason, and fairness.
Ultimately, justice in taxation is not judged only by the amount demanded, but by the manner in which the demand is made.
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