Haryana Value Added Tax Act, 2003 : ss. 33 and 34 – Revision – As regards, tax liability on mosquito repellant manufactured by the appellant, the Revisional Authority suo moto called for the assessment records of appellant as found that the Assessing Authority erred in levying tax on mosquito repellant @ 4% instead of 10 % – It issued show cause notices and passed final revisional order enhancing the liability of the appellant to tax @10% instead of 4% – Writ petition thereagainst – High Court relegated the appellant to the alternative remedy of appeal u/s. 33, which it had not pursued – Justification of – Held: Mere availability of an alternative remedy of appeal or revision, which the party invoking the jurisdiction of the High Court u/Art. 226 has not pursued, would not oust the jurisdiction of the High Court and render a writ petition “not maintainable” – Availability of an alternative remedy does not operate as an absolute bar to the “maintainability” of a writ petition – 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 – Hence, dismissal of a writ petition by a High Court on the ground that the petitioner has not availed the alternative remedy without examining whether an exceptional case has been made out for such entertainment would not be proper – Moreover, a jurisdictional issue raised in the writ petition questioning the very competence of the Revisional Authority to exercise suo motu power, was a pure question of law – Thus, the High Court erred in dismissing the writ petition – Constitution of India - Art.226.
s.34 – Revisional jurisdiction – Orders of the Revisional Authority seeking to revise the orders of the Assessing Authority pertaining to the Assessment Years – Held : Sine qua non for exercise of power u/s. 34 is the satisfaction of the Revisional Authority that an order has been made by a taxing authority in any proceeding prejudicial to the interests of the State, the legality or propriety of which appears to him to be prima facie vulnerable. Constitution of India : Art.226 – Writ – “entertainability” and “maintainability” – Difference between – Discussed. Art. 226 – Writ – Entertainability of, when effective and efficacious alternative remedy available – Discussed.”
Judicial discipline: Principle of judicial discipline – Adherence to the decision of higher authorities – Unless the discipline of adhering to decisions made by the higher authorities is maintained, there would be utter chaos in administration of tax laws apart from undue harassment to assesse – On facts, nothing on record to justify either illegality or procedural/moral impropriety in the proceedings before the Assessing Authority or the orders passed by him, as such – To brand the order of the Assessing Authority as illegal, the same appears to be not only unjustified but also demonstrates thorough lack of understanding of the principle regulating exercise of suo motu revisional power by a quasi-judicial authority apart from being in breach of the principle of judicial discipline, while confronted with orders passed by a superior tribunal/Court – It is not the Assessing Authority’s orders but those passed by the Revisional Authority, which suffer from a patent illegality. Allowing the appeal, the Court
HELD: 1.1 It is axiomatic that the High Courts (bearing in mind the facts of each particular case) have a discretion whether to entertain a writ petition or not. One of the self-imposed restrictions on the exercise of power under Article 226 that has evolved through judicial precedents is that the high courts should normally not entertain a writ petition, where an effective and efficacious alternative remedy is available. It must be remembered 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”. Availability of an alternative remedy does not operate as an absolute bar to the “maintainability” of a writ petition and 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. Though elementary, it needs to be restated that “entertainability” and “maintainability” of a writ petition are distinct concepts. The fine but real distinction between the two ought not to be lost sight of. The objection as to “maintainability” goes to the root of the matter and if such objection were found to be of substance, the courts would be rendered incapable of even receiving the lis for adjudication. On the other hand, the question of “entertainability” is entirely within the realm of discretion of the High Courts, writ remedy being discretionary. A writ petition despite being maintainable may not be entertained by a High Court for very many reasons or relief could even be refused to the petitioner, despite setting up a sound legal point, if grant of the claimed relief would not further public interest. Hence, dismissal of a writ petition by a High Court on the ground that the petitioner has not availed the alternative remedy without, however, examining whether an exceptional case has been made out for such entertainment would not be proper. [Para 4][878-H; 879-A-F]
1.2. The appellant had claimed before the High Court that the suo motu revisional power could not have been exercised by the Revisional Authority in view of the existing facts and circumstances leading to the only conclusion that the assessment orders were legally correct and that the final orders impugned in the writ petition were passed upon assuming a jurisdiction which the Revisional Authority did not possess. In fine, the orders impugned were passed wholly without jurisdiction. Since a jurisdictional issue was raised by the appellant in the writ petition questioning the very competence of the Revisional Authority to exercise suo motu power, being a pure question of law, the plea raised in the writ petition did deserve a consideration on merits and the appellant’s writ petition ought not to have been thrown out at the threshold. [Para 9][881-B-D]
1.3. Ordering a remand is an available option. However, having regard to the lapse of time (almost a life term of fourteen years) since the orders impugned in the writ petition were made, it would not be in the best interests of justice to remit the matter to the High Court. Since prior to reserving judgment on this appeal, the parties were heard on the merits of the jurisdictional issue that the appellant had raised before the High Court, it is time to rule on the jurisdiction of the Revisional Authority. [Para 13][882-F]
1.4. Suo motu power of revision could be exercised by the Revisional Authority for the purposes of satisfying himself as to the legality or propriety of any order made in any proceeding which is prejudicial to the interests of the State. The first proviso, however, imposed a restriction on exercise of such suo motu power, if an issue had been settled, inter alia, by an appellate authority. Thus, the sine qua non for exercise of power under section 34 is the satisfaction of the Revisional Authority that an order has been made by a taxing authority in any proceeding prejudicial to the interests of the State, the legality or propriety of which appears to him to be prima facie vulnerable. Nevertheless, such power cannot be exercised if the issue involved is pending before or has been settled by an appellate authority. It cannot be disputed that the tribunal is comprehended within the meaning of ‘appellate authority’ as defined in section 2(b) of the VAT Act. [Para 27][888D-F]
1.5. While deciding the present appeal, the Court is primarily concerned with the issue of assumption of jurisdiction by the Revisional Authority on the face of the unchallenged order of the tribunal dated 21st November, 2001, and not with the merits of the decision either given by the tribunal or by the Revisional Authority. What stares at the face of the respondents is that the said decision of the tribunal, quoted in the order of the Assessing Authority, has attained finality. Once the issue stands finally concluded, the decision binds the State, a fortiori, the Revisional Authority. The decision of the tribunal may not be acceptable to the Revisional Authority, but that cannot furnish any ground to such authority to perceive that it is either not bound by the same or that it need not be followed. The first proviso, in such a case, gets activated and would operate as a bar to the exercise of powers by the Revisional Authority. [Para 33][889-F-H; 890-A]
1.6. The Revisional Authority might have been justified in exercising suo motu power to revise the order of the Assessing Authority had the decision of the Tribunal been set aside or its operation stayed by a competent Court. So long it is not disputed that the tribunal’s decision, having regard to the framework of classification of products/tax liability then existing, continues to remain operative and such framework too continues to remain operative when the impugned revisional orders were made, the Revisional Authority was left with no other choice but to follow the decision of the tribunal without any reservation. Unless the discipline of adhering to decisions made by the higher authorities is maintained, there would be utter chaos in administration of tax laws apart from undue harassment to assesses. [Para 34][890-BD]
1.7 The submission that suo motu power of revision, on the terms of section 34, could have been exercised only if the orders sought to be revised suffered from any illegality or impropriety, is accepted. [Para 36][890-F-G]
1.8 A decision may be questioned as suffering from an illegality if its maker fails to understand the law that regulates his decision making power correctly or if he fails to give effect to any law that holds the field and binds the parties. On the other hand, having regard to the purpose section 34 seeks to serve, to take exception to a decision on the ground of lack of propriety of any proceedings or order passed in such proceedings, it essentially ought to relate to a procedural impropriety. It is incumbent for the accuser to show that the decision maker has failed to observe the standard procedures applicable in case of exercise of his power. Additionally, to impeach an order on the ground of moral impropriety, it has to be shown that the weight of facts together with the applicable law overwhelmingly points to one course of action but the decision has surprisingly gone the other way, giving reason to suspect misbehaviour or misconduct in the sphere of activity of the decision maker warranting a revision. [Para 37][890-G-H; 891-A-B]
1.9. There is nothing on record to justify either illegality or (procedural/moral) impropriety in the proceedings before the Assessing Authority or the orders passed by him, as such. The Assessing Authority was bound by the order of the tribunal and elected to follow it having no other option. Such decision of the tribunal was even binding on the Revisional Authority. In such circumstances, to brand the orders of the Assessing Authority as suffering from illegality and impropriety appears to be not only unjustified but also demonstrates thorough lack of understanding of the principle regulating exercise of suo motu revisional power by a quasi-judicial authority apart from being in breach of the principle of judicial discipline, while confronted with orders passed by a superior tribunal/Court. It is not the Assessing Authority’s orders but those passed by the Revisional Authority, which suffer from a patent illegality. [Para 38][891-C-E]
1.10 The impugned final revisional orders dated 2nd March, 2009 for the Assessment Years 2003-04 and 2004-05 is invalidated. [Para 39][891-E]
Titagarh Paper Mills vs. Orissa State Electricity Board & Anr. (1975) 2 SCC 436 – held inapplicable.
Sonic Electrochem vs. S.T.O.(1998) 6 SCC 397 : [1998]
3 SCR 1102 – distinguished.
Union of India and Ors. Vs. Kamlakshi Finance
Corporation Ltd. 1992 SUPP (1) SCC 443 – relied on. Titaghur Paper Mills Co. Ltd. vs. State of Orissa (1983)
2 SCC 433 : [1983] 2 SCR 743; State of Uttar Pradesh vs. Mohd. Nooh [1958] SCR 595; Whirlpool
Corporation vs. Registrar of Trade Marks, Mumbai and Others (1998) 8 SCC 1 : [1998] 2 Suppl. SCR 359; Assistant Commissioner of State Tax vs. M/s. Commercial Steel Limited 2021 SCC OnLine SC 884; State of Uttar Pradesh & ors. vs. Indian Hume Pipe Co. Ltd. (1977) 2 SCC 724 : [1977] 3 SCR 120; Union of India vs. State of Haryana (2000) 10 SCC 482 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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