The Hindu Business Line : What is writ in tax matters?

The basic principle of law is that a writ will not ordinarily be issued by the court where an order, not patently erroneous, is made by an authority within his jurisdiction. But where the defect of jurisdiction is apparent, or there is an abuse of power, a writ of prohibition or other appropriate writ or order will be issued.

THE Income-Tax Act, 1961 being a self-contained code, prescribes an appellate procedure which a tax-payer may resort to when he is aggrieved by the action of a revenue officer. In exceptional cases the tax-payer may bypass the appellate procedure and file a writ petition in his jurisdictional court.

The basic principle of law is that a writ will not ordinarily be issued by the court where the impugned order, not patently erroneous, is made by an authority within his jurisdiction. However, where the defect of jurisdiction is apparent on the face of the proceedings, or there is an abuse of power, a writ of prohibition or other appropriate writ or order will be issued despite some delay in filing the petition (State of UP v. Bahadur Singh; 142 ITR 745), or the existence of an alternative remedy for example the right of appeal. In fact, the existence of an alternative remedy is not an absolute bar to the issue of a writ of certiorari (Parkar v. Palekar; 94 ITR 616); and a writ of mandamus would not be refused merely because the assessee could have filed a suit.

Where an order is quashed by the court for a reason other than want of fundamental jurisdiction, in appropriate cases the court may direct the authority concerned to pass a fresh order (Grindlays v. ITO; 122 ITR 55; SC). A writ, direction or an order may be issued by the High Court under Article 226 to a person or authority amenable to the court's jurisdiction either by residence or location within the State, even if the petitioner and other parties are from other States (Rashid v. IT Investigation Commission; 25 ITR 167; SC).

The High Court may issue a writ of prohibition to prohibit the income-tax authorities from acting in excess of their jurisdiction (Officer's Association v. Union of India; 139 ITR 937), or a writ of mandamus or an order under Article 226 to compel the income-tax authorities to perform their statutory duties, for example, to refund money wrongfully recovered from the petitioner. Further, the High Court may issue a writ of certiorari to quash quasi-judicial proceedings taken by income-tax authorities without jurisdiction or in excess of jurisdiction (King v. Brixton IT Comrs; 6 TC 195). A writ can also be issued to quash an order which is vitiated by an error apparent on the face of the record (Brahmananda v. Gajapathinath; 58 ITR 579) or which is passed in violation of the principles of natural justice (IR v. Hood Barrs; 39 TC 683; HL), or to quash a summons or an order which has been issued without application of mind (Dwijendralal v. New Central Jute; 112 ITR 568). The Court may issue a writ of habeas corpus to release an assessee from illegal detention by the Tax Recovery Officer (Annamma v. TRO; 64 ITR 85). The Court will interfere by a writ if the action is mala fide or arbitrary or does not comply with the statutory requirements, or if the action amounts to an exercise in futility.

In Nooruddin v. Dr K. L. Anand ([1995] 1 SCC 242), the Supreme Court observed that the judicial process should never become an instrument of abuse or a means in the process of the court to subvert justice.

However, the power being discretionary, the court has to balance the competing interest, keeping in mind that the interest of justice and public interest can coalesce in certain circumstances. The court must so act as to prevent perpetuation of a legal fraud and to promote good faith and equity (vide Champalal Binani v. ITC; AIR 1970 SC 645). In A. M. Allison v. B. L. Sen (AIR 1957 SC 227), the apex court held that a writ court can refuse to exercise its jurisdiction if it is satisfied that there has been no failure of justice.

In Collector, Land Acquisition v. Mst. Katiji (AIR 1987 SC 1353), the Supreme Court held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done.

Therefore, the court has to examine the case bearing in mind that the cause of substantial justice cannot be defeated on mere technicalities.

In Assistant Collector of Central Excise v. Dunlop India Ltd. (154 ITR 172), the apex court held that 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, for instance, where the very vires of the statute is in question or where private or public wrongs are 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.

In the case of Mohd. Ghulam Ghouse, (AIR 2004 SC 1467), the apex court deprecated the practice of the High Court entertaining the writ petition questioning the legality of the show-cause notice stalling enquiries as proposed and retarding investigative process.

In the case of M. K. Mohammed Kunhi (71 ITR 815), the Supreme Court held that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make it effective. The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them all powers and duties incidental and necessary to make the exercise of those powers fully effective.

In the case of Empire Industries Ltd. (162 ITR 846), the apex court held that every Bench hearing a matter on the facts and circumstances of each case should have the right to grant interim orders on such terms as it considers fit and proper and if it had granted interim order at one stage, it should have the right to vary or alter such interim orders.

In the case of Tata Cellular, (AIR 1996 SC 11), the court held that the principles of judicial review would apply to the exercise of contractual power by government bodies in order to prevent arbitrariness or favouritism.

Under Article 226, the High Court has the power to issue not only writs of certiorari, prohibition and mandamus, but also writs, directions and orders. In other words, even if the case is one in which a High Prerogative Writ proper as known in England cannot be issued, the Indian High Court has jurisdiction to issue such directions and orders as may be necessary to meet the ends of justice, in respect of both administrative action and judicial or quasi-judicial action.

Powers to issue writs, directions and orders are conferred on the Supreme Court under Article 32, but they are restricted to the enforcement of fundamental rights. Section 293 of the Income-tax Act cannot override Article 32 or Article 226 of the Constitution.

In conclusion, it needs to be mentioned that the question of constitutional validity or vires of a provision of the Act has been held by the Supreme Court to be foreign to the jurisdiction of authorities appointed under this Act.

Therefore, such questions can be decided only in a writ petition.

(The author, a Mumbai-based advocate specialising in tax laws, can be contacted at ranina@bom2.vsnl.net.in)

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