THE STATE OF MADHYA PRADESH AND ANOTHER versus M/S COMMERCIAL ENGINEERS AND BODY BUILDING COMPANY LIMITED on 14 October 2022

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 05.08.2015 passed by the High Court of Madhya Pradesh,Principal Seat at Jabalpur in Writ Petition No. 7628/2015, by which theDDivision Bench of the High Court has entertained the writ petition underArticle 226 of the Constitution of India and has quashed and set asidethe Assessment Order passed by the Divisional Deputy Commissioner,Commercial Tax, Jabalpur, the State of Madhya Pradesh has preferredthe present appeal.E2. By an Assessment Order dated 28.02.2015, the AssessingOfficer denied the Input rebate under Section 14 of the Madhya PradeshValue Added Tax Act, 2002 (hereinafter referred to as the ‘MP VATAct, 2002’) to the respondent. Without preferring an appeal against theAssessment Order denying the Input rebate under Section 46(1) of theMP VAT Act, 2002, the respondent preferred the writ petition before theFHigh Court. Despite the specific objection raised on behalf of the Statenot to entertain the writ petition against the Assessment Order denyingthe Input rebate in view of the availability of the statutory remedy ofappeal under Section 46(1) of the MP VAT Act, 2002, the High Courtentertained the writ petition by observing that there are no disputedGquestions of facts involved in the matter and it is a question to be decidedon admitted facts for which no dispute or enquiry into factual aspects ofthe matter is called for. That thereafter by the impugned judgment andorder, the High Court has set aside the Assessment Order denying theInput rebate and consequently has allowed the Input rebate in favour ofthe respondent – assessee – original writ petitioner. The impugnedH

judgment and order passed by the High Court is the subject matter ofpresent appeal.

3. Number of submissions have been made by the learned counselappearing on behalf of the respective parties on merits including theentertainability of the writ petition by the High Court under Article 226of the Constitution of India challenging the Assessment Order denyingthe Input rebate. However, for the reasons stated hereinbelow, wepropose to dismiss the writ petition preferred before the High Court andrelegate the respondent – assessee – original writ petition to prefer astatutory appeal against the Assessment Order, we are not consideringany other submission on merits on whether the High Court is justified inallowing the Input rebate or not.

4. Having heard learned counsel for the respective parties at lengthon the entertainability of the writ petition under Article 226 of theConstitution of India by the High Court against the Assessment Orderand the reasoning given by the High Court while entertaining the writpetition against the Assessment Order despite the statutory remedy byway of an appeal available, we are of the opinion that the High Courtought not to have entertained the writ petition under Article 226 of theConstitution of India challenging the Assessment Order denying the Inputrebate against which a statutory appeal would be available under Section46(1) of the MP VAT Act, 2002.

5. While entertaining the writ petition under Article 226 of theConstitution of India challenging the Assessment Order denying the Inputrebate, the High Court has observed that there are no disputed questionof facts arise and it is a question to be decided on admitted facts forwhich no dispute or enquiry into factual aspects of the matter is calledfor. The aforesaid can hardly be a good/valid ground to entertain thewrit petition under Article 226 of the Constitution of India challengingthe Assessment Order denying the Input rebate against which a statutoryremedy of appeal was available.

6. At this stage, a recent decision of this Court in the case of TheState of Maharashtra and Others v. Greatship (India) Limited (CivilAppeal No. 4956 of 2022, decided on 20.09.2022) is required to bereferred to. After taking into consideration the earlier decision of thisCourt in the case of United Bank of India v. Satyawati Tondon andothers, reported in (2010) 8 SCC 110, it is observed and held that in a A

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Atax matter when a statutory remedy of appeal is available, the HighCourt ought not to have entertained the writ petition under Article 226 ofthe Constitution of India against the Assessment Order by-passing thestatutory remedy of appeal. While holding so, this Court considered theobservations made by this Court in paragraphs 49 to 53 in SatyawatiTondon (supra), which read as under:B

“49. The views expressed in Titaghur Paper Mills Co.Ltd. vs. State of Orissa (1983) 2 SCC 433 were echoedin CCE v. Dunlop India Ltd. (1985) 1 SCC 260 in the followingwords: (SCC p. 264, para 3)

C“3. … Article 226 is not meant to short-circuit or circumventstatutory procedures. It is only where statutory remedies areentirely ill-suited to meet the demands of extraordinarysituations, as for instance where the very vires of the statute isin question or where private or public wrongs are so inextricablymixed up and the prevention of public injury and the vindicationDof public justice require it that recourse may be had to Article226 of the Constitution. But then the Court must have goodand sufficient reason to bypass the alternative remedy providedby statute. Surely matters involving the revenue where statutoryremedies are available are not such matters. We can also takeEjudicial notice of the fact that the vast majority of the petitionsunder Article 226 of the Constitution are filed solely for thepurpose of obtaining interim orders and thereafter prolong theproceedings by one device or the other. The practice certainlyneeds to be strongly discouraged.”

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50. In Punjab National Bank v. O.C. Krishnan (2001) 6 SCC569 this Court considered the question whether a petition underArticle 227 of the Constitution was maintainable against an orderpassed by the Tribunal under Section 19 of the DRT Act andobserved: (SCC p. 570, paras 5-6)

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“5. In our opinion, the order which was passed by the Tribunaldirecting sale of mortgaged property was appealable underSection 20 of the Recovery of Debts Due to Banks andFinancial Institutions Act, 1993 (for short ‘the Act’). The HighCourt ought not to have exercised its jurisdiction under Article227 in view of the provision for alternative remedy contained G

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in the Act. We do not propose to go into the correctness of thedecision of the High Court and whether the order passed bythe Tribunal was correct or not has to be decided before anappropriate forum.

6. The Act has been enacted with a view to provide a specialprocedure for recovery of debts due to the banks and thefinancial institutions. There is a hierarchy of appeal providedin the Act, namely, filing of an appeal under Section 20 and thisfast-track procedure cannot be allowed to be derailed eitherby taking recourse to proceedings under Articles 226 and 227of the Constitution or by filing a civil suit, which is expresslybarred. Even though a provision under an Act cannot expresslyoust the jurisdiction of the Court under Articles 226 and 227 ofthe Constitution, nevertheless, when there is an alternativeremedy available, judicial prudence demands that the Courtrefrains from exercising its jurisdiction under the saidconstitutional provisions. This was a case where the High Courtshould not have entertained the petition under Article 227 ofthe Constitution and should have directed the respondent totake recourse to the appeal mechanism provided by the Act.”

51. In CCT v. Indian Explosives Ltd. [(2008) 3 SCC 688] theCourt reversed an order passed by the Division Bench of theOrissa High Court quashing the show-cause notice issued to therespondent under the Orissa Sales Tax Act by observing that theHigh Court had completely ignored the parameters laid down bythis Court in a large number of cases relating to exhaustion ofalternative remedy.

52. In City and Industrial Development Corpn. v. DosuAardeshir Bhiwandiwala [(2009) 1 SCC 168] the Courthighlighted the parameters which are required to be kept in viewby the High Court while exercising jurisdiction under Article 226of the Constitution. Paras 29 and 30 of that judgment which containthe views of this Court read as under: (SCC pp. 175-76)

“29. In our opinion, the High Court while exercising itsextraordinary jurisdiction under Article 226 of the Constitutionis duty-bound to take all the relevant facts and circumstancesinto consideration and decide for itself even in the absence of A

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proper affidavits from the State and its instrumentalities as towhether any case at all is made out requiring its interferenceon the basis of the material made available on record. There isnothing like issuing an ex parte writ of mandamus, order ordirection in a public law remedy. Further, while considering thevalidity of impugned action or inaction the Court will not consideritself restricted to the pleadings of the State but would be freeto satisfy itself whether any case as such is made out by aperson invoking its extraordinary jurisdiction under Article 226of the Constitution.

30. The Court while exercising its jurisdiction under Article226 is duty-bound to consider whether:

(a) adjudication of writ petition involves any complex anddisputed questions of facts and whether they can besatisfactorily resolved; (b) the petition reveals all material facts;

(c) the petitioner has any alternative or effective remedy forthe resolution of the dispute; (d) person invoking the jurisdiction is guilty of unexplained delayand laches; (e) ex facie barred by any laws of limitation;

(f) grant of relief is against public policy or barred by any validlaw; and host of other factors.

The Court in appropriate cases in its discretion may direct theState or its instrumentalities as the case may be to file properaffidavits placing all the relevant facts truly and accurately forthe consideration of the Court and particularly in cases wherepublic revenue and public interest are involved. Such directionsare always required to be complied with by the State. No reliefcould be granted in a public law remedy as a matter of courseonly on the ground that the State did not file its counter-affidavitopposing the writ petition. Further, empty and self-defeatingaffidavits or statements of Government spokesmen by themselvesdo not form basis to grant any relief to a person in a public lawremedy to which he is not otherwise entitled to in law.”

53. In Raj Kumar Shivhare v. Directorate of Enforcement[(2010) 4 SCC 772] the Court was dealing with the issue whetherthe alternative statutory remedy available under the ForeignExchange Management Act, 1999 can be bypassed and jurisdictionunder Article 226 of the Constitution could be invoked. Afterexamining the scheme of the Act, the Court observed: (SCC p.781, paras 31-32)

“31. When a statutory forum is created by law for redressalof grievance and that too in a fiscal statute, a writ petitionshould not be entertained ignoring the statutory dispensation.In this case the High Court is a statutory forum of appeal on aquestion of law. That should not be abdicated and given a go-by by a litigant for invoking the forum of judicial review of theHigh Court under writ jurisdiction. The High Court, with greatrespect, fell into a manifest error by not appreciating this aspectof the matter. It has however dismissed the writ petition on theground of lack of territorial jurisdiction.

32. No reason could be assigned by the appellant’s counsel todemonstrate why the appellate jurisdiction of the High Courtunder Section 35 of FEMA does not provide an efficaciousremedy. In fact there could hardly be any reason since theHigh Court itself is the appellate forum.”

7. In view of the above, the impugned judgment and order passedby the High Court entertaining the writ petition under Article 226 of theConstitution of India against the Assessment Order denying the benefitof Input rebate is unsustainable and the same deserves to be quashedand set aside and the original writ petitioner is to be relegated to preferan appeal against the Assessment Order dated 28.02.2015 passed bythe Divisional Deputy Commissioner, Commercial Tax, Jabalpur, whichmay be available under Section 46(1) of the MP VAT Act, 2002.

8. In view of the above and for the reasons stated above andwithout expressing anything on merits in favour of either of the partieson the Input rebate claimed by the respondent – original writ petitioner,the impugned judgment and order passed by the High Court is herebyquashed and set aside. The writ petition preferred by the respondentherein – original writ petitioner – assessee is hereby dismissed on theground of alternative efficacious statutory remedy of appeal available to A

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Athe respondent. The respondent is relegated to prefer an appeal beforethe appellate authority under Section 46(1) of the MP VAT Act, 2002. Ifsuch an appeal is preferred within a period of four weeks from today,the same be entertained and decided and disposed of on merits withoutraising an issue with respect to limitation, however, subject to complianceof the statutory requirements, if any, for preferring an appeal under SectionB46(1) of the MP VAT Act, 2002. The appellate authority to decide anddispose of the appeal and the issue without in any way being influencedby any of the observations made by the High Court which as such ishereby quashed and set aside by the present judgment and order.

9. The present appeal is allowed to the aforesaid extent. However,Cthere shall be no order as to costs.

Devika Gujral

Appeal allowed.

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