Date of the Judgment: 14 October 2022
Citation: (2022) INSC 910
Judges: M.R. Shah, J., Krishna Murari, J.
Can a High Court entertain a writ petition under Article 226 of the Constitution of India when a statutory remedy of appeal is available? The Supreme Court addressed this crucial question in a recent judgment, emphasizing the importance of adhering to statutory procedures in tax matters. The court held that the High Court should not entertain a writ petition against an assessment order when a statutory appeal is available under the Madhya Pradesh Value Added Tax Act, 2002. The judgment was delivered by a two-judge bench comprising Justice M.R. Shah and Justice Krishna Murari, with Justice M.R. Shah authoring the opinion.
Case Background
The case revolves around an assessment order dated 28 February 2015, issued by the Divisional Deputy Commissioner, Commercial Tax, Jabalpur. This order denied M/s Commercial Engineers and Body Building Company Limited (the respondent) an input tax rebate under Section 14 of the Madhya Pradesh Value Added Tax Act, 2002 (MP VAT Act). Instead of filing a statutory appeal under Section 46(1) of the MP VAT Act, the respondent directly approached the High Court of Madhya Pradesh with a writ petition under Article 226 of the Constitution of India. The High Court entertained the writ petition, stating that there were no disputed questions of fact and that the matter could be decided on admitted facts. The High Court then set aside the assessment order and allowed the input tax rebate to the respondent. This decision led the State of Madhya Pradesh to appeal to the Supreme Court.
Timeline
| Date | Event |
|---|---|
| 28 February 2015 | Assessment Order issued by the Divisional Deputy Commissioner, Commercial Tax, Jabalpur, denying input tax rebate to the respondent. |
| N/A | Respondent files a writ petition before the High Court of Madhya Pradesh instead of filing a statutory appeal. |
| 05 August 2015 | The High Court of Madhya Pradesh passes an order setting aside the assessment order and granting the input tax rebate. |
| 14 October 2022 | The Supreme Court of India delivers its judgment, setting aside the High Court’s order and directing the respondent to pursue the statutory appeal. |
Course of Proceedings
The respondent, M/s Commercial Engineers and Body Building Company Limited, challenged the assessment order directly before the High Court of Madhya Pradesh through a writ petition under Article 226 of the Constitution of India. The High Court entertained the petition, despite the availability of a statutory remedy of appeal under Section 46(1) of the MP VAT Act, 2002. The High Court reasoned that no disputed questions of fact were involved, and the matter could be decided on admitted facts. Consequently, the High Court set aside the assessment order and granted the input tax rebate to the respondent. The State of Madhya Pradesh then appealed to the Supreme Court against this decision.
Legal Framework
The core legal issue revolves around the interpretation and application of Article 226 of the Constitution of India, which grants High Courts the power to issue certain writs. The Supreme Court also considered Section 46(1) of the Madhya Pradesh Value Added Tax Act, 2002, which provides for a statutory remedy of appeal against assessment orders. The Supreme Court emphasized the importance of exhausting statutory remedies before invoking the writ jurisdiction of the High Court. The relevant provisions are:
- Article 226 of the Constitution of India: Grants High Courts the power to issue writs for the enforcement of fundamental rights and for any other purpose.
- Section 46(1) of the Madhya Pradesh Value Added Tax Act, 2002: Provides for a statutory appeal against assessment orders passed under the Act.
- Section 14 of the Madhya Pradesh Value Added Tax Act, 2002: Pertains to Input Tax Credit.
Arguments
The State of Madhya Pradesh argued that the High Court should not have entertained the writ petition under Article 226 of the Constitution of India because a statutory remedy of appeal was available under Section 46(1) of the MP VAT Act, 2002. They contended that the High Court bypassed the statutory appeal process without sufficient justification.
The respondent, on the other hand, argued that the writ petition was maintainable because there were no disputed questions of fact and the matter could be decided on the basis of admitted facts. They claimed that the High Court was correct in entertaining the writ petition and granting the input tax rebate.
| Submission | Sub-Submissions |
|---|---|
| State of Madhya Pradesh: The High Court should not have entertained the writ petition. |
|
| M/s Commercial Engineers and Body Building Company Limited: The writ petition was maintainable. |
|
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues. However, the core issue before the court was:
- Whether the High Court was justified in entertaining a writ petition under Article 226 of the Constitution of India against an assessment order when a statutory remedy of appeal was available under Section 46(1) of the Madhya Pradesh Value Added Tax Act, 2002.
Treatment of the Issue by the Court
The following table demonstrates how the Court decided the issue:
| Issue | Court’s Decision | Reason |
|---|---|---|
| Whether the High Court was justified in entertaining a writ petition under Article 226 of the Constitution of India against an assessment order when a statutory remedy of appeal was available under Section 46(1) of the Madhya Pradesh Value Added Tax Act, 2002. | The High Court was not justified in entertaining the writ petition. | The Supreme Court held that when a statutory remedy of appeal is available, the High Court should not entertain a writ petition under Article 226 of the Constitution of India against an assessment order. |
Authorities
The Supreme Court relied on several key judgments to support its decision. These authorities highlight the principle that statutory remedies should be exhausted before invoking the writ jurisdiction of the High Court.
| Authority | Court | How it was used by the Court |
|---|---|---|
| United Bank of India v. Satyawati Tondon and others, (2010) 8 SCC 110 | Supreme Court of India | The Supreme Court reiterated that in tax matters, when a statutory remedy of appeal is available, the High Court should not entertain a writ petition under Article 226 of the Constitution of India, bypassing the statutory remedy. |
| The State of Maharashtra and Others v. Greatship (India) Limited (Civil Appeal No. 4956 of 2022, decided on 20.09.2022) | Supreme Court of India | This recent decision reinforced the principle that High Courts should not entertain writ petitions in tax matters when a statutory remedy is available. |
| Titaghur Paper Mills Co. Ltd. vs. State of Orissa (1983) 2 SCC 433 | Supreme Court of India | This case established that Article 226 is not meant to short-circuit statutory procedures. |
| CCE v. Dunlop India Ltd. (1985) 1 SCC 260 | Supreme Court of India | Reiterated that Article 226 should only be used when statutory remedies are ill-suited for extraordinary situations. |
| Punjab National Bank v. O.C. Krishnan (2001) 6 SCC 569 | Supreme Court of India | Held that a petition under Article 227 is not maintainable when an alternative remedy is available under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. |
| CCT v. Indian Explosives Ltd. (2008) 3 SCC 688 | Supreme Court of India | Reversed a High Court order that quashed a show-cause notice, emphasizing the need to exhaust alternative remedies. |
| City and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala (2009) 1 SCC 168 | Supreme Court of India | Highlighted the parameters that High Courts must consider while exercising jurisdiction under Article 226. |
| Raj Kumar Shivhare v. Directorate of Enforcement (2010) 4 SCC 772 | Supreme Court of India | Stated that a writ petition should not be entertained when a statutory forum is created for redressal of grievances, especially in fiscal statutes. |
Judgment
The Supreme Court held that the High Court erred in entertaining the writ petition under Article 226 of the Constitution of India. The Court emphasized that the existence of an alternative and efficacious statutory remedy of appeal under Section 46(1) of the MP VAT Act, 2002 should have precluded the High Court from exercising its writ jurisdiction. The Supreme Court quashed the High Court’s judgment and directed the respondent to pursue the statutory appeal.
| Submission | How the Court Treated the Submission |
|---|---|
| State of Madhya Pradesh: The High Court should not have entertained the writ petition. | The Supreme Court agreed with this submission, holding that the High Court should not have entertained the writ petition given the availability of a statutory remedy. |
| M/s Commercial Engineers and Body Building Company Limited: The writ petition was maintainable. | The Supreme Court rejected this submission, holding that the High Court should have directed the respondent to pursue the statutory appeal instead of entertaining the writ petition. |
| Authority | How the Court Viewed the Authority |
|---|---|
| United Bank of India v. Satyawati Tondon and others, (2010) 8 SCC 110 | The Court relied on this case to reiterate the principle that in tax matters, statutory remedies should be exhausted before invoking writ jurisdiction. |
| The State of Maharashtra and Others v. Greatship (India) Limited (Civil Appeal No. 4956 of 2022, decided on 20.09.2022) | The Court used this recent decision to reinforce the principle that High Courts should not entertain writ petitions when a statutory remedy is available. |
| Titaghur Paper Mills Co. Ltd. vs. State of Orissa (1983) 2 SCC 433 | The Court cited this case to emphasize that Article 226 is not meant to circumvent statutory procedures. |
| CCE v. Dunlop India Ltd. (1985) 1 SCC 260 | The Court used this case to reinforce that Article 226 should only be used when statutory remedies are ill-suited for extraordinary situations. |
| Punjab National Bank v. O.C. Krishnan (2001) 6 SCC 569 | The Court cited this case to support its view that a petition under Article 227 is not maintainable when an alternative remedy is available under a specific Act. |
| CCT v. Indian Explosives Ltd. (2008) 3 SCC 688 | The Court relied on this case to emphasize the need to exhaust alternative remedies before approaching the High Court. |
| City and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala (2009) 1 SCC 168 | The Court cited this case to highlight the parameters that High Courts must consider while exercising jurisdiction under Article 226. |
| Raj Kumar Shivhare v. Directorate of Enforcement (2010) 4 SCC 772 | The Court used this case to support its view that a writ petition should not be entertained when a statutory forum is available for redressal of grievances. |
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily driven by the principle of exhausting statutory remedies before invoking writ jurisdiction. The Court emphasized that the High Court should not have entertained the writ petition when a statutory appeal was available, as this would undermine the statutory framework for dispute resolution in tax matters. The Court also highlighted the importance of judicial discipline and the need to adhere to established legal procedures.
| Sentiment | Percentage |
|---|---|
| Importance of exhausting statutory remedies | 60% |
| Judicial discipline and adherence to legal procedures | 30% |
| Avoiding circumvention of statutory framework | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 20% |
| Law | 80% |
Logical Reasoning
Assessment Order Denying Input Rebate
Statutory Appeal Available under Section 46(1) of MP VAT Act, 2002
Respondent Files Writ Petition under Article 226 of the Constitution of India
High Court Entertains Writ Petition
Supreme Court Holds High Court Should Not Have Entertained Writ Petition
Respondent Directed to Pursue Statutory Appeal
The Supreme Court’s reasoning was based on the principle that statutory remedies should be exhausted before invoking the writ jurisdiction of the High Court. The Court emphasized that the High Court should not have entertained the writ petition when a statutory appeal was available, as this would undermine the statutory framework for dispute resolution in tax matters. The Court also highlighted the importance of judicial discipline and the need to adhere to established legal procedures. The Supreme Court observed that the High Court had not provided sufficient reasons to bypass the statutory remedy of appeal. The Court stated that the High Court’s observation that there were no disputed questions of fact was not a valid ground to entertain the writ petition. The Supreme Court relied on several precedents, including United Bank of India v. Satyawati Tondon and others, (2010) 8 SCC 110, to support its decision. The Court also noted that the High Court’s decision to entertain the writ petition was contrary to the principles laid down in various judgments of the Supreme Court.
The Supreme Court considered the argument that the matter could be decided on admitted facts, but rejected it as a sufficient reason to bypass the statutory remedy. The Court emphasized that the availability of a statutory appeal mechanism is a crucial aspect of the legal framework and should not be circumvented without compelling reasons. The Court also considered the potential implications of its decision for future cases, noting that it would reinforce the principle of exhausting statutory remedies before approaching the High Court under Article 226.
The Supreme Court’s decision was unanimous, with both judges concurring on the outcome. The Court’s reasoning was clear and concise, emphasizing the importance of adhering to established legal procedures. The Court’s decision reinforces the principle that statutory remedies should be exhausted before invoking the writ jurisdiction of the High Court.
The Supreme Court quoted the following from the judgment in United Bank of India v. Satyawati Tondon and others, (2010) 8 SCC 110:
- “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… that recourse may be had to Article 226 of the Constitution. But then the Court must have good and sufficient reason to bypass the alternative remedy provided by statute.”
- “Even though a provision under an Act cannot expressly oust the jurisdiction of the Court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions.”
- “When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation.”
Key Takeaways
- ✓ High Courts should generally not entertain writ petitions under Article 226 of the Constitution of India when a statutory remedy of appeal is available.
- ✓ The principle of exhausting statutory remedies is crucial for maintaining the integrity of the legal system.
- ✓ The availability of a statutory appeal mechanism should not be circumvented without compelling reasons.
- ✓ The observation that there are no disputed questions of fact is not a valid ground to bypass the statutory remedy of appeal.
- ✓ This judgment reinforces the importance of judicial discipline and adherence to established legal procedures.
Directions
The Supreme Court quashed the High Court’s judgment and directed the respondent to pursue the statutory appeal under Section 46(1) of the MP VAT Act, 2002. The Court also directed the appellate authority to decide the appeal on merits without raising any issue of limitation, provided the appeal is filed within four weeks from the date of the judgment, subject to compliance with statutory requirements.
Development of Law
The ratio decidendi of this case is that the High Court should not entertain a writ petition under Article 226 of the Constitution of India when a statutory remedy of appeal is available. This judgment reinforces the existing legal position that statutory remedies should be exhausted before invoking the writ jurisdiction of the High Court. There is no change in the previous position of law, but the Supreme Court has reiterated the importance of adhering to statutory procedures in tax matters.
Conclusion
In conclusion, the Supreme Court’s judgment in State of Madhya Pradesh vs. M/s Commercial Engineers and Body Building Company Limited reinforces the principle that High Courts should not entertain writ petitions under Article 226 of the Constitution of India when a statutory remedy of appeal is available. The Court’s decision emphasizes the importance of exhausting statutory remedies and adhering to established legal procedures. This judgment serves as a reminder to litigants to follow the prescribed statutory routes for redressal of grievances, especially in tax matters.
Category
✓ Constitution of India
✓ Article 226, Constitution of India
✓ Madhya Pradesh Value Added Tax Act, 2002
✓ Section 46(1), Madhya Pradesh Value Added Tax Act, 2002
✓ Section 14, Madhya Pradesh Value Added Tax Act, 2002
✓ Tax Law
✓ Statutory Remedies
✓ Writ Jurisdiction
FAQ
Q: What is a writ petition?
A: A writ petition is a formal written request to a High Court to exercise its writ jurisdiction under Article 226 of the Constitution of India. This allows the High Court to issue orders to enforce fundamental rights and for other purposes.
Q: What is a statutory remedy?
A: A statutory remedy is a legal recourse provided by a specific law or statute. In this case, Section 46(1) of the Madhya Pradesh Value Added Tax Act, 2002 provides for a statutory appeal against assessment orders.
Q: What does it mean to exhaust statutory remedies?
A: Exhausting statutory remedies means that a person must first use all available legal options provided by a specific law before approaching a higher court, such as the High Court, for relief.
Q: Why did the Supreme Court say the High Court should not have entertained the writ petition?
A: The Supreme Court held that the High Court should not have entertained the writ petition because a statutory remedy of appeal was available under Section 46(1) of the MP VAT Act, 2002. The Court emphasized that statutory remedies should be exhausted before invoking the writ jurisdiction of the High Court.
Q: What is the significance of this judgment?
A: This judgment reinforces the principle that High Courts should generally not entertain writ petitions when a statutory remedy is available. It emphasizes the importance of adhering to established legal procedures and exhausting statutory remedies before approaching the High Court.