Remedy under Article 226 available only in limited cases

In this 5-minute read you will learn how the Supreme Court denied maintainability of a petition under Article 226 as alternative remedies were already given under the concerned statute.
TITLEAditanar Educational Institution Vs. Assistant Director Of Income Tax
CITATION 
COURTSupreme Court of India
JUDGES/CORAMJustice B.P. Jeevan Reddy and Justice K.S. Paripoornan
DATE OF JUDGEMENT05.02.1997

Introduction

This case raises question in relation to Article 226 of the Constitution and Section 11 and 13 of Income Tax Act, 1961.

Facts

The facts of the case are as follows: The petitioner was a society registered with an object to establish, manage or assist schools and other educational institution existing solely for education purpose, sought exemption under section 10(22) of the Income Tax Act.

The Income Tax department denied the exemption saying that the petitioner is not an educational institution within the meaning of section 10(22) of the Act. However, the Court allowed the exemption for the year 1998 under the section by its order in 118 ITR 235.

In the Finance Act, 1998, Section 10(22) was repealed and after following amended procedure, the petitioner claimed exemption under Section 11 and 12 of the Act. With regard to the claim for exemption under the assessment year 1999-2000, 2000-2001 and 2001-2002 the returns were filed on 9th October 1999, 25th October 2000 and October 24th 2001 respectively.

The respondent, by order dated March 31st 2003, granted the exemption. For the claim for exemption for assessment year 2002-2003 the respondent directed the petitioner to produce the records and after procuring them respondent intimated that there was violation of Section 13(1)(d)  as the petitioner was holding shares of limited companies and thus, exemption under Sections 11 and 12 of the Act were not applicable and thereby the rejected the exemption claim.

Thereafter, the respondent issued a notice alleging that income escaped assessment for years 1999-2000, 2000-2001, and 2001-2002. Even after repeated requests of petitioner that returns have already been filed and that there was no need to reopen the case, the respondent said that there were violations and thus reopened the case without giving opportunity of being heard to the petitioner.

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Issues

The main issues in the case was: Whether or not the appeal to the High Court under Article 226 by the petitioner against the order of the respondent was maintainable.

Summary of Court Decision and Judgement

The Petition was not maintainable as the statute provides for a complete machinery to redress the dispute, if any. The Court held that the dispute in this case was not relating to the question of law but a factual dispute thus cannot be submitted to the High Court under Article 226 when there were other mechanisms established by a statute to deal with such issues.       

Analysis

In Titatghar Paper mills Co. vs. State of Orissa[1] the Court held that when an express statutory alternative is available under the statute as appeal and second appeal there is no need to surpass them and file a petition in High Court, if filed then it will not be maintainable.

In Assistant Collector of Central Excise vs. Dunlop India Ltd.[2] it was said that Article 226 was not meant to be a short-cut or circumvent statutory procedure. It is only available only when the statutory mechanisms are ill-suited to meet the demands of extra-ordinary situations one can bypass them and present before the High Court.

Conclusion

In my opinion the judgment delivered was correct if would have been given the other way the importance of the statutory redressal bodies would have been jeopardized and it would have been an erroneous judgment creating more burden on the High Courts.


[1] (1983) 142 ITR 663

[2] (1985) 154 ITR 174