Full Judgment Text
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PETITIONER:
BABU RAM PRAKASH CHANDRA MAHESHWARI
Vs.
RESPONDENT:
ANTARIM ZILA PARISHAD MUZAFFAR NAGAR
DATE OF JUDGMENT:
02/08/1968
BENCH:
RAMASWAMI, V.
BENCH:
RAMASWAMI, V.
SHAH, J.C.
GROVER, A.N.
CITATION:
1969 AIR 556 1969 SCR (1) 518
ACT:
Constitution of India, Art. 226--Alternative remedies not
availed of--High Court can still entertain writ petition and
issue writ of certiorari where Tribunal has acted on a
provision of law which is ultra vires and where natural
justice is denied.
HEADNOTE:
The appellant was a partnership firm carrying on the
business of manufacturing Khandsari Sugar in the District of
Muzaffarnagar, U.P. Under s. 114- of the U.P. District
Boards Act X of 1922 a District Board had power to levy a
tax on circumstances and property subject to certain
conditions and restrictions. The powers of District Boards,
under the aforesaid Act were by virtue of the U.P. Antarim
Zila Parishad Act, 1958 conferred on the Parishads formed
under the latter Act. The U.P. Antarim Zila Parishad Act
1958 expired on 31st December, 1959 but its life was
extended to 31st December, 1960 by .Amending Act No. 1
1960 which received the assent of the Governor on January
5, 1960. When the taxing officer of the Antarim Zila
Parishad Muzaffarnagar subjected the appellant to
circumstances and property tax for 1959-60 the appellant
filed a writ petition in the High Court contending inter
alia that Amending Act No. 1 of 1960 could not continue the
Act of 1958 because the latter had already expired on 31st
December, 1959 while the former received the consent of the
Governor on January 5, 1960. The constitutionality of the
taxing provisions was also challenged. The writ petition
was dismissed by the High Court on the sole ground that the
remedy by way of appeal under s. 128 of the District Boards
Act 1922, had not been exhausted. The U.P. Kshetra Samitis
and Zila Parishads Adhiniyam of 1961 (U.P. Act 32 of 1961)
was passed in November, 1961. Acting under it
the .taxing officer of the Zila Parishad subjected the
appellant to circumstances and property tax for the year
1961-62 without giving any notice or inviting objections. In
respect of this assessment also the appellant filed a writ
petition in the High Court pleading denial of natural
justice as well as challenging the constitutionality of the
taxing provisions. This petition was also dismissed on the
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same ground as the earlier one. The appellant came to this
Court.
HELD: The rule of exhaustion of statutory remedies
before a writ is granted is a rule of self imposed
limitation, a rule of policy and discretion rather than a
rule of law and the court may therefore in exceptional cases
issue a writ such as a writ of certiorari notwithstanding
the fact that the statutory remedies have not been
exhausted. [522 C]
State of Uttar Pradesh v. Mohammad Nooh, [1958] S.C.R.
596, 605, relied on.
There are at least two well recognised exceptions to the
doctrine with regard to the exhaustion Of statutory
remedies. In the first place it is well-settled that where
proceedings are taken before a Tribunal under a provision of
law, which is ultra vires, it is open to a party aggrieved
thereby to move the High Court under Art. 226 for issuing
appropriate writs for quashing them on the ground that they
are incompetent. without his being obliged to wait until
those proceedings run their full course. [523 C]
519
Cart Still G.M.B.H.v. State of Bihar, A.I.R. 1961 S.C.
1615 and The Bengal Immunity Co. Ltd. v. State of Bihar,
[1955] 2 S.C.R. 603, relied on.
In the second place the doctrine has no application in a
case where the impugned order has been made in violation of
the principle of natural justice. [523 D]
State of Uttar Pradesh v. Mohammad Nooh, [1958] S.C.R.
596, 605, referred to.
In the present case in view of the allegations of the
appellant that the .taxing provisions were ultra vires and
that there was a violation of the principles of natural
justice the High Court was in error in summarily dismissing
the writ petition on the ground that the appellant had an
alternative remedy of statutory appeal. The High Court was
no doubt vested with a discretion but in the present case
the discretion had not been exercised in accordance with
law. [523 C-524 A]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 605 of 1966.
Appeal by special leave from the judgment and decree
dated March 27, 1964 of the Allahabad High Court in Special
Appeal No. 322 of 1964.
E.C. Agarwala and E. Udayarathnam, for the appellant.
M.C. Chagla and P.C. Agrawala, for the respondent.
The Judgment of the Court was delivered by
Ramaswami, J. The appellant is a partnership firm
consisting of two brothers Lala Baburam and Shri Prakash
Chandra, carrying on the business of manufacturing Khandsari
sugar in the district of Muzaffarnagar. The partnership
firm carries on its business through its two units (1) one
located in the village Basera and run under the name and
style of M/s. Baburam Ashok Kumar and (2) the other located
in village Morna and run under the name and style of M/s.
Baburam Prakash Chandra, both in the district of
Muzaffarnagar. The case of the appellant was that the
business of manufacturing Khandsari was seasonal and was
carried on at both the places for less than 5 months in a
year, i.e., from the month of November to the beginning of
April. Under the U.P. District Boards Act No. X of 1922, the
District Board of Muzaffarnagar was empowered to levy tax
under ss. 108 and. 114 in the rural area. Section 114 was
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to the following effect:
"The power of a board to impose a tax
on circumstances and property shall be subject
to the following conditions and restrictions
namely :--
(a) The tax may be imposed on any
person residing or carrying on business in the
rural area provided that such person has so
resided or carried on business for a
520
total period of at least six months in the
year under assessment.
(b) The total amount of tax imposed on
any person shall not exceed such maximum (if
any) as may be prescribed by rule.
Under s. 123 of that Act the matters relating to the
assessment and collection of taxes were to be governed by
rules framed under s. 172 of that Act. On March 1,. 1928,
the Government of U.P. issued notification no. 315/LX-413
notifying the rules for the rules for the assessment and
collection of a tax on circumstances and property in the
rural area of the Muzaffarnagar district. The rules
provided, among other matters, that all the activities of an
assessee within the district, whether carried on under the
same or different name, shall be considered in calculating
the total amount to be assessed; and the tax shall be
assessed by an Assessing Officer appointed by the District
Board, and the list of assessment of the preceding year
ending December 31, shall be completed on or before January
20, and shall be submitted to the Board which will return it
by February 15 to the Assessing Officer for being revised
and thereafter the Assessing Officer shah give notice of a
date not less than one month when he will proceed to
consider the objection. The assessee may file objections
before the date fixed and thereafter the Assessing Officer
shall allow the assessee an opportunity to be heard. Rule
16 read with Rule 2 fixed the maximum limit of the total
amount of tax assessed on any person not to exceed Rs.
2,000/- in any year, having regard to all the activities of
an assessee within the district whether carried on under the
same or a different name. In the year 1950 the Constitution
of India was promulgated and under el. 2 of Art. 276 the
total amount payable in respect of any one person to the
district board, local Board or other local authority in the
State by way of taxes on professions, trades, callings and
employments shall not exceed two hundred and fifty rupees
per annum. On August 22, 1958, the U.P. Antarim Zila
Parishad Act of 1958 (U.P. Act no. XXII of 1958) passed by
the U.P. Legislature received the assent of the Governor and
was published in the U.P. Gazette dated August 23, 1958.
Clause (3) of s. 1 of the U.P. Antarim Zila Parishad Act,
1958 runs as follows :--
"It shall be deemed to have come into force on the
29th day of April, 1958, and shall expire on the 31st day of
December, 1959."
But the Amending Act (U.P. Act no. 1 of 1960) received the
assent of the Governor on January 5, 1960 whereby the figure
1960 was substituted in place of 1959 in el. (3) of s. 1 of
U.P. Act XXII of 1958. The case of the appellant is that the
original
521
Act no. XXII of 1958 had expired on December 31, 1959 and as
such could not be revived on January 5; 1960 when the
Amending Act no. 1 of 1960 received the assent of the
Governor and that fresh legislation was necessary. On March
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20, 1960, a copy of the Assessment Order assessing the
appellant to the maximum amount of Rs. 2,000/- as
circumstances and property tax for the assessment year 1959-
60 was issued by the Antarim Zila Parishad Muzaffarnagar.
The assessment order was issued by Shri O.P. Varma
purporting to act as a Taxing Officer of the Antarim Zila
Parishad. Aggrieved by the assessment order, the appellant
filed a Civil Miscellaneous Writ Petition no. 1780 of 1960
in the Allahabad High Court challenging the authority of the
respondent Antarim Zila Parishad to impose the tax and
praying for the grant of a writ to quash the said assessment
order. The writ petition was summarily dismissed on July
21, 1960 by Jagdish Sahai, J. on a preliminary point that
the appellant had a right to appeal to the prescribed
authority under s. 128 of U.P. Act no. X of 1922. The
appellant thereafter preferred a Special Appeal no. 452 of
1960 in the Allahabad High Court against the order of
Jagdish Sahai, J. which was also dismissed on the ground
that the appellant had an alternative remedy of appeal.
During the pendency of the Special Appeal no. 452 of 1960,
another new Act, namely the U.P. Kshetra Samitis and Zila
Parishads Adhiniyam of 1961 (i.e., the U.P. Act no. XXXII of
1961).was passed by the U.P. Legislature and on November 29,
1961 received the assent of the President of India. The
case of the appellant is that on January 15, 1962, without
giving any notice or inviting any objections, the Taxing
Officer Shri O.P. Verma passed the assessment order for
1961-62 in respect of the circumstances and property tax
regarding the Basera Unit. Being aggrieved by the two
separate assessment orders of Rs. 2000/- each in respect of
the two units of Morana and Basera for the years 1961-62,
the. appellant filed again in the Allahabad High Court a
writ petition no. 2371 of 1962 under Art. 226 of the
Constitution. The writ petition was summarily dismissed by
S. N. Dwivedi, 1. on, February 13, 1964. The appellant
took the matter in appeal in. Special Appel no. 322 of 1964
but the Special Appeal was dismissed by the Division Bench
on March 27, 1964 on the ground’ that the appellant had not
availed himself of the alternative remedy by way of
appeal. The present appeal is brought to this Court by
special leave from the judgment of the Division Bench of the
Allahabad High Court dated March 27, 1964 in Special’ Appeal
no. 322 of 1964.
The sole argument presented on behalf of the appellant
is that the High Court was in error in holding that an
appeal under the U.P. District Boards Act no. X of 1922 was
an adequate and efficacious remedy and that the appellant
should have exhausted’ the statutory remedy before applying
for a writ under Art. 226 of the Constitution.
522
It is a well-established proposition of law that when an
alternative and equally efficacious remedy is open to a
litigant he should be required to pursue that remedy and not
to invoke the special jurisdiction of the High Court to
issue a prerogative writ. It is true that the existence of a
statutory remedy does not affect the jurisdiction of the
High Court to issue a writ. But, as observed by this Court
in Rashid Ahmed v. The Municipal Board, Kairana(1), "the
existence of an adequate legal remedy is a thing to be taken
into consideration in the matter of granting writs" and
where such a remedy exists it will be a sound exercise of
discretion to refuse to interfere. in a writ petition unless
there are good grounds therefore. But it should be
remembered that the rule of exhaustion of statutory remedies
before a writ is granted is a rule of self imposed
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limitation, a rule of policy, and discretion rather than a
rule of law and the court may therefore in exceptional cases
issue a writ such as a writ of certiorari notwithstanding
the fact that the statutory remedies have not been
exhausted. In The State of Uttar Pradesh v. Mohammad
Nooh(2), S.R. Das, C.J., speaking for the Court, observed:
"In the next place it must be borne in mind that there
is no rule, with regard to certiorari as there is with
mandamus, that it will lie only where there is no other
equally effective remedy. It is well established that,
provided the requisite grounds exist, certiorari will lie
although a right of appeal has been conferred by statute.
(Halsbury’s Laws of England, 3rd Ed., Vol. II, p. 130 and
the cases cited there). The fact that the aggrieved party
has another and adequate remedy may be taken into
consideration by the superior court in ’ arriving at a
conclusion as to whether it should, in exercise of its
discretion, issue a writ of certiorari to quash the
proceedings and decisions of inferior courts subordinate to
it and ordinarily the superior court will decline to
interfere until the aggrieved party has exhausted his other
statutory remedies, if any. But this rule requiring the
exhaustion of statutory remedies before the writ will be
granted is a rule of policy, convenience and discretion
rather than a rule of law and instances are numerous where a
writ of certiorari has been issued in spite of the fact that
the aggrieved party. had other adequate legal remedies. In
the King v. Postmaster-. General Ex parte Carmichael [1928
(1) K.B. 291] a certiorari was issued although the aggrieved
party had and alternative remedy by way of appeal. It has
been held’ that the superior court will readily issue a
certiorari in a case where there has been a denial of
natural justice before a court of summary jurisdiction.
The.
(1) [1950] S.C.R. 566. (2) [1958] S.C.R. 595, 605.
523
case of Rex v. Wandsworth Justices Ex parte
Read [1942 (1) K.B. 281] is an authority in
point. In that case a man had been convicted
in a court of summary jurisdiction without
giving him an opportunity of being heard. It
Was held that his remedy was not by a case
stated or by an appeal before the quarter
sessions but by application to the High Court
for an order of certiorari to remove and quash
the conviction."
There are at least two well-recognised exceptions to .the
doctrine with regard to the exhaustion of statutory
remedies. In the first place, it is well-settled that where
proceedings are taken before a Tribunal under a provision of
law, which is ultra vires, it is open to a party aggrieved
thereby to move the High Court under Art. 226 for issuing
appropriate writs for quashing them on the ground that they
are incompetent, without his being obliged to wait until
those proceedings run their full course.--(See the decisions
of this Court in Carl Still G.m.b.H.v. The State Bihar(1)
and The Bengal Immunity Co. Ltd. v. The State Bihar(2). In
the second place, the doctrine has no application in a case
where the impugned order has been made in violation of the
principles of natural justice (See The State of Uttar
Pradesh v. Mohammad Nooh(3).
It is manifest in the present case that the appellant
had alleged in the writ petition that the Taxing Officer had
no authority to impose the tax and there was no validly
constituted Antarim Zila Parishad after December 31, 1959.
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It was further alleged that ss. 114 and 124 of the U.P.
District Boards Act no. X of 1922 violated Art. 14 of the
Constitution as arbitrary power was granted to District
Boards as well as the State Government to exempt any person
or class of persons or any property or class of properties
from the scope of the Act. There is also an allegation that
the imposition of the tax violated the provisions of Art.
276 of the Constitution and that the Antarim Zila Parishad
could not impose the tax beyond the maximum limit of Rs.
250/per annum prescribed in that Article. It was further
contended on behalf of the appellant that the procedure for
assessment of the tax was not followed and there was
violation of the principles of natural justice. In view of
the allegations of the appellant that the taxing provisions
are ultra vires and that there was violation of the
principles of natural justice, we think that the High Court
was in error in summarily dismissing the writ petition on
the ground that the appellant had an alternative remedy of
statutory. appeal. It was contended by Mr. Chagla on behalf
of the respondent that in dismissing the writ petition the
High Court was acting in its discretion. But it is manifest
in the present case that
(1) A.I.R. 1961 S.C. 1615.
(2) [1955] 2 S.C.R. 603.
(3) [1958] s.c.R,. 595.
524
the discretion of the High Court has not been exercised in
accordance with law and the judgments of the Division Bench
dated March 27, 1964 and of the learned Single Judge dated
February 13, 1964 summarily dismissing the writ petition are
defective in law.
For the reasons expressed we hold that this appeal must
be allowed, the judgments of the Division Bench in Special
Appeal no. 322 of 1964 dated March 27, 1964 and of the
learned Single Judge dated February 13, 1964 should be set
aside and Civil Miscellaneous Writ no. 2371 of 1962 should
be restored to file and dealt with in accordance with law.
There will be no order with regard to the costs of this
appeal in this Court.
G.C. Appeal allowed.
525