Madras HC dismisses Petition on Ground of lack of Jurisdiction by applying the Doctrine of Exhaustion of Alternative Remedies [Read Order]

The Madras High Court dismissed the writ petition on Ground of lack of Jurisdiction by applying the Doctrine of Exhaustion of Alternative Remedies.

The petitioner, M/s. Vishwataj Developers Pvt Ltd has been involved in the business to acquire, purchase, hire or obtain by exchange of any land, buildings or other structures, for the purpose of development and for carrying on developmental activities on such lands, buildings or other structures and to rent, transfer, sell or otherwise dispose of such land, buildings, structures, before or after development.

Advocate P.H.Aravind Pandian on behalf of the petitioner contended that the share capital made is in accordance with law and the Ministry of Finance in letter dated 19.05.2008 approved the capital share of the petitioners-Company.

Relying on the said order passed by the Government of India, petitioners state that there was no illegal flow of money nor the investment is made in an inappropriate manner. When the share capital was made the approval of the Competent Authorities of the Government of India, there is no reason whatsoever to pass the impugned order of assessment contrary to the legality of investments made by petitioners- Company.

The respondent authority have stated that “the Mauritius Company had simply been used by the UAE Company to hoodwink the taxing authorities in India, whereas actually, it is the UAE Company which has made the investment in the Assessees- Company”. Therefore, the mere contention raised by petitioners regarding the alleged admission by the respondents, is incorrect and it is mere extraction of the averments of petitioners in their affidavit.

The single judge bench of Justice S.M. Subramaniam opined that when the facts are disputed by the parties to the writs on hand, then the appeal alone would be a proper remedy and in these cases, the Assessees state that there are certain admissions and discrepancies.

“However, such admissions are denied by the respondents. Thus, an elaborate adjudication with reference to the original records are certainly imminent. Such an exercise cannot be done by the High Court in writ proceedings. In the event of preferring an appeal, the Assessees are also benefited and more-so adjudication of issues with reference to documents shall be done and thus, petitioners are bound to approach the Appellate Authority as contemplated under the provisions of the Act,” the court said.

The court held that the petitioners have not exhausted the appellate remedy provided under Section 246A of the Income Tax Act. Thus, petitioners are at liberty to prefer an appeal by following the procedures contemplated. In the event of filing any appeal, the Appellate Authority is bound to consider the same and pass orders on merits and in accordance with law and by affording an opportunity to the parties concerned.

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