[SC] Writ Petition Challenging Reassessment Cannot Be Dismissed Merely Based on Alternative Remedy

The Supreme Court of India recently, in Red Chilli International Sales v ITO [2023] 146 taxmann.com 224 (SC), set aside a judgment of the High Court, and held that a writ petition cannot be dismissed merely on the ground that alternative remedy was available.

The Court held that:

• It should have been examined by the High Court as to whether jurisdiction preconditions for issue of notice under Section 148 of the Income Tax Act, 1961 were satisfied.

• The provisions of reopening have undergone substantial changes vide Finance Act, 2021, and require a deeper and in-depth consideration keeping in view the earlier case law.

• The writ petition could not have merely been dismissed on the basis of availability of alternative remedy, and the issue required to be examined in depth.

• The Court ought to have examined the notice issued u/s 148A(b) of the Income Tax Act, 1961 and the annexures thereto, the reply filed by the assessee, and the order passed u/s 148A(d) of such Act.

Our Analysis

The availability of alternative remedy should not come in the way of a writ petition in case there are jurisdictional questions involved. Jurisdiction is an objective matter, wherein it can clearly be decided by the Court whether the authority had the relevant jurisdiction or not to proceed with the case.

In cases where the issues involved are based on merits and facts, and the writ petition is filed on the basis of perversity of an order, the availability of alternative remedy may be a ground for dismissal - perversity is a subjective matter, and unless the perversity is clearly apparent on the face of the record, higher courts may not be inclined to entertain.