IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN THURSDAY, THE 21ST JANUARY 2010 / 1ST MAGHA 1931 WP(C).No. 35318 of 2008(D) ----------------------------------------- PETITIONER(S): ------------------------ M/S.PANOPHARAM, “NARAYANEEYAM”, KOTTAPPURAM ROAD, THRISSUR 680 004, REPRESENTED BY ITS DEPUTY GENERAL MANAGER, MR. V.P. MENON. BY ADVS. MR.E.K.NANDAKUMAR, MR.A.K.JAYASANKAR NAMBIAR, MR.K.JOHN MATHAI, MR.P.BENNY THOMAS, MR.ANIL D. NAIR. RESPONDENT(S): ---------------------------- 1. THE UNION OF INDIA REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DELHI 110001. 2. COMMISSIONER OF CENTRAL EXCISE, CACLICUT COMMISSIONERATE, C.R. BUILDING, MANANCHIRA, CALICUT 673 001. 3. COMMISSION OF CENTRAL EXCISE, (APPEALS), C.R. BUILDING I.S. PRESS ROAD, COCHIN 682 018. 4. ASSISTANT COMMISSIONER OF CENTRAL EXCISE, THRISSUR DIVISION, THISSUR 680 001. 5. SUPERINTENDENT OF CENTRAL EXCISE, SERVICE TAX RANGE, THRISSUR DIVISION, THRISSUR 680 001. R2 TO R5 BY ADV. MR.TOJAN J.VATHIKULAM,SC,C.B. EXCISE THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21/01/2010 ALONG WITH WPC NO. 37168 OF 2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss P.R.RAMAN & P.S.GOPINATHAN, JJ. =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= W.P.(C) Nos. 35318 of 2008 & 37168 of 2009 =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= Dated this the 21st day of January, 2010 JUDGMENT Raman, J. When W.P.(C) No.35318 of 2008 was taken up for hearing, W.P.(C) No. 37168 of 2009, though not listed today, on agreement between the parties, was called up, since the question raised in both the writ petitions is one and the same. 2. For the purpose of appreciation of question of law arising for consideration, it will be sufficient to refer to the facts relating to W.P.(C) No. 35318/2008. 3. Petitioner is a partnership firm, registered as a service provider. The petitioner submits that the petitioner has been providing clearing and forwarding agent’s service to Abbot India Ltd., in terms of specific agreement between the parties. Ext.P1 produced for identification. Ext.P2 is another agreement. According to the petitioner, service tax is not payable on the reimbursed amount and the service tax on the entire commission was paid by the petitioner. The authorities did not accept this W.P.(C) No. 35318/08 & con. case. 2 contention and Ext.P3 show cause notice was issued as to why the alleged difference in service tax should not be demanded from him. The petitioner submitted Ext.P4 reply. The adjudicating authority rejected the contention in Ext.P4 and confirmed the demand. The petitioner was also imposed a penalty under section 78 of the Finance Act, 1994. Separate penalty under section 76 of the Finance Act was also imposed. A copy of the order is produced as Ext.P5. The order was received at the office of the petitioner on 24-4-2008. Though the petitioner is entitled to prefer a statutory appeal against the said order before the 3rd respondent within three months, as prescribed under section 85 of the Finance Act, he did not invoke the appellate remedy within time. Obviously, for the reason that power to condone the delay by the appellate authority is limited for a period of three months which also expired on 24-10-2008. Since the petitioner could not file a statutory appeal, the petitioner has approached this Court by filing this writ petition. 4. According to the petitioner, the person in charge of the affairs and dealing with the tax matters had left the service without intimating the fact of receipt of Ext.P5. Only later when the petitioner was served with notice dated 3-11-2008, which W.P.(C) No. 35318/08 & con. case. 3 was received on 7-11-2008, he came to know about Ext.P5 order. 5. When the matter came up before the learned Single Judge of this Court, the respondents relying on a Division Bench decision of this Court in Asst. Commissioner of Central Excise V. Krishna Poduval (2005(4) KLT 947) contended that once the period of limitation has run out for filing the appeal and when the authority had no power to condone the delay beyond the maximum period prescribed thereunder, the remedy of the petitioner has come to an end and no cause survives thereafter to entertain the writ petition. But, according to the learned counsel for the petitioner, the principle laid down in the above decision may not be correct and power under Article 226 of the Constitution of India still would be available, even if statutory remedy is not available. The learned Single Judge doubting the correctness of the decision reported in the Assistant Commissioner of Central Excise case (Supra) adjourned the case to be considered by a Division Bench. Accordingly, we heard the matter. 6. W.P.(C) No. 37168 of 2009 was also filed in similar circumstances. W.P.(C) No. 35318/08 & con. case. 4 7. Learned counsel Sri.Jayasankar appearing on behalf of the petitioner submits that an alternate remedy by way of an appeal is not a bar for entertaining a writ petition under Article 226 of the Constitution of India. According to him, at least when situation warrants and there are exceptional circumstances, remedy by way of writ petition under Article 226 of the Constitution of India is still available. The petitioner placed reliance on a decision of the Madras High Court in Rayalseema Constructions and another V. Deputy Commercial Tax Officer, Mannady Division, Madras I, and others ((1959)10 STC 345) and two decisions of the Supreme Court in K.Venkatachalam V. A.Swamickan and another (1999)4 SCC 526) and Deputy Commercial Tax Officer, Madras V. Rayalaseema Constructions 9 ((1966) 17 STC505). Per contra, learned senior standing counsel Sri.John Varghese would contend that it is now well settled that though the alternate remedy by itself may not be a bar for invoking the power under Article 226 of the Constitution of India it has been held by catena of decisions that by way of self imposed restriction, this Court will not entertain any writ petition when such effective appellate remedy is available to the aggrieved party. He placed reliance on a decision of the Apex W.P.(C) No. 35318/08 & con. case. 5 Court in Surya Dev Rai V. Ram Chander Rai and others ((2003)6 SCC 675). He also contended that when the statutory remedy available to the petitioner under law is barred by Law of Limitation, his remedy has come to an end just like in the case of a time barred suit and he cannot resurrect his unenforceable cause of action. Reliance is also placed on two decisions of this Court in Kerala Motor Transport W.W.F.Board V. Government of Kerala (2001 (1) KLT 608) and Krishnan T. and another V. State of Kerala and others (ILR (2007(1) Ker. 233). 8. Heard both sides. 9. In Rayalseema Constructions and another case (Supra) the Madras High Court held that the finality of an assessment under the terms of a statute is not always or necessarily conclusive of the legality of the assessment and an assessment made without jurisdiction, or in pursuance of a provision which is found to be ultra vires continues to be unlawful, and nothing less than a validating provision properly enacted would alter that fact. In relation to a tax, where an Assessing Officer acts outside the boundaries of his jurisdiction, his acts would to that extent be null and void. If any authority seeks to collect a tax so imposed, a citizen can call in aid Article 265 and seek the W.P.(C) No. 35318/08 & con. case. 6 assistance of this Court. In Deputy Commercial Tax Officer, Madras case (Supra) the Apex Court held that although when there was an alternative remedy, the High Court would not normally entertain an application under Article 226 of the Constitution of India but where the High Court had chosen to exercise its jurisdiction to grant relief to the petitioner the Supreme Court would not interfere with the jurisdiction exercised by the High Court. There is a clear finding in that case the Sales tax Authorities had acted outside the Act in making an assessment under the relevant part of the charging section which was declared ultra vires by the Supreme Court. Though it was contended by the appellant therein that the High Court was in error in issuing a writ of mandamus when the proper remedy was to file a suit, answering the said contention it was held that no doubt true that when there was an alternate remedy, the High Court will not normally entertain an application under Article 226 of the Constitution of India, but where the High Court has chosen to exercise its jurisdiction the Apex Court will not interfere with the jurisdiction by the High Court. 10. In K. Venkatachalam’s case (Supra) the Apex Court held that High Court’s jurisdiction under Article 226 of the W.P.(C) No. 35318/08 & con. case. 7 Constitution of India, unless barred, is wide and covers all violations of the law or the Constitution when recourse cannot be had to other remedies provided by law. The Apex Court in C.A. Abraham V. Income-tax Officer, Kottayam and another (AIR 1961 SC 609) held that the Income Tax Act provides a complete machinery for assessment of tax and imposition of penalty and for obtaining relief in respect of any improper orders passed by the Income-tax authorities, and a person who is aggrieved by an order of the Appellate Assistant Commissioner imposing a penalty, cannot be permitted to abandon resort to that machinery and to invoke the jurisdiction of the High Court under Article 226 when he had adequate remedy open to him by way of an appeal to the Tribunal. 11. The Apex Court in Surya Dev Rai V. Ram hander Ram Chander Rai and others ((2003)6 SCC 675), after scanning various decisions rendered by the Apex Court, summed up the principles as to when and at what circumstances the constitutional remedy under Articles 226 and 227 of the Constitution of India could be invoked by a party. In paragraph 38 the Apex Court held that : W.P.(C) No. 35318/08 & con. case. 8 “38. Such like matters frequently arise before the High Courts. We sum up our conclusions in a nutshell, even at the risk of repetition and state the same as hereunder: (1) Amendment by Act 46 of 1999 with effect from 1- 7-2002 in Section 115 of the Code of Civil Procedure cannot and does not affect in any manner the jurisdiction of the High Court under Articles 226 and 227 of the Constitution. (2) Interlocutory orders, passed by the courts subordinate to the High Court, against which remedy of revision has been excluded by CPC Amendment Act 46 of 1999 are nevertheless open to challenge in, and continue to be subject to, certiorari and supervisory jurisdiction of the High Court. (3) Certiorari, under Article 226 of the Constitution, is issued for correcting gross errors of jurisdiction i.e. when a subordinate court is found to have acted (i) without jurisdiction — by assuming jurisdiction where there exists none, or (ii) in excess of its jurisdiction — by overstepping or crossing the limits of jurisdiction, or (iii) acting in flagrant disregard of law or the rules of W.P.(C) No. 35318/08 & con. case. 9 procedure or acting in violation of principles of natural justice where there is no procedure specified, and thereby occasioning failure of justice. (4) Supervisory jurisdiction under Article 227 of the Constitution is exercised for keeping the subordinate courts within the bounds of their jurisdiction. When a subordinate court has assumed a jurisdiction which it does not have or has failed to exercise a jurisdiction which it does have or the jurisdiction though available is being exercised by the court in a manner not permitted by law and failure of justice or grave injustice has occasioned thereby, the High Court may step in to exercise its supervisory jurisdiction. (5) Be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied: (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (ii) a grave injustice or gross failure of justice has occasioned thereby. W.P.(C) No. 35318/08 & con. case. 10 (6) A patent error is an error which is self-evident i.e. which can be perceived or demonstrated without involving into any lengthy or complicated argument or a long-drawn process of reasoning. Where two inferences are reasonably possible and the subordinate court has chosen to take one view, the error cannot be called gross or patent. (7) The power to issue a writ of certiorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion. Care, caution and circumspection need to be exercised, when any of the above said two jurisdictions is sought to be invoked during the pendency of any suit or proceedings in a subordinate court and the error though calling for correction is yet capable of being corrected at the conclusion of the proceedings in an appeal or revision preferred there against and entertaining a petition invoking certiorari or supervisory jurisdiction of the High Court would obstruct the smooth flow and/or early disposal of the suit or proceedings. The High Court may feel inclined to intervene where the error is such, as, if not corrected at W.P.(C) No. 35318/08 & con. case. 11 that very moment, may become incapable of correction at a later stage and refusal to intervene would result in travesty of justice or where such refusal itself would result in prolonging of the lis. (8) The High Court in exercise of certiorari or supervisory jurisdiction will not convert itself into a court of appeal and indulge in re- appreciation or evaluation of evidence or correct errors in drawing inferences or correct errors of mere formal or technical character. (9) In practice, the parameters for exercising jurisdiction to issue a writ of certiorari and those calling for exercise of supervisory jurisdiction are almost similar and the width of jurisdiction exercised by the High Courts in India unlike English courts has almost obliterated the distinction between the two jurisdictions. While exercising jurisdiction to issue a writ of certiorari, the High Court may annul or set aside the act, order or proceedings of the subordinate courts but cannot substitute its own decision in place thereof. In exercise of supervisory jurisdiction the High Court may not only give suitable directions so as to guide the subordinate W.P.(C) No. 35318/08 & con. case. 12 court as to the manner in which it would act or proceed thereafter or afresh, the High Court may in appropriate cases itself make an order in supersession or substitution of the order of the subordinate court as the court should have made in the facts and circumstances of the case.” 12. The Apex Court has enunciated the principles as above that a writ of certiorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion. At the same time, the High Court in exercise of certiorari or supervisory jurisdiction will not convert itself into a court of appeal and indulge in re-appreciation or evaluation of evidence or correct errors in drawing inferences or correct errors of mere formal or technical character. A party aggrieved has necessarily to chose that remedy available under the Statute rather than abandon the same to invoke the extra-ordinary jurisdiction under Article 226 of the Constitution. Though an alternate remedy may not be a bar for interference under Article 226 of th Constitution, being a constitutional remedy, the High Court will sparingly exercise the jurisdiction by way of self imposed restriction. W.P.(C) No. 35318/08 & con. case. 13 13. In the case on hand there is no dispute that the petitioner had the right to file an appeal against the order impugned in this writ petition. But, the period prescribed under the Statute in filing the appeal has expired even beyond the period within which the authority could condone the delay. So, when his remedy of filing an appeal is thus barred, can he invoke the extra-ordinary jurisdiction under Article 226 of the Constitution of India is a real question that arises for consideration? 14. This Court in Prasad V. State of Kerala (1999(2)KLT 531) considered similar circumstances arising under the Toddy Workers Welfare Fund Contribution Act. An order was passed by the Welfare Fund Inspector under section 8(1) of the Act and it provides an appellate remedy to the Government within 60 days from the date of receipt of the order. The appeal was preferred after a long delay. The said appeal was rejected by the Government, which was challenged before this Court. It was held that when the special statute does not contain a provision making the provisions of section 5 of the Limitation Act applicable, the question of condonation of delay invoking that provision does not arise. The period prescribed under the W.P.(C) No. 35318/08 & con. case. 14 Statute has already expired. In the circumstances, when there was no power to condone the delay to entertain an appeal filed beyond the time prescribed under the Act, the delay cannot be condoned by invoking the provisions of the Limitation Act. The writ petition in such circumstances though the appellate remedy was barred and rejected without being entertained, was not entertained by this Court under Article 226 of the Constitution of India. The Division Bench confirmed the decision of the learned Single Judge and dismissed the appeal. 15. In Krishnan T. and another V. State of Kerala and others (ILR 2007(1) Ker. 233) the same issue, arising under the Motor Transport Workers Welfare Fund Act, was considered by this Court. There also the power of the appellate authority to condone the delay was prescribed by the Statute and further provided the maximum of which the period could be extended, when that period has also expired and the appellate remedy thus could not be invoked by a party by efflex of time. It was held that the provisions under Article 226 of the Constitution of India cannot be invoked by such person to bypass statutory remedy when the appeal is not preferred within time. 16. This view was reiterated in the decision in Kerala W.P.(C) No. 35318/08 & con. case. 15 Motor Transport W.W.F.Board V. Government of Kerala (2001(1) KLT 608. There the question arose for consideration was as to whether in the absence of any specific statutory provision to condone the delay, can an appellate authority be compelled to entertain an appeal filed beyond the prescribed period and when a right of appeal is provided, has the appellate authority got an inherent power or implied power to condone the delay in filing an appeal and under the provisions of the Kerala Motor Transport Workers' Welfare Fund Act, 1985, can a time-barred appeal be directed to be entertained treating it as an appeal within time? These were the questions sought for consideration as referred to in paragraph 1 of the judgment. After referring to the relevant provision of the Statute, it was held that an appeal cannot be entertained beyond the prescribed period and there is no inherent right of appeal under the Act and the Government has no power, express or implied, to condone the delay and entertain an appeal. 17. Yet in another case, Assistant Commissioner of Central Excise V. Krishna Poduval (2005(4) KLT 947), where also a similar question arise for consideration under the Finance Act, 1994. That also relates to the payment of service tax, interest W.P.(C) No. 35318/08 & con. case. 16 and penalty under the Finance Act, 1994. When notices were issued to the parties as to why service tax quantified thereunder along with interest and penalty should not be recovered and ultimately, show cause notice culminated in demand of service tax. The same was challenged in an appeal field before the Commissioner of Central Excise. That was dismissed, since the appeal itself was filed beyond the period prescribed under the Act and even the time within which to condone the delay had expired. Therefore, the appellate authority had no power to condone the delay in filing the appeal beyond the maximum period prescribed under the Act and that appeal was preferred beyond the maximum period within which it should condone the delay. Consequently, the appeal was rejected by the appellate authority without the same being entertained. Thus, the matter could not be considered on merits. Challenging the order the writ petitions were preferred before this Court. In paragraph 7 of the judgment it was held as follows:- “.. In so far as the respondents have not taken up the original orders imposing penalty in appeals before the appellate authority within the maximum period prescribed under section 85(3) of the Finance Act, they cannot get the appeals revived and heard on merits by resorting to the discretionary remedy before this Court under Article 226 of the W.P.(C) No. 35318/08 & con. case. 17 Constitution of India. Once the period of limitation has run itself out and the appellate authority does not have power to condone the delay in filing the appeals beyond the maximum period prescribed under the Act, the remedies of the appellants come to an end just like in the case of a time barred suit and the respondents cannot, by invoking the discretionary remedy under the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India, resurrect their unenforceable cause of action and require this court to consider their contentions against the original orders on merit. That would amount to defeating the very law of limitation which we are not expected to do under Article 226. If we are to entertain the contentions of the respondents on merits, that would amount to negating the law of limitation which we have no jurisdiction to do under Article 226 and which may even lead no anomalous results. We are not satisfied that the jurisdiction of this Court under Article 226 of the Constitution of India is so wide as to resurrect a cause of action which has become unenforceable on account of the law of limitation. Further, we are of the firm opinion that the jurisdiction under Article 226 of the Constitution of India cannot be invoked against express statutory provisions, however harsh the effect of the provisions may be on an assessee or litigant. 18. The above principle is supported by various decisions of the Apex Court. Reference was made to Maheswary Fire Work Industries V. Commercial Tax Officer and others (12 STC 272), Commissioner of Sales Tax, Uttar Pradesh V. Parson Tools and Plants, Kanpur (1975) 35 STC 413 which eloquently makes the position clear that a person whose remedy provided under the W.P.(C) No. 35318/08 & con. case. 18 Statute has expired, there is no provision for invoking the extraordinary jurisdiction under Article 226 of the Constitution of India as it would amount to resurrect a cause of action. 19. We may even say that even if writ petition was filed under Article 226 of the Constitution of India at a time when an appellate remedy is not barred, this Court could certainly say it would not entertain a writ petition, if the reliefs sought for in the writ petition are available to be granted by invoking the statutory remedy provided under the Statute. If that be so, the case of a person who failed to invoke statutory remedy cannot be better placed so as to invoke the extraordinary jurisdiction. 20. In paragraph 8 of the decision reported in Asst. Commissioner of Central Excise's case (Supra) the Division Bench of this Court, after referring to the decision in Maheswary Fire Work Industries case (Supra), held that the power to condone the delay of 30 days provided under