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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