BABU RAM PRAKASH CHANDRA MAHESHW ARI v. ANTARIM ZILA PARISHAD MUZAFFAR NAGAR

Jn the fir.c:t place ii run their p:-irt~· aggriC\'Cd H BABU RAM v. ZILA PARISHAD (Ramaswami, J.) 519 A Carl Still G. M. B. H. v. State of Bihar, A.LR. 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 bas no application in a case \Vhere the impugned order has been made in violation of the principle of natural justice. [523 DJ B c State of Uuar Pradesh v. Mohammad Nooh, [1958] S.C.R. 596, 605, referred to. In the present case in view of the allegations- of the apJ?ella~t that the taxing provisions were ultra vires and that there was a v1olat1on 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 alter native remedy of statutory appeal. The High Court was no doubt vested with a discretion but in the present case the discretion had nC>t been exercised in accordance with law. [523 C-524 Al 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. D E. C. Agarwala and E. Udayarathnam, for the appellant., E F G H 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 con sisting 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 O]l 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 to the following effect : "The power of a board to impose a tax on circum stances 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 SUPREME COURT REPORTS (1969) I s.C.R. total period of at least six months in the year under assessment. A (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 I, 1928, the Government of U.P. issued notification no. 315/IX-413 notiiying the rules rules for the assessment and collection of a tax on circumstances and property in the rural area of the M u1.affarnagar district. The rules provided, among other matters, that all the activities of an assesi; ee within the district, wl~~ther 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, :md 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 shall give notice of a date not less than one month when he will proceed to consider the objection. The assesscc 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 Con stitution of India was promulgated and under cl. 2 of Art. 276 the total amount payable in respect of any one person to the dis trict 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 rupeei; 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. Ga7.ette 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." c I> E F G But the Amending Act (U.P. Act no. I of 1960) received the H assent of the Governor on January 5, 1960 whereby the figure 1960 was substituted in place of 1959 in cl. (3) of s. I of U.P. Act XXJI of 1958. The case of the appellant is that the original - A B c D E F G H BABU RAM v. ZILA PARISHAD (Ramaswami, I.) 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 Amend ing Act no. 1 of 1960 received the assent of the Governor and that fresh legislation was necessary. On March 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 0. P. Varma purporting to act as a Taxing Officer of the Antarim Zila Parishad. Aggrieved by the assessment order, the appell~t filed a Civil Miscellaneous Writ Petition no. 1780 of 1960 m 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 pen dency 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. XXXIl of 196l)_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 0. P. Verma passed the assess ment order for 1961-62 in respect of the circumstances and pro p'erty 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 Oourt a writ petition no. 2371 of 1962 under Art. 226 of the Constitution. The writ petition was summarily dismissed by S. N. Dwivedi, J. on February 13, 1964. The appellant took the matter in appeal in Special Appel no. 322 of 1964 but the Special Appeal was dis missed 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 A1lahabad 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 SUPREME COURT REPORTS f 1969] I S.C.R. lt is a wdl-establishcd proposition of law that when an alter native 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 docs not affect the jurisdiction of the High Court to issue a writ. Rut, as ob served by this Court in Rashid Ahmed v. The Municipal Board. Kairana('), "the existence of an adequate legal remedy is a thing to be taken into consideration in the matter of gr~nting writs" and whCTc such a remedy exists it will be a sound exercise of discre tion to refuse to interfere in a writ petition unless there arc good grounds therefor. But it should be remembered that 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 excep tional cases issue a writ such as a writ of certiorari notwithstand ing the fact that the statutory remedies have not been exhausted. In The State of VIiar Pradesh v. Moharnmad Noah('), S. R. Das, C.J.. speaking for the Court. observed : •·Jn the next place it must he home in mind that there is no rule, with regard to certiorari as there is with mandamus. that it will lie onlv where there is no other equally effective remedy. 1t' is well cstahlished that. provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred hy statute. (Halshury's Laws of En~Jand. 3rd Ed., Vol. II. p. 130 and the cases c;hi there). The fact that the aggrieved party has another and adequate remedy may he taken into consideration hy the superior court in arriving at a conclusion a~ •n whether it should, in exer cise of its discretion, issue a writ of certiorari to quash the nrocccdings and dcci<ions of inferior courts subor dinate to it and ordinarily the superior court will de cline to interfere until the aggrieved party has exhausted his other statutory remedies, if any. But this rule re quiring 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 ade v. Postmal'ter quate legal remedies. Genera/ Ex parte Carmichael [ 1928 (I) 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 certio rari in a case where there has been. a denial of natural j_usticc before a court of summary jurisdiction. The [19501 S.C.R. 566. Jn the King (2) Jt958] S.C.R. 595, 605. (I) A B c D I F G H A , BABU RAM v. ZILA PAR!SHAD (Ramaswami, !.) 523 case of Rex v. Wandsworth Justices Ex parte Read [1942 0) 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 cer tiorari 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 befo~e a Tribunal under a provision of law, which is ultra vires, 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 de cisions of this Court in Carl Still G. m. b. H. v. The State of Bihar(') and The Bengal Immunity Co. Ltd. v. The State of 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('). · It is manifest in the present case that the appellant had alle- ged 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. It was further alleged that ss. 114 and 124 of the U.P. District Boards Act no. X of I 922 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 alle gation 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 wa~ n~t followed and there was violation of the principles In view of the allegations of the appellant that of natu~al 1ust1ce. the taxmg provisions are ultra vires and that there was violation of the principles of, natural justice, we think that the High Court was m 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 res pondent that in dismissing the writ petition the High Court was acting in its discretion. But it is manifest in the present case that (I) A.l.R. 1961 S.C. 1615. (3) [1958] S.C.R. 595. (2) [1955] 2 S.CR. 603. B c D E F G H 524 SUPREME cm; RT REPORTS [l 969] I S.CR the discretion of the High Court has not been exercised in accor dance 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 I 964 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. A B c