THE HIGH COURT OF SIKKIM : GANGTOK

(Civil Extraordinary Jurisdiction)

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SINGLE BENCH : THE HON’BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE

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WP(C) No.39 of 2022

Petitioner : Zydus Healthcare Ltd.

[Earlier M/s. Zydus Healthcare, Sikkim (Firm)]

versus

Respondent : Assistant Commissioner of Income Tax,

Circle 3(2), Gangtok

Application under Articles 226 and 227 of the Constitution of India

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Appearance

Mr. Mukesh M. Patil, Senior Advocate with Mr. Anup Kumar

Bhattacharjee and Ms. Babita Kumari, Advocates for the Petitioner.

Ms. Sangita Pradhan, Deputy Solicitor General of India for the

Respondent.

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Date of Hearing : 04-11-2025

Order reserved : 04-11-2025

Order pronounced & uploaded : 05-11-2025

ORDER

Meenakshi Madan Rai, J.

1. The Respondent has filed the instant petition raising

preliminary objections on the maintainability of the Writ Petition.

Learned Deputy Solicitor General of India (DSGI) appearing for the

Objector-Respondent, submits that, the Writ Petitioner is debarred

from invoking the writ jurisdiction of this High Court when an

efficacious alternative remedy is available by way of statutory

provisions, which the Writ Petitioner has failed to invoke, but has

instead approached the High Court. It is contended that on receiving

the information of income having escaped assessment within the

meaning of Section 147 of the Income Tax Act, 1961 (IT Act) , based

on the objections raised by the Revenue Audit, Notice under Section

148A(b) of the IT Act dated 19 -03-2022 was issued to the Writ

Petitioner on three issues, namely, (a) under charge of deemed

WP(C) No.39 of 2022 2

Zydus Healthcare Ltd. vs. Assistant Commissioner of Income Tax

income under Section 115JC in relation to donation claimed under

Section 80GC of the IT Act. (b) under determination of Book Profit

and escapement of income in respect of Excise Duty refund of ₹

22,99,92,702/-. (c) under charge of income of ₹ 22,99,92,702/- by

claiming Excise Duty refund as Capital Receipt. The Writ Petitioner

responded vide communication , dated 26-03-2022, after which the

Order under Section 148A(d) was passed by the Respondent on 27 -

04-2022 discussing and summarising the findings on the above

issues. That, as the Writ Petitioner sought redressal of its grievances

against the Assessment Order, it was imperative that they approach

the Commissioner of Income Tax (Appeals) under Section 246A(1)(b)

in the first instance. Pursuant thereto, if further aggrieved by the

Order of the Appellate Authority, Section 253 of the IT Act provides

for redressal of grievances to the Income Tax Appellate Tribunal. The

Writ Petitioner has however without exhausting the alternative

remedies filed the instant Writ Petition which therefore is not

maintainable in the eyes of law. To fortify her submissions, Learned

DSGI drew strength from the decision of the Supreme Court in Anshul

Jain vs. Principal Commissioner of Income Tax and Another

1

.

2. Resisting the arguments advanced by the Learned DSGI,

Learned Counsel for the Writ Petitioner contended that, the IT Act

makes no provision for approaching the statutory machinery in an

order under Section 148A(d) of the IT Act. It was next contended

that, when the re-assessment was made, it was without jurisdiction,

hence the Writ Petitioner is well within his rights to approach the High

Court by invoking the provisions of Article s 226/227 of the

Constitution of India instead of awaiting prolonged litigation and its

completion before the statutory authorities. It was further canvassed

1

[2022] 143 taxmann.com 38 (SC) : 2022 SCC OnLine SC 1756

WP(C) No.39 of 2022 3

Zydus Healthcare Ltd. vs. Assistant Commissioner of Income Tax

that the Order of the Tax Authority dated 27 -04-2022 is wholly

without jurisdiction as the Notice was issued in violation of the period

of limitation prescribed in Section 149 of the IT Act.

(i) Inviting the attention of this Court to the contents of

Section 148 of the IT Act it was argued that several conditions have

been prescribed therein for issuance of Notice. Notice to the Writ

Petitioner could not be contemplated under the prescribed conditions.

(ii) The Explanation to Section 149 of the IT Act requires that

for the purposes of Section 149(1)(b) “asset” shall include immovable

property being land, building or both, shares and securities, loan and

advances, deposits in Bank Account. The amount of ₹ 22,99,92,702/-

reflected in the impugned Order, does not fall under any of the

foregoing definitions of the Explanation, for the reason that, the said

amount was the deposit made by the concerned authority in the

Personal Ledger Account of the Writ Petitioner and is not a Bank

Deposit, as erroneously interpreted by the Respondent, consequent

upon which the assessment of the authority was then passed. That,

no law prevents the Writ Petitioner from invoking the writ jurisdiction

of this Court. That, the Punjab and Haryana High Court in both

Anshul Jain vs. Principal Commissioner of Income Tax and Another

2

and

Red Chilli International Sales vs. Income-tax Officer and Another

3

vide

Orders dated 02-06-2022 opined that, where the proceedings have

not been concluded by the statutory authority, the writ Court should

not interfere at such a premature stage. Learned Counsel for the Writ

Petitioner sought to clarify that the decision of the Supreme Court in

Anshul Jain (supra) relied on by the Respondent was superseded by

the decision of a coordinate Bench of the Supreme Court in Red Chilli

2

[2022] 143 taxmann.com 37 (Punjab & Haryana)

3

[2022] 140 taxmann.com 177 (Punjab & Haryana)

WP(C) No.39 of 2022 4

Zydus Healthcare Ltd. vs. Assistant Commissioner of Income Tax

International Sales vs. Income-tax Officer and Another

4

pronounced at a

later point in time. That, in Anshul Jain (supra) the Supreme Court,

vide Order dated 02-09-2022, noticed inter alia that the challenge

before the High Court was the re-opening of Notice under Section

148A(d) of the IT Act. The Supreme Court observed that the High

Court had rightly dismissed the Writ Petition by ordering that any

grievance on merits has to be agitated before the Assessing Officer in

the re-assessment proceedings. Contrary thereto , in Red Chilli

International Sales (supra), the Supreme Court vide Order dated 03-

01-2023, inter alia observed that the Court was with th e Writ

Petitioner as the impugned Judgment rejecting the Writ Petition on

the ground of alternative remedy, does not take into consideration

several Judgments of the Supreme Court on the jurisdiction of the

High Court, as Writ Petitions have been entertained to examine

whether the jurisdiction, pre-conditions, for issuance of Notice under

Section 148 of the IT Act is satisfied.

(iii) Strength was also garnered from the decision in Uttar

Pradesh Power Transmission Corporation Limited and Another vs. CG

Power and Industrial Solution s Limited and Another

5

, where the

Supreme Court considered the final Judgment and Order dated 24-

02-2020 of the High Court of Judicature at Allahabad (Lucknow

Bench) allowing the Writ Petition filed by the Respondent, setting

aside two letters issued by the Executive Engineer, Unnao UPPTCL

directing the Respondent No.1 to remit labour cess amounting to ₹

2,60,68,814/- and other details as mentioned in the Petition. It was

urged that the Supreme Court observed therein that availability of an

alternative remedy does not prohibit the High Court from entertaining

4

[2023] 146 taxmann.com 224 (SC) : 2023 SCC OnLine SC 237

5

Special Leave Petition (C) No.8630 of 2020 dated 12-05-2021 : (2021) 6 SCC 15

WP(C) No.39 of 2022 5

Zydus Healthcare Ltd. vs. Assistant Commissioner of Income Tax

a Writ Petition in an appropriate case. Reference in the aforesaid

matter was made to Whirlpool Corporation vs. Registrar of Trade Marks,

Mumbai and O thers

6

and Pimpri Chinchwad Municipal Corporation and

Others vs. Gayatri Construction Company and Another

7

.

(iv) The submission of Learned Counsel for the Writ Petitioner

was further buttressed by the decision of the Supreme Court in M/s

Godrej Sara Lee Ltd. vs. Excise and Taxation Officer -cum-Assessing

Authority and Others

8

where the Supreme Court while referring to a

plethora of precedents observed inter alia that where the controversy

is a purely legal one and it does not involve disputed questions of fact

but only questions of law, then it should be decided by the High Court

instead of dismissing the Writ Petition on the ground of an alternative

remedy being available.

3. Due consideration has been given to the rival contentions

advanced by Learned Counsel for the parties and the relevant

pleadings perused. At the outset, I am not inclined to agree with the

submission of the Learned Counsel for the Writ Petitioner that the IT

Act makes no provision for appeals against an Order under Section

148A(d) of the IT Act as a reading of Section 246A(1)(b) makes such

room. That having been said, it is now a settled position of law that

the power to issue prerogative writs under Article 226 of the

Constitution of India is plenary and discretionary in nature. Relevant

reference is made to the observation of the Supreme Court in Uttar

Pradesh Power Transmission Corporation Ltd. (supra) viz;

“67. It is well settled that availability of an alternative

remedy does not prohibit the High Court from

entertaining a writ petition in an appropriate case. The

High Court may entertain a wri t petition,

notwithstanding the availability of an alternative

remedy, particularly (1) where the writ petition seeks

6

AIR 1999 SC 22

7

(2008) 8 SCC 172

8

Civil Appeal No.5393 of 2020 dated 01-02-2023

WP(C) No.39 of 2022 6

Zydus Healthcare Ltd. vs. Assistant Commissioner of Income Tax

enforcement of a fundamental right; (ii) where there is

failure of principles of natural justice or (iii) where the

impugned orders or pro ceedings are wholly without

jurisdiction or (iv) the vires of an Act is under challenge.

Reference may be made to Whirlpool Corporation v.

Registrar of Trade Marks, Mumbai and Ors. reported in

AIR 1999 SC 22 and Pimpri Chinchwad Municipal

Corporation and O rs. V. Gayatri Construction Company

and Ors, reported in (2008) 8 SCC 172, cited on behalf

of Respondent No.1.”

(i) The Supreme Court in Godrej Sara Lee Ltd. (supra)

observed as follows;

“4. …………………………….. The power to issue prerogative

writs under Article 226 is plenary in nature. Any

limitation on the exercise of such power must be

traceable in the Constitution itself. Profitable reference

in this regard may be made to Article 329 and

ordainments of other similarly worded articles in the

Constitution. Article 226 does not, in terms, impose any

limitation or restraint on the exercise of power to issue

writs. While it is true that exercise of writ powers

despite availability of a remedy under the very statute

which has been invoked and has given rise to the action

impugned in the writ petition ought not to be made in a

routine manner, yet, the mere fact that the petitioner

before the High Court, in a given case, has not pursued

the alternative remedy available to him/it cannot

mechanically be construed as a ground for its dismissal.

It is axiomatic that the High Courts (bearing in mind the

facts of each particular case) have a discretion whether

to entertain a writ petition or not. One of the self -

imposed restrictions on the exercise of power under

Article 226 that has evolved through judicial precedents

is that the High Courts should normally not entertain a

writ petition, where an effective and efficacious

alternative remedy is available. At the same time, it

must be remembered that mere availability of an

alternative remedy of appeal or revision, which the party

invoking the jurisdiction of the High Court under Article

226 has not pursued, would not oust the jurisdiction of

the High Court and render a writ petition "not

maintainable". In a long line of decisions, this Court has

made it clear that availability of an alternative remedy

does not operate as an absolute bar to the

"maintainability" of a writ petition and that the rule,

which requires a party to pursue the alternative remedy

provided by a statute, is a rule of policy, convenience

and discretion rather than a rule of law. ………………… ”

4. In light of the settled position of law and the questions

raised before this Court by the Writ Petitioner, in my considered view,

nothing prevents this Court from exercising its discretion and plenary

WP(C) No.39 of 2022 7

Zydus Healthcare Ltd. vs. Assistant Commissioner of Income Tax

powers provided under Article 226 of the Constitution of India to

consider the matter at hand.

5. On the anvil of the foregoing discussions, the preliminary

objection stands rejected and the Petition disposed of.

( Meenakshi Madan Rai )

Judge

05-11-2025

Approved for reporting : Yes

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