A three-judge Bench of the Supreme Court has ruled that the High Court can exercise its writ jurisdiction, even when an alternative remedy is available with the parties, if the question of authority and jurisdiction of the authority that the passed the order alone is involved, which is a pure question of law.
The Bench of Justice DY Chandrachud, Justice Vikram Nath and Justice BV Nagarathna has observed that, "It is not the case of the appellant that the respondents have miscalculated the duty and penalty imposed on it. The appellant contends that the State Government does not have the power to levy tax on its sale of electricity to BSEB. Thus, the plea strikes at the exercise of jurisdiction by the Government. In view of the law discussed above on the rule of alternate remedy, the High Court can exercise its writ jurisdiction if the order of the authority is challenged for want of authority and jurisdiction, which is a pure question of law."
The Bench further said, "While a High Court would normally not exercise its writ jurisdiction under Article 226 of the Constitution if an effective and efficacious alternate remedy is available, the existence of an alternate remedy does not by itself bar the High Court from exercising its jurisdiction in certain contingencies."
Facts of the Case
The appellant M/s Magadh Sugar & Energy Ltd had challenged the imposition of electricity duty and penalty under the Bihar Electricity Duty Act, 1948, on the electricity that it was supplying to Bihar State Electricity Board (BSEB). The waste of sugarcane (bagasse) produced in the process of manufacturing sugar is used for the production of electricity for its own consumption and the surplus energy is supplied to BSEB. The High Court had refused to entertain the plea on two grounds, (i) the appellant has an alternate statutory remedy under Section 9A of the 1948 Act; and (ii) the dispute involves questions of fact which are not amenable to the writ jurisdiction of the High Court.
Citing various judgments of the Supreme Court, the Bench concluded that the issue involved is amenable to the writ jurisdiction of the High Court,
"The issues raised by the appellant are questions of law which require, upon a comprehensive reading of the Bihar Electricity Act, a determination of whether tax can be levied on the supply of electricity by a power generator (which also manufactures sugar) supplying electricity to a distributor; and whether the first respondent has the legislative competence to levy duty on the sale of electricity to an intermediary distributor in view of the decision of this Court in State of AP (supra). The question of whether the appellant is liable to file returns under Sections 6B(1) and 5A of the Act is directly related to the issue of whether the sale of electricity by the appellant to BSEB falls under the charging provisions of Section 3(1). The questions raised by the appellant can be adjudicated without delving into any factual dispute. Thus, the present matter is amenable to the writ jurisdiction of the High Court."
The Bench relied on judgments of Whirpool Corporation v. Registrar of Trademarks, Mumbai and Harbanslal Sahni v. Indian Oil Corporation Ltd to hold that the existence of an alternate remedy does not by itself bar the High Court from exercising its jurisdiction in certain contingencies.
The Bench pointed out that principles of the alternative remedies have been summarized in the recent judgment of Radha Krishan Industries v. State of Himachal Pradesh & Ors.,
"Exceptions to the rule of alternate remedy arise where,
(a) the writ petition has been filed for the enforcement of a fundamental right protected by Part III of the Constitution;
(b) there has been a violation of the principles of natural justice
(c) the order or proceedings are wholly without jurisdiction or
(d) the vires of a legislation is challenged."
By referring to the judgment in the matter of Union of India v State of Haryana, the Bench observed, "The assessing authorities imposed sales tax on the rentals charged for supply of telephones. Writ petitions were filed in the High Court challenging the levy. The writ petitions were dismissed on the ground that an alternative remedy of a statutory appeal was available. An appeal against these orders was filed before this Court. The appeal was allowed and the matter was remanded back to the High Court for determination since it involved a question of law on whether the supply of telephones amounted to sale."
The Court then referred the matter back to the High Court of Patna for a fresh determination.