‘Alternate Remedy’, a common word for lawyers
defending the respondent in a writ petition, has significant meaning.
In case of inadequacy or ineffectiveness or absence of alternate route
for enforcement of legal rights, the Supreme Court issues orders in
favour of petitioner under extraordinary jurisdiction provided in
Article 88(2) of the Constitution of the Kingdom of Nepal. The aggrieved
party however must show that his legal right is violated and there
is either no remedy at all in the law or the remedy, even though provided,
is inadequate or ineffective to enforce the rights. Supreme Court
has frequently taken into account the Doctrine of Alternate Remedy
while deciding writ petitions.
Some facts from Man Bahadur’s case file represent
some trends in the judiciary’s attitude towards tax cases and
as well as the autocratic concept of tax officers. Man Bahadur Sunar
was a retailer of textile products in Dodhara, a remote village beyond
Mahakali river with his firm named ‘Dodhara Cloth Centre’.
He closed business in 2045 BS with the approval of the tax office
concerned and by paying off the tax liabilities till the date of the
closure. His brother Prem Bahadur commenced the same type of business
under a separate firm ‘Ganesh Bastralaya’. Man Bahadur had
no business involvement in Ganesh Bastralaya but was engaged in local
level politics and social services. Prem Bahadur regularly went on
paying the tax by himself for his business till Fiscal Year 2047/48.
The story begins when Prem Bahadur stopped filing
the income tax return for Fiscal Year 2048/49. Assuming that Man Bahadur
was receiving the income from ‘Ganesh Bastralaya’, the tax
officer of Mahendranagar Tax Office issued the assessment order in
the name of Man Bahadur with the tax amount Rs. 1,700,500 and fine
of Rs. 392,101. The reason as we are told was simply that the Chief
Tax Officer wanted to revenge on Man Bahadur for his leadership of
a local level struggle against the autocratic tax administration.
Man Bahadur was the chairman of Dodhara Village Development Committee
and was strongly lobbying in favour of tax collection only as per
law since he had a background in business carrier with bitter experience
of torture from tax authorities. It seems to be a strategic plan of
the tax administration to shut the mouth that speaks against the illegal
actions.
The Income Tax Act, 1974, provides for two options
for taxpayer if he is dissatisfied with the assessment order. Under
Section 34(2), the aggrieved party may file petition before the Director
General of Tax Department (now called Inland Revenue Department) within
35 days of receipt of assessment order. In order to qualify for filing
the petition, the taxpayer has to deposit one third of total payable
tax amount as per order. Section 57 of the Act provides for appellate
jurisdiction of Revenue Tribunal. The appellate jurisdiction also
requires a deposit of half of the total assessed tax amount plus the
full amount of fine ordered. There is no provision to accept bank
guarantee or any other type of guarantee in stead of depositing cash.
As a villager having no current business but engaged
in local level politics and social services, he did not have sufficient
amount in cash to deposit either Rs. 697,533.67 in case of petition
before the Director General or Rs. 1,242,351 in case of appeal before
Revenue Tribunal. Both the alternatives were beyond his financial
capacity. He approached the Director General with the problems at
hand requesting to accept the petition with personal or financial
guarantee, but was rejected. He had thus no alternate but to knock
the door of the Supreme Court under writ jurisdiction.
The Supreme Court by its full bench consisting of
nine Justices rejected the petition on the ground that the petitioner
had alternate remedy. The decision itself does not talk of the alternate
remedy in explicit way but it can be understood if we read the decisions
of all three benches that considered the case. A full bench of three
Justices had referred the case to the extended full bench of more
Justices than those in the benches which had earlier decided Parshuram
Jha’s and Pradip Kumar Agrawal’s cases. The reason was to
decide by a larger bench on the adherence of either of the decisions
made on Parshuram Jha’s and Pradip Kumar’s case as a precedent
on the Man Bahadur’s case since the said earlier decisions contradicted
on the applicability of Doctrine of Alternate Remedy. This case was
referred to full bench by the joint bench as there was no unanimity
of opinion between the Justices.
Under Article 88(2) of the Constitution, writ jurisdiction
is a prerogative right of the Supreme Court. A writ is issued not
only to enforce the legal right to which the alternate remedy is absent
or is inadequate or is ineffective. It may also be issued for enforcement
of fundamental rights. The question of alternate remedy in case of
the violation of fundamental rights is virtually irrelevant. The Constitution
does not require the Supreme Court to look into the alternate remedy
if the fundamental rights are infringed. Furthermore, in tax jurisprudence,
if an abuse of power or an apparent error of law is noticed from the
facts, the alternate remedy should not be a bar to issue prerogative
writs.
In the decision of Parshuram Jha’s case, the
Supreme Court went with the Constitution to provide for remedies under
prerogative writs if there is violation of fundamental rights, regardless
of alternate remedy available. It further remarked that the absence
of alternate remedy or its inadequacy or ineffectiveness can also
be a ground to invoke the extra ordinary jurisdiction of Supreme Court.
There are many cases in which the Supreme Court has issued the writ
for enforcement of fundamental rights even in presence of alternate
remedy. In similar way, the instances are aplenty of assuming extra
ordinary jurisdiction to enforce violated legal rights where the remedy
is not effective or adequate.
In Man Bahadur’s case the questions were: was
his right to property as guaranteed by the Constitution as a fundamental
right, violated by the tax assessment for the business registered
in the name of another person which, moreover, was done without complying
with the due process of law? Does the tax assessment by more then
hundred percent compared to previous years, leave any room to think
that he has effective and adequate alternate remedy? Is each and every
case relating to tax required to seek the remedy under appellate jurisdiction
even if the facts show prima facie the prejudiced mind of tax
officer or if there is a gross negligence or violation of law?
Instead of addressing the said questions, the decision
only analysed whether there is a contradiction between Parshuram Jha’s
case and Pradip Kumar’s case. The Court could have taken into
account, while deciding the case, the inability of depositing that
much of amount by the villager and yet his efforts to try to choose
the appellate jurisdiction offering a guarantee. The writ petition
was his compulsion since he had only two choices: either accept the
assessment or to knock the judiciary’s door as the last effort.
The Court, which was kind enough to Parshuram giving remedy on the
ground that it was customary to come through extra ordinary jurisdiction
even though there was alternate remedy, could not be as gracious to
Man Bahadur to protect his right to property.
The reason may be that the court wanted to establish
the precedent in a strict sense. But with due respect to the honourable
Court, we can say that the Supreme Court is becoming more and more
conservative in tax cases. The trend in foreign Courts is to give
a different treat to the tax cases due to its nature of involving
property rights which is related to the right to life under a free
economic system. It is also due to the fact that the balance of convenience
has always been in government’s side. Writs are not conclusive
remedy and they only purify the wrongful decisions. Even if the writ
had been issued, Man Bahadur could not have immunity from his liability
of paying tax if he was in fact involved in Prem Bahadur’s business.
Since the tax officer disregarded Prem Bahadur’s reply in which
he had accepted the fault of failing to file the return and also had
declared that he was the sole owner of the business, there is enough
to smell a prejudiced mind of the tax officer. The remedy sought from
the Supreme Court could be to the extent of nullifying the assessment
order and requiring the tax officer to assume the role similar to
the Court under Section 45 of the Act and examine the evidences and
comply with the due process of law as prescribed.
