Writ Petitions: Safeguarding your Rights in Tax Litigations
Meaning of Writ Petition:
An issuance of a direction for immediate relief on the appeal of an individual by the
Honorable Supreme Court or High Courts is known as a Writ.
In simple terms, it is a formal written order or directive issued by a Court, to be obeyed or adhered to by the person or authority to whom it is directed.
The aggrieved individual, whose fundamental rights have been violated, files a Writ Petition before a High Court or the Supreme Court.
A Writ Petition can be filed before the Supreme Court under Article 32 of the Constitution of India and before the High Court under Article 226 / Article 227 of the Constitution of India. It is the final recourse for the affected party to seek a remedy for the injury from the Hon’ble Supreme Court or the High Courts.
While Article 226 of the Constitution empowers the High Courts to issue directions, orders, or writs to any person or authority, including the government, Article 227 of the Constitution confers that every High Court shall have the power to supersede “all courts and tribunals” in their territorial jurisdiction.
Types of Writ:
There are 5 kinds of Writs provided by the Indian Constitution that can be issued by the Courts. They are:
- Habeas Corpus
- Quo Warranto
- A writ of Habeas Corpus: “Habeas Corpus” means “Let us have the body” (which means to physically present a person who has been unlawfully detained). A writ of habeas corpus is issued by the courts to compel an authority or individual to produce a person in court to determine if the person was arrested illegally. If the court finds that the detention lacks legal authority, it can issue an order for the person’s release, along with compensation for the unlawfully detained individual.
- A writ of prohibition: A writ of prohibition is issued to a lower court or a public authority to cease performing functions beyond its legal powers. This can be issued when an authority lacks jurisdiction and proceeds to make decisions. Prohibition is also referred to as a ‘Stay Order.’
- A writ of Mandamus: “Mandamus” is a Latin term that translates to “we command.” A writ of mandamus is a directive to an authority to either perform or refrain from a specific action, particularly when such an action results in injustice to the general public. This type of writ is issued by a higher court to a lower court, tribunal, or public authority, compelling them to fulfil their public duties, which they have been neglecting. A Writ of Mandamus safeguards the rights of citizens by ensuring the fulfilment of civic obligations.
- A writ of Quo Warranto: A writ of quo warranto is issued to prevent a person from holding a government office when they are not entitled or qualified to do so. If such an appointment is found to be illegal, it can be nullified. This writ applies exclusively to public offices and not to private ones. Courts issue the Writ of Quo Warranto against individuals who wrongfully hold office, challenging their authority to do so. Quo Warranto literally means “by what authority,” and it serves as an effective measure to prevent individuals from unlawfully assuming public offices
- A writ of Certiorari: A writ of certiorari is issued to review the decision made by a lower court or tribunal. The Court intervenes through Writ of Certiorari when it is found that a subordinate court has acted without jurisdiction or in excess of jurisdiction, and in a manner that offensively disregards the law or principles of natural justice, thereby resulting in failure to justice. Directions are issued to lower courts or an authority to present before the Court the records on which a decision challenged in the writ petition was based. By examining those records, the Court will determine whether the authority considered the relevant materials before making its decision.
In the case of Indirect Tax Litigations as well, the assessee may feel that the principles of natural justice have been violated or that there has been an encroachment of fundamental rights. To seek relief, the assessee may file a Writ Petition. The Court may admit the writ petition and exercise its “writ jurisdiction” when it perceives that the action or order was issued under the following circumstances:
- When quasi-judicial proceedings are conducted by GST authorities without jurisdiction or when orders are issued without due consideration and in violation of the principles of natural justice.
- When a person is arrested without proper reasons provided for the arrest.
- When a person’s fundamental rights, such as the right to personal liberty, are deprived.
- When the proper legal procedures are not followed by the authority.
- When GST authorities act beyond their jurisdiction or fail to refund money wrongly collected from taxpayers.
- When orders passed by GST authorities are arbitrary or do not comply with statutory requirements.
- When orders of detention and preventive detention under the GST Act are issued without serving the notice containing the ‘grounds’ for the actual detention.
- When the GST authorities unlawfully seize/ confiscate the goods and freeze the bank accounts of a person.
- When a GST officer visits a place of business or any other location without obtaining authorization from the proper officer for the purpose of inspecting, searching, or seizing goods, documents, books, or items subject to confiscation under Section 67(2) of the CGST Act, 2017, and Rule 139 of the CGST Rules, 2017.
- In cases of illegal arrest under Section 69 of the CGST Act, 2017.
- When there is an issuance of an illegal summons to provide evidence or produce documents for investigation under Section 70 of the CGST Act, 2017.
- When frivolous show-cause notices are issued for the recovery of illegal demands under Section 73 / Section 74 of the CGST Act, 2017.
- Where the benefits available under statutory provisions are denied to taxpayers or assesses by the authorities vested with statutory powers.
- When the constitutional validity of the provisions of an Act and Rules can be challenged.
- When the provisions prescribed through notifications, instructions, orders, and circulars have been misinterpreted and deemed illegal or ultra vires
Maintainability of writ petition:
While Article 226 and Article 227 of the Constitution of India grant powers to taxpayers to file Writ Petitions before the High Court, the High Courts are often hesitant to interfere when adequate alternative statutory remedies are available under tax laws. When someone approaches the High Court without availing of these alternative remedies, the High Court ensures that they have a strong case or that there are substantial grounds to invoke its extraordinary jurisdiction.
However, there are numerous decisions both in favour of and against filing writ petitions before the High Court in cases of urgent tax issues, with the aim of providing immediate interim relief to the general public suffering from such issues.
It can be observed that there is no absolute prohibition on entertaining a writ petition under Articles 226 and 227 of the Constitution of India, even when alternative remedies are available. In cases where there is a grave injustice to taxpayers, and statutory remedies are not appropriate, or when the petitioner challenges the validity of notifications or circulars, the High Court may allow the writ petition for consideration.
However, taxpayers should not resort to writ remedies as their first choice unless there is a lack of effective statutory alternatives under tax laws.