M/s Godrej Sara Lee Ltd. vs The Excise and Taxation Officer-cum-Assessing Authority & Ors.
Background
Godrej Sara Lee makes household insecticides such as "Good Knight" and "Hit" mosquito mats and coils. For the years 2003-04 and 2004-05 the Haryana Assessing Authority taxed these products at the 4% "insecticide" rate, expressly because the Haryana Tax Tribunal had already ruled in 2001 that mosquito repellents containing Allethrin are insecticides. Years later a Revisional Authority reopened both completed assessments on its own motion under Section 34 of the Haryana VAT Act and demanded tax at 10%, treating the goods as unscheduled general items. When the company challenged this in the Punjab and Haryana High Court, the High Court refused to hear the writ petition, saying the company should have filed a statutory appeal instead.
Decision Breakdown
The Supreme Court held that the High Court was wrong to throw out the writ petition at the threshold. It explained that the existence of an alternative remedy never makes a writ petition "not maintainable"; it only goes to whether the High Court should choose to "entertain" it, and that is a rule of discretion, not a rule of law. Where the challenge is a pure question of law (here, whether the Revisional Authority had any jurisdiction at all) the High Court ought to decide it rather than send the taxpayer through the appeal ladder. Rather than remit the matter after fourteen years, the Court decided the jurisdiction point itself: the Tribunal's 2001 order on the same classification question had become final and bound the entire State machinery, including the Revisional Authority, and the first proviso to Section 34 expressly bars revision on an issue already settled by an appellate authority. Since the Assessing Authority had simply followed a binding Tribunal ruling, its orders suffered from no "illegality or impropriety" that could justify revision; it was the revisional orders that were patently illegal. Both revisional orders of 2 March 2009 were quashed and the appeal allowed.
Lesson Learnt
A government officer cannot reopen a finished tax assessment merely because they disagree with a higher tribunal's binding ruling: judicial discipline requires lower authorities to follow superior decisions until they are set aside. Separately, a High Court cannot mechanically dismiss a writ petition just because an appeal route exists; where the complaint is that an authority acted wholly without jurisdiction, the writ court should look at the merits.