Orissa HC Dismisses Writ Plea, Cites Petitioner's Non-Cooperation and Availability of Statutory Appeal

Cuttack, Odisha – 06.08.2025 — The Orissa High Court, in a significant ruling on the scope of writ jurisdiction, has dismissed a petition challenging a tax assessment order, emphasizing that the extraordinary powers under Article 226 of the Constitution cannot be invoked by a litigant who has consistently failed to cooperate with assessment proceedings and has an efficacious alternative remedy available under the statute.

A Division Bench comprising Chief Justice Harish Tandon and Justice Murahari Sri Raman delivered the judgment, declining to interfere with an assessment order that raised a demand of Rs. 1.23 crore against Shri Samir Kundu, proprietor of Shri Krishna Enterprises.

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Background of the Case

The case originated from an income tax assessment for the Assessment Year 2020-21. The National Faceless Assessment Centre initiated proceedings against Samir Kundu based on information that he had availed Input Tax Credit (ITC) through bogus purchase transactions with several entities, including M/s. Utsav Enterprise, which were found to be fictitious or non-existent.

The Income Tax Officer, Ward-3(2), Purulia, proceeded to frame a best judgment assessment under Section 147 read with Section 144 of the Income Tax Act, 1961, after Kundu failed to respond to a series of notices issued over a period of twelve months, from March 2024 to March 2025. The final assessment order, dated March 26, 2025, raised a demand of ₹1,23,78,764. Aggrieved, Kundu filed a writ petition before the High Court, seeking to quash the order.

Arguments Presented

Petitioner's Stance: Senior Advocate Jagabandhu Sahoo, representing the petitioner, argued that the assessment order was passed in gross violation of the principles of natural justice. He contended that the petitioner was unable to participate in the proceedings due to personal hardships, including a bereavement in the family and prolonged health issues. Sahoo submitted that had the Assessing Officer granted a reasonable adjournment, the petitioner could have furnished documents like e-waybills and tax invoices to prove the genuineness of the transactions. He also raised a challenge to the jurisdiction of the Income Tax Officer in Purulia, West Bengal, to assess a dealer based in Odisha.

Revenue's Counter-Arguments: Subash Chandra Mohanty, Senior Standing Counsel for the Income Tax Department, strongly opposed the petition, arguing that it was not maintainable due to the availability of a statutory appellate remedy. He pointed out that the department had provided numerous opportunities to the petitioner over a year, but the petitioner chose not to respond until the proceedings were on the verge of becoming time-barred on March 31, 2025. Mohanty argued that the petitioner's last-minute request for a month-long adjournment was a deliberate tactic to frustrate the assessment process.

Court's Detailed Analysis and Findings

The High Court meticulously examined the timeline of the proceedings and the petitioner's conduct. Justice Murahari Sri Raman, writing for the Bench, noted several key points:

• Failure to Cooperate: The Court observed that despite being issued at least nine notices and communications between March 2024 and March 2025, the petitioner failed to respond. The Court noted, " The sequence of events... would go to show that the assessment proceeding has been protracted for around 12 months due to ‘non-response’ of the petitioner. "

• Personal Hardships Not Substantiated: While acknowledging the petitioner's claims of personal hardship, the court scrutinized the medical documents provided. It found that the petitioner was certified as "fit to resume normal duties" from February 7, 2024, well before most of the notices were issued. The bereavement, the court noted, had occurred much earlier, around 2021.

• No Violation of Natural Justice: The Bench concluded that the Assessing Officer had not acted in undue haste. Given the impending limitation deadline of March 31, 2025, and the petitioner's repeated non-compliance, the rejection of the final adjournment request was justified. The Court stated, " this Court does not perceive any undue haste being shown by the authority concerned... so as to warrant indulgence. "

• Jurisdictional Challenge Waived: On the question of jurisdiction, the Court held that the petitioner had effectively waived this right by not raising it at the earliest opportunity. Instead, in his reply dated March 19, 2025, the petitioner surrendered to the jurisdiction of the Purulia officer and requested time, thereby acquiescing to the authority.

• Alternative Remedy: Citing a catena of judgments, including Commissioner of Income Tax Vrs. Chhabil Dass Agrawal , the Court reiterated the established principle that writ jurisdiction should not be exercised when an efficacious alternative remedy is available, except in exceptional circumstances like a breach of natural justice or an excess of jurisdiction, neither of which was found in this case. The Court held that disputed questions of fact regarding the bogus transactions were best adjudicated by the appellate authority.

Final Decision

Concluding that the petition was devoid of merit, the High Court dismissed it. The Court made it clear that its findings were limited to the question of entertaining the writ petition and would not prejudice the petitioner's right to pursue a statutory appeal, where the merits of the case, including the jurisdictional issue, could be fully examined. The judgment serves as a stern reminder that litigants cannot expect relief from a High Court's writ jurisdiction after consciously avoiding statutory proceedings.