High Court Is Bound To Entertain A Writ When Vires Of The Section Is Challenged

The appellant filed a writ petition before the High court, Judicature at Madras for challenging the validity of Section 40(a)(iib) of the Income Tax Act. The appellant contented that the amount which is deductable while computing the income tax, chargeable in terms of the income tax is not allowed as deductions to him. He further contented that the provision of Section 40(a)(ii) is discriminatory and violative of Article 14 of the Indian Constitution and there are many Central Government undertakings which have not been subjected to any such computation of taxes and are enjoying the exemptions.

The assessing officer for the assessment year 2017-2018 issued a show cause stating that the tax applicable or levied upon him is an exclusive tax by the state government and the same is covered under the Section 40(a)(iib) of the income tax Act and therefore, not allowed for the deductions and thereon, the assessing officer finalized the assessment and passed the assesment order.

The High court set aside the assessment order on the ground of violation of principal of natural justice and the matter is still pending before the assessing officer. Thereafter, the appellant filed an writ petition before the High Court of the Madras challenging the vires of Section 40(a)(iib) being ultra vires to article 14,15 and 265 of the Indian Constitution. The High Court dismissed the writ petition without deciding the validity observing that it need not be entertained as the matter is still pending before the assessing authority.

The appellant not being satisfied and being aggrieved filed the present appeal before the Supreme Court on the ground that the appellant is of the opinion that the order passed by the High Court is not sustainable at all. The Supreme Court allowed the appeal and held that when a vires of any Section is challenged and alone the High Court can exercise power under Article 226 and ought to decide the matter, irrespective of the fact that whether the matter is still pending before the concerned authority and the matter is required to return to High Court to decide the Writ petition and to decide the question in respect to the provisions challenged. The Supreme Court quashed and set aside the judgment passed by the High Court and further stated that the court has not expressed any opinion on merits with respect to legality and validity of the Section in question.