ORDER
Tirath S. Thakur, J.
1. 'Every error of law' let alone every conceivable error that a statutory authority may commit does not touch upon or affect its jurisdiction to pass the order. An error would be an error of jurisdiction only if the authority passing the order assumes competence by an erroneous application of a principle of law, or an erroneous assumption of the essential jurisdictional lads. Lack of jurisdiction to pass an order has therefore to be distinguished from an erroneous order. While the former can be assailed in appropriate writ proceedings, the latter ought to be questioned only in accordance with the machinery provided by the statute to do so, in which of the two categories does the error pointed out by the petitioner in the present case fall is the moot question.
2. The petitioner-company has established a medium scale industrial unit at Mysore for the manufacture of computers and computer peripherals. In terms of a notification issued under section 8A of the Karnataka Sales Tax Act, 1957, finished goods manufactured by a new industrial unit are entitled to certain sales tax exemptions depending inter alia upon the extent of investment made by it in 'fixed assets'. For the assessment year ending March, 1994 the assessing authority issued proposition notices, in which it, inter alia, questioned the petitioner's claim for exemption made on the basis of investments in fixed assets, Objections filed by the petitioner to these notices did not find favour with the assessing authority who has by its order dated April 21, 1997 assessed the petitioner to payment of sales tax in the process partially rejecting the petitioner's claim for exemption. Aggrieved the petitioner has filed the present writ petition assailing the validity of assessment orders as also the demand notice issued on the basis thereof.
3. Shri Sarangan, learned senior counsel appearing for the petitioner strenuously argued that the order passed by the assessing authority bringing to tax even that part of the turnover of the petitioner which ought to have been granted exemption under the notifications issued by the State Government was illegal and without jurisdiction. He submitted on the authority of the decisions in Kumar Fuels v. State of Uttar Pradesh [1986] 63 STC 467 (All.); P.P.P. Industries v. Commissioner of Industries ; Commissioner of Sales Tax v. Madhya Bharat Paper Ltd. [1996] 103 STC 142 (MP), and Maurya Timbers v. State of Havana [1997] 104 STC 243 (P&H;), that exemption certificate once granted could not be questioned by the assessing authority nor could the benefit flowing from such certificates be declined on the ground that the assessee was not actually entitled to the same. He urged that refusal of the benefit due to the petitioner as per certificate issued in its favour was no more than a prevarication which the law could hardly countenance. According to him the assessing authority had committed a serious error of jurisdiction in having gone into the question of the petitioner's entitlement to claim exemption despite inc competent authority having issued what he termed a valid certificate to dial effect.
4. Notification dated June 19, 1990 issued by Slate Government in exercise of its power under section 8A of Karnataka Sales Tax Act, 1957, provides that exemption from payment of sales tax shall be available to the existing tiny/SSIs/medium/large scale units registered as such with Director of Industries and Commerce with reference to the investments made by such units after October 1, 1990 for (heir expansion, diversification or modernisation in the manner and subject to the conditions stipulated therein. One of the conditions that the notification stipulates is that the assessee produces a certificate issued by the Director of Industries and Commerce or his nominee, inter alia, certifying that the unit is registered and that the investment in the unit having been made on or after October 1, 1990 is eligible for exemption. What is significant is that notification does not in specific terms make any such certificates binding upon the statutory authority determining the tax liability of the unit. Whether or not the certificate so issued, would prevent the assessing authority from going into its validity, is therefore the crucial question. A some what similar question had arisen before a single Bench of this Court in Associated Cement Company v. State of Karnataka (W.P. Nos. 29825-29829 of 1996 disposed of on November 29, 1996), where upon examination of the certificate procured by the assessee this Court found that the same was not in accordance with the requirements stipulated in the exemption notification and was rightly rejected by the assessing authority. The following passage from the decision speaks for itself :
'In the present case, the certificate issued by the Joint Director of Industries and Commerce does not specify whether the investment is made by the petitioners industry on or after July 12, 1993 and also does not specify about the creation of additional capacity by the assesses-company on account of investment programme. In my view, certificate so issued by the Joint Director of Industries and Commerce Department is not in accordance with the requirement under the exemption notification. In my view, since the certificate so produced does not give vital information that is required, the Sales Tax Officer ban rightly rejected the same while framing the provisional assessments for the months of April, May, June and July, 1996. A dealer claiming exemption must mandatorily comply with all the conditions prescribed.'
5. In the instant case the assessing authority was of the view that the exemption certificate issued in favour of petitioner was palpably erroneous in regard to three items of investment said to have been made by the petitioner namely : (i) dies and patterns; (ii) expenditure on internally capitalised computers; (iii) computers on lease, accounting for a total investment of Rs. 81.60,000. In so far as exemption claimed by the petitioner on account of investment made in the purchase of dies and patterns, the assessing authority found that the said item of machinery had been purchased but not installed in the petitioner's manufacturing unit. Instead the machinery had been given by the petitioner to another unit which was manufacturing certain components for sale to it. Investment made un machinery which was purchased but which was not installed, was according to assessing authority not eligible for exemption. Similarly the claim made on account of computers taken on lease by the petitioner-company was also held to be not an investment in 'fixed assets' of the company to qualify for exemption nor could the internal capitalisation of computers be considered to be so. Suffice it to say that the assessing authority had considered the legal effect of the investments allegedly made and came to the conclusion that the same could not be deemed to be investments in the fixed assets of the company. Significantly the making of such investments as certified by the director in the certificate issued by him was not disputed by the assessing authority. What was examined and held against the petitioner was that the same did not amount to investments in the 'fixed assets' of the company to qualify for exemption. The question then is whether in arriving at the said conclusion the assessing authority committed any error of jurisdiction which could justify interference with the assessment order in exercise of the extraordinary writ jurisdiction of this Court. According to the petitioner the error is one affecting the jurisdiction of the assessing authority. If that be really so it may be possible for the petitioner to maintain this writ petition but not otherwise. Courts interfere with orders passed by statutory authorities, even without the remedies available under the Act being exhausted but they do so only in certain well recognised and exceptional situations. For instance if the orders under challenge are passed in violation of the principles of natural justice, or where the constitutionality of the provision under which the orders are passed is itself under challenge, a writ court would entertain a petition without the petitioner exhausting the alternate remedy. So also the court would not insist upon resort to the appellate remedy where the order under challenge is totally without jurisdiction. In all other situations particularly where public revenues are involved or when rights or liabilities are created and enforced under the statutes made on the subject, resort to the machinery provided by such statutes is the only and indeed the right option for the party aggrieved to exercise. Reference in this regard may be gainfully made to Titaghur Paper Mills Co. Ltd. v. Stale of Orissa : [1983]142ITR663(SC) , where the court has observed thus :
'Under the scheme of the Act, there is a hierarchy of authorities before which the petitioners can get adequate redress against the wrongful acts complained of. The petitioners have the right to prefer an appeal before the prescribed authority under sub-section (1) of section 23 of the Act. If the petitioners are dissatisfied with the decision in the appeal, they can prefer a further appeal to the Tribunal under sub-section (3) of section 23 of the Act, and then ask for a case to be slated upon a question of law for the opinion of the High Court under section 24 of the Act. The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under article 226 of the Constitution. It is now well-recognized that where a fight or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of.'
6. The above view was reiterated even in Assistant Collector of Central Excise. Chandan Nagar, West Bengal v. Dunlop India Ltd. : 1985ECR4(SC) in the following words :
'That it has become necessary, even now, for us to repeat this admonition, is indeed a matter of tragic concern to us. Article 226 is not meant to short circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill-suited to meet the demands of extraordinary situations as, for instance, where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to article 226 of the Constitution. But then the court must have good and sufficient reason to by-pass the alternative remedy provided by statute. Surely matters involving the revenue where statutory remedies are available are not such matters. We can also take Judicial notice of the fact that the vast majority of the petitions under article 226 of the Constitution are filed solely for the purpose of obtaining interim orders and thereafter prolong the proceedings by one device or the other. The practice certainly needs to he strongly discouraged.'
It is not in dispute that the petitioner's case does not involve any challenge to the vires of the statute under which the impugned assessment order has been made. It is also not the case of the petitioner that the order is violative of the audi alteram partem rule. The total case of the petitioner is that the order in question is without jurisdiction hence assailable in the writ jurisdiction of this Court. I do not think so. The test for determining whether an order passed by an authority or Tribunal is within its jurisdiction is to sec whether the statute under which the authority purports to have acted entrusts the power to pass such an order. If the answer be in the affirmative then the very tact that the order actually passed suffers from errors which may render it bad is no reason to hold the order to be without jurisdiction. Nor can the Jurisdiction to pass an order imply jurisdiction to pass only a correct order. An order would remain within the jurisdiction of the authority passing the same, if it is passed in exercise of a power, which the statute confers upon the authority no matter while exercising that power the authority commits errors which may render the order unsustainable on merits. It follows that every error of law much less every conceivable error, which an authority may commit would not affect the jurisdiction of the authority. Ample support is available for the view that I have taken from the decision of the Supreme Court in Titaghur Paper Mills case : [1983]142ITR663(SC) where the court was considering whether the assessment order passed by the assessing authority under the Orissa Sales Tax Act, disallowing certain exemptions could be said to render the order without jurisdiction. Rejecting the argument that the order could be rendered without jurisdiction; the court observed as follows :
'It is not for us to say whether or not the learned Sales Tax Officer was justified in proceeding to best judgment under rule 15 of the Central Sales Tax (Orissa) Rules, 1957, and under sub-section (4) of section 12 of the Orissa Sales Tax Act, 1947, or whether he was justified in treating the gross turnover as returned by the petitioners to be their taxable turnover or whether he was wrong in disallowing the deductions claimed for the assessment year in question. In the very nature of things, these are the questions which the petitioners should raise in appeals preferred before the prescribed appellate authority under subsection (1) of section 23 of the Act.
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No such question arises in a case like the present where the impugned orders of assessment are not challenged on the ground that they are based on a provision which is ultra vires. We are dealing with a case in which the entrustment or power 10 assess is not in dispute, and the authority within the limits of his power is a Tribunal of exclusive jurisdiction. The challenge is only to the regularity of the proceedings before the learned Sales Tax Officer as also his authority to treat the gross turnover returned by the petitioners to be the taxable turnover. Investment of authority to tax involves authority to tax transactions which in 'exercise of his authority the taxing officer regards as taxable, and nut merely authority to tax only those transactions which are, on a true view of the facts and the law, taxable.'
The position in the instant case is no different. Here also the petitioner has not disputed the fad that the assessing authority passing the order was legally competent under the Karnataka Sales Tax Act to make an assessment. What is contended is that while doing so, the assessing authority erroneously disallowed the exemptions that the petitioner was entitled to under law. Assuming for a moment that the order suffers from any such error of law as alleged by the petitioner, yet the same would not affect the jurisdiction of the assessing authority to pass an order, so that it may be unnecessary for the petitioner to agitate the matter in appeal under the Act. If the argument advanced by the petitioner were to be accepted it would mean that all that a party aggrieved of an order is required to show for purposes of involving the writ jurisdiction of this Court is that the order suffers from some error regardless whether it does or does not affect the inherent Jurisdiction of the authority. Such an interpretation I am afraid cannot advance the cause of justice nor can it promote the hierarchical systems of adjudication of matters arising under statute dealing with special subjects including taxes and duties.
7. I have therefore no hesitation in holding that orders passed by the assessing authority cannot be rendered without jurisdiction. Just because the same have denied to the petitioner the exemption claimed by it. It was open to the petitioner to assail the validity of the orders on their merits in appropriate appeals filed in accordance with the provisions of the Act. Reserving liberty for the petitioner to do so, this petition fails and is dismissed in limine.
8. Petition dismissed.