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Gauribidanur Sahakara Sakkare … vs The Government Of Andhra Pradesh … on 23 January, 1987

Karnataka High Court
Gauribidanur Sahakara Sakkare … vs The Government Of Andhra Pradesh … on 23 January, 1987
Equivalent citations: 1988 68 STC 257 Kar
Author: P C Jain
Bench: P C Jain, S Hakeem


JUDGMENT

Prem Chand Jain, C.J.

1. M/s. Gauribidanur Sahakara Sakkare Karkhane Ltd., through its Managing Director, has filed this appeal against the judgment of a learned single Judge of this Court dated 13th February, 1981 by which Writ Petition No. 5037 of 1980 has been dismissed on the ground that the same is not tenable before this Court.

2. In order to appreciate the controversy, certain salient features of the case may be noticed :

The appellant is a co-operative society registered under the Karnataka Co-operative Societies Act and is running a sugar factory in Kolar district, Karnataka State, which is situate right across the border of Andhra Pradesh. The sugarcane growers of Andhra Pradesh approached the appellant with a request to purchase the sugarcane grown by them with a view to alleviate their sufferings and the Board of Management of the appellant-society resolved to purchase the sugarcane grown by them. Pursuant to the said resolution of the Board of Management, the appellant purchased sugarcane during the years 1973-74, 1974-75 and 1975-76. It is averred in the petition that at the time of the purchase of sugarcane from the growers in Andhra Pradesh the purchase of sugarcane was exempted from tax under the general sales tax laws; yet the Assistant Director of Agriculture – third respondent – issued a show cause notice to the appellant demanding the tax at the rate of Rs. 10 per M.T. of sugarcane purchased by it from the growers during 1973 season under the Andhra Pradesh (Regulation of Supply and Purchase) Act, 1961 (hereinafter referred to as “the Act”). The appellant made efforts with the authorities to desist from making the demand of tax, but failed in their effort, with the result that Writ Petition No. 516 of 1975 was filed before the High Court of Judicature of Andhra Pradesh questioning amongst other things the legality of the demand made by the third respondent. The High Court of Andhra Pradesh, by its judgment dated 26th September, 1977, allowed the writ petition filed by the appellant, quashed the notices and directed the third respondent to determine, after giving due notice to the appellant to place before him all the necessary material and evidence as to the purchases, i.e., what quantity if any has been purchased in the State of Andhra Pradesh. It was further observed that once the third respondent is satisfied that certain quantities of sugarcane have been purchased in the State of Andhra Pradesh during the period under consideration the third respondent will be at liberty to exercise his powers under the Act and the Rules made thereunder by levying and collecting the tax at the rate of Rs. 10 per M.T. A copy of the judgment of the Andhra Pradesh High Court is attached as annexure A.

Pursuant to the said direction issued by the Andhra Pradesh High Court, the third respondent called upon the appellant to furnish all the particulars with regard to the cane purchased from the sugarcane growers of Andhra Pradesh and to appear before him and to submit what it had to submit in the matter. In response to the said notice, the appellant appeared before the third respondent and filed a detailed statement regarding the purchase of cane, a copy of which is annexure B. After examining the documents and the agreement and on hearing the appellant, the third respondent held that the the purchase of sugarcane took place in Andhra Pradesh State for the following reasons :

“1. the petitioners paid to the cane growers who supplied cane to their factory at Rs. 145 per M.T. while the harvesting charges, charges of loading and lorry freight were borne by them;

2. the petitioners issued way bills to the cane growers in Andhra Pradesh State as ‘consignor’. The way bills were issued by the Cane Development Officer of the petitioners’ factory from the office at Hindupur;

3. the petitioners have not paid any purchase tax in Karnataka State on the plea that they have not purchased the cane in Karnataka. Therefore the place of purchase of cane is only Andhra Pradesh and no Karnataka.”

Consequently, the appellant was held liable to pay the tax under the Act. A copy of the order of the third respondent is attached as annexure C. Feeling aggrieved from the said order of the third respondent, the appellant preferred an appeal before the Cane Commissioner and the Director of Sugarcane, Government of Andhra Pradesh, under section 21(a) read with rule 45(c)(i) of the Rules. That appeal was dismissed vide order dated 29th April, 1978, a copy of which is annexure D. Still dissatisfied, a revision petition was preferred by the appellant under section 21(a)(3) of the Act before the Secretary to Government of Andhra Pradesh, Department of Agriculture, Hyderabed (first respondent). That revision petition was dismissed by the first respondent finding the same without any merit. Aggrieved from the orders of the authorities, the appellant filed Writ Petition No. 5037 of 1980 in this Court praying for the quashing of the orders, viz., :

(i) Order No. RCO.380/1977 dated 17th February, 1978 issued by the third respondent (annexure C);

(ii) Order No. (F2)1558/1975 dated 29th April, 1978 issued by the second respondent (annexure D); and

(iii) Order No. 3172/IA and S/78-4 dated 9th November, 1978 issued by the first respondent (annexure E).

At the time of hearing, the learned counsel appearing for the respondents raised a preliminary objection to the effect that since the prayer is to quash the orders passed by the authorities under the jurisdiction of the Andhra Pradesh High Court, by issuing a writ of certiorari, this Court could not get jurisdiction as it has no supervisory powers over the authorities within the jurisdiction of the Andhra Pradesh High Court. This preliminary objection of the learned counsel was controverted by the learned counsel for the appellant by contending that the sale had taken place within the territories of Karnataka, that part of the cause of action had arisen in Karnataka State and that in view of the provisions of article 226(2) of the Constitution which reads as under :

“The power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by the High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories.”

this Court has jurisdiction to entertain the writ petition and to dispose it of on merits.

On consideration of the entire matter, the learned single Judge came to the conclusion that no part of the cause of action has arisen within the limits of Karnataka State and as the orders of the authorities which are within the jurisdiction of Andhra Pradesh have been challenged in the writ petition, the writ petition before this Court is not tenable. Consequently, the writ petition was dismissed.

Hence, as earlier observed, the present appeal.

3. It was vehemently contended by Sri Shantharaju, learned counsel appearing for the appellant, that part of cause of action has arisen in Karnataka and that in view of the provisions of article 226(2) this Court has jurisdiction to entertain the petition. In order to substantiate his contention that part of cause of action has arisen in Karnataka, the learned counsel submitted that on the basis of the agreement of cane was required to be supplied at the factory premises, that the cane was required to be weighed at the factory premises and that the price of the cane was to be paid at the factory premises. According to the learned counsel, the sale is not complete until and unless the weight of the material is ascertained and the price paid and if these two acts are done within the jurisdiction of this Court than it would be taken that part of cause of action has arisen within the State of Karnataka. The learned counsel emphasized that the sale transaction has to be taken as a whole and it will not be complete unless and until the payment of price is made by the factory owner and that price having been paid in the factory premises the cause of action in part shall be deemed to have arisen within the State of Karnataka. In support of his contention, the learned counsel placed reliance on the judgments in Shiv Shanker Lal Gupta v. Commissioner of Income-tax, Bombay AIR 1968 Delhi 295, Gopal Vinayak Godse v. Union of India , Dr. P. S. Rao v. Union Government (1972) 2 Kar LJ 302, State of Rajasthan v. Swaika Properties and Damomal Kausomal Raisinghani v. Union of India . The learned counsel also placed reliance on para 16.249 at page 1345 of Constitutional Law of India by H. M. Seervai (Vol. III, Third Edn.) which reads :

“The newly added sub-article (1A) to article 226 introduces an additional basis of jurisdiction, namely, the whole or part of a cause of action arising within the jurisdiction of a court. This is clear from the use of the words ‘the power conferred by Clause 1. …………. may also be exercised …….’ Therefore jurisdiction to issue writs can be exercised (i) by a court within whose jurisdiction a person or authority (including in appropriate cases any Government) resides or is located, and (ii) also by a court within whose jurisdiction the cause of action wholly or in part arises, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories.”

4. On the other hand it was submitted by Sri Seshagiri Rao, learned counsel appearing for the respondents, that article 226(2) has no application to the facts of the case in hand and that it is under article 226(1) read with article 227 that the question of jurisdiction has to be determined. It was also contended by the learned counsel that the appellant has no case even under article 226(2) as on consideration of the entire material on the record that was placed by the appellant, the appropriate authority has come to a firm finding that the sale took place within the area under the jurisdiction of the Andhra Pradesh High Court and that such a finding of fact is not liable to be disturbed in exercise of extraordinary jurisdiction of this Court and in view of this finding coupled with the fact that the authorities within the jurisdiction of Andhra Pradesh High Court have exercised jurisdiction no case for interference has been made out by the appellant. What was sought to be emphasized by Sri Seshagiri Rao was that no cause of action at all has arisen within the State of Karnataka and the learned counsel for the appellant has tried to build his case on mere suppositions and conjectures.

5. As is evident from the contention of Sri Shantharaju, learned counsel for the appellant, the whole case of his is based on the assumption that as part of cause of action has arisen in the territory over which this Court has jurisdiction, a writ is maintainable by the appellant in this Court. Judicial decisions referred to above have also been cited to support the said contention. Thus on the contention of Sri Shantharaju what has to be found out is whether cause of action in part has arisen within the State of Karnataka. In our considered view, the answer to the proposition has to go against the appellant.

6. In this case, on going through all the facts and material available on the file, we find absolutely no difficulty in arriving at a conclusion that no cause of action has arisen within the territories over which this Court has jurisdiction. As is evident from the facts to which reference has been made earlier also, a demand notice was issued by the third respondent calling upon the appellant to remit a sum of Rs. 19,285.30 stating that that amount represents the purchase tax at the rate of Rs. 10 per metric ton on 1928-53 metric tons of sugarcane. The appellant challenged the legality of that notice before the Andhra Pradesh High Court by filing W.P. No. 516 of 1975 and the main grievance agitated before the Bench was that the impugned demand notices had been issued without proper enquiry as to where the purchases had taken place and without offering any opportunity to the appellant to adduce evidence as to where it has made the purchase of sugarcane. Finding that the liability to pay the tax was not satisfactorily determined by the third respondent, the issuance of the notice was found arbitrary as it had been done without giving adequate opportunity to the appellant to show that the purchases were not made in the State of Andhra Pradesh. As a result of this finding the writ petition was allowed and the case was remanded back to the third respondent for deciding the matter in accordance with law.

7. After the decision of the writ by the Andhra Pradesh High Court, the appellant filed his statement of objections before the third respondent who after affording full opportunity of hearing to the appellant, came to a firm conclusion that the purchases of sugarcane were made by the appellant only in the State of Andhra Pradesh. The appellant challenged the order of the third respondent in appeal, but failed. His revision before the first respondent also failed. The finding of fact which was arrived at by the third respondent on consideration of the entire material has been affirmed by the appellate as well as the revisional authorities. In the wake of this finding, in our view it is too late in the day for the appellant to challenge the legality of the impugned orders on the ground that the said authorities had no jurisdiction to issue demand notices and take proceedings against the appellant. At this stage, it would be pertinent to observe that the Andhra Pradesh High Court in para 6 of its judgment had made it clear that once the third respondent is satisfied that certain quantities of sugarcane had been purchased in the State of Andhra Pradesh during the period under consideration, the third respondent will be at liberty to exercise his powers under the Act and the Rules thereunder by levying and collecting the tax at the rate of Rs. 10 per metric ton.

8. The matter can be viewed from another angle. The demand notice initially was issued by the third respondent. In case the appellant felt that the third respondent had no jurisdiction to issue the demand notice as cause of action in part had arisen in the territory which is within the jurisdiction of this Court, then the appellant would straightaway have filed a petition here and not in the Andhra Pradesh High Court. For the reasons best known to him, the appellant submitted to the jurisdiction of the Andhra Pradesh High Court, obtained a judgment in his favour and thereafter again submitted to the jurisdiction of the third respondent and the other two respondents. In the wake of these glaring facts, the appellant cannot be permitted to invoke the extraordinary jurisdiction of this Court for quashing the impugned orders on the plea that they had no jurisdiction to deal with the matter. It may be emphasized that it is not the case of the appellant that the entire cause of action has arisen in the territory over which this Court has jurisdiction. That being so, the appellant having chosen his forum and having submitted to the jurisdiction of the authorities in the State of Andhra Pradesh cannot legally file this petition in this Court and challenge the legality of those orders. The judgments cited before us by Sri Shantharaju have no applicability to the facts of the case in hand and are clearly distinguishable. In this view of the matter, we hold that for the reasons, viz., (1) that no cause of action at all has arisen in the territory over which this Court has jurisdiction; and (2) that the appellant chose his forum and submitted to the jurisdiction of the authorities in the State of Andhra Pradesh, the writ petition filed by the appellant is not legally maintainable in this Court. The view taken by the learned single Judge is unexceptionable and does not call for any interference.

9. For the reasons recorded above, the appeal fails and is dismissed, but without any order as to costs.

10. Appeal dismissed.

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