JUDGMENT
V.C. Daga, J.
Page 0681
1. This application is under Section 130A of the Customs Act, 1962 (“Act” for short) seeking direction against the Tribunal to state the case and raise and refer the question of law framed in para-4 of the said application arising from paras-6 to 13 of the impugned order dated 19th August, 1999 passed by the Customs Excise and Gold (Control) appellate Tribunal, West Regional Bench at Mumbai (“Tribunal” for short).
2. At the commencement of the hearing of this application, learned Counsel for the respondent assessee raised two preliminary objections. Firstly; relating to the tettitorial jurisdiction of this Court to entertain and try the application in question. Secondly, relating to the tenability of this application under Section 130A of the Act. It has, therefore, become necessary to first decide the preliminary objections before proceeding to hear the application on merits.
FACTS:
3. The respondent-importer pursuant to the show cause notice issued under Section 28(1) of the Customs Act, 1962 by the Commissioner of Customs No. 1, Trichy-1 dated 20th January, 1998, was called upon to show cause as to why he should not be called up on to pay Rs. 1,85,14,512/-for alleged diversion of duty exempt material; imported under two value based advanced licence schemes framed under Notification Nos.159/90 and 203/92 dated 30th March, 1990 and 19th March, 1992 respectively, to produce the goods which were subsequently cleared in Domestic Tariff Area (DTA) and, later on, the requirements of the notifications were sought to be fulfilled to complete export obligations by manufacturing goods from duty paid imported material that too after having taken input credit on such goods in violation of the notifications referred to hereinabove.
4. The respondent-noticee replied the aforesaid notice denying all the allegations made in the show cause notice and tried to justify their action or stand taken by them in their reply.
5. The statement of various persons representing the respondent-company were recorded and after hearing the parties, the Commissioner of Customs, Trichy, vide his order dated 25th January, 1999 refused to accept the Page 0682 contentions of the respondent-noticee/ assessee that there was no violation of the conditions prescribed in the Notification No. 203/92 dated 9th march, 1992 relating to the utilisation of modvat credit used for the export products.
6. The show cause notice was, consequently, culminated in the order-in-original dated 25th January, 1999 passed by the Commissioner of Customs, Trichy; who was pleased to confirm the demand of duty in the sum of Rs. 1,85,14,512/-as detailed in the show cause notice. An order of confiscation of 2,400 MTS of potassium chloride, although the same were not available for confiscation under Section 111 of the Act, came to be passed. However, option was given to the party to redeem the same on payment of fine of Rs. 25 lakh under Section 125 of the Act. He was also pleased to pass consequential orders against the respondent-noticee.
7. Being aggrieved by the aforesaid order, appeal came to be preferred before the Tribunal. The Tribunal by its order dated 19th August, 1999 allowed the said appeal.
8. Being aggrieved by the aforesaid order dated 19th August, 1999 passed in the appeal by the Tribunal, the petitioner herein approached this Court by moving this application raising therein certain substantial questions of law with a prayer to call upon the Tribunal to state, raise and refer the question of law for the opinion of this Court.
PRELIMINARY OBJECTIONS:
9. Mr. Prakash Shah, learned Counsel appearing for the respondents while raising preliminary objection to the maintainability of the said application before this Court for want of territorial jurisdiction contends that the High Court in whose jurisdiction original adjudicating authority is located (in this case, Trichy) will have jurisdiction to hear and decide the application under reference since the authority-in-original has decided the matter treating itself bound by the law laid down by the Tribunal and/or High Court under whose jurisdiction the said authority-in-original functions. In his submission, the petitioner was bound by the law as applicable and prevailing in the State of Tamil Nadu, as such the application for reference ought to have been made to the High Court of Madras and not to this Court. He, thus, submits that for want of territorial jurisdiction with this Court to hear this application, it is liable to be rejected with liberty to approach appropriate High Court for seeking appropriate direction or relief, or in the alternative, application is liable to be returned for presentation to a proper High Court. Mr. Shah placed reliance on the judgment of the Delhi High Court in the case of Suraj Woolen Mills v. Collector of Custom Bombay reported in 2000 (123) ELT 471 in support of his submission.
10. Mr. Shah also placed reliance on the short judgment of the Delhi High Court in the case of Commissioner of C. Ex., Delhi-III v. Enkay HWS India Limited, wherein it was held that reference in terms of Section 25F of the Central Excise Act would lie only to the High Court within whose territorial jurisdiction original adjudicating authority functions.
11. The contention on the above canvas is that site of commissionerate or the appellate authority must determine the jurisdiction of the High Court in Page 0683 view of the earlier decision of the Delhi High Court in Seth Banarsi Dass Gupta v. Commissioner of Income Tax (Central) which was subsequently relied upon in the case of Suresh Desai and Associates v. Commissioner of Income Tax . Similar view was expressed by the Delhi High Court in Central Excise Act Case No. 7 of 2000 disposed of on 30th October, 2000, taking note of the decision of the Apex Court in Stridewell Leather (P) Ltd. v. Bhankerpur Simbhaol Beverages (P) Ltd. which was relied upon.
12. Per contra, Mr. Jetly, learned Counsel appearing for the applicant-Revenue submitted that the above application has been filed under Section 130A of the Customs Act which enables the Commissioner of Customs or the other party to apply to the High Court with a prayer to direct the Tribunal to refer to the High Court any question of law arising from the order of the Tribunal. He submits that Clause (b) of Section 131C defines “High Court” means in relation to any State, the High Court for that State . He submits that the impugned order having been passed by the Tribunal at Mumbai, application under Section 130A read with Sections 130D and 131C will lie before this Court. He vehemently tried to canvass contrary view contending that the order passed by the Commissioner of Customs, Trichy got merged in the appellate order of the Tribunal at Mumbai which is outside the territorial jurisdiction of the Madras High Court. The Madras High Court cannot command the appellate Tribunal at Mumbai directing it to state the case and refer question of law for its opinion. Reliance is placed on the judgment of the Patna High Court in the case of C.I.T. v. Justice S.B. Sinha .
13. Mr. Jetly also relied upon the judgment of the Andhra Pradesh High Court in the case of C.I.T. v. Parke Davis (India) Ltd. ; wherein reference application was dismissed by the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT). Facts, relevant subsequent to the disposal of the appeal are that, the files of the assessee (respondent therein) were transferred to Hyderabad. The reference application having been rejected by the Mumbai Bench of ITAT, application under Section 256(2) of the Income Tax Act was filed before the Andhra Pradesh High Court. The Andhra Pradesh High Court while disposing of the said application was pleased to hold that the said application ought to have been filed before the High Court of Bombay only and that the Andhra Pradesh High Court had no jurisdiction to entertain the application to direct reference.
14. Mr. Jetly also placed reliance on the judgment of the Calcutta High Court in the case of C.I.T. v. A.B.C. India Ltd. ; wherein the assessees assessments were transferred from Gauhati to Calcutta by order dated 28th July 1997. A reference application was made to the Appellate Tribunal at Gauhati which came to be rejected. Consequently, application under Section 256(2) of the Income Tax Act was made to the Calcutta High Court, Page 0684 which came to be allowed. On an application for recall of the order, Calcutta High Court was pleased to set aside its own order and application seeking direction to make reference came to be rejected on the sole ground that the Calcutta High Court lacked territorial jurisdiction to direct the Tribunal to make reference.
15. Mr. Jetly also placed reliance on another judgment of the Calcutta High Court in the case of C.I.T. v. J.L. Morrison (India) Limited ; wherein the High Court was pleased to hold that the Calcutta High Court could not assume jurisdiction in respect of the matter reaching finality before the appellate tribunal at Mumbai.
16. Mr. Jetly also placed reliance on the judgment of the Apex Court in the case of L. Chandra Kumar v. Union of India and laid emphasis on paragraph 77 thereof; wherein the Apex Court was pleased to observe that power vests in the High Courts to exercise judicial superintendence over the decisions of all Courts and Tribunals within their respective jurisdictions is a part of the basic structure of the Constitution.
17. Mr. Jetly also relied upon the judgment of the Apex Court in the case of Collector of Customs v. East India Commercial Co. Ltd. to contend that once the order of the original authority is taken in appeal to the appellate authority, located beyond the territorial jurisdiction of its High Court, then it is the order of the latter authority that operates after the appeal is disposed of. It was thus held that the High Court cannot issue a writ against the appellate authority who is not within its territorial jurisdiction. It is further held that it may be open to it to issue a writ to the original authority which may have been within its territorial jurisdiction but once the appeal is disposed, though it may be that the appellate tribunal or authority confirmed the order of the original authority and dismissed the appeal.
18. Mr. Jetly also placed reliance on some of the judgments of this Court in the case of Kishore Rungta v. Punjab National Bank ; Varun Shipping Co. Ltd. v. Deputy Collector of Customs ; G.P. Dave & Sons (Shipping) v. Collector of Customs and C. Ex., Ahmedabad ; J.M. Baxi & Co. v. Dy. Collector of Customs ; Kantilal Parekh v. Union of India ; and Page 0685 South India Corporation (Agencies) Ltd. v. Addl. Collector of Customs, Ahmedabad (2003) 160 ELT 145 to reiterate his submissions.
19. Another preliminary objection raised by Mr. Shah, learned Counsel for the respondent is that the application filed by the revenue is not maintainable before this Court as the issues involved herein relate to the interpretation of the Clauses in an exemption notification which ultimately relates to the value of the goods for the purpose of assessment and, therefore, as per Section 130E of the Customs Act, the appeal would be maintainable before the Apex Court.
20. Relying upon a decision of the Apex Court in the case of Navin Chemicals Mfg. & Trading Co. Ltd. v. Collector of Customs and two decisions of this Court in the case of Commissioner of Customs & C. Ex. v. Primella Sanitary Products (P) Ltd. and Union of India v. Auto Ignation Ltd. , Mr. Shah submitted that the application filed before this Court is not maintainable.
21. Mr. Jetly, learned Counsel appearing on behalf of the appellant tried to distinguish the aforesaid judgments and relying upon the decision of the Apex Court in the case of ITC v. Collector of Central Excise reported in 94 ELT 456 (SC) and the decision of the Apex Court in the case of Commissioner of Central Excise v. Amar Bitumen & Allies Products Pvt. Ltd. reported in 202 ELT (SC) submitted that the application filed by the revenue is maintainable before this Court.
THE ISSUES :
22. Both the learned Counsel appearing for the rival parties, representing rival views based on deep research made by them, very strongly and effectively canvassed their rival views giving rise to the following issue:
(A) “Whether this Court has territorial jurisdiction to entertain, try and decide the application under Section 130A of the Customs Act and to call upon the Tribunal to state, raise and refer the questions of law raised in the subject application?
(B) Whether the application filed by the Revenue is not maintainable under Section 130A of the Act before this Court, as the issues involved therein relate to the value of the goods for the purpose of assessment and therefore as per Section 130E of the Act appeal would be maintainable before the Apex Court?
CONSIDERATION:
Issue- A:
23. Having heard the strongly canvassed rival views giving rise to the aforesaid issue, needless to mention that both views have their strong friends to support; making the job of this Court little difficult to decide. It compelled this Court to make its own research to answer the question raised.
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24. The facts are not in dispute. proposition of law canvassed is debatable, especially, in absence of any authoritative decision of the Apex Court.
25. Jurisdiction may be defined to be the power or authority of a court to hear and determine a cause, to adjudicate and exercise any judicial power in relation to it. In other words, by jurisdiction is meant the authority which a court has to decide matters that are litigated before it or to take cognizance of the matters presented in a formal way for its decisions. (See, Official Trustee, W.B. v. Sachindra Nath ) Thus, jurisdiction of a court means the extent of the authority of a court to administer justice prescribed with reference to the subject matter, pecuniary value and local limits, as held by the Apex Court in Raja Soap Factory v. Santharaj . Jurisdiction of a court may be classified into various categories; such as (i) territorial jurisdiction; (ii) pecuniary jurisdiction; (iii) jurisdiction as to subject matter, etc. Every Court has its own local or territorial limits beyond which it cannot exercise its jurisdiction.
26. The question of territorial jurisdiction of this Court needs to be decided on the provisions of the Customs Act. The interpretation of Clause (b) of Section 131C of the Act falling under Chapter V which defines “High Court” to mean:
(i) in relation to any State, the High Court for that State;
(ii) in relation to a Union Territory to which the jurisdiction of the High Court of a State has been extended by law, that High Court;
(iii) in relation to the Union Territories of Dadra and Nagar Haveli and Daman and Diu, the High Court at Bombay;
(iv) in relation to any other Union Territory, the Highest Court of civil appeal for that territory other than the Supreme Court of India
27. The above clause was a subject-matter of legal debate before the Delhi High Court in the case of Suraj Woolen Mills case (supra), wherein it was noticed that there was no provision either in the Act or Rules or Orders specifying the High Court of which State should hear a petition under any of the sub-sections of Section 130 of the Act in the event of an occasion arising for the purpose. It was also noticed in the said judgment that the appellate Tribunal is one for the entire country with its Benches in different States, but the adjudicating authorities in original with their appellate forums are spread and scattered throughout the country falling within the territorial jurisdiction of different High Courts.
28. The Delhi High Court was pleased to notice that jurisdiction of different officers under the Customs Act is determined by reference to the nature of powers and functions conferred upon them and not necessarily by residence but by reference to the location of the office of the adjudicating authority in the particular case. The appellate jurisdiction is determined again not by the location of the assessees business or residence but by location of case. For example, though an assessee may be in West Bengal, but if he imports the goods at Mumbai and order of adjudication is passed by an officer below Page 0687 the Collector of Customs, Mumbai, then the appeal would lie before the Collector (Appeals) at the office of the adjudicating authority in the particular Mumbai and second appeal filed would be heard by west Regional Bench of the Tribunal at Mumbai though for the sake of convenience the President may direct the matter to be heard by the East Regional Bench.
29. The Delhi High Court, relying upon its earlier judgment in the case of Seth Banarsi Dass Gupta (supra) in principle, approved the decision of the High Court of Madras in the case of C.I.T. v. S. Sivaramkrishna Iyer (1968) 70 ITR 860 except for a marginal dissent. Madras High Court had held that the reference could be made to the High Court which had jurisdiction over the place at which the assessee carried on business, profession or vocation or resided.
30. The Delhi High Court also held that the basis for determination of jurisdiction should be the location of the office of the assessing authority. No importance was attached to the doctrine of merger, though it was pressed into service by the learned Counsel appearing for the petitioner in that case.
31. The Delhi High Court in the above judgment of Suraj Woolen Mills (supra), ultimately, held that the petitioner may have its factory establishment at Panipat in the State of Hariyana, but that was held irrelevant. The adjudicating authority having been at Mumbai, it was held that the Tribunal was bound by the law laid down under the provisions of the Act or any other law as interpreted by the High Court of Bombay. The petitioner was held bound by the law as applicable and as prevailing in the State of Maharashtra whereat the goods were to be imported whereat the proceedings under the Act were concluded. The assessee strongly relied upon the said judgment of Suraj Woolen Mills case.
32. The rival view canvassed by the Revenue is essentially based on the doctrine of merger. In all the cases cited by Mr. Jetly, learned Counsel for the applicant-Revenue, the common thread running through all the judgments is that, the orders passed by the authorities in original and first appellate authorities having merged into the appellate order passed by the appellate tribunal; as such location of the Tribunal was considered as basis to decide territorial jurisdiction of the High Court.
33. On the above canvass of the views, in our considered view, applicability of the doctrine of merger would be one of the important parameters to decide the territorial jurisdiction of the High Court. Sometimes location of the authority deciding lis subordinate to the High Court would also be relevant to decide territorial jurisdiction of the High Court.
34. In absence of any authoritative pronouncement of the Apex Court on the issue involved in this application, we propose to take into account the question of jurisdiction dealt with by the Supreme Court while interpreting Article 226 of the Constitution prior and subsequent to its amendment.
35. Article 226 as it originally stood had two-fold limitations on the jurisdiction of High Courts with regard to their territorial jurisdiction. Firstly, the power could be exercised “throughout the territories in relation to which it exercises jurisdiction”, that is to say, the writs issued by the court cannot run beyond the territories subject to its jurisdiction. Secondly, the person or authority to Page 0688 whom the High Court is empowered to issue such writs must be “within those territories” which clearly implied that they must be amenable to its jurisdiction either by residence or location within those territories. (See Election Commission v. Venkata Rao ).
36. In Venkata Rao v. Election Commission , while reversing the decision of the Madras High Court, the Supreme Court held that Ryots of Garabandho AIR 1943 PC 164 was no authority for the proposition that the location of the subject matter or the cause of action or the parties within the territorial limits of the High Courts jurisdiction was sufficient to vest the High Court with the substance of jurisdiction to issue prerogative writs to an authority even though such authority was located outside jurisdiction. Speaking for the Court, Patanjali Sastri, C.J. (as he then was) made the following instructive and oft quoted observations:
The makers of the Constitution, having decided to provide for certain basic safeguards for the people in the new set up, which they called fundamental rights, evidently though it necessary to provide also a quick and inexpensive remedy for the enforcement of such rights and, finding that the prerogative writs, which the Courts in England had developed and used whenever urgent necessity demanded immediate and decisive interposition, were peculiarly suited for the purpose, they conferred, in the States sphere, new and wide powers on the High Courts of issuing directions, orders, or writs primarily for the enforcement of fundamental rights, the power to issue such directions, etc. “for any other purpose” being also included with a view apparently to place all the High Courts in this country in somewhat the same position as the Court of Kings Bench in England. But wide as were the powers thus conferred, a two-fold limitation was placed upon their exercise. In the first place the power is to be exercised “throughout the territories in relation to which it exercises jurisdiction” that is to say, the writs issued by the Court cannot run beyond the territories subject to its jurisdiction. Secondly, the person or authority to whom the High Court is empowered to issue such writs must be “within those territories”, which clearly implies that they must be amenable to its jurisdiction either by residence or location within those territories.
Regarding cause of action, the Apex Court stated:
The rule that cause of action attracts jurisdiction in suits is based on statutory enactment and cannot apply to writs issuable under Article 226 which makes no reference to any cause of action or where it arises but insists on the presence of the person or authority within the territories in relation to which the High Court exercises jurisdiction.
37. A converse case came up before the Apex Court in Rashid v. ITI Commissioner . It was held that the High Court of Punjab had jurisdiction to issue a writ of prohibition or certiorari to an authority at Delhi investigating a case of an assessee in the State of Uttar Pradesh and it was immaterial where the cause of action arose.
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38. Again, a question arose in Khajoor Singh v. Union of India . In that case, the petitioner was serving as Lt. Col. in the J & State Forces. An order was passed by the Government of India, prematurely retiring him from service. The petitioner filed a petition in the High Court of Jammu & Kashmir against the order. A preliminary objection was raised by the Union of India that since the authority against which the writ was sought (Union of India) was outside the territorial jurisdiction of the High Court, the petition was not maintainable. The High Court of Jammu & Kashmir upheld the preliminary contention and dismissed the petition, relying upon two previous judgments of the Supreme Court in case of Election Commission v. Venkata Rao (supra) and Rashid v. ITI Commissioner (supra). The High Court, however, granted certificate under Article 132 of the Constitution. Initially, the matter was placed for hearing before a Bench of five Judges, however, the appellant not only tried to distinguish the previous judgments of the Supreme Court but also tried to question the correctness of those decisions. In view of that, the matter was placed before a larger Bench of seven Judges. The majority reaffirmed and approved the earlier view taken by the Court in Venkata Rao and Rashid Ahmad (supra) and held that the petition filed by the petitioner in the High Court of Jammu & Kashmir was not maintainable. Speaking for the majority, Sinha, C.J. (as he then was) stated:
It seems to us therefore that it is not permissible to read in Article 226 the residence or the location of the person affected by the order passed in order to determine the jurisdiction of the High Court. That jurisdiction depends on the person or authority passing the order seeing within those territories and the residence or location of the person affected can have no relevance on the question of the High Courts jurisdiction.
Construing the words, “in appropriate cases”, the Court declared:
Why then were these words in appropriate cases used at all? It seems to me that the constitution makers being conscious of the difficulties that would arise if all the High Courts in the country were given jurisdiction to issue writs against the central Government on the ground that the Central Government was functioning within its territories wanted to give such jurisdiction only to that High Court where the act or omission in respect of which relief was sought had taken place. In every case where relief is sought under Article 226 it would be possible to ascertain the place where the act complained of was performed or when the relief is sought against an omission, the place where the act ought to have been performed. Once this place is ascertained the High Court which exercises jurisdiction over the place is the only High Court which has jurisdiction to give relief under Article 226. That, in my view, is the necessary result of the words in appropriate cases.
39. The net effect of the above decisions was that no High Court other than the High Court of Punjab before the constitution of the High Court of Delhi had, and no High Court other than the High Court of Delhi after the constitution of that High Court had jurisdiction to issue any direction, order Page 0690 or writ to the Union of India, because the seat of the Government of India was located in New Delhi. That situation caused great hardship and inconvenience to the persons residing far away from Delhi even if they were aggrieved by some order passed by the Union of India and even if their grievance was well founded. But as observed in Khajoor Singhs case (supra), the court cannot ignore the express provision contained in the Constitution, however, that may be a reason for making a suitable constitutional amendment in Article 226.
40. An interesting question of doctrine of merger arose in Collector of Customs v. East India Commercial Co. . There, an order of confiscation was passed by the Collector of Customs, Calcutta which was confirmed by the Central Board of Revenue. A petition was filed under Article 226 of the Constitution in the High Court of Calcutta. When the said petition came up for hearing before the learned Single Judge, a preliminary objection was raised by the department, relying upon the decision of the Supreme Court in Election Commission v. Venkata Rao (supra) that since the Central Board of Revenue was not within the territorial jurisdiction of the High Court of Calcutta, no writ could be issued against it. Since the point was important, the Single Judge referred the matter to a Special Bench. The Special Bench addressed itself to two questions : (i) Whether any writ could be issued against the Central Board of Revenue which was a party to the writ petition and which was permanently located outside the jurisdiction of the High Court; and (ii) Whether, if no writ could be issued against the Central Board of Revenue, any writ could be issued against the Collector of Customs (Original Authority) when the Central Board of Revenue (Appellate Authority) had merely dismissed the appeal.
41. On the first question, the Special Bench held that the High Court had no jurisdiction to issue a writ against the Central Board of Revenue in view of the decision in Venkata Raos case (supra). On the second question, however, the Special Bench held that since the Central Board of Revenue had merely dismissed the appeal against the order of the Collector of Customs, Calcutta, the really operative order was of the original authority which was situated within the jurisdiction of the High Court and, therefore, it had jurisdiction to pass an order against the Collector of Customs in spite of the fact that the said order had been taken in appeal to the Central Board of Revenue to which no writ could be issued.
42. After getting the certificate of fitness, the Collector of Customs approached the Supreme Court. (See Collector of Customs v. East India Commercial Co. Ltd. ). The question before the Supreme Court was whether the High Court could have jurisdiction to issue a writ against the Collector of Customs, Calcutta in spite of the fact that his order was taken in appeal to the Central Board of Revenue against which the High Court could not issue a writ. The Supreme Court also noted that there was difference of opinion amongst various High Courts. One view was that where the original authority passing the order was within the jurisdiction of the High Court but the appellate authority was not within such jurisdiction, the High Court would Page 0691 still have jurisdiction to issue a writ to the original authority, where the appellate authority had merely dismissed the appeal since the effect of the dismissal of the appeal would mean that the order of the original authority stood confirmed without any modification whatsoever. (See Barkatali v. Custodian General Evacuee Property ).
43. In another case of Somnath Sahu v. State of Orissa , the Supreme Court made the following observations:
An order passed by a Tribunal does not survive after it has been reversed, modified or even confirmed in the appeal provided by a statutory rule. After merger original order does not survive and it is only the appellate decision which in law becomes operative. No relief by way of a writ can be granted even if the original order is illegal unless it is established that the appellate decision is defective in law.
44. But the other view was that even when the appeal was merely dismissed, the order of the original authority gets merged in the order of the appellate authority and if the appellate authority was beyond the territorial jurisdiction of the High Court, no writ could be issued even to the original authority. (See Azamat Ullah v. Custodian, Evacuee Property ).
45. Speaking for the Court, Wanchoo, J. (as he then was) observed:
The question therefore turns on whether the order of the original authority becomes merged in the order of the appellate authority even where the appellate authority merely dismisses the appeal without any modification of the order of the original authority. It is obvious that when an appeal is made, the appellate authority can do one of the three things, namely (i) it may reverse the order under appeal; (ii) it may modify that order; and (iii) it may merely dismiss the appeal and thus confirm the order without any modification. In all these three cases after the appellate authority has disposed of the appeal, the operative order is the order of the appellate authority whether it has reversed the original order or modified it or confirmed it. In law, the appellate order of confirmation is quite as efficacious as an operative order as an appellate order of reversal or modification. Therefore, if the appellate authority is beyond the territorial jurisdiction of the High Court it seems difficult to hold even in a case where the appellate authority has confirmed the order of the original authority that the High Court can issue a writ to the original authority which may even have the effect of setting aside the order of the original authority when it cannot issue a writ to the appellate authority which has confirmed the order of the original authority.
46. In Burhanpur National Textile Workers Union v. Labour Appellate Tribunal AIR 1955 Nag 148, an application for cancellation of the recognition of the petitioner union was filed before the Registrar of Trade Unions, Nagpur. It was rejected. The appeal filed before the Provincial Industrial Court, Nagpur was allowed and the enquiry was ordered. Further appeal to Labour Appellate Tribunal, Bombay was dismissed. The petitioner union filed a petition under Page 0692 Article 226 of the Constitution in the High Court of Madhya Pradesh against the authorities. Relying upon the decision in Election Commission v. Venkata Rao (supra) and dismissing the petition, Hydayatullah, J. (as he then was) made the following remarkable observations:
The power to compel an inferior tribunal so to certify its record must of necessity be territorial in extent and has been rendered more so by the manner in which Article 226 has been framed in the Constitution. If we cannot make our writ run to the certify its record to us or to bind it with our consequent order, we have no jurisdiction to interfere with its decision at all. To interfere with the order of the Industrial Court in such circumstances would be improper. The Court does not do indirectly what it cannot do directly and this Court would be loath to quash an immediate order so as to get rid of a subsequent order by implication. Further, our action in quashing the order of the Industrial Court would place that court and the Registrar on the horns of a dilemma. Under the Act they would be bound by the Appellate Tribunal, and equally bound to give effect to our order. If we do not quash the order of the Appellate Tribunal and leave it operative we indirectly compel the Industrial Court to disobey that order. The Industrial Court and the Registrar are thus exposed to commitment for contempt at the instance of the Appellate Tribunal and equally at our instance, if they disobey our writ. Such a situation cannot be allowed to arise and is against the practice of Courts.
47. As discussed above, the Supreme Court had held that the cause of action was not at all relevant for the purpose of conferring jurisdiction on High Courts under Article 226 as it originally stood. The attempt to import the said concept by certain High Courts was repelled by the Supreme Court. The only remedy according to the Supreme Court was amendment in the Constitution. Accordingly, by the Constitution (Fifteenth Amendment) Act, 1963, after Clause (1), new Clause (1-A) (renumbered as Clause (2) by the Constitution (Forty-second Amendment) Act, 1976) came to be added, which read as under:
(2) The power conferred by Clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any 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 not within those territories.
48. The underlying object of the amendment was expressed in the following words:
Under the existing Article 226 of the Constitution, the only High Court which has jurisdiction with respect to the Central Government is the Punjab High Court. This involves considerable hardship to litigants from distant places. It is, therefore, proposed to amend Article 226. So that when any relief is sought against Government, authority or person for any action taken, the High Court within whose jurisdiction the cause of action taken, the High Court within whose jurisdiction the cause of action arises may also have jurisdiction to issue appropriate directions, orders or writs.
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49. The effect of the amendment is that it made the accrual of cause of action an additional ground to confer jurisdiction to a High Court under Article 226. As Joint Committee observed:
This clause would enable the High Court within whose jurisdiction the cause of action arises to issue directions, orders or writs to any Government, authority or person, notwithstanding that the seat of such Government or authority or the residence of such person is outside the territorial jurisdiction of the High Court. The Committee feels that the High Court within whose jurisdiction the cause of action arises in part only should also be vested with such jurisdiction.
50. Thus, after the insertion of Clause (1-A), the legal position is that a writ can be issued by a High Court against a person, Government or authority residing within the jurisdiction of that High Court, or within whose jurisdiction the cause of action in whole or in part arises.
51. In the case of State of Rajasthan and Ors. v. Swaika Properties and Anr. , the Supreme Court has dealing with the question as to whether the Calcutta High Court had jurisdiction to entertain the petition challenging the acquisition of land situated in Rajasthan. It was sought to be canvassed that the service of the Notice was an integral part of the cause of action within the meaning of Article 226(1) of the Constitution of India and as such, since the service has been effected at Calcutta, the Calcutta High Court had jurisdiction to entertain the petition, though the land was situate and the acquisition proceedings had been initiated and conducted within the territorial jurisdiction of the Rajasthan High Court. While dealing with this aspect, the Supreme Court held as under:
The mere service of notice under Section 52(2) of the Act on the respondents at their registered office at 18-B, Brabourne Road, Calcutta, i.e. within the territorial limits of the State of West Bengal could not give rise to a cause of action within the territory unless the service of such notice was an integral part of the cause of action. The entire cause of action culminating in the acquisition of the land under Section (1) of the Act arose within the State of Rajasthan i.e. within the territorial jurisdiction of the Rajasthan High Court at the Jaipur Bench. The answer to the question whether service of notice is an integral part of the cause of action within the meaning of Article 226(2) of the Constitution must depend upon the nature of the impugned order giving rise to cause of action….
52. Considering the above principles laid down by the Apex Court, the issue of territorial jurisdiction must depend upon the nature of impugned order giving rise to the cause of action. In the case at hand, the cause of action for moving the present application is the order of Tribunal located at Bombay. Consequently, this Court will have a jurisdiction.
53. In the case of Haji Ismail Noor Mohammad and Co. v. Competent Officer, Lucknow , the Competent Officer was at Lucknow, issue Page 0694 for consideration was whether the High Court of Allahabad had jurisdiction to issue writ under Article 226 of the Constitution of India against the appellate authority which was located outside its jurisdiction of the High Court. The factual matrix in that case revealed that the order dated 10th November, 1959 was passed by the Competent Officer having his office At Kanpur (UP). The Appellate Officer, who by his order dated 25th April, 1960, dismissed the appeal against the order of the Competent Officer, had his office located at New Delhi. In the memorandum of appeal filed by the appellants before the Appellate Officer the location of his office was described thus:
In the Court of the Appellate Officer, under the Evacuee Interest (Separation) Act, 1951. Ministry of Rehabilitation, Government of India, Dilaram Place, Mussoorie.
In the order of the Appellate Officer, the said Officer is described thus:
Shri Parshottam Swarup, Appellate Officer, India.
The appeal was heard and judgment was delivered at Allahabad. However, the office of Appellate Officer was situated at New Delhi and the record of the Appellate Officer was kept at New Delhi. As the appellate authority had its main office at Musoorie in Uttar Pradesh and later on its main office was shifted to Delhi, the question which, in the aforesaid factual backdrop, arose was -“Whether the Delhi High Court had jurisdiction or the High Court of Allahabad had jurisdiction to entertain writ petition against the order of the appellate authority?” The Apex Court while answering this question, observed as under:
…But in the present case, the appellate authority, though for convenience is having its head office in New Delhi, is factually and legally functioning under the State Act within the territorial jurisdiction of the High Court. To hold that such an authority which is appointed by the State Government and hold office, entertains and disposes of appeals within the State is outside the jurisdiction of the High Court is to carry technicality beyond reasonable limits. One can hold reasonably that such an appellate authority is located within the territorial limits of the High Court for the purpose of disposing of the appeals under the Act. This is a converse case where legally and factually the appellate authority is located in the State though for convenience it also holds office in New Delhi, as presumably the same office has been appointed appellate officer by other States under different Act. We, therefore, hold that the High Court has jurisdiction to issue a writ in appropriate cases against such an authority under Article 226.
54. Extending the aforesaid principle of law enunciated by the Apex Court that even if the authority is dealing with the case arising in the State could be deemed principal authority located in the State, though, factually, its office may be outside the State, such authority could be amenable to the jurisdiction of the High Court from where the original proceedings were initiated, it is, thus, clear that the High Court, whether or not the original authority located, will have jurisdiction to deal with he matter.
55. In the above view of the matter, turning to the facts of the case at hand, it would be reasonable to hold that even the Madras High Court will have Page 0695 jurisdiction over the Tribunal at Mumbai to command to state, raise and refer the question of law raised by the Revenue. This view goes hand in hand with the view taken by the Delhi High Court in Suraj Woolen Mills (supra).
56. The other view which is effectively canvassed by the Revenue based on the question of doctrine of merger giving rise to the cause of action also creates jurisdiction in favour of the High Court in whose territorial jurisdiction the subordinate authority, namely, Tribunal is located, consequently, as held, this Court will also have jurisdiction to entertain and deal with the subject application.
57. In the aforesaid backdrop of the discussion, in our considered view, both the High Courts, namely, the High Court of Madras as well as the High Court of Judicature at Bombay will have territorial jurisdiction over the lower appellate Tribunal in the facts and circumstances of the case. Having said so, it is always open for the suitor to select or choose the forum convenient to him. Suitor has a choice to select forum as held by the Kerala High Court in the case of Velupillai v. Gopala Pillai AIR 1974 Kerala 27, which normally happens when the cause of action falls within the territorial jurisdiction of two Courts.
58. On the aforesaid view of the matter and in the result, we over-rule the preliminary objection raised by the respondent-assessee and hold that the application made before the this Court is perfectly maintainable.
Issue- B :
59. So far as second preliminary objection leading to maintainability of application under Section 130A of the Act is concerned, we find merit in the contentions raised on behalf of the respondent. The Apex Court in the case of Navin Chemicals (Supra) has held as follows: It will be seen that Sub-section (5) uses the said expression determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment and the Explanation thereto provides a definition of it for the purposes of this sub-section. The Explanation says that the expression includes the determination of a question relating to the rate of duty; to the valuation of goods for purposes of assessment; to the classification of goods under the Tariff and whether or not they are covered by an exemption notification; and whether the value of goods for purposes of assessment should be enhanced or reduced having regard to certain matters that the said Act provides for. Although this Explanation expressly confines the definition of the said expression to Sub-section (5) of Section 129D, it is proper that the said expression used in the other parts of the said Act should be interpreted similarly. The statutory definition accords with the meaning we have given to the said expression above. Questions relating to the rate of duty and to the value of goods for purposes of assessment are questions that squarely fall within the meaning of the said expression. A dispute as to the classification of goods and as to whether or not they are covered by an exemption notification relates directly and proximately to the rate of duty applicable thereto for purposes of assessment. Page 0696 Whether the value of goods for purposes of assessment is required to be increased or decreased is a question that relates directly and proximately to the value of goods for purposes of assessment. The statutory definition of the said expression indicates that it has to be read to limit its application to cases where, for the purposes of assessment, questions arise directly and proximately as to the rate of duty or the value of the goods.
60. Following the aforesaid decision, this Court in the case of Primella Sanitary Products (Supra) and Auto Ignation (supra) held that where any dispute as to whether an exemption notification is applicable or not, then the application would not be maintainable before this Court. The decisions relied upon by Mr. Jetly do not support the case of the revenue, because in the case of ITC Limited (Supra), the applicability of a notification was not an issue and in the case of Amar Bitumen & Allied Products Pvt.Ltd., the question as to whether appeal was maintainable before the High Court or before the Supreme Court was not an issue. Thus, both the decisions relied upon by Mr. Jetly do not support the case of the revenue.
61. Accordingly, in the light of the Apex Court in the case of Navin Chemicals (Supra), we are of the opinion that the application filed by the revenue is not maintainable before this Court. In the result, application is dismissed with no order as to costs.