TMI Blog2007 (2) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent-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 ₹ 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 hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia 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 powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortant 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce 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. 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 (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition 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 prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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