TMI Blog2016 (10) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided against the assessee. - WRIT APPEAL No.250 of 2016 and C.M.P. No.4260 of 2016 - - - Dated:- 19-7-2016 - THE HONOURABLE MR.JUSTICE S.MANIKUMAR AND THE HONOURABLE MR.JUSTICE D.KRISHNAKUMAR For the appellant : Mr.Nithyaesh Natraj M/s.Nithyaesh Vaibhav For the respondent : Mr.J.Narayanasamy JUDGMENT S.Manikumar, J. Challenge in this appeal is to an order of the writ court, made in W.P.No.3611/2016 dated 22.02.2016, by which, the writ court, declined to entertain the writ petion, on the grounds of territorial jurisdiction. 2. The facts in nutshell are that the petitioner Tecpro System Limited is a public limited company and represented by its Authorised Signatory/Principal Officer at Chennai. Prayer sought for in the writ petition was for a mandamus directing the Assistant Commissioner of Income Tax, New Delhi/respondent, not to take any coercive or any other steps against the petitioner, which is under the Board for Industrial and Financial Reconstruction (BIFR), as per the provisions of the Sick Industrial Companies Act, 1985 (SICA), by invoking the provisions of the Income Tax Act, 1961, pursuant to a proceeding dated 20.01.2016 issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merit. In appropriate cases, the court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum convenience. 6. Going through the material on record, writ court in W.P.No.3611/2016 dated 22.02.2016 at paragraphs 5 to 7 ordered as follows: 5. On a careful consideration of the materials available on record and the submissions made by the learned counsel on either side, it could be seen that the writ petition has been filed pursuant to the order dated 20.01.2016 passed by the respondent at New Delhi. Though the prayer sought for is for the issuance of a writ of mandamus, the learned counsel appearing for the respondent submitted that no record is available in Chennai office and all the records are only in New Delhi office. The learned senior counsel appearing for the petitioner submitted that the petitioner is an assessee only in the New Delhi office and not at Chennai. The petitioner also submitted their Income Tax Returns only at New Delhi office and not at Chennai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all not have jurisdiction to entertain the writ petition. Since there is no cause of action, either wholly or in part, occurred at Chennai, this Court has no jurisdiction to entertain the writ petition filed by the petitioner. 7. The petitioner having an office at Chennai shall not confer territorial jurisdiction at Chennai. That apart, the learned counsel appearing for the respondent also submitted that since no records are available in Chennai office, they have to get all instructions only from New Delhi office in respect of the relief sought for in the writ petition. Since no part of cause of action has arisen at Chennai, I am of the view that this Court has no territorial jurisdiction to entertain the writ petition. In these circumstances, the judgments relied upon by the learned senior counsel appearing for the petitioner are not applicable to the petitioner's case. Since the writ petition is being decided on the question of territorial jurisdiction, I am not going into the merits of the case. In these circumstances, the writ petition filed by the petitioner is rejected on the ground of territorial jurisdiction. No costs. Consequently, connected miscellaneous petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Basu Ors. reported in (1994) 4 SCC 711, learned counsel for the petitioner/appellant further submitted that even if a part of or fraction of cause of action arises within the territorial jurisdiction of this court, writ is maintainable. He also submitted that the seat of the respondent is irrelevant to entertain a writ petition. 10. Placing reliance on Union of India and others vs. Adhani Export and another reported in (2002) 1 SCC 567, it is the submission of the learned counsel for the appellant that when specific averments have been made in the affidavit supporting the prayer for mandamus, writ court ought to have decided the issue of territorial jurisdiction de hors the truth or otherwise of the averments made in the affidavit. In this context, he also invited attention of this court to the additional affidavit filed by writ petitioner wherein, the petitioner has stated that the company has been functioning in Chennai since 2002 onwards and established a full-fledged Corporate office at Siruseri IT Park, where 70% of the permanent employees are working. He has also stated that 90% of the payments are processed only at Chennai, as a result of which, books of accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee itself had admitted the place of principal office and place of business at Delhi and accordingly TAN number has been allotted at Delhi. In such circumstances, de hors the above, petitioner/appellant cannot be permitted to contend that this court has jurisdiction to entertain a writ petition. Survey and issue of demand notice has been done from Delhi. According to him, Kusum Ingots Alloys Ltd. v. Union of India and another resported in 2004 (6) SCC 254 would lend support to the case of the respondent. He stated that, if at all the petitioner/appellant is aggrieved over the order, writ petition, challenging the same can be filed only within whose jurisdiction, the cause of action arose. 14. For the above said reasons, he submitted that there is no error in the order impugned before this court and prayed for dismissal of the writ appeal. 15. Heard the learned counsel for the parties and perused the materials on record. 16. Fact that the writ petitioner M/s.Tecpro System Limited, 202-204, Pacific Square Mall, JMD Campus, Sector-15, Gurgaon, has been issued with Tan number at Delhi viz.TANDELT03519F has not been disputed. Survey operation under Section 133-A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ten Thousand only) but which may be extended to ₹ 10,000/- (Rupees Ten Thousand only) for each such default or failure, shall be imposed upon you under Section 272A(1)(c) of the Income Tax Act, 1961. 17. In response to the above, the petitioner/appellant has sent an e-mail dated 20.01.2016, which is extracted here under: Dear sirs/Madam, Kind Attn: Ms.Sudha Yadav Asst. Commr. IT With reference to your visit to our Gurgaon office today on 20.01.2016 and subsequent discussions had with you, as desired by you the documents were submitted to you and the left out documents if any shall be sent to you shortly. As regards the payment plan against TDS liability, we would like to bring your kind notice that considering the present financial situation being faced by the company, we are not in a position to remit the money immediately, as we are not getting any payment from the customers. However, we will be giving the cheque of ₹ 25.00 lacs which may please be withheld for 3/4 days and by tis time we shall be sending the amount by RTGS and shall take back the cheque of ₹ 25.00 lacs. As regards the balance payment plan, it may kindly be note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... let us consider the decisions relied on by the learned counsel for the rival parties. 19. In Union of India and others vs. Adhani Export and another reported in (2002) 1 SCC 567, the principal contenteion involved was to the entitlement of the respondents therein, to the benefit of the Passport scheme found in paragraph 54 of the Import Export Policy introduced by the Government of India, in relation to certain credits to be given on export of shrimps. High Court of Gujarat at Ahmedabad, granted reliefs. On appeal to the Hon'ble Supreme Court, it was contended by Union of India/appellants that High Court at Ahmedabad had no jurisdiction to entertain special civil applications, as no part of cause of action arose within the territorial jurisdiction of High Court at Ahmedabad. On the facts and circumstances, the High Court observed that the respondents therein carried on business of export and import from Ahmedabad. Orders for export and import placed from an executor from Ahmedabad. The documents and paymens for export and import were sent/made at Ahmedabad. The credit of duty claimed in respect of exports were received at Ahmedabad and payments were also received at Ahmedab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a High Court to entertain a writ petition or a special civil application as in this case, the High Court must be satisfied from the entire facts pleaded in support of the cause of action that those facts do constitute a cause so as to empower the court to decide a dispute which has, at least in part, arisen within its jurisdiction. It is clear from the above judgment that each and every fact pleaded by the respondents in their application does not ipso facto lead to the conclusion that those facts give rise to a cause of action within the court's territorial jurisdiction unless those facts pleaded are such which have a nexus or relevance with the lis that is involved in the case. Facts which have no bearing with the lis or the dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned. If we apply this principle then we see that none of the facts pleaded in para 16 of the petition, in our opinion, falls into the category of bundle facts which would constitute a cause of action giving rise to a dispute which could confer territorial jurisdiction on the courts at Ahmedabad. 20. In Kusum Ingots Alloys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate cases, the Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum convenience. 22. In Nawal Kishore Sharma vs. Union of India and others reported in (2014) 9 SCC 329, the appellant therein was suffering from serious heart muscle disease and breathing problem, which forced him to go back to his native place in Bihar, wherefrom, he had been making all correspondence with regard to his disability, compensation etc. Earlier he was declared as permanently unfit by authority of the respondent Corporation at Mumbai. Appellant therein has approached Patna High Court under Article 226 of the Constitution of India and claimed various benefits including 100% disability compensation. Maintainability of the writ petition was one of the objections raised by the respondent, on the ground that no cause of action or even a fraction of cause of action arose within the jurisdiction of the Patna High Court. The appellant before the Hon'ble Apex Court contended that he discharged his duty outside the territory of State of Bihar. One of the facts pleaded by the appellant before the Apex Court was that he was a permanent resident of Bihar, asserted his r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d finally only when both these options fail and the public interest so requires, BIFR may recommend winding up of the sick industrial company. So long as the scheme is under consideration before BIFR or it is being implemented after being sanctioned and is made operational from a given date, it is the legislative intent that such scheme should not be interjected by any other judicial process or frustrated by the impediments created by third parties and even by the management of the sick industrial company, in relation to the assets of the company. In the above case, the Apex court held that the claim for recovery of money, could lie or be proceeded with only after express consent of the BIFR. There cannot be quarrel over the said position of law. But the question to be decided is whether a writ would lie, within the jurisdiction of this court. 24. According to the learned counsel for the petitioner, recourse that the learned Single Judge ought to have considered is whether the petitioner has a right to adjudicate his case before BIFR and in the light of the dictum in Raheja Universal Ltds case, the revenue demand could be allowed pending BIFR and in such circumstances, if co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. After investigation, money was returned to him, but without interest. He filed a writ petition in the court of Andhra Pradesh seeking action against the Income Tax officials and the newspapers, claiming compensation and for other reliefs. Objection raised before Andhra Pradesh High Court was that seizure took place at Chennai, and therefore writ cannot be maintained at Hyderabad. On maintainability, writ petition was dismissed. The matter went upto the Hon'ble Supreme Court and on the facts and circumstances, at paragraphs 9 and 10, the Hon ble Apex Court held as follows: 9. The first question that arises for consideration is whether the Andhra Pradesh High Court was justified in holding that as the seizure took place at Chennai (Tamil Nadu), the appellant could not maintain the writ petition before it. The High Court did not examine whether any part of cause of action arose in Andhra Pradesh. Clause (2) of Article 226 makes it clear that the High Court exercising jurisdiction in relation to the territories within which the cause of action arises wholly or in part, will have jurisdiction. This would mean that even if a small fraction of the cause of action (that bundle o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the petitioner therein was that he was canvassing his fundamental right and by virtue of Article 226(2) of the Constitution of India, High Court of Delhi had jurisdiction, as the cause of action had arisen within the territorial jurisdiction of the High Court, though the authorities were situated outside the jurisdiction of the High Court. The question posed before the court was as to whether any cause of action has arisen within the territorial jurisdiction of the Delhi High Court. After considering the decision of the Hon'ble Supreme Court in State of Rajasthan vs. Swaika Properties reported in AIR 1985 SC 1289, U.P.Rashtriya Chini Mill Adhikari Parishad vs. State of U.P. reported in (1995) 4 SCC 738, the Hon'ble Division Bench of the Delhi High Court held that so far as the impugned order of the IT Authority situate within the State of Haryana is concerned, no cause of action has arisen to the petitioner, within the territorial jurisdiction of the High Court of Delhi. Thus the writ petition filed was dismissed. 29. In the case on hand, though the petitioner has contended that the right under BIFR is likely to be infringed and that there is a threat if the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of the writ petition has to be decided on the aspect of territorial jurisdiction, there is no need to record any finding on the aspect as to whether the petitioner/appellant, has committed any violation of the provisions of the Income Tax Act and thus recovery proceeding should be initiated or not, but there is an admission on the part of the petitioner/appellant. 31. Article 226 of the Constitution of India, deals with the powers of the High Court, to issue certain writs and the said Article is extracted hereunder: (1) Notwithstanding anything in article 32, every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including (writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose. (2) The power conferred by clause (1) to issue directions, orders or writs to any Governments, authority or person may also be exercised by any High Court exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al parlance is existent of those facts, which give a party a right to judicial interference on his behalf. (See Navinchandra N. Majithia vs. State of Maharashtra). 34. While considering the issue, relating to the maintainability of the writ petition, on territorial jurisdiction, Courts have to examine, as to whether, the petitioner has established that a legal right claimed by him, has been infringed or threatened to be infringed by the respondent. An infringement may take place by causing him the actual injury or threat thereof, but on the facts and circumstances of the case, the issue to be considered, is whether, the petitioner/appellant has established a legal right or there is any cause or any material, to substantiate that such right has been infringed or a threat thereof, within the territorial jurisdiction of this Court. 35. Cause of action for filing the present writ petition, for a Mandamus, directing the Assistant Commissioner of Income Tax, New Delhi, respondent herein, not to take any coercive or any other steps against the appellant, which is under the Board for Industrial and Financial Reconstruction (BIFR), as per the provisions of the Sick Industrial Compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thereafter, sent the amount, by RTGS. There are no materials, to indicate, as to whether, the respondent has taken any further proceedings, after 20.01.2016, notwithstanding the pendency of the proceedings, under the SICA Act, which is stated to have been communicated on 21.09.2015, which according to the appellant, is an infringement of right, available under the provisions of the SICA Act and that no tax could be coercively collected. For the abovesaid reasons, the actual injury or alleged threat to the infringement of right also, is not substantiated. 39. Each and every fact pleaded in the writ petition may not be relevant, but only such material facts, which have a nexus or relevance to the lis, that is involved in a case, give rise to cause of action, to decide, as to why, the said facts confer territorial jurisdiction on the Court. In Alchemist Limited v. State Bank Of Sikkim reported in JT 2007 (4) 474, the Hon'ble Supreme Court held as follows: From the aforesaid discussion and keeping in view the ratio laid down in catena of decisions by this Court, it is clear that for the purpose of deciding whether facts averred by the petitioner appellant, would or wou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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