TMI Blog2020 (11) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... sdictional High Court if the appellant desires - TAX APPEAL NO.14 OF 2016 - - - Dated:- 27-10-2020 - M.S. SONAK DAMA SESHADRI NAIDU, JJ. Ms. Susan Linhares, Standing Counsel for the Appellant. Shri D. Pangam with Shri Parikshit Sawant, Advocate for the Respondent No.1. ORAL JUDGMENT : (Per Dama Seshadri Naidu, J.) Introduction : An Income Tax Appellate Tribunal exercises its jurisdiction over more than one state, though it is located in one of those states. Its order is sought to be challenged. Which High Court should have the jurisdiction to rule on the Tribunal's order? Is it the High Court in whose territorial jurisdiction that Tribunal is located? Or is it the High Court in whose territorial jurisdiction the authority that passed the preliminary order operates? Facts : 2. The respondent is a company located in Raichur District, Karnataka. Its registered office, too, is in Karnataka. For the income tax purposes, the respondent company falls within the jurisdiction of Assistant Commissioner of Income Tax, Central Circle 1, Belgaum, Karnataka. 3. As seen from the record, for the assessment year 2008-09, the A.O., Belgaum, reopened the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate ruling, both the Assessee and the Revenue appealed to the Income Tax Appellate Tribunal, Panaji Bench, Goa. 8. If we reckon the jurisdiction based on the physical location of the Tribunal, we will have jurisdiction. Instead, if we reckon the jurisdiction based on the situs of the parties, we will not-for both the Assessee and the Income Tax authority that passed the primary order are in Karnataka. Incidentally, the Tribunal has jurisdiction over the whole of Goa and few parts of Karnataka: Karwar, Belgaum, Mangalore, North Kanara. And Raichur District falls within the jurisdiction of Central Circle 1, Belgaum. 9. So let us see how the jurisdictional tangle ought to be resolved: should it be based on the place of the parties or that of the Tribunal? (a) Ambica Industries: 10. In Ambica Industries, the appellant carried on business at Lucknow; it was assessed there. The tax dispute, however, ultimately came up before the Central Excise and Service Tax Appellate Tribunal ( the Tribunal ), New Delhi, in an appeal. But the Tribunal exercised jurisdiction not only over Uttar Pradesh but also National Capital Territory of Delhi and Maharashtra. Aggrieved by the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the legislative intent, Ambica Industries has held that when an appeal remedy is provided for under a statute, Parliament must have thought of a particular High Court. It is a different matter that, by way of necessity, a Tribunal may have to exercise jurisdiction over several States. Still, it does not appeal to any reason that Parliament intended, despite providing for an appeal before the High Court, that appeals may be filed before different High Courts at a party s sweet will. 14. Then, Ambica Industries has turned to the provisions of the Act and acknowledged the appellant s argument that in terms of sub-section (1) of section 100 of the CPC, the First Appellate Court s order being a decree, a Second Appeal shall lie before the High Court to which it is subordinate. 15. In answer to the above contention, Ambica Industries has held that in terms of Article 227 as also Clause (2) of Article 226 of the Constitution of India, the High Court will exercise its discretionary jurisdiction and also issue writs of certiorari over orders passed by the subordinate courts within its territorial jurisdiction. Besides, if any cause of action arises within its territorial limits, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make a choice, in the absence of a statutory provision, relating to the matter it must be guided by the principles of Section 64-that is, the place where the Assessee carries on his business, profession or vocation or resides. There is also another approach to the question: the subject-matter test. Then, S. Sivaramakrishna Iyer, on the facts, observed that the penalty proceedings were originally initiated by the Income-tax Officer at Trichur. But the penalty proceedings are but a continuation of the original assessment orders. And the original assessment was in Kerala. On that basis too, S. Sivaramakrishna Iyer has held that the situs of the Tribunal cannot be determinative of the jurisdictional issue. 19. Finally, Ambica Industries has, on the facts, held that the case has arisen from the State of Maharashtra. The appellant may have its factory in the State of Haryana. But that is irrelevant. The adjudicating authority is in Bombay. Obviously, that authority is bound by the law laid down under the Customs Act or any other law-as interpreted by the High Court of Bombay. For the purpose of the case at hand, the petitioner must be held bound by the law as applicable and as prevai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an assessment order in Bombay may invoke the jurisdiction of the Delhi High Court to take advantage of the law laid down by it, which may be contrary to judgments of the High Court of Bombay. This cannot be allowed . (c) Sungard Solutions (I) Pvt. Ltd: 23. In the face of Ambica Industries rendered by the Apex Court, we must now examine the decision of our High Court in Sungard Solutions. It is a co-equal Bench decision. In an appeal filed by the Revenue, the respondent objected to this Court s territorial jurisdiction over the matter. The respondent has contended that the impugned order was passed by the Bangalore Bench of the Tribunal. So, the appeal from the order of the Tribunal s Bangalore Bench should lie before the Karnataka High Court and not this Court. To contend thus, he relied on Chapter XX of the Act and, in particular, sections 260A and 269 of the Act. In fact, the Tribunal at Bangalore passed an order under Section 127 of the Act, transferring the respondent s case from an Assessing Officer at Bangalore to an Assessing Officer at Pune. Assailing that order, the Revenue appealed to this Court. According to the Revenue, this Court alone will have jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he jurisdiction of the bench depends upon the areas from where the impugned orders have originated . In the above standing order, Note 4 specifically states that the jurisdiction of a bench will not be determined by the place of business or residence of the assessee but by the location of the office of the Assessing Officer . Eventually, Sungard Solutions has held that if an assessment proceeding has been transferred from one place to another under Section 127 of the Act, then the bench of the Tribunal before which appeals would lie may shift with the seat of the Assessing Officer before the filing/hearing of the appeal . 27. Finally comes into play the Bombay High Court Rules. Sungard Solutions concludes, with reference to these Rules, that the Appellate Court to which an appeal would lie from the order of the Tribunal would necessarily be the High Court exercising jurisdiction over the places where the Tribunal which passed the order is situated . 28. Summing up the statutory and precedential position, Sungard Solutions has held that the Tribunal which passes orders is bound by the orders passed by the jurisdictional High Court where the Tribunal is situated . Then, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of a Tribunal in its territorial limit. Co-equal Benches and Precedential Propriety: 32. Indeed, we have a thorny task of considering whether a co-equal Bench is correct in its dictum. That is the task best performed by its avoidance. But compelled to answer, for us the prudent course is to put it to the scrutiny of better wisdom-a Bench of superior strength. That said, if there is a decision from the Supreme Court, then Article 142 of the Constitution comes into play: all decisions at all other levels yield to the Supreme Court's. Yet let us begin from the desired point of avoidance, later proceed to resolution by harmonisation or distinction, and finally--if the two methods remain unavailable-to the reference. Dicta v. Holding: 33. Under the caption Dicta v. Holding , Bryan A Garner et al. in The Law of Judicial Precedent6 say that the holding of an appellate court constitutes the precedent, as a point necessarily decided. Dicta do not: they are merely remarks made in the course of a decision but not essential to the reasoning behind the decision. To elaborate on this point, the learned authors hold that not all text within a judicial decision serves as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the concrete problem before it, ratio decidendi is normally seen as a genus-proposition of which the concrete holding is one species or instance. Garner et al. admit that the distinction is a fine one, but it available for those who observe it. In the end, they declare that ratio requires adherence to the extent possible, but the holding compels compliance fully. Thus, stare decisis admits of no exception to a caseholding in the adjudicatory hierarchy, but not to digressing dicta. What is the Holding of Sungard Solutions? 37. Sungard Solutions is a converse case. In that case, the Bangalore Bench of the Tribunal passed the impugned order. In fact, the Tribunal at Bangalore passed the order under Section 127 of the Act, transferring the respondent s case from an Assessing Officer at Bangalore to one at Pune. Assailing that order, the Revenue filed the appeal before this Court. According to the Revenue, this Court alone will have jurisdiction to deal with the respondent s case because, now, the assessment proceedings are in Mumbai consequent to the Tribunal s order under section 127 of the Act. Pertinently, the Revenue wanted this Court to determine the territorial ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on over more than one State . And situated in Sungard Solutions has a figurative, rather than literal, meaning. An inter-state Tribunal, we may add, is deemed to have been situated in all the States it covers. 41. So, we respectfully hold that Sungard Solutions does not fall foul of Ambica Industries. Even if it were, we stand, as we must be, guided by Ambica Industries. Conclusion : 42. To sum up, the mere physical location of an inter-state Tribunal cannot be determinative of the High Court's jurisdiction for an aggrieved party to challenge that Tribunal's order. 43. Here, the Assessee is located in Karnataka, so are the Income Tax authorities. The primary order, too, emanated from Karnataka; so was the first appellate order. All challenges, including the appeal before the Tribunal, were in continuation of that primary adjudication or consideration before the Assessment Officer at Belgaum, Karnataka. Therefore, Ambica Industries applies on all fours. Result : 44. We hold that this Court has no jurisdiction to entertain this Appeal. As a result, we return the Tax Appeal, to be presented to the jurisdictional High Court if the appellant desires. No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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