TMI Blog2004 (6) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1962, issued a notification in the public interest thereby exempting the vegetable fat imported from Nepal from the whole of the duty of customs to the extent indicated therein. (b) The Government of India, Ministry of Commerce and Industries prescribed the procedure for duty free import of vanaspati up to 1,00,000 mt. on annual quota basis and further directed that such import should be made only by the Central Warehousing Corporation (C.W.C.). (c) Subsequently by way of issue of further notification, such right was given jointly to the C.W.C. and State Trading Corporation (S.T.C). Ultimately another notification was issued conferring such right exclusively to the S.T.C. (d) The S.T.C., however, in stead of importing the commodities by itself, entered into agreements with various private agents authorizing them to import vanaspati on payment of some amount of money to the S.T.C. by way of "service charge". The S.T.C. by the so-called "import contract" sold the commodities to those agents before actual arrival of those goods in India. In those import contracts, the S.T.C. was described as "seller" and the agents were mentioned as "Associate distributor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personnel and the total quantity of goods fixed under the notification is 1,00,000 mt per annum. It is further asserted that by relying on the said procedure, and after being satisfied that all those importations were done on behalf of S.T.C., the Customs Authority cleared those duty-free goods. Apart from the aforesaid defence, the Customs Authority has also questioned the territorial jurisdiction of this court to entertain this writ application. The locus standi of the petitioners to maintain the writ application has also been challenged. 6.In its affidavit, the S.T.C. has virtually adopted the stance taken by the Customs Authority. It has been, however, reiterated that this court has no territorial jurisdiction to entertain this writ application inasmuch as the office of the S.T.C. is situated beyond the territorial limit of this court and at the same time, the alleged irregularities committed by the Customs Authority have taken place in Bihar and Uttar Pradesh. It is further stated that the petitioners have neither any locus standi nor any cause of action to file this writ application. Various agreements entered into between S.T.C. and the prospective buyers have been annexe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid preliminary objections raised on behalf of the respondents. As regards the question of want of territorial jurisdiction, Mr. Sengupta contends that the grievance of the petitioners in this writ application, precisely, is that the customs authority and the S.T.C., both "states", within the meaning of Article 12 of the Constitution, have violated the law of the land and such violation has affected the fundamental right of the petitioners to have equality before law, the moment the duty-free vanaspati illegally cleared by the customs authority in favour of the so-called associate distributors of the S.T.C. had entered the market of the West Bengal because those agents are favoured with the selfsame commodities at 30% lesser price, whereas the petitioners are obliged to purchase the vanaspati at a higher price. Mr. Sengupta, thus, contends that a part of cause of action has definitely arisen within the State of West Bengal. Mr. Sengupta in this connection draws attention of this court to the annexures attached to the affidavit filed by the S.T.C. wherefrom it will appear that the agreements between the S.T.C. and their agents were executed in Kolkata. Mr. Sengupta in this conne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t can issue appropriate order in exercise of power conferred under the aforesaid Article upon any person or authority situated within the territories in relation to which such court exercises jurisdiction, if such person or authority interferes with the legal or fundamental right of the petitioner. Even if such person or authority is not stationed within such territorial limit, the High Court can exercise its jurisdiction under the aforesaid Article if the cause of action for filing such application arises wholly, or in part, within its territorial jurisdiction. 13.In the present case, except the respondent Nos. 2 and 6, namely, the Commissioner of Customs, West Bengal and the Director of Revenue and Intelligence, respectively, all other respondents are situated beyond the territorial limit of this court. Even in the writ application, the petitioners have not alleged any illegal action or inaction on the part of those two respondents, which, according to the petitioners, have infringed their legal or fundamental right. Thus, the petitioners can maintain this writ application before this court only if they can show that the cause of action for filing this writ application has aris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation in favour of the petitioners so long such act did not invade any of the rights of the petitioners. But the moment those duty-free goods intruded into the zone of the business of the petitioners, such intrusion gave rise to "evil consequence" to the petitioners causing infringement of their rights guaranteed by Article 14 of the Constitution of India and thus, a cause of action accrued in favour of the petitioners and such cause of action has arisen within the State of West Bengal, the place where the petitioners are carrying on their business notwithstanding the fact the illegalities were really committed by the customs officers at Bihar. As pointed out by the Apex Court in the case of Kusum Ingots and Alloys Limited (supra), although the petitioner therein wanted to challenge an enactment passed by the Parliament, they were not permitted to file the writ application in Delhi High Court as the impugned enactment had an "evil consequence" upon the petitioner at the place of their business at Bhopal notwithstanding the fact that the enactment was passed by the Parliament situated in New Delhi. 17.I now propose to deal with the two decisions cited by Mr. Kapoor in this regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the principles laid down therein rather support the petitioners' contention that the cause of action has arisen within the territorial limit of this court. 21.I, thus, find that the cause of action of filing the present writ application has accrued within the territorial limit of this court and as such, this court has jurisdiction to entertain this writ application. 22.The next question is whether this application should fail for want of necessary parties. 23.I have already pointed out that the writ petitioners have prayed for direction upon the Customs Authority not to allow any other person than S.T.C. to avail the benefit of the notification granting exemption issued by the Union of India pursuant to the treaty between Nepal and India and their specific case is that the so-called associate distributors of the S.T.C. cannot get such benefits. In my view, Mr. Sengupta was quite justified in contending that the petitioners having challenged the misinterpretation of the instructions issued by the Union of India at the instance of Customs Authority and the S.T.C., those two authorities are the real necessary parties to this writ application and in their absence no effecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose, document of title i.e. RRS/GRs will be endorsed in favour of Associate Distributor before the goods cross Customs frontier of India. The Associate Distributor will arrange clearance of cargo through the designated customs after paying all relevant and statutory duties, levies and taxes. S.T.C. will not be responsible for payment of customs duty, levy and taxes, claims expenses, if any, whatsoever in the operation. S.T.C. will issue sale invoice showing "Sale during the course of import" ex-Indian border point duly PFA cleared as per Indian laws. The sale invoice will indicate value of goods and the S.T.C.'s service margin. (8)________________________________ ……………………………………………… ………………………………………………. (16) _____________________________" "PUBLIC NOTICE NO. 30(RE-2003)/2002-2007 NEW DELHI : 23-10-2003 Subject : Procedure for import for certain items under the India Nepal Treaty of Trade signed on 2-3-2003 amendment therein. In exercise of powers conferred under paragraph 24 of the Export and Import Policy 2002-2007, as notified in the Gazette of India Extraordinary, Part-II, Section-3, Sub-section (ii) vide S.O. No. 349 - E, dated 31-3-2002, as ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also been described as "associate distributor of S.T.C"; but the code number of such importer appears to be that of the distributor himself and not of the S.T.C. 27.From the aforesaid materials it is clear that the S.T.C. had neither held itself as importer nor was the S.T.C. owner of the goods at the time of importation and as such, the customs authority illegally cleared those goods without imposing any duty, as if, the S.T.C. was the importer. Merely because the owner of the goods, for the purpose of illegally getting the benefit of relaxation of customs duty, described himself as the "Associate Distributor of the S.T.C.", the customs authority could not grant such benefit to the owner of the goods notwithstanding the fact that the S.T.C. is not the "importer" in accordance with law. 28.Mr. Kapoor in this connection has placed strong reliance on the following decisions of the Supreme Court in support of his contention that the provisions contained in Section 2(26) of the Customs Act should be interpreted in a reasonable manner so as to achieve the purpose of the statute :- (a) Bajaj Tempo Ltd., Bombay v. Commissioner of Income Tax, Bombay ' City-III, Bombay rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through a writ of mandamus at the instance of the persons who entered into contract with the said undertakings for supply of material and making payment. According to the case set up by the writ petitioners, money was paid by them to the textile mills before the appointed day but they had failed to supply the cloth. In such a situation, the Supreme Court was of the view that after receipt of money, the textile mills having incurred a liability, were under an obligation to supply the cloth to the writ petitioners, but such liability having been incurred by the textile mills before the date of taking over, the same could not be enforced against the Central Government or the custodian. Thus, the said case was an instance of pure and simple business contract and therefore the writ application was not maintainable. I fail to understand how the said decision can be of any help to the respondents in contending that the petitioners have no right to maintain the present writ application. 32.As a last resort, the learned Counsel for the respondents tried to impress upon this court that this writ application should be dismissed on the ground of delay. The notification, conferring absolute ..... X X X X Extracts X X X X X X X X Extracts X X X X
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