M/S. AMBICA INDUSTRIES versus COMMISSIONER OF CENTRAL EXCISE

12. The said decision proceeded on the basis that part of the cause of action may arise at the forum where the appellate order or the revisional order is sourced. If, *us, a cause of action arises within one or the other High B Court, the petititmer shall be the dominus litis. Indisputably, if this set of reasoning is to be accepted, the impugned judgment as also the decision rendered in Bombay Snuff (supra) would not be correct. Before dilating on the said proposition of law it may be noticed that the decision of a Tribunal would be binding on the Assessing Authority. If the situs of the appellate C Tribunal should be consid~red to be the detenninative factor, a decision rendered by the Tribunal shall be binding on all the authorities exercising its jurisdiction under the said Tribunal.

13. The Tribunal, as noticed hereinbefore, exercises jurisdiction over all the three States. In all the three States there are High Courts. Jn the event, tJ the aggrieved person is treated to be the dominus litus, as a result whereof, he elects to file the appeal before one or the other High Court, the decision of the High Court shall be binding only on the authorities which are within., its jurisdiction. It will only be of persuasive value on the authorities functioning under a different jurisdiction. If the binding authority of a High Court does not extend beyond its territorial jurisdiction and the decision of one High E Court would not be a binding precedent for other High Courts or Courts or Tribunals outside its territorial jurisdiction, some sort of judicial anarchy shall come into play. An assessee, affected by an order of assessment made at Bombay, may invoke the jurisdiction of the Allahabad High Court to take advantage of the law laid down by it and which might suit him and thus he p would be able to successfully evade the law laid down by the High Court at Bombay.

14. Furthennore, when an appeal is provided under a statute, Parliament must have thought of one High Court. It is a different matter that by way of necessity, a Tribunal may have to exercise jurisdiction over several States G but 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 the sweet will of the party aggrieved by the decision of the 1t\buna\.

15. In a case of this nature, therefore, the cause of action doctrine may H (2007) 7 S.C.R. A not be invoked.

16. Sub-section 9 of Section 35G, whereupon Mr. C. Hari Shankar, learned counsel places strong reliance, in our opinion, does not answer the question placed before us. Learned counsel contends that in tenns of sub- section I of Section 100 of the Code of Civil Procedure, the order of the First . B Appellate Court being a decree, a Second Appeal shall lie before the High Court subordinate thereto.

17. There cannot be any doubt whatsoever that in tenns of Article 227 of the Constitution of India as also Clause (2) of Article 226 thereof, the High C Court would exercise its discretionary jurisdiction as also power to issue writ of certiorari in respect of the orders passed by the Subordinate Courts wjthin its territorial jurisdiction or if any cause of action has arisen therewithin but the same tests cannot be applied when the appellate court exercises a jurisdiction over Tribunal situated in more than one State. In such a situation, in our opinion, the High Court situated in the State where the first court is D located should be considered to be the appropriate appellate authority. Code of Civil Procedure did not contemplate such a situation. It provides for jurisdiction of each court. Even a District Judge must exercise its jurisdiction . · only within,the territorial limits of a State. It is inconceivable under the Code ·of Civil Procedure that the jurisdiction of the District Court would be exercisable beyond the territorial jurisdiction of the District, save and except in such E matters where the law specifically provides therefor.

18. The submission of Mr. C. Hari Shankar, learned counsel, as noticed hereinbefore, is inconsistent and contradictory. The doctrine of dominus litus or doctrine of situs of the Appellate Tribunal do not go together. Dominus F litus indicates that the suitor has more than one option, whereas the situs of an Appellate Tribunal refer~ to only one High Court wherein the appeal can be preferred. We may consider two hypothetical cases in order to enable us to find out an answer. A Tribunal may hear out a matter either at Allahabad or at Bombay and pass a judgment at that place. Only because the head office is situated at Delhi, would it mean that a judgment delivered at Allahabad G or at Bombay would not attain its finality then and there.

19. We may notice some incongruities ifthe contention of the appellant is taken to its logical conclusion. It is possible that in a case of emergency while the Tribunal holding its sitting at Allahabad or Bombay may entertain a matter where the cause of action had arisen at Delhi. But that would not H mean that when the Tribunal pronounces its judgment at Allahabad or Bombay, AMBICA INDUSTRIES v. COMMNR. OF CENTRAL EXCISE [S.B. SINHA, J.] although the cause of action had initially arisen at Delhi, the Delhi High Court A would have no jurisdiction in relation thereto.

20. The situs of a Tribunal may vary from time to time. It could be Delhi or some other place. Whether its jurisdiction would be extending to 3 States or more or less would depend upon the Executive order which may be issued. Determination of the jurisdiction of a High Court on the touchstone of Sections B 35G and 35H of the Act, in our opinion, should be considered only on the basis of statutory provisions and not anything else. While defining High Court in terms of Section 36B of the Act, the Parliament never, in our opinion, contemplated to have a situation of this nature.

21. An appeal may have to be filed by the Commissioner of Central C Excise. His office may be located in a different State. If he has to prefer an appeal before the High Court, he would be put to a great inconvenience whereas, the assessee would not be.

22. We may, keeping in view the aforementioned backdrop, notice a few D decisions. In CommissiOner of Income Tax, Madras v. S. Sivaramakrishna Iyer, AIR (1969) Mad 300, it was held :- "On that view, we think that where a Tribunal has jurisdiction over more States than one, and it has got to make a choice, in the absence of a statutory provision, relating to the matter it must be guided by E the principles of Section 64, that is to say, the place where the assessee carries on his business, profession or vocation or resides. On that test, it is the High Court of Kerala which will have jurisdiction. There is also another approach to the question, namely, the subject- matter test As we mentioned, the penalty proceedings were originally initiated by the Income-tax Officer at Trichur and it was because of F a directive by Section 274(2) he made a reference to the Inspecting Assistant Commissioner. But in effect, as we think, the penalty proceedings are but a continuation of the original assessment orders and the subsequent proceedings started by the Income-tax Officer at Trichur for levy of penalty. On that basis too, we are inclined to think G that this court wili have no jurisdiction under Section 66(2)."

23. A Division Bench of Delhi High Court in Seth Banarsi Dass Gupta v. Commissioner of Income Tax, ( 1978) 11 DLT 14, while construing Section 66 of the Income Tax Act, 1922, held as under :- c "The question then arises as to which High Court the Delhi Bench could refer the questions of law proposed in the applications under section 66( I) of the Act. The only relevant provisions in the Act are those in Section 66. Section 66(1) merely states that within the time mentioned therein, the assessee or the Commissioner may require the Appellate Tribunal ~o refer to "the High Court" any question of law arising out of an order under Section 33, and that the Appellate Tribunal shall within the time prescribed in the sub-section draw up ~ statement of case and refer the question to "the High Court" Section 66(2) provides that if the Appellate Tribunal refuses to state a case on an application under Section 66(1) on the ground that no question of law arises, the assessee or the Commissioner, as the case maybe, may, within the time mentioned in the sub-section, apply to "the High Co1Jft", and "the High Court" if it is not satisfied with the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case and refer it. Section 66(8) provides that for the purposes of Section' 66, "the High Court" means – (a) in relation to any State, the High Court of the State, and (b) in relations to the Union TerritOry of Delhi, the High Court of Delhi. The aforesaid provisions do not clearly indicate to which particular High Court the Appellate Tribunal has.to make a reference under Section 66( I) or which High Court can call for a reference under Section 66(2), in a case where a Bench of the Appellate Tribunal has jurisdiction over more than one State."

24. Referring to a judgment of Madras High Court, namely; dti'tmissioner of Income Tax v. S. Sivaramakrishna Iyer, (1968) 70 ITR 860, the learned F Judge opined :- "The said provisions show that in a case where a reference is made to a High Court by a Bench of the Appellate Tribunal under section 66 of the Act the reference is just an intermediate stage, and the case (appeal before the Bench) would be finally disposed of by the Bench after receiving the judgment of the High Court in the reference. So, instead of adopting a different basis for that intermediate stage, if would be quite appropriate to adopt the same basis as the one adopted for determining the jurisdiction of the Bench. Thus, it would be appropriate and in consonance with the aforesaid provisions of the Act and the Standing Orders if the basis for the jurisdiction of the Bench is adopted, instead of adopting the basis mentioned in Section AMBICA INDUSTRIES v. COMMNR. OF CENTRAL EXCISE [S.B. SINHA, J.) 64 of the Act, as suggested in the decision of the Madras High Court A in the case. Commissioner of Income-tax, Madars v. S. Sivaramakrishna Iyer."

25. Yet again in Suraj Woolen Mills v. Collector of Customs, (2000) 123· EL T 471 (Del), Lahoti, J. as the learned Chief Justice of India then was, noticed the aforementioned decision as also other decisions operating in the field and B held:- "10. The Division Bench decision in the case of Seth Banarsi Dass Gupta has been followed by another Division Bench in Bir/a Cotton & Spg Mills Ltd.v. CIT Rajasthan. (1980) 123 ITR 354. The assessee carried on business in Jaipur. It had its registered office in Delhi. The C assessment orders were passed by ITO at Jaipur and appeals were disposed by the C at Jaipur. The matter came up before the Tribunal at Delhi and was heard by the Central Bench of the Income-true Appellate Tribunal as there was no Tribunal at Jaipur. The Division Bench held that the court to which reference should be made would D be the court having jurisdiction over the territory in which the office of the ITO was situated. 11. Recently the same principle has been followed by this Court in Suresh Desai & Associates v. CIT ( 1991) 230 ITR 912. In this judgment, the Divi- sion Bench has assigned yet another reason why the High E Court of that State wherefrom the matter arises would only be competent to hear the reference. A decision of one High Court is a binding authority within its territorial jurisdiction; but it is not a binding precedent for another High Court or Tribunal outside its territorial jurisdiction. The Division Bench has held as under : "On account of the abovesaid doctrine of precedents and the rule of binding efficacy of the law laid down by the High Court within its territorial jurisdiction, the questions of law arising for decision in a reference should be determined by the High Court which exercises territorial jurisdiction over the situs of the Assessing Officer. Else it would result .in serious anomalies. An assessee affected by an G assessment order at Bombay may invoke the jurisdiction of the Delhi High Court to take advantage of the law laid down by it and suited to him and thus get rid of the law laid down to the contrary by the High Court of Bombay not suited to the assessee. This cannot be allowed." c (2007) 7 S.C.R. 12. Having made a careful comparative reading of the provisions of the Income-tax Act and the Customs Act, as also the relevant rules and orders of the Tribunal we are unhesitatingly of the opinion that the principles laid down in the abovesaid three Division Bench decisions of Delhi High Court can be applied and do apply to the facts and circumstances of the present case. 13. The present case arises out of the State of Bombay. The petitioner may have its factory establishment at Panipat in the State of Haryana but that is irrelevant. The adjudicating authority is at Bombay. Obviously it is bound by the law laid down under the provisions of 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 prevailing in the State of Mahrashtr~ whereat the goods were to be imported and whereat the proceeclings under the Act were concluded. In the case at hand if the CEGA T would have stated the case then the reference would have been made to the High Court of Bombay and in the event of the application for statement of case having been refused it is the High Court of Bombay whjch the petitioner should have approached for issuing a requi- sition to the Tribunal to state the case." 26. In Commissioner of Central Excise, Delhi v. Enkay HWS India Ltd., E (2002) 139 E.L.T. 21, Arijit Pasayat & D.K. Jain, JJ. in a case arising under section 35H of the Central Excise Act opined :- "2. When the matter was placed for admission, we pointed out to learned counsel for the petitioner that this High Court does not have jurisdiction to deal with the matter, in view of the decision of this Court in Seth Banarsi Dass Gupta v. Commissioner of Income Tax, (Central) ( 1978) 113 ITR 817. In the said case, white dealing with the scope of entertaining reference under the Income Tax Act, 1961 (in short, 'the l.T Act'), it was observed that this High Court, that the State within whose territorial jurisdiction origfoal adjudicating authority functions would have jurisdiction to deal with the reference under the concerned Statute. The view was again reiterated in Suresh Desai and Associates v. Commissioner of Income Tax, 71 (1968) DLT 772. That was also a case under Section 256 (2) of the l.T. Act. In a petition for reference arising under the Act in Central Excise Case No. 5 of 1997 (Commissioner of Central Excise v. Technological Institute of Textile, decided on 9-11-1998, it was held that the High Court within whose r'· AMBICA INDUSTRIES v. COMMNR. OF CENTRAL EXCISE [S.B. SINHA, J.] "'t jurisdiction adjudicating authority functions would have territorial A jurisdiction to entertain the matter. We have also expressed similar view in Central Excise Act Case No. 7 of 2000 disposed of on 30-10- 2000 taking note of decision of the Apex Court in Stridewell leather (P) Ltd v. Bhankerpur Simbhao/i Beverages (P) Ltd., AIR (\944) SC 158, while dealing with the scope of expression "the High Court" B under Section !OF of the Companies Act, 1956 (in short, the Companies Act'). 3. We find no substance in the plea of learned counsel for petitioner that site of the Commissionerate or appellate authority determines the jurisdiction in view of what has been stated in the aforesaid decision." c 27. The said decisions were followed by the Division Bench of the High Court of Bombay in Bombay Snuff (supra) to hold:- "6. The only difference in the legal position that existed at the time the above decision was rendered and the position that prevails today is that instead of the law envisaging a reference from the Tribunal to the High Court, the law now provides for an appeal from every order passed by the Appellate Tribunal. That difference does not however affect the reasoning underlying the view taken by this Court in regard to its jurisdiction to entertain a petition under Section 35G. If a petition seeking reference under Section 35G was not maintainable in this E court, there is no reason why an appeal under the said provision after its amendment can be said to be so maintainable. On the reasoning adopted by this court in Technological Institute of Textile's case (supra), an appeal under Section 35G must also be filed only in the High Court who has jurisdiction over the authority from whose order the proceedings have originated. The fact that the main seat of the F CEST AT is situated in Delhi or that the appeal was heard and decided at Delhi would not mean that all appeals arising from cases so decided regardless from Page 2522 which State the case has originated can be maintained in this court." 28. Before the High Court, the decision of this Court in Kusum Ingots G & Alloys Ltd v. Union of India, (2004) 168 ELT 3, wherein one of us was a member, was strongly relied upon. Therein, this Court while construing the provisions of clause 2 of Article 226, held:- "25. The said decision is an authority for the proposition that the H (2007) 7 S.C.R. place from where an appellate order or a revisional order is passed may give rise to a part of cause of action although the original order was at a place outside the said area. When a part of the cause of· action arises within one or the other High Court, it will be for the petitioner to choose his forum." 29. The decisions operating in the field, which have been taken note of in Kusum Ingots & Alloys ltd (supra), would clearly go to show how the situs doctrine had been given a go-bye by making constitutional amendments. At one point of time writ petitions against the Union of India were being filed only before the Punjab & Haryana High Court as the said Court exercised C territorial jurisdiction over Delhi, which was the seat of the Central Government. Experiencing difficulties, clause IA of Article 226 was introduced. The Constitution again underwent a change by way of insertion of clause 2 of Article 226. Bombay Snuff (supra) has been followed by Kamataka High Court in Big Apple Computers Vs. Commissioner of Customs & Central Excise, Hyderabad 2007 (207) EL T 36, wherein it was held :- "IO. This judgment clearly applies to the facts of this case. We also , see a subsequent judgment of the Delhi High Court 2006 (194) ELT 264. In the said case, the High Court was considering~ to whether in terms of Section 35(G)3, of the Customs Act the Delhi High Court could consider the appeal, filed by the assessee. The tribunal in para 6 noticed as under; 6. The only difference in the legat[losition that existed at the time the above decision was rendered and the position that prevails today is that instead of the law envisaging a reference from the tribunal to the High Court, the law now provides for an appeal from every order passed by the appellate tribunal. That difference does not however affect the reasoning underlying the view taken by this court in regard to its jurisdiction to entertain a petition under Section 35G. If a petition seeking reference under Section 35G was not maintainable in this court, there is no reason why an appeal under the said provision after its amendment can be said to be maintainable. On the reasoning adopted by this amendment can be said to be so maintainable. On the reasoning adoptea by this court in Technological Institute of Textile's case (supra), an appeal under Section 35G must also be filed only in the High Court who has jurisdiction over the authority from whose order the proceedings have originated. The fact that the main seat of the CEST AT is situated in Delhi or that the appeal was heard and t …, l i AMBICA INDUSTRIES"· COMMNR. OF CENTRAL EXCISE [S.B. SINHA, J.) 70} decided at Delhi would not mean that all appeals arising from cases A so decided regardless from which State the case has originated can be maintained in this court." 30. In Nasiruddin (supra) and Kusum Ingots & Alloys ltd. (supra), the court was not dealing with a question of this nature. Therefore, the same are not authorities for the proposition that the High Court, which is situated at B the same place as the situs of the Tribunal, alone will have jurisdiction. If the cause of action doctrine, as analysed hereinbefore is given effect to, invariably more than one high Court may have jurisdiction, which is not contemplated. 31. The teamed Solicitor General relies upon the decision in Stridewell leathers (P) ltd. & Ors. v. Bhankerpur Simbhaoli Beverages (P) ltd [1994) C l SCC 34 wherein construing Section 1 OA vis-a-vis Section l OF of Companies Act, 1956, it was held that the High Court would mean the High Court having jurisdiction in relation to a place at which the registered office of the Company concerned is situated as indicated in Section 2(11) read with Section IA thereof. 32. We are, however, of the view that in terms of the Companies Act, "the High Court" was clearly intended to specify the particular High Court identified by Section 1 OF itself, and therefore, it was held not to be a High Court indicated by the place at which Company Law Board passes the order under appeal. 33. However, our attention has been drawn to Gurdit Singh & Ors. v. Muns ha Singh & Ors., AIR ( 1977) SC 640, wherein this Court opined that no distinction could legitimately been drawn between the right to sue and cause of action unless so indicated in the relevant statute. Yet again in Mis. M Ramnarain Pvt. ltd. & Anr. v. State Trading Corpn. Of India ltd, [1983J 3 F SCC 75, a right to appeal was held to be carrying with it distinct cause of action stating :- "It is his submission that in considering the provisions of Order 23, Rule I, the relevant fact to be borne in mind is the subject matter of the appeal and if the subject matter of the appeal b~ different, as in the present case it is the earlier appeal No. 36 of 1981 being confined to the subject matter of instalment and the subsequent appeal No. 44 of 1981 being against the decree on the merits of the claim,the withdrawal of the earlier ap~l"'C:~~not, in any way, be a bar to the maintainability of the subsequent appeal. Mr. Nariman has in this (2007) 7 S.C.R. connection referred to the decision of this Court in Vallabhdas v. Dr. Madan Lal and Ors. in which this Court "equated the meaning of the l -1" words "subject matter" in Order 23 Rule I with the meaning of the words "cause of action" in Order 23 Rule 2. Relying on this decision, Mr. Nariman has argued that the "subject matter" of the appeal within the meaning of Order 23, Rule I, must be considered in the light of the meaning of the words "cause of action" in Order 2, Rule 2; and it is his argument that as the "cause of action" in respect of the claim for instalment is entirely different from the "cause of action" in respect of decree whi,ch embraces within its fold the 'subject matter" of the r- respective claims of the parties in the suit, the withdrawal of the earlier c appeal No. 36 of 1981 against the instalments cannot in any way affect the maintain ability of the appeal No. 44 of 1981 against the decree on the merits of the claim. Mr. Nariman has next contended that the provisions of Order 2, Rule 2 of the Civil Procedure Code do not in any way affect the maintainability and the merits of the present appeal No. 44 of 1981. He has submitted that the said provisions have no application to an appeal and in any event, the cause of action and the subject matter of the present appeal are entirely different from the cause of action and the subject of the earlier appeal. 34. As against this, the submission of the learned Attorney General E was as under: "It is his argument that the right of appeal which is no doubt a statutory right will also necessarily be governed by the provisions of Order 2, Rule 2 and as the appeal is filed not against the entire subject matter of appeal arising out of the cause of action in the appeal, the right to file another appeal against the decree is cli::arly lost." 35. Accepting Mr. Nariman's submissions, this Hon'ble Court ruled ,… thus: "Even if the principles underlying Order 2, Rule 2 can be considered to apply to an appeal, the maintainability of the instant case cannot be held to be affected in any way as the cause of action in respect of the present appeal is entirely different from the cause of action on the basis of which the earlier appeal had been filed." (Emphasis supplied) 36. In that case the jurisdiction of the High Court was not to be AMBICA INDUSTRIES v. COMMNR. OF CENTRAL EXCISE [S.B. SINHA, J.) determined in order to give effect to the doctrine of 'cause of action' envisaged A under the Code of Civil Procedure. 37. However, we are not oblivious of another line of authority where the situs of the Tribunal was held to be the basis for determination of the jurisdiction of the High Court. In the said decisions, however, the contentions which have been raised before us did not arise for consideration. 38. We have noticed hereinbefore that ifthe decision of the High Court in the aforementioned question is taken to its logical conclusion, the same would lead to a great anomaly. It would also give rise to the problem of forum shopping. We may notice some examples to show that the determination of C the appellate forum based upon the situs of the Tribunal would lead to an anomalous result. For example, 'an assessee affected by 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. [See Suresh Desai and Associates v. CIT, (1998) 230 ITR 912 at 915-917 and CCEv. M's. Technological D Institute of Textile, in 76 (I 998) DLT 862 (DB]. 39. Section 20(c) of the Code of Civil Procedure reads as under: "20. Other suits to be instituted where defendant reside or cause of action arises. Subject to the limitation aforesaid, every suit shall be E instituted in a court within the local limits of whose jurisdiction (c) the cause of act5ion, wholly, or in part, arises." 40. Although in view of Section 141 of the Code of Civil Procedure the provisions thereof would not apply to writ proceedings, the phraseology F used in Section 20(c) of the Code of Civil Procedure and Clause (2) of Article 226, being in pari materia, the decisions of this Court rendered on interpretation of Section 20(c) of CPC shall apply to the writ proceedings also. Before proceeding to discuss the matter further it may be pointed out that the entire bundle of facts pleaded need not constitute a cause of action, as what is necessary to be proved, before the petitioner can obtain a decree, is material G facts. The expression material facts is also known as integral facts. 41. Keeping in view the expression "cause of action" used in clause (2) of Article 226 of the Constitution of India, indisputably even if a small fraction thereof accrues within the jurisdiction of the Court, the Court will have jurisdiction in the matter though the doctrine of forum conveniens may also H (2007) 7 S.C.R. A have to be considered. 42. In Mussummat Chand Kour v. Partap Singh, (15 IA 156), it was held:- " …. the cause of action has no relation whatever to the defence which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the ground set forth in the plaint as the cause of action, or, in other words, to the media upon which the plaintiff asks the court to arrive at a conclusion in his favour." For the reasons aforementioned, we are of the opinion that the High Court was correct in its view. These appeals, therefore, being devoid of any merit, deserve to be dismissed. However, in the facts and circumstances of this case, there shall be no order as to costs. vs Appeals dismissed.