M-S. CANON STEELS P. LTD. v. COMMISSIONER OF CUSTOMS

Citation: [2007] 11 S.C.R. 1053

Court: Supreme Court of India

Bench: ARIJIT PASAYAT, P. SATHASIVAM

Case summary

M-S. CANON STEELS P. LTD. v. COMMISSIONER OF CUSTOMS.pdf

Judgment text

( t ~ r MIS. CANON STEELS P. LTD. v. COMMISSIONER OF CUSTOMS NOVEMBER 12, 2007 . B ~ [DR. ARIJIT PASAVAT AND P. SATHASIVAM, JJ.

] ( Customs Act, 1962; Section 130/Constitution ofIndia, 1950; Article 227: Territorialjurisdiction ofHigh Court-Cause ofaction not arises within-Discretionaryjurisdiction-Invoking of-Held: When a part ofcause ofaction arises within territorial jurisdiction ofone or the other High Court, it will be for the petitioner to choose any one of them-However, merely because part ofcause ofaction arises within territorial jurisdiction ofHigh Court, that by itself may not be a determinative factor compelling the High Court to decide the matter on merit-High Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine ofForum Conveniens-ln the instant case, Punjab and Haryana High Courtjustified in dismissing the appeal on ground that both the acjjudication order and the appellate order not issued by any authority within its territorialjurisdiction- Delhi High Court has jurisdiction to deal with the matter. Doctrines: Doctrine of 'Farum Conveniens.

'-invoking of The question which arose for determination in this appeal was as to whether the Punjab & Haryana High Court had jurisdiction to deal with the matter in which the original order was passed by Adjudicating authority at Mumbai and the appellate order was ·-\ passed at Delhi by the Customs, Excise and Service Tax Appellate Tribunal in an appeal filed u/s. 130 ofthe Customs Act, 1962. Appellant-assessee contended that the judgment in Kusum 1 ' Ingots & Alloys Ltd. v. Unionof! ndiaandAnr. , is in its favour and on misreading ofthe decision the appeal has been dismissed by the High Court; that prima facie, the High Court was of the view that the appeal was not maintainable before it and, therefore, the appellant withdrew the said appeal to file it before the appropriate High Court; that since the cause of action arose at Chandigarh, Punjab and f Haryana High Court has jurisdiction; and that the situs offraming > law or rule would give jurisdiction to the Delhi High Court.

Respondent submitted that before moving the Punjab and Haryana High Court, the Delhi High Court was moved, and at the request ofthe appellant, the High Court permitted to withdraw the appeal. Disposing ofthe appeal, the Court HELD: 1. 1. The Court must have the requisite territorial jurisdiction. An order passed on a writ petition questioning the constitutionality ofa Parliamentary Act, whether interim or final keeping in view the provisions contained in clause (2). ofArticle 226 ofthe Constitution oflndia, will have effect throughout the territory oflndia subject ofcourse to the applicability ofthe Act. [Para 6] [1056-F, G] 1. 2. The decision ofthis Court in the case ofNasirruddin v. STAT is an authority for the proposition that the 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. [Para 8] [1058-B, C] Nasiruddin v. STAT, [1975] 2 SCC 671, referred to. 1. 3. Even if a small part of cause of action arises within the territorial jurisdiction ofthe 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 ~ ( MIS. CANONSTEELSP. LTD. v. COMMISSIONER OF 1055 doctrine offorum conveniens. [Para 9] [1058-C, D] . ' Bhagat Singh Buggav. Dewan Jagbir Sawhney, AIR (1941) Cal 670; Madan/alJalan v. Madanial, AIR (1949) Cal 495; Bharat Coking Coal Ltd. v. Jharia Talkies &ColdStorage (P) Ltd. , (1997) CWN 122; I S. S. Jain &Co. v. Union ofIndia, (1994) 1 CHN 445 and New Horizons Ltd. v. Union ofIndia, AIR (1994) Del 126, referred to. 1. 4.

The appellate order in this case was issued from CESTAT office at New Delhi. In that sense the Delhi High Court has jurisdiction to deal with the matter. [Para 10] [1058-E, F] Kusumingots&AlloysLtd. v. UnionofindiaandAnr. , [2004] 6 sec 254, referred to. 1. 5. The Punjab & Haryana High Court was justified in its view as the original adjudication order and the appellate orders were not issued by any authority within its territorial jurisdiction. But no person should be left without a remedy, therefore, even though the· case was withdrawn by the asscssee, the same is restored as the Delhi High Court has jurisdiction to deal with the matter. [Para 11] [1058-F, G] CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5153 of 2007. From the final Judgment and Order dated 8. 5. 2006 ofthe High Court ofPunjab and Haryana at Chandigarh in Customs Act Appeal No. 4 of ... ,_ )-- 2004. , S. R. Sharma and S. Balaji for the Appellant. B. Krishna Prasad for the Respondent.

The Judgment ofthe Court was delivered by DR ARIJIT PASAYAT, J. 1. Leave granted. 2. Challenge in this appeal is to the orders passed by the Punjab & Haryana High Court dismissing the Customs Act Appeal No. 4/2004, filed under Section 130 of the Customs Act, 1962 (in short the 'Act') dated 8th May, 2006, and the order passed in review application dated 12. 10. 2006. The High Court held that it had no jurisdiction to deal with the matter as the original order was passed by Adjudicating authority at Mumbai and the appellate order was passed at Delhi by the Customs, Excise and. Service Tax Appellate Tribunal (in short 'CESTAT'). Reference was made to the decision of this Court in Kusum Ingots & ~ Alloys Ltd. v. Union ofIndia and Anr. , [2004] 6 SCC 254. > 3. In support of the appeal, learned counsel for the appellant submitted that the judgment in Kusum Ingots (supra) is in favour ofthe appellant and on misr~ading ofthe decision the appeal has been dismissed.

Learned Additional Solicitor General, on the other hand, submitted that before moving the Punjab and Haryana High Court, the Delhi High Court was moved, and at the request ofthe appellant, the High Court permitted to withdraw the appeal (wrongly stated as writ petition). 4. The factual position is not in dispute. The adjudication order under the Act was passed by the Commissioner ofCustoms (EP Mumbai) and the appeal against that order was adjudicated by CESTAT. Against the order ofCESTAT, Customs Appeal No. 6/04 was filed before the Delhi High Court. It is submitted by learned counsel for the appellant thatprima facie, the High Court was ofthe view that the appeal was not maintainable before it and, therefore, the appellant withdrew the said appeal to file it before the appropriate High Court. Since the cause ofaction arose at Chandigarh it was submitted that the Punjab and Haryana High Court has jurisdiction. 5.

At this juncture, it would be appropriate to take note of what has been stated by this Court in Kusum Ingots (supra). 6. The Court must have the requisite territorial jurisdiction. An order passed on a writ petition questioning the constitutionality of a Parliamentary Act, whether interim or final keeping in view the provisions contained in clause (2) of Article 226 ofthe Constitution oflndia, will have effect throughout the te1Titory of India subject of course to the applicability ofthe Act. 7. Learned counsel for the appellant in support of his argument j MIS. CANON STEELS P. LTD. v. COMMISSIONER OF 1057 .. ,, r would contend that the situs offraming law or rule would givejurisdiction to the Delhi High Court and in support ofthe said contention relied upon the decisions ofthis Court in Nasiruddin v. STAT (1975] 2 SCC 671~ and UP. Rashtriya Chini Mill Adhikari Parishad v. State of UP. , (1995] 4 SCC 738.

So far as the decision ofthis Court inNasiruddin's case (supra) is concerned, it is not an authority for the proposition that ~ the situs of legislature of a State or the authority in power to make ~ subordinate legislation or issue a notification would confer power or jurisdiction on the High Court or a Bench ofthe High Court to entertaiQ a petition under Article 226 ofthe Constitution. In fact, this Court while construing the provisions of the United Provinces High Courts, (Amalgamation) Order, 1948 stated the law thus: (SCC p. 683, para 37) "37 . The conclusion as well as the reasoning ofthe High Court is incorrect. It is unsound because the expression 'cause ofaction' in an application under Article 226 would be as the expression is understood and ifthe cause ofaction arose because ofthe appellate, order or the revisional order which came to be passed at Lucknow then Lucknow would have jurisdiction though the original order was passed at a place outside the areas in Oudh.

It may be that the original order was in favour ofthe person applying for a writ. In such case an adverse appellate order might be the cause ofaction. The expression 'cause of action' is well known. Ifthe cause of action arises wholly or in part at a place within the specified Oudh areas, the Lucknow Bench will have jurisdiction. Ifthe cause of _,.. ';- action arises wholly within the specified Oudh areas, it is indisputable that the Lucknow Bench would have exclusive jurisdiction in such a matter. Ifthe cause ofaction arises in part within the specified areas in Oudh it would be open to the litigant who is the dominus litis to have hisforum conveniens. The litigant has the right to go to a court where part of his cause of action ~ '-< arises. In such cases, it is incorrect to say that the litigant chooses any pru. ticular court. The choice is by reason ofthe jurisdiction of the com1 being attracted by part ofcause ofaction arising within ·the jurisdiction ofthe coUii.

Similarly, ifthe cause ofaction can be -<{ 'tC said to have arisen part within specified areas in Oudh and part outside the specified Oudh areas, the litigant will have the choice to institute proceedings either at Allahabad or Lucknow. The court will find out in each case whether the jurisdiction ofthe court is rightly attracted by the alleged cause ofaction. " )a-. 8. The said decision is an authority for the proposition that the place from where an appellate order or a revisional order is passed may give rise to a part ofcause ofaction although the original order was at a place outside the said area. When a part ofthe cause of action arises within one or the other High Court, it will be for the petitioner to choose his fomm. 9.

We must, however, remind ourselves that even ifa small part of cause ofaction arises within the territorial jurisdiction ofthe 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 -. i. , cases, the Court may refuse to exercise ifs discretionary jurisdiction by invoking the doctrine offorum conveniens. [See Bhagat Singh Bugga v. Dewan Jagbir Sawhney, AIR (1941) Cal 670, Madan/al Jalan v. Madan/al, AIR (1949) Cal 495, Bharat Coking Coal Ltd. v. Jharia Talkies & Cold Storage (P) Ltd. , (1997) CWN 122, S. S. Jain & Co. v. Union ofIndia, (1994) 1CHN445 and New Horizons Ltd. v. Union ofIndia, AIR (1994) Del 126. ] 10. The appellate order in this case was issued from CESTAT office at New Delhi. In that sense the Delhi High Court has jurisdiction to deal with the matter in terms ofwhat has been stated in paragraph 25 ofKusum -< Ingot's case (supra). 11.

The Punjab & Haryana High Court was justified in its view as the original adjudication order and the appellate order were not issued by any authority within its territorial jurisdiction. But no person should be . /'"' left without a remedy, therefore, even though the Customs Case No. 6/ r- 04 was withdrawn by the assessee, we direct the restoration of the said as undisputably, the Delhi High Court has jurisdiction to deal with the matter. . H M/S. CANON STEELS P. LTD. v. COMMISSIONER OF 1059 12. Customs Case No. 6104 in the Delhi High Court needless to A say shall be dealt with on merits. 13. We make it clear that we have not expressed any opinion on the merits ofthe appeal. 14. The appeal is accordingly disposed ofwithout any order as to · B i costs. S. K. S. Appeal disposed of.