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CASE NO.:

Appeal (civil) 2749 of 2007

PETITIONER:

M/s. Ambica Industries

RESPONDENT:

Commissioner of Central Excise

DATE OF JUDGMENT: 18/05/2007

BENCH:

S.B. Sinha & Markandey Katju

JUDGMENT:

J U D G M E N T

CIVIL APPEAL NO. 2749 2007

[Arising out of S.L.P. (C) No. 18405 of 2006]

WITH

CIVIL APPEAL NO. 2750/2007 @ S.L.P.(C)No. 18822 of 2006

CIVIL APPEAL NO. 2751/2007 @ S.L.P.(C)No. 18956 of 2006

S.B. SINHA, J.

1. Leave granted.

2. The issue which arises for our consideration in these appeals relates to

determination of situs of the High Court in which appeals would lie under

Section 35G(1) of the Central Excise Act.

3. Appellant herein carries on business at Lucknow. It was assessed at

the said place. The matter, however, ultimately came up before Central

Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi in

Appeal No.E/2792/02-NBC. The said Tribunal exercises jurisdiction in

respect of cases arising within the territorial limits of the State of Uttar

Pradesh, National Capital Territory of Delhi and the State of Maharashtra.

4. Having regard to the situs of the Tribunal, an appeal in terms of

Section 35G of the Central Excise Act, 1944 was filed before the Delhi High

Court. A Division Bench of the said Court relying on or on the basis of an

earlier Division Bench judgment in Bombay Snuff Pvt. Ltd. Vs. Union of

India 2006 (194) ELT 264 opined that it had no territorial jurisdiction in the

matter.

5. Mr. C. Hari Shankar, learned counsel appearing on behalf of the

appellant would submit that despite the fact that sub-section (9) of Section

35G of the Act was brought to the notice of the High Court, the court

refused to consider the effect thereof in determining the question of its

jurisdiction. Had the said provision been taken into consideration for

determination of the issue, it was possible to hold that its decision in

Bombay Snuff (supra) had been rendered per incurium. Referring to the

development of law governing the field, by reason of the amendment carried

out by Parliament in the said Act as also other pari materia statutes, the

learned counsel would submit that the High Court was wrong in arriving at

the said conclusion.

6. Mr. G.E. Vahanvati, learned Solicitor General of India, on the other

hand, would submit that the term 'cause of action' applicable in relation to a

suit or a writ petition before the High Court having regard to clause 2 of

Article 226 of the Constitution of India cannot be the basis for determining

the situs of the High Court to which an appeal shall lie under section 35G of

the Act. It was submitted that the situs of the Assessing Officer would be

the determinative factor for the High Court to exercise its territorial

jurisdiction in entertaining appeal thereunder and not the situs of the

Tribunal alone.

7. We may, at the outset, notice some provisions of the Act which are

relevant for our purpose:-

"35G. Appeal to High Court \026

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(1) An appeal shall lie to the High Court from

every order passed in appeal by the Appellate

Tribunal on or after the 1st day of July, 2003 (not

being an order relating, among other things, to the

determination of any question having a relation to

the rate of duty of excise or to the value of goods

for the purposes of assessment), if the High Court

is satisfied that the case involves a substantial

question of law.

(2) The Commissioner of Central Excise or the

other party aggrieved by any order passed by the

Appellate Tribunal may file an appeal to the High

Court and such appeal under this sub-section shall

be---

(9) Save as otherwise provided in this Act, the

provisions of the Code of Civil Procedure, 1908(5

of 1908), relating to appeals to the High Court

shall, as far as may be, apply in the case of appeals

under this section."

8. In terms of the said provision, the questions involving "rate of duty of

excise or the value of the goods" may be subjected to an appeal before the

High Court, subject of course to its satisfaction that the matter involves a

substantial question of law. Sub-section (9) of Section 35G, prior to 1999,

provided for application of the procedure of Code of Civil Procedure, 1908

mutatis mutandis to the appeals to the High Courts, recourse to which could

be taken for challenging the final orders of the Tribunal before the High

Court. Post 1999, two provisions, namely, Section 35G and Section 35H

were made available, the relevant provisions whereof are as under :-

"35G. Statement of case to High Court.--

(1) The Commissioner of Central Excise or the

other party may, within sixty days of the date upon

which he is served with notice of an order under

section 35C passed before the 1st day of July, 1999

(not being an order relating, among other things, to

the determination of any question having a relation

to the rate of duty of excise or to the value of

goods for purposes of assessment), by application

in the prescribed form, accompanied, where the

application is made by the other party, by a fee of

two hundred rupees, require the Appellate Tribunal

to refer to the High Court any question of law

arising out of such order and, subject to the other

provisions contained in this section, the Appellate

Tribunal shall, within one hundred and twenty

days of the receipt of such application, draw up a

statement of the case and refer it to the High Court:

Provided that the Appellate Tribunal may, if it is

satisfied that the applicant was prevented by

sufficient cause from presenting the application

within the period herein before specified, allow it

to be presented within a further period not

exceeding thirty days\005"

9. The Finance Act of 2003, however, did away with the remedy of

reference to the High Court, altogether, except in the case of final orders

passed by the Tribunal on or before 1.7.2003. Final orders passed after the

said date by reason of Section 144 of the Finance Act, 2003 were made

appealable to the High Court under an entirely substituted Section 35G,

whereas Section 145 of the Finance Act, 2003, amended Section 35H of the

Act to restrict its applicability to Final Orders passed after 1.7.2003. Section

35H as amended reads as under :-

"35H. Application to High Court.--

(1) The Commissioner of Central Excise or the

other party may, within one hundred and eighty

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days of the date upon which he is served with

notice of an order under section 35C passed *

[before the 1st day of July, 2003] (not being an

order relating, among other things, to the

determination of any question having a relation to

the rate of duty of excise or to the value of goods

for purposes of assessment), by application in the

prescribed form, accompanied, where the

application is made by the other party, by a fee of

two hundred rupees, apply to the High Court to

direct the Appellate Tribunal to refer to the High

Court any question of law arising from such order

of the Tribunal.

(2) The Commissioner of Central Excise or the

other party applying to the High Court under sub-

section (1) shall clearly state the question of law

which he seeks to be referred to the High Court

and shall also specify the paragraph in the order of

the Appellate Tribunal relevant to the question

sought to be referred.

(3) On receipt of notice that an application has

been made under sub-section (1), the person

against whom such application has been made,

may, notwithstanding that he may not have filed

such application, file, within forty-five days of the

receipt of the notice, a memorandum of cross-

objections verified in the prescribed manner

against any part of the order in relation to which an

application for reference has been made and such

memorandum shall be disposed of by the High

Court as if it were an application presented within

the time specified in sub-section (1).

(4) If, on an application made under sub-section

(1), the High Court directs the Appellate Tribunal

to refer the question of law raised in the

application, the Appellate Tribunal shall, within

one hundred and twenty days of the receipt of such

direction, draw up a statement of the case and refer

it to the High Court."

10. Similar problems have arisen in respect of the decisions rendered by

Tribunals constituted under different Acts, for example Income Tax Act.

We are also not unmindful of a catena of decisions rendered by some High

Courts that situs of the Tribunal is the determinative factor for reference

and/or appeal before the High Court.

11. The question incidentally came up for consideration before a 5 Judge

Bench of this Court in Nasiruddin Vs. S.T.A. Tribunal AIR 1976 SC 331

wherein, inter alia, it was held :-

"37. To sum up, our conclusions are as follows.

First, there is no permanent seat of the High Court

at Allahabad. The seats at Allahabad and at

Lucknow may be changed in accordance with the

provisions of the Order. Second, the Chief Justice

of the High Court has no power to increase or

decrease the areas in Oudh from time to time. The

areas in Oudh have been determined once by the

Chief Justice and, therefore, there is no scope for

changing the areas. Third, the Chief Justice has

power under the second proviso to paragraph 14 of

the Order to direct in his discretion that any case or

class of cases arising in Oudh areas shall be heard

at Allahabad. Any case or class of cases are those

which are instituted at Lucknow. The

interpretation given by the High Court that the

word "heard" confers powers on the Chief Justice

to order that any case or class of cases arising in

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Oudh areas shall be instituted or filed at Allahabad

instead of Lucknow is wrong. The word "heard"

means that cases which have already been

instituted or filed at Lucknow may in the discretion

of the Chief Justice under the second proviso to

paragraph 14 of the Order be directed to be heard

at Allahabad. Fourth, the expression "cause of

action" with regard to a civil matter means that it

should be left to the litigant to institute cases at

Lucknow Bench or at Allahabad Bench according

to the cause of action arising wholly or in part

within either of the areas. If the cause of action

arises wholly within Oudh areas then the Lucknow

Bench will have jurisdiction. Similarly, if the

cause of action arises wholly outside the specified

areas in Oudh then Allahabad will have

jurisdiction. If the cause of action in part arises in

the specified Oudh areas and part of the cause of

action arises outside the specified areas, it will be

open to the litigant to frame the case appropriately

to attract the jurisdiction either at Lucknow or at

Allahabad. Fifth, a criminal case arises where the

offence has been committed or otherwise as

provided in the Criminal Proceduce Code. That

will attract the jurisdiction of the Court at

Allahabad or Lucknow. In some cases depending

on the facts and the provision regarding

jurisdiction, it may arise in either place."

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, thus, a cause of action arises within one or the other

High Court, the petitioner 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

Tribunal should be considered to be the determinative 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. In the event,

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 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 would be able to successfully evade the law laid down

by the High Court at Bombay.

14. Furthermore, 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

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 Tribunal.

15. In a case of this nature, therefore, the cause of action doctrine may not

be invoked.

16. Sub-section 9 of Section 35G, whereupon Mr. C. Hari Shankar,

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learned counsel places strong reliance, in our opinion, does not answer the

question placed before us. Learned counsel contends that in terms of sub-

section 1 of Section 100 of the Code of Civil Procedure, the order of the

First 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 terms of Article 227 of

the Constitution of India as also Clause (2) of Article 226 thereof, the High

Court would exercise its discretionary jurisdiction as also power to issue writ

of certiorari in respect of the orders passed by the Subordinate Courts within

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 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 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 litus indicates that the suitor has more than one option, whereas the

situs of an Appellate Tribunal refers 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 or at Bombay would not attain its finality then and there.

19. We may notice some incongruities if the 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

mean that when the Tribunal pronounces its judgment at Allahabad or

Bombay, although the cause of action had initially arisen at Delhi, the Delhi

High Court 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 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

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

decisions. In Commissioner of Income Tax, Madras Vs. 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 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 a directive by Section 274(2) he

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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 that this court will have no

jurisdiction under Section 66(2)."

23. A Division Bench of Delhi High Court in Seth Banarsi Dass Gupta

Vs. Commissioner of Income Tax, 1978 (11) DLT 14, while construing

Section 66 of the Income Tax Act, 1922, held as under :-

"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(1) 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

to 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 a 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 Court", 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(1) 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,

Commissioner of Income Tax Vs. S. Sivaramakrishna Iyer 1968 (70) ITR

860, the learned 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 64 of the Act, as suggested in the

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decision of the Madras High Court in the case.

Commissioner of Income-tax, Madars v. S.

Sivaramakrishna Iyer."

25. Yet again in Suraj Woolen Mills Vs. Collector of Customs, 2000

(123) ELT 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 held :-

"10. The Division Bench decision in the case of

Seth Banarsi Dass Gupta has been followed by

another Division Bench in Birla Cotton & Spg

Mills Ltd Vs. CIT Rajasthan (1980) 123 ITR 354.

The assessee carried on business in Jaipur. It had

its registered office in Delhi. The 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-tax Appellate

Tribunal as there was no Tribunal at Jaipur. The

Division Bench held that the court to which

reference should be made would 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 Vs.

CIT [1991] 230 ITR 912. In this judgment, the

Divi- sion Bench has assigned yet another reason

why the High 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 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."

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

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petitioner must be held bound by the law as

applicable and as prevailing in the State of

Mahrashtra whereat the goods were to be imported

and whereat the proceedings under the Act were

concluded. In the case at hand if the CEGAT

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 which the petitioner should

have approached for issuing a requi- sition to the

Tribunal to state the case."

26. In Commissioner of Central Excise, Delhi Vs. Enkay HWS India Ltd.

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 I.T Act'), it

was observed that this High Court, that the State

within whose territorial jurisdiction original

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 I.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 jurisdiction adjudicating

authority functions would have territorial

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 Simbhaoli

Beverages (P) Ltd. [AIR 1944 SC 158], while

dealing with the scope of expression "the High

Court" under Section 10F 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."

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

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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 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

CESTAT 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 &

Alloys Ltd. Vs. 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 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

territorial jurisdiction over Delhi, which was the seat of the Central

Government. Experiencing difficulties, clause 1A 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

Karnataka High Court in Big Apple Computers Vs. Commissioner of

Customs & Central Excise, Hyderabad 2007 (207) ELT 36, wherein it was

held :-

"10. 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 as 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 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 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 adopted by this

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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 CESTAT 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 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

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 learned Solicitor General relies upon the decision in Stridewell

Leathers (P) Ltd. & Ors. Vs. Bhankerpur Simbhaoli Beverages (P) Ltd.

(1994) 1 SCC 34 wherein construing Section 10A vis-`-vis Section 10F 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 1A 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 10F 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. Vs.

Munsha 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 M/s. M.

Ramnarain Pvt. Ltd. & Anr. Vs. State Trading Corpn. Of India Ltd. (1983)

3 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 1, the relevant fact to

be borne in mind is the subject matter of the appeal

and if the subject matter of the appeal be 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,\027the withdrawal of the earlier appeal

cannot, in any way, be a bar to the maintainability

of the subsequent appeal. Mr. Nariman has in this

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 words

"subject matter" in Order 23 Rule 1 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 1, 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 which

embraces within its fold the 'subject matter" of the

respective claims of the parties in the suit, the

withdrawal of the earlier appeal No. 36 of 1981

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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 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 clearly 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

determined in order to give effect to the doctrine of 'cause of action'

envisaged 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 if the 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 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

CCE V. M/s. Technological Institute of Textile in 76 (1998) 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 instituted in

a court within the local limits of whose

jurisdiction\026

(c) the cause of act5ion, wholly, or in part, arises."

40. Although in view of Section 141 of the Code of Civil Procedure the

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provisions thereof would not apply to writ proceedings, the phraseology

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 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

have to be considered.

42. In Mussummat Chand Kour V. Partap Singh (15 1A 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.