1987 (1) TMI 474 - HC - VAT and Sales Tax

Issues Involved:
1. Jurisdiction of Karnataka High Court under Article 226(2) of the Constitution.
2. Determination of cause of action.
3. Legality of demand notices issued by Andhra Pradesh authorities.
4. Submission to jurisdiction by the appellant.

Issue-wise Detailed Analysis:

1. Jurisdiction of Karnataka High Court under Article 226(2) of the Constitution:
The primary issue was whether the Karnataka High Court had jurisdiction to entertain the writ petition under Article 226(2) of the Constitution. The appellant argued that part of the cause of action had arisen in Karnataka, thus conferring jurisdiction on the Karnataka High Court. The relevant provision states that a High Court can issue directions, orders, or writs if the cause of action, wholly or in part, arises within its jurisdiction, even if the seat of the government or authority is outside its territory. The appellant contended that the sale transaction was completed in Karnataka, where the sugarcane was weighed and payment made.

2. Determination of cause of action:
The Court examined whether any part of the cause of action arose within Karnataka. The appellant's argument was based on the assumption that the sale was not complete until the sugarcane was weighed and paid for in Karnataka. However, the Court found that the entire transaction, including the issuance of way bills and the payment of harvesting and freight charges, took place in Andhra Pradesh. The Court concluded that no part of the cause of action arose in Karnataka, as the purchase of sugarcane occurred entirely in Andhra Pradesh.

3. Legality of demand notices issued by Andhra Pradesh authorities:
The appellant challenged the demand notices issued by Andhra Pradesh authorities for purchase tax on sugarcane. The Andhra Pradesh High Court had previously quashed the notices and remanded the matter for a fresh determination. Upon re-evaluation, the third respondent concluded that the purchases were made in Andhra Pradesh, thus validating the tax demand. The appellate and revisional authorities upheld this finding. The Karnataka High Court held that the appellant's challenge to the jurisdiction of Andhra Pradesh authorities was unfounded, as the transactions were confirmed to have occurred within Andhra Pradesh.

4. Submission to jurisdiction by the appellant:
The Court noted that the appellant had initially submitted to the jurisdiction of the Andhra Pradesh High Court and the subsequent authorities. The appellant had chosen to challenge the demand notices in Andhra Pradesh and had participated in the proceedings there. The Court emphasized that having chosen the forum and submitted to its jurisdiction, the appellant could not later claim that the Karnataka High Court had jurisdiction. The Court found the appellant's attempt to invoke the jurisdiction of Karnataka High Court legally untenable.

Conclusion:
The Karnataka High Court dismissed the appeal, holding that:
1. No part of the cause of action arose within Karnataka.
2. The appellant had chosen and submitted to the jurisdiction of the Andhra Pradesh authorities.
3. The orders passed by the Andhra Pradesh authorities were valid and within their jurisdiction.
4. The writ petition in Karnataka High Court was not maintainable.

The appeal was dismissed without any order as to costs.

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