2023 (8) TMI 1451 - HC - Indian Laws

Territorial jurisdiction to entertain the present writ petition - place of arising of cause of action - petitioners were receiving the goods for onward sale etc. in the State of Punjab were manufactured by the respondent No.7 in the State of Rajasthan - HELD THAT - No part of cause of action has arisen within the territorial jurisdiction of this Court. Merely because the petitioner-Firm was having a business transaction with respondent No.7 and certain evasions having been pointed out in the same, will not give any cause of action to the petitioner-Firm to approach this Court by way of filing the present writ petition. Secondly, merely because the show cause notice has been issued to the petitioner-Firm on the basis of a common file maintained by the official respondents, will not be relevant to draw a presumption that part of cause of action has arisen to the petitioner-Firm in the territorial jurisdiction of this Court, merely because on the basis of the same common file, the show cause notice has been issued to the respondent No.7. In view of authoritative pronouncements of the judgments by the Hon ble Supreme Court, the arguments of learned Sr. Counsel that the proceedings out of the present show cause notice have started from a file of even number from which the proceedings were started against the respondent No.7, has no bearing giving rise to any cause of action to file the present writ petition before this Court. Merely because respondent No.7- M/s. Gagan Pharmaceuticals, Sriganganagar has filed the writ petition against the show cause notice issued to it before this Court and the same is pending, will not give any cause of action to the petitioner-Firm to file a writ petition before this Court against the show cause notice issued to it in State of Punjab. The present writ petition is not maintainable before the High Court of Judicature for Rajasthan at Jodhpur and, therefore, the same is dismissed on the ground of territorial jurisdiction.

Summary

Issues Involved:
1. Maintainability of the writ petition before the Rajasthan High Court.
2. Territorial jurisdiction of the Rajasthan High Court.
3. Adjudication of show cause notices by different authorities.

Summary:

1. Maintainability of the writ petition before the Rajasthan High Court:
The writ petition was filed against a Show Cause Notice dated 28.09.2020 issued by the Directorate General, GST Intelligence, Chandigarh Zonal Unit, Chandigarh. The petitioners sought quashing of the notice. The respondent, Union of India, raised a preliminary objection on the maintainability of the writ petition before the Rajasthan High Court.

2. Territorial jurisdiction of the Rajasthan High Court:
The respondent's counsel argued that the petitioner-Firm, located in Punjab, received the show cause notice from an authority also located in Punjab. Therefore, no part of the cause of action arose within the territorial jurisdiction of the Rajasthan High Court. The petitioners contended that under Sub-clause (2) of Article 226 of the Constitution, the Rajasthan High Court had territorial jurisdiction since the manufacturing of goods, which led to the alleged evasion of Central Excise Duty, occurred at M/s. Gagan Pharmaceuticals in Sri Ganganagar, Rajasthan. However, the court found that the petitioner-Firm's business transactions and the issuance of the show cause notice occurred entirely in Punjab, thus no cause of action arose in Rajasthan.

3. Adjudication of show cause notices by different authorities:
The petitioners argued that the proceedings should be consolidated and transferred to Jodhpur to avoid multiplicity of proceedings and potential conflicting outcomes. They relied on a Department Circular dated 03.03.2015, which stipulates that cases involving multiple Commissionerates should be adjudicated by the Commissioner with the highest demand of duty. However, the court noted that the Circular did not confer any cause of action within its jurisdiction. The court emphasized that separate adjudications by different authorities were appropriate given the distinct violations and infractions at each end.

Conclusion:
The court concluded that no part of the cause of action arose within its territorial jurisdiction. The argument that the show cause notice emanated from a common file used to issue notices to both the petitioner-Firm and respondent No.7 was insufficient to establish jurisdiction. The court dismissed the writ petition on the grounds of lack of territorial jurisdiction, stating that the Rajasthan High Court could not transfer proceedings pending in Punjab.