2020 (9) TMI 771 - HC - Income Tax

Jurisdiction of Court entertaining this appeal - whether situs of the Settlement Commission was within the jurisdiction of this Court? - HELD THAT - Doctrine of dominus litis or doctrine of situs of the appellate Tribunal do not go together; and a dominus litis 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. As pointed out that situs of a Tribunal may vary from time to time and it could be Delhi or some other place or Chennai as in the case on hand and the determination of jurisdiction of the High Court should be based on the relevant Statute and that the Parliament never contemplated to have a situation of this nature and if the cause of action doctrine is given effect to, invariably more than one High Court may have jurisdiction, which is not contemplated. Appellant is an assessee on the file of the third respondent namely the DCIT, Company Circle 4(1)(Inv.), IV Floor, Kendriya Sadan, Koramangala, Bangalore. The Appellate Authority, before whom the assessee filed the appeal is the second respondent herein namely the Commissioner of Income Tax, Bangalore-III, Bangalore. Therefore, the learned Single Judge was justified in rejecting the writ petition on the ground that due to lack of territorial jurisdiction, the order passed by the Settlement Commission did not call for interference. Writ appeal is dismissed leaving it open to the appellant to move the High Court of Karnataka if they are so advised. It is also made clear that the above writ appeal has been dismissed solely on the ground of lack of territorial jurisdiction to entertain the appeal/writ petition and the merits of the case of the appellant have not been dealt with in this judgment.

Summary

Issues Involved:
1. Territorial jurisdiction of the High Court.
2. Application of the doctrine of dominus litis.
3. Relevance of the situs of the Settlement Commission.

Issue-wise Detailed Analysis:

1. Territorial Jurisdiction of the High Court:
The primary issue in this case was whether the Madras High Court had the territorial jurisdiction to entertain the writ petition filed by the appellant. The appellant challenged the order passed by the Settlement Commission, which is situated in Chennai. The learned Single Judge dismissed the writ petition on the grounds of lack of territorial jurisdiction, relying on precedents such as Kusum Ingots and Alloys Ltd. vs. Union of India, R.T. Industries vs. Income Tax Settlement Commission, and West Coast Ingots (P) Ltd. vs. Commissioner of Central Excise, New Delhi. The court reiterated that the situs of the Settlement Commission alone does not confer jurisdiction on the High Court if the cause of action arises outside its territorial limits.

2. Application of the Doctrine of Dominus Litis:
The appellant argued that the doctrine of dominus litis, which allows a suitor to choose the forum, should apply as a part of the cause of action arose within the jurisdiction of the Madras High Court. The appellant contended that since the Settlement Commission is located in Chennai and has jurisdiction over multiple states, including Karnataka, where the appellant is registered, the writ petition should be maintainable. However, the court rejected this argument, stating that the doctrine of dominus litis does not apply in this context. The court emphasized that the jurisdiction should be determined based on statutory provisions and not merely on the convenience of the parties.

3. Relevance of the Situs of the Settlement Commission:
The court referred to previous decisions, including Ambica Industries vs. Commissioner of Central Excise, to clarify that the situs of the appellate Tribunal or Settlement Commission is not the sole determinative factor for jurisdiction. The court highlighted that if jurisdiction were based solely on the location of the Tribunal, it could lead to judicial anarchy, with different High Courts potentially issuing conflicting decisions. The court concluded that the appropriate High Court for jurisdiction is the one where the original authority or first appellate authority is located, in this case, the High Court of Karnataka, as the appellant's assessment and appellate authorities are situated in Bangalore.

Conclusion:
The Madras High Court dismissed the writ appeal on the grounds of lack of territorial jurisdiction, leaving it open for the appellant to approach the High Court of Karnataka. The court clarified that the dismissal was solely based on jurisdictional grounds and did not address the merits of the appellant's case. Consequently, the connected CMP was also dismissed.