2023 (11) TMI 728 - HC - Customs

Maintainability of petition - principles of Territorial Jurisdiction of High Court - Where the cause of action arisen? - Validity of notifications restricting benefit of exemption - Denial of exemption from customs duty on export of goods - Payment in cash instead of letter of credit as a pre-condition as per the notification - whether a cause of action, wholly or in part, has arisen for exercise of power conferred under Article 226(1) of the Constitution of India has been laid down, in various facts and circumstances, having universal application, in series of decision by the Hon'ble Supreme Court? HELD THAT - In the case of UNION OF INDIA VERSUS ADANI EXPORTS LTD. 2001 (10) TMI 321 - SUPREME COURT , somewhat similar facts as in the present case, had arisen for consideration. On facts, that was a case where claim of the benefit of the Passbook Scheme contained in Import Export Policy in relation to certain credits to be given on export of shrimps was involved. The respondents therein claimed benefit on the basis of export of prawns and import of the inputs. It was an admitted fact that the benefits, which the respondents therein were seeking, were to be extended through the port situated at Chennai. As those benefits were not admitted for various reasons, the respondents therein filed special civil applications before the High Court at Ahmedabad. Had it been a case that the respondents have refused to grant the benefit of exemption from payment of customs duty only on the ground of payment through cash mode, it would have been an integral part of cause of action as the petitioner was required to prove this fact, unless traversed, to succeed in getting the relief sought in the writ petition. All other facts stated in the petition, indisputably, which otherwise could be treated as integral part of cause of action, even according to the petitioner, have arisen outside the territorial jurisdiction of this Court. In the writ petition, it has been stated that a mail was sent for grant of clearance of goods, but the same has not been accepted. It has not even been averred categorically in the writ petition that the only operative reason was difference in mode of payment. It, therefore, appears that though the petitioner's grievance is mainly on account of non-clearance of goods despite fulfillment of the conditions incorporated in notification no. 50/2023-Customs dated 25.08.2023, on an assumption, without any factual basis, writ petition has been filed before this Court that benefit of exemption has been disallowed only on the basis of difference in mode of payment. Keeping that fine, but clear distinction as also applying the principle that the issue of territorial jurisdiction has to be decided on the pleadings as made in the writ petition, this Court lacks territorial jurisdiction to decide the merits of the case and the petitioner ought to have approached the appropriate forum. The objection to the maintainability of the writ petition on the ground of lack of jurisdiction is sustained - the writ petition is dismissed.

Summary

Issues Involved:

1. Territorial Jurisdiction of the High Court to entertain the writ petition.
2. Validity of Notification No. 50/2023-Customs dated 25.08.2023.
3. Discrimination and arbitrariness of the notification.
4. Interim relief for the petitioner.

Summary:

1. Territorial Jurisdiction:
The primary issue addressed was the territorial jurisdiction of the Rajasthan High Court to entertain the writ petition. The petitioner argued that the notification was discriminatory and violative of Article 14 of the Constitution of India. The respondents contended that no part of the cause of action arose within the territorial jurisdiction of this Court, as all relevant actions occurred outside Rajasthan. The Court emphasized that the facts pleaded in the writ petition must have a nexus with the subject matter of the challenge to establish jurisdiction. The Court concluded that the petitioner's assumption that the benefit of exemption was denied solely based on the mode of payment was unfounded and that the integral facts constituting the cause of action arose outside its jurisdiction.

2. Validity of Notification No. 50/2023-Customs:
The petitioner challenged the validity of Notification No. 50/2023-Customs dated 25.08.2023, arguing that it was discriminatory and operated retrospectively, which is impermissible in law. The notification allowed the export of goods backed by irrevocable letters of credit but excluded those where payment was made by other modes, including advance payment. The Court noted that the petitioner's cargo entered the customs station before the publication of the notifications and that the formalities were completed before the notifications were issued.

3. Discrimination and Arbitrariness:
The petitioner claimed that the notifications were arbitrary as they penalized exporters who had made payments through modes other than irrevocable letters of credit. However, the Court found no specific averment in the writ petition that clearance was denied solely on the ground of the mode of payment. The Court stated that if the respondents had explicitly refused the exemption on this ground, it could have constituted an integral part of the cause of action. Since this was not the case, the Court held that the petitioner's grievance was based on an assumption without factual basis.

4. Interim Relief:
The petitioner sought interim relief to allow the export of goods with appropriate conditions. However, since the Court determined it lacked territorial jurisdiction, it did not address the merits of the interim relief sought.

Conclusion:
The Court sustained the objection to the maintainability of the writ petition on the ground of lack of jurisdiction and dismissed the writ petition, leaving the petitioner to seek remedy before the appropriate forum.