2006 (4) TMI 82 - HC - Income Tax

Doctrine of forum convenience - respondents argue that the petitioner cannot maintain the present writ petition in Delhi, not only because no part of the alleged cause of action has accrued to the petitioner in Delhi but also because the Delhi High Court is not a forum convenient to the respondents. - even if a small part of cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on the merits. In appropriate cases, the court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum convenience. - submission made on behalf of the respondents that Delhi is not a forum convenient for adjudication of the issues being raised by the petitioner cannot be brushed aside. - In the result, this writ petition fails and is hereby dismissed,

Summary

Issues:
Determining the appropriate forum for a writ petition seeking redress for tax-related matters when the cause of action arises in a different jurisdiction.

Analysis:
The judgment revolves around the question of whether a writ petition should be entertained in Delhi when the cause of action for the petitioner's claims primarily originates in Kolkata. The petitioner, a non-resident bank conducting business in India, sought redress regarding interest levied under sections 234B and 234C of the Income-tax Act, 1961. The key issue was whether the Delhi High Court was a suitable forum for the petition, considering that the assessments, appeals, deductions, and applications related to the petitioner's claims were all conducted in Kolkata.

The Court highlighted that the majority of the relief sought by the petitioner, including quashing orders and refund requests, were directly linked to actions taken in Kolkata. While one relief involved a mandamus against an authority in Delhi, the core of the cause of action stemmed from Kolkata. The judgment referenced the principle established in the case of Kusum Ingots and Alloys Ltd. v. Union of India, emphasizing that even if a minor part of the cause of action arises in a particular jurisdiction, it may not justify litigating there if the primary cause of action is elsewhere.

The Court concluded that since the significant aspects of the petitioner's claims were tied to Kolkata, maintaining the writ petition in Delhi was not appropriate. Despite one relief involving an authority in Delhi, the foundational cause of action did not justify shifting the forum. Therefore, the petition was dismissed, with the petitioner advised to seek redress in the competent court where the primary cause of action arose. The judgment underscored the importance of forum convenience and upheld the principle that the choice of forum should align with where the major part of the cause of action arises.