2014 (12) TMI 81 - HC - Service Tax

Challenge to the inquiry notice / summon notice - Legality of order of the order passed by the ld. single judge bench dismissing the writ petition 2013 (8) TMI 749 - CALCUTTA HIGH COURT - appellant subjected to exhaustive scrutiny with regard to its tax liability by the respondent as well as by CERA associated with the office of the Comptroller and Auditor General - Held that - In the instant case, the subject matter of challenge are impugned summons issued by the authority from Kochi in the State of Kerala. Impugned summons have been received in Kolkata by the appellant company. Such fact is an incidental one and does not constitute an integral part of cause of action so as to vest jurisdiction in this Court. It has been pleaded that the appellant-company had been subjected to alleged similar enquiries at the behest of respondent No. 3 and other authorities in Kolkata, we are of the considered view that in the factual matrix of the instant case as impugned summons had been issued by respondent No. 1 authority from Kochi and the appellant-company is required to respond to the same at Kochi also, the principle of forum conveniens, as aforesaid, would dissuade the Court from exercising its discretionary writ jurisdiction - Decided against assesee.

Summary

Issues:
Challenge to territorial jurisdiction based on impugned summons issued by respondent No. 1 authority from Kochi, Kerala.

Analysis:
The appellant, a non-banking finance company in Kolkata, challenged the summons dated 18-8-2012 and 11-1-2013 issued by the Assistant Director in Kochi, Kerala, claiming lack of territorial jurisdiction. The appellant argued that the enquiries and orders related to the impugned period were initiated in Kolkata, and the records were within Kolkata's jurisdiction. The appellant contended that the mere location of the respondent's office in Kochi should not affect the court's jurisdiction. Citing the National Textile Corpn. Ltd. case, the appellant argued that the cause of action was traceable within the court's territorial limits.

The appellant relied on legal precedents like Union of India v. Adani Exports Ltd. and National Textile Corpn. Ltd. to support their argument that the facts pleaded must have a nexus with the dispute to confer territorial jurisdiction. The court noted that the subject matter of the challenge was the summons issued from Kochi, received in Kolkata, which was deemed incidental and not integral to the cause of action. Referring to State of Rajasthan v. M/s. Swaika Properties, the court emphasized that the mere receipt of notice at the registered office does not establish cause of action within the territory. The court also cited Kusum Ingots & Alloys Ltd. case, highlighting the concept of "Forum Conveniens" where a small part of the cause of action within the jurisdiction may not compel the court to decide on the merit.

The court, considering the factual matrix, found that the principle of forum conveniens would dissuade the court from exercising its discretionary writ jurisdiction. Therefore, the court declined to interfere with the impugned order, clarifying that the decision did not delve into the case's merits. The appellant was granted the liberty to challenge the impugned summons before the appropriate forum as per the law.