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TMI Blog2013 (6) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... tself would not be conclusive factor for determining territorial jurisdiction of the High Court. Because by merely receiving consignment at a particular place by itself will not confer jurisdiction to the Court of that place where the consignment is received. This is not such a factor or circumstance which by itself will confer jurisdiction to the Court. Each and every fact pleaded in the Writ Petition does not ipso facto lead to the conclusion that those facts give rise to a cause of action which the Court’s territorial jurisdiction unless those facts pleaded are such which have a nexus or relevance with the lis or dispute involved in the case. The facts which have no bearing with the lis or the dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the Court concerned. The territorial jurisdiction must be decided on the facts pleaded in the petition, the truth or otherwise of the averment made in the petition being immaterial. To confer jurisdiction on a Court even if a part of the cause of action arises within its jurisdiction, it is sufficient. It is purely a question of fact. The preliminary objection as raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dated 26-11-2007, 28-10-2008, 21-11-2008, 18-5-2009 and 7-6-2011. Petitioner vide letter dated 7-6-2011 also furnished details of Value Added Service (VAS) paid to M/s. DTC. 2.4 On completion of the investigation, the department reached to the conclusion as under : (A) The petitioner without obtaining service tax registration, have received Business Auxiliary Services provided by M/s. Goldie International Ltd. and have paid them consideration in foreign currency, as commission for their services, which is taxable with effect from 18-4-2006 on reverse basis in terms of Section 66A of the Finance Act, 1994 read with Rule 3(iii) of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, (B) The petitioner without obtaining service tax registration received Business Support Services provided by DTC and paid them consideration in foreign currency, as Professional fees towards the Value Added Services (VAS) provided by M/s. DTC, which is taxable with effect from 1-5-2006 on reverse basis in terms of Section 66A of the Finance Act, 1994 read with Rule 3(iii) of the Taxation of Services (Provided from Outside India and Received in Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 98,87,631/-, Edu. Cess of ₹ 7,97,752/- and Higher Sec. Edu. Cess of ₹ 3,61,643/-) as detailed in summary to Annexure A2 to this Notice should not be demanded and recovered from them under the proviso to Section 73(1) of the Finance Act, 1994, read with Section 68 and Section 66A of the Finance Act, 1994 read with Rule 3(iii) of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006; (ii) interest should not be demanded and recovered from them at the appropriate rates under Section 75 of the Act; (iii) penalty should not be imposed on them under Section 77 of the Act for failure to take registration as required under Section 69 of the Act read with Rule 4 of the Rules and failure to file returns within the prescribed period under Section 70 of the Act and Rule 7 of the Rules; (v) penalty should not be imposed on them under Section 78 of the Act as they have suppressed the value of taxable services with the intent to evade payment of Service Tax. 3. It is at that stage that the petitioner though fit to prefer this petition challenging the legality, validity and propriety of the show-cause notice dated 21-9-2011 with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nary objection raised by the department, as regards lack of territorial jurisdiction of this High Court to entertain this petition. Mr. Shah invited our attention to Article 226 Clause (2) of the Constitution of India which speaks of the territorial jurisdiction of the High Court. Article 226 Clause (2) of the Constitution of India reads as under : The power conferred by clause (1) to issue directions, orders or writ to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, not-withstanding that the seat of such Government or authority or the residence of such person is not within those territories. 8. Relying on Article 226 Clause (2) of the Constitution of India, Mr. Shah, learned Counsel vehemently submitted that the High Court can exercise the jurisdiction in relation to the territories within which the cause of action, wholly or in part arises. Mr. Shah, further submitted that it is settled law that Cause of Action consists of bundle of facts which gives cause to invoke legal jurisdiction for redress i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed questions of fact. 12. Mr. Patel submitted that the registered Corporate Office of the petitioner is at Mumbai which is within the jurisdiction of Mumbai, Service Tax Commissioner. According to Mr. Patel, the petitioner had responded to various queries raised by the Mumbai, Service Tax Commissionerate during the investigation and the issue of jurisdiction of Mumbai Commissionerate had never been raised at any point of time. 13. Mr. Patel, further submits that as per the provisions of Service Tax Law, a person can take registration including for the registered office, which in present case is at Mumbai. The petitioner holds PAN No. AAAFV0888R on the registered address at 902, Panchratna, Opera House, Mumbai. 14. Mr. Patel submits that even if it is assumed without accepting that the rough diamonds imported may have been received at Surat, then also record indicates that payments for the services received from M/s. Goldie International and M/s. DTC by the petitioner was made from Mumbai. 15. Mr. Patel further submitted that statement made by the petitioner in para 11 of the petition to the fact that they have not filed any other application either in this High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is as to whether any part of cause of action can be said to have arisen within the territorial jurisdiction of this High Court, so as to make the present petition maintainable challenging the show-cause notice issued by Commissioner of Service Tax-I, Mumbai. 18. Jurisdiction may be defined to be the power or authority of a Court to hear and determine a cause, to adjudicate and exercise any judicial power in relation to it. In other words, by jurisdiction is meant the authority which a court has to decide matters that are litigated before it or to take cognizance of matters presented in a formal way for its decisions. Jurisdiction of a court may be classified into various categories; (i) territorial jurisdiction; (ii) pecuniary jurisdiction; (iii) jurisdiction as to subject matter etc. Every court has its own local or territorial limits beyond which it cannot exercise its jurisdiction. In the present case, we are concerned with the territorial jurisdiction of this High Court to grant reliefs as prayed for by the petitioner in this petition. 19. Territorial jurisdiction of the High Courts has been defined and dealt with in Article 226 of the Constitution of India. By the Consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arises, wholly or in part, within the territorial jurisdiction of that High Court. However, the expression cause of action has neither been defined in the Constitution nor in the Code of [Civil] Procedure, 1908. But it may be described as a bundle of essential facts, which is necessary for the plaintiff to prove before he can succeed. or if not proved would give the defendant a right to judgment in his favour. It gives occasion for and forms the foundation of the suit. The classic definition of the expression cause of action is found in the case of Cooke v. Gill (42 LJPC 98), wherein Lord Brett observed : Cause of action means every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. 20. In ABC Laminart Pvt. Ltd. v. A.P. Agencies, reported in 1989 (2) SCC 163, the Supreme Court observed : A cause of action means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the ground set forth in the plaint as the cause of action, or in other words, to the media upon which the plaintiff asks the court to arrive at a conclusion in his favour. (III) Leading case laws on the subject : 21. In the case of Union of India v. Adani Exports Ltd. (supra) the Supreme Court criticised the manner in which the certain facts which had no bearing with the lis or dispute involved in the case were sought to be highlighted and relied upon with the sole object to conferring territorial jurisdiction on the High Court of Gujarat. This judgment of the High Court has been very heavily relied upon by the Learned Counsel Mr. V. K. Patel appearing for the respondents in support of his contention that this Court has no territorial jurisdiction to entertain this petition. In the case of Adani Exports Ltd. (supra) the following facts were pressed into service to give rise to the cause of action conferring territorial jurisdiction on the High Court of Gujarat at Ahmedabad, they are : (i) the respondents carry on their business of export and import from Ahmedabad; (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of accounts of business, printing of letterheads indicating branch offices of the firm, booking of orders from a particular place are not the factors which would give rise to either wholly or in part cause of action conferring territorial jurisdiction to Courts. In the said case, this Court also held that the mere service of notice is also not a fact giving rise to a cause of action unless such notice is an integral part of the cause of action. 24. Supreme Court thereafter, proceeded further to consider the decision in the case of Navinchandra v. State of Maharashtra (supra) which has been relied upon by learned counsel for the petitioner. Supreme Court in para 20 explaining the ratio laid down in the Navinchandra v. State of Maharashtra and why it would not help Adani Exports Ltd., who had succeeded before the High Court : 20. Mr. Desai, however, placed reliance on a recent judgment of this Court in Navinchandra v. State of Maharashtra (supra) wherein this Court had held that a part of the cause of action had arisen within the jurisdiction of the Bombay High Court. It is to be noted that in the said petition, among other reliefs, the writ petitioner had prayed for a writ o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal in this Court which appeal is pending consideration by this Court, therefore, the objection having been taken at the first instance itself and the court having not proceeded to decide this question of territorial jurisdiction as contemplated under Order XIV Rule 2 CPC, we think we cannot deny relief to the appellant solely on the ground that the High Court has chosen to proceed to decide the case on merit. This being a judgment of a court having no territorial jurisdiction, the judgment has to be set aside. However, the special civil applications cannot be dismissed on this ground because it has been the contention of the appellants themselves in the objections filed by them before the High Court, that these applications ought to be transferred to the High Court at Chennai, in the interest of justice, we agree with this plea. 25. In the case of Madhya Pradesh State Electricity Board v. Shree Bharat Co-operative Bank Ltd., reported in 2009 (2) GLH 750, Division Bench of this High Court had the occasion to consider the issue of territorial jurisdiction. The Division Bench held in para 10 of the said judgment as under after taking into consideration, Navinchandra v. State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mills were situated in Bombay and the supply of cloth was to be made by them ex-factory at Bombay. It was contended by the writ petitioner that money was paid to the mills at Bombay. The learned Single Judge after a detailed discussion of the matter held that the Calcutta High Court had no jurisdiction to entertain the writ petition. The Division Bench reversed this finding on the ground that the concluded contract had come into existence which could be cancelled only after giving an opportunity of hearing and consequently the question of revocation of the contract at its Calcutta address would constitute a cause of action. Supreme Court in the facts of the case held that the view taken by the Division Bench was wholly erroneous in law. Supreme Court held that the mere fact that the writ petitioner carries on business at Calcutta or that the reply to the correspondence made by it was received at Calcutta is not an integral part of the cause of action, and, therefore, the Calcutta High Court had no jurisdiction to entertain the writ petition and the view taken by the Division Bench could not be sustained. More observations of the Supreme Court are in para 10 of the judgment wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The entire bundle of facts pleaded need not constitute a cause of action as what is necessary to be proved before the petitioner can obtain a decree is the material facts. The expression material facts is also known as integral facts. All necessary facts must form an integral part of the cause of action. The question as to whether the Court has a territorial jurisdiction to entertain a writ petition, must be arrived at on the basis of averments made in the petition, the truth or otherwise thereof being immaterial. In order to confer jurisdiction a High Court to entertain a writ petition it must disclose that the integral facts pleaded in support of the cause of action do constitute a cause so as to empower the Court to decide the dispute and that the entire or a part of it arose within its jurisdiction. The facts pleaded in the writ petition must have a nexus on the basis whereof a prayer can be granted. Those facts which have nothing to do with the prayer made therein cannot be said to give rise to a cause of action which would confer jurisdiction on the Court. Keeping in view the expressions used in Article 226(2) of the Constitution indisputably even if a small facti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. In other words, the question whether the High Court has territorial jurisdiction to entertain a writ petition must be answered on the basis of the averments made in the petition, the truth or otherwise thereof being immaterial. 29. In our view, whether the diamonds imported were received at Mumbai or Surat by itself would not be conclusive factor for determining territorial jurisdiction of the High Court. Because by merely receiving consignment at a particular place by itself will not confer jurisdiction to the Court of that place where the consignment is received. This is not such a factor or circumstance which by itself will confer jurisdiction to the Court. 30. We shall now look into the judgment relied upon by learned counsel Mr. Shah in support of his contention. Mr. Shah very heavily relied upon the decision of the Supreme Court in the case of Rajendran Chingaravelu (supra). In Rajendran Chingaravelu (supra) the appellant travelled by air from Hyderabad to Chennai on 15-6-2007, carrying cash of ₹ 65 lac along with bank certificate certifying the source and withdrawals. At the time when he boarded the flight from Hyderabad airport the security personnel allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. There cannot be any quarrel with the proposition of the law as explained and laid down by the Supreme Court but the same in our view would not help Mr. Shah for the simple reason that on the facts of the present case we are convinced that no part of cause of action can be said to have been arisen within State of Gujarat so as to make this petition maintainable before this High Court. 31. Viewed from the angle, the expression cause of action means the bundle of facts which the petitioner must prove, if traversed, to entitle him to a judgment in his favour by the Court. Every fact, which, if traversed, would be necessary for the petitioner to prove in order to support his right to a judgment of the Court. It is a bundle of facts which taken with the law applicable to them gives the petitioner a right to relief against the respondents. In legal parlance the expression cause of action is generally understood to mean a situation or state of facts that entitles a party to maintain an action in a Court or a tribunal; a group of operative facts giving rise to one or more bases for suing; a factual situation that entitles one person to obtain a remedy in the court from another per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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