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TMI Blog2020 (11) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... , Karnataka. 3. As seen from the record, for the assessment year 2008-09, the A.O., Belgaum, reopened the assessment under section 147 of the Income Tax Act, issued a notice under section 148, and completed the reassessment in March 2013. Assailing that Assessment Order, the respondent-assessee appealed to CIT (A), Bangalore. Eventually, both the Assessee and the Revenue further appealed to the Income Tax Appellate Tribunal, Panaji Bench. Through the Order, dated 30/09/2014, the Tribunal held in the Assessee's favour. So the Revenue filed this appeal before us. Submissions: Preliminary Objection: 4. When the learned Standing Counsel for the Revenue began her submissions on the merits, Shri Devidas Pangam, the learned counsel for the respondent, raised a preliminary objection: this Court has no territorial jurisdiction to entertain the appeal. So we required both the learned counsel to advance their arguments on this preliminary objection. The Respondent: 5. To begin with, Shri Pangam has submitted that the High Court's jurisdiction in matters emanating from Tribunals depends on whether the Tribunal is multi-state or uni-state. To elaborate, he has pointed out that unlike ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rashtra. Aggrieved by the Tribunal's decision, the appellant carried the matter under Section 35G of the Central Excise Act, 1944, to the Delhi High Court. A Division Bench of that Court relied on its earlier co-equal Bench judgment in Bombay Snuff Pvt. Ltd. v. Union of India (2006) 194 ELT 264, and ruled that it had no territorial jurisdiction over the matter. 11. Further aggrieved, the appellant took the matter to the Supreme Court. Sub-section (9) of Section 35G of the Act applies CPC to the proceedings under that Act if the proceedings concern "appeals to the High Court". So the appellant contended that the Tribunal is subordinate to the High Court of Delhi, with its physical location in its territorial limits. Then, the Delhi High Court alone must have the jurisdiction. But the Supreme Court, in an elaborate judgment, repelled that contention and ruled that the High Court of Delhi has no jurisdiction. To its credit, Ambica Industries has surveyed the entire case law available on the issue until then. 12. Ambica Industries reminded itself that similar problems had arisen in respect of the decisions rendered by Tribunals constituted under different Acts, such as the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erritorial limits, it will exercise its jurisdiction. According to Ambica Industries "[T]he same tests cannot be applied when the appellate court exercises jurisdiction over a Tribunal situated in more than one State. In such a situation, in our opinion, the High Court located in the State where the first court is located should be considered to be the appropriate appellate authority. The Code of Civil Procedure did not contemplate such a situation. It provides for the jurisdiction of each court. Even a District Judge must exercise its jurisdiction only within the territorial limits of a State. It is inconceivable under the Code of Civil Procedure that the jurisdiction of the District Court would be exercisable beyond the territorial jurisdiction of the District, save and except in such matters where the law specifically provides therefor. 16. Then, Ambica Industries went on to cite the examples of incongruity that might result if the jurisdictional theory under CPC was applied to the Tribunals. According to it, in a case of emergency, while the Tribunal sitting at Allahabad or Bombay may entertain a matter though the cause of action had arisen at Delhi. But that would not mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailing in the State of Maharashtra whereat the goods were to be imported and whereat the proceedings under the Act were concluded". Kusum Ingots stands explained by Ambica Industrries: 20. We may as well note the dictum of Kusum Ingots & Alloys Ltd. v. Union of India JT 2004 (Suppl.1) SC 475. In that case, the Supreme Court has interpreted clause (2) of Article 226 of the Constitution. It has held that the place where an appellate order or a revisional order is passed may give rise to a part of the cause of action, although the original order was at a place outside that area. When a part of the cause of action arises within one or the other High Court, it will be for the petitioner to choose his forum. 21. As to resolve the territorial tangle and the situs conflict, Ambica Industries notes the legislative changes wrought on Article 226. According to it, experiencing difficulties, Parliament introduced clause (1A) to Article 226. Later, again, it inserted clause (2). And, then, Ambica Industries holds that in Kusum Ingots & Alloys Ltd., the Court "was not dealing with a question of this nature". Therefore, it is not an authority for the proposition that the High Court which is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's case because, now, the assessment proceedings are in Mumbai consequent to the Tribunal's order under section 127 of the Act. 24. In the above factual backdrop, Sungard Solutions has analysed the relevant provisions of the Income Tax Act and the Rules. Then, in paragraph 17 of the judgment, it has held that Chapter XX of the Act decides which High Court will hear appeals from the orders passed by the Tribunal. It has a specific provision dealing with appeals, amongst others, to the High Court. According to it, [S]ection 260A and 269 of the Act, when read together, would mean that the High Court referred to in Section 260A of the Act will be the High Court as provided/defined in Section 269 of the Act i.e. in relation to any State, the High Court of that State. Therefore, the seat of the Tribunal (in which State) would decide the jurisdiction of the Court to which the appeal would lie under the Act. Thus, in the present facts, the High Court which would have jurisdiction over the place where the Tribunal (when not exercising jurisdiction over more than one State) is situated and passed the order. Therefore, in the facts of this case, on the bare examination of the provisions, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l which passed the impugned order is situated in Bangalore. Therefore, the Tribunal would be bound by the orders passed by the Karnataka High Court at Bangalore. 29. After holding as above, Sungard Solutions considers a few hypothetical propositions. According to it, it is likely that there could be a divergence of opinion between two High Courts on a particular issue: one view by the Court where the Tribunal is situated, say Bangalore; and the other view by the Court where the Assessing Officer is now situated, say Pune. It will, then, lead to an incongruous situation. 30. To resolve this incongruity, Sungard Solutions gathers legislative intent from section 260A read with 269 of the Act. And it concludes that "the orders passed by the Tribunal are subject to an appeal before the High Court under which it exercises jurisdiction". According to Sungard Solutions, if we accept the Revenue's contention, then "[W]e would have a peculiar situation where the powers under Articles 226 and 227 of the Constitution, would be exercised by the Court which exercises jurisdiction over the seat of the Tribunal which is passing the order while for the purposes of appeal under the Act, the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r holdings: the parts of a decision that focus on the legal questions actually presented to and decided by the court." A holding consists of the "court's determination of a matter of law pivotal to its decision". Everything else amounts to dicta- what Francis Bacon in 1617 called the "vapours and fumes of law". 34. One of the age-old maxims of organic law is that "what is not judicially presented cannot be judicially considered, decided, or adjudged Ibid, 47". Garner et al. point out that the distinction between a holding 6Bryan A. Garner et al., The Law of Judicial Precedent (Thomson Reuters, USA, 2016) 44 under dictum does not depend on whether the point was argued by counsel and deliberately considered by the court, but instead on whether the solution of the particular point was more or less necessary to determining the issues involved in the case Ibid, 51. According to them, no judge can write opinions with mathematical precision. The meaning of the opinion, even the holding, must be read in context, with due regard for the difficulty-the impossibility, really-of the court's anticipating every circumstance in which the language could be applied. 35. Chief Justice Marshall has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final. That was not. 38. From the judgment we may discern that Sungard Solutions's case-holding is this: An appeal should lie to that High Court which has the jurisdiction over the place where the Tribunal that passed the impugned order is "situated". Sungard Solutions has been cautious enough to hedge its declaration with "in the present facts". Besides, another limiting factor in the pronouncement is that the jurisdictional assertion in Sungard Solutions comes into play when the Tribunal was "not exercising [jurisdiction] over more than one State". To contextualise this proposition, Sungard Solutions has considered the problem in its myriad shades and discussed the issue in the alternative. Those alternatives and the judicial assertions on those alternatives are polemical presentations with no precedential force. 39. What should happen when the Tribunal exercises jurisdiction over more than one State? That is not the question that fell for consideration in Sungard Solutions. In fact, precisely, that was the question in Ambica Industries. Then, what is the case-holding of Ambica Industries? S. B. Sinha J, who authored Ambica Industries had an occasion to cull out its case-holdin ..... 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