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2023-TIOL-19-SC-CX
State of Goa Vs Summit Online Trade Solutions (P) Ltd
CX - The appellant is one of multiple respondents in W.P.(C) No. 36 of 2017, W.P.(C) No. 38 of 2017 and W.P.(C) No. 59 of 2017, pending on the file of the High Court of Sikkim - Separate applications in the said three writ petitions were filed by the appellant seeking its deletion from the array of Respondents - The appellant had pleaded in the said applications that, inter alia , a notification issued by it was under challenge in the writ petitions and that if, at all, such notification could be made a subject matter of challenge, the High Court of Bombay at Goa is the appropriate court where remedy ought to be pursued - According to the appellant, a notification issued under a statute enacted by a State legislature cannot be subjected to judicial scrutiny within the jurisdiction of a high court of a different State, more so when no cause of action has arisen within the jurisdiction of that high court - It was further pleaded that since no part of the cause of action for invocation of the writ jurisdiction had arisen within the territorial limits of the High Court, the writ petitions ought not to proceed against the appellant - One other fact brought to the notice of the High Court by the appellant was that the same notification was under challenge in W.P.(C) No. 759/2017 instituted by Serenity Trades Private Limited before the High Court of Bombay at Goa and that such writ petition after admission was pending for final hearing - It was urged by the appellant that to avoid conflict of opinions, the writ petitioners could either independently challenge the notification before the High Court of Bombay at Goa or apply for intervention in W.P.(C) No. 759/2017 - The High Court, by a common judgment and order dated 6th June, 2018, has dismissed the three applications.
Held - The High Court ought not to have dismissed the applications of the appellant without considering the petition memo which has no semblance of a case having been made out as to how part of cause of action arose within the territorial limits of the High Court or without any pleading as to how any right has been affected within the territory of Sikkim - The High Court was not justified in dismissing the interim applications - Assuming that a slender part of the cause of action did arise within the State of Sikkim, the concept of forum conveniens ought to have been considered by the High Court. As held by this Court in Kusum Ingots Vs. Union of India and Ambica Industries Vs. CCE (2007) 6 SCC 769 , even if a small part of the cause of action arises within the territorial jurisdiction of a high court, the same by itself could not have been a determinative factor compelling the High Court to keep the writ petitions alive against the appellant to decide the matter qua the impugned notification, on merit: SC
+ While dealing with an objection as to lack of territorial jurisdiction to entertain a writ petition on the ground that the cause of action has not arisen within its jurisdiction, a high court essentially has to arrive at a conclusion on the basis of the averments made in the petition memo treating the contents as true and correct. That is the fundamental principle. Bearing this in mind, we have looked into the petition memo of W.P.(C) No. 38 of 2017 and searched in vain to trace how at least part of the cause of action has been pleaded by the petitioning company to have arisen within the territorial jurisdiction of the High Court (Para 14);
+ This is a case where clause (2) of Article 226 has been invoked by the High Court to clothe it with the jurisdiction to entertain and try the writ petitions. The Constitutional mandate of clause (2) is that the ‘cause of action', referred to therein, must at least arise in part within the territories in relation to which the high court exercises jurisdiction when writ powers conferred by clause (1) are proposed to be exercised, notwithstanding that the seat of the Government or authority or the residence of the person is not within those territories. The expression ‘cause of action' has not been defined in the Constitution. However, the classic definition of ‘cause of action' given by Lord Brett in Cooke vs. Gill (1873) 8 CP 107 that “ 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 ”, has been accepted by this Court in a couple of decisions. It is axiomatic that without a cause, there cannot be any action. However, in the context of a writ petition, what would constitute such ‘cause of action' is the material facts which are imperative for the writ petitioner to plead and prove to obtain relief as claimed. Determination of the question as to whether the facts pleaded constitute a part of the cause of action, sufficient to attract clause (2) of Article 226 of the Constitution, would necessarily involve an exercise by the high court to ascertain that the facts, as pleaded, constitute a material, essential or integral part of the cause of action. In so determining, it is the substance of the matter that is relevant. It, therefore, follows that the party invoking the writ jurisdiction has to disclose that the integral facts pleaded in support of the cause of action do constitute a cause empowering the high court to decide the dispute and that, at least, a part of the cause of action to move the high court arose within its jurisdiction. Such pleaded facts must have a nexus with the subject matter of challenge based on which the prayer can be granted. Those facts which are not relevant or germane for grant of the prayer would not give rise to a cause of action conferring jurisdiction on the court. These are the guiding tests (Para 15);
+ Here, tax has been levied by the Government of Goa in respect of a business that the petitioning company is carrying on within the territory of Goa. Such tax is payable by the petitioning company not in respect of carrying on of any business in the territory of Sikkim. Hence, merely because the petitioning company has its office in Gangtok, Sikkim, the same by itself does not form an integral part of the cause of action authorizing the petitioning company to move the High Court. We hold so in view of the decision of this Court in National Textile Corporation Ltd. vs. Haribox Swalram (2004) 9 SCC 786 . The immediate civil or evil consequence, if at all, arising from the impugned notification is that the petitioning company has to pay tax @ 14% to the Government of Goa. The liability arises for the specific nature of business carried on by the petitioning company within the territory of Goa. The pleadings do not reflect that any adverse consequence of the impugned notification has been felt within the jurisdiction of the High Court. At this stage, we are not concerned with the differential duty as envisaged in Schedule II [@ 6%] vis-à-vis Schedule IV [@ 14%] of the impugned notification. That is a matter having a bearing on the merits of the litigation. The long and short of the matter is that the petitioning company has to bear the liability of paying tax @ 14% levied by the Government of Goa for selling lottery tickets in the State of Goa under Schedule IV of the impugned notification. It does not bear out from the petition memo how the impugned notification levying tax for carrying on business in the State of Goa subjects the petitioning company to a legal wrong within the territory of Sikkim for the writ petition to be entertained by the High Court (Para 16).
- SLP disposed of: SUPREME COURT OF INDIA |
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