By TIOL News Service

CHENNAI, MAR 11, 2014: DEPARTMENT's Objection - Jurisdiction of Madras High Court : It was contended that the appellant was a licensed bonded warehouse in Visakhapatnam and the licences having been granted by the Commissioner of Customs, Visakhapatnam; the fraud committed by the appellant was detected at Visakhapatnam; the show cause notice was issued by the customs authorities at Visakhapatnam and the show cause notice was adjudicated and order in original was passed by the Assistant Commissioner of Customs, Visakhapatnam. Aggrieved by this, the appellant preferred appeal before the Commissioner of Customs and Central Excise (Appeals), Hyderabad, who by order dated 10.11.1998, dismissed the appeal. Thereafter, show cause notice was issued to the appellant under Section 124 of the Customs Act by the Commissioner of Customs, Visakhapatnam. This was adjudicated and order in original was passed by the Commissioner, Visakhapatnam, by order dated 31.03.1999. The appellant filed appeal as against the said order before the Tribunal and the Tribunal passed an interim order, dated 11.11.1999. As against the said order, the appellant initially filed a writ petition before this Court in W.P.No.16490 of 2000, withdrawing the writ petition on the ground that they proposed to move the High Court of Andhra Pradesh and the writ petition was dismissed by this Court on 13.10.2000. Thereafter, the appellant moved the High Court of Andhra Pradesh and the writ petition was dismissed and the order passed by the Tribunal was confirmed. Therefore, it is contended that the present appeal which has been filed under Section 130 of the Customs Act is not maintainable before this Court as the cause of action for filing the appeal does not arise within the jurisdiction of this Court as the situs of the Assessing Officer will determine the jurisdiction and not the situs of the Tribunal in this regard. The learned counsel appearing for the Revenue in support of his submission relied upon the decision of the Supreme Court in the case of Ambica Industries vs. Commissioner of Central Excise, reported in (2007-TIOL-97-SC-CX);

The High Court noted:

The issue which fell for consideration before the Hon'ble Supreme Court in the case of Ambica Industries , referred above, was relating to determination of situs of the High Court in which appeals would lie under Section 35G(1) of the Central Excise Act (pari materia to Section 130 of the Customs Act). The appellant therein was an assessee under the provisions of the Central Excise Act. The assessment proceedings ultimately went before the Tribunal at New Delhi.

The Hon'ble Supreme Court after noticing the earlier Five Judges Bench judgment in the case of Nasiruddin vs. S.T.A., Tribunal, pointed out that the decision of a Tribunal would be binding on the Assessing Authority and if the situs of the appellate Tribunal should be considered to be the determinative factor, a decision rendered by the Tribunal shall be binding on all the authorities exercising its jurisdiction under the said Tribunal. In the said case, the Delhi Tribunal exercised jurisdiction over all the three States and in all the three States there are High Courts. It was further pointed out that in the event, aggrieved person is treated to be a dominus litus, as a result whereof, he elects to file the appeal before one or the other High Court, the decision of the High Court shall be binding only on the authorities which are within its jurisdiction and it will only be of persuasive value on the authorities functioning under a different jurisdiction. It was held that if the binding authority of a High Court does not extend beyond its territorial jurisdiction and the decision of one High Court would not be a binding precedent for other High Courts or Courts or Tribunals outside its territorial jurisdiction, some sort of judicial anarchy shall come into play, pointing out that an assessee, affected by an order of assessment made at Bombay, may invoke the jurisdiction of the Allahabad High Court to take advantage of the law laid down by it and which might suit him and would be able to successfully evade the law laid down by the High Court at Bombay. Furthermore, it was held that when an appeal is provided under a statute, Parliament must have thought of one High Court and it is a different matter that by way of necessity, a Tribunal may have to exercise jurisdiction over several States, but it does not appeal to any reason that Parliament intended, despite providing for an appeal before the High Court, that appeals may be filed before different High Courts at the sweet will of the party aggrieved by the decision of the Tribunal and in the case of this nature, the cause of action doctrine may not be invoked. The Supreme Court further held that in terms of Article 226(2) of the Constitution, High Court has power to issue writ of Certiorari in respect of the orders passed by the Subordinate Courts within its territorial jurisdiction or if any cause of action has arisen there within, but the same tests cannot be applied when the appellate Court exercises jurisdiction over a Tribunal situated in more than one State and in such a situation, the High Court situated in the State where the first court is located should be considered to be the appropriate appellate authority.

Therefore, it was held that determination of the jurisdiction of the High Court on the touchstone of Sections 35G and 35H of the Central Excise Act should be considered only on the basis of statutory provisions and not anything else.

The High Court had no hesitation to hold that the appeal filed by the appellant before this Court is not maintainable in the light of the law laid down by the Supreme Court in the case of Ambica Industries, referred above.

Forum Shopping : The High Court had one more reason to reject the appeal as the conduct of the appellant clearly amounts to "forum shopping". The appellant had earlier approached this High Court and after withdrawing the petition, approached the AP High Court and had again come back to this Court. The conduct of the appellant in filing the appeal before this Court is not appreciable and it is a definite case of "forum shopping". This is one more reason to hold that the appeal cannot be entertained by this Court .

No benefit of delay: The counsel appearing for the appellant submitted that the appeal having been admitted in 2006, the appellant should not be compelled to approach the High Court of Andhra Pradesh and the appeal should be heard on merits. The submission was rejected, since this is not a case where the appellant has approached this Court by way of writ petition under Article 226 without availing the statutory appellate remedy and in certain cases, the Supreme Court has held that if the writ petitions have been entertained and pending for a long period of time, the petitioner should not be relegated to the statutory Appellate Authorities. Such principle cannot be applied to the case on hand, as being a statutory appeal under Section 130 of the Act and the territorial jurisdiction of this Court cannot extend over the authorities functioning under the Customs Act in the State of Andhra Pradesh. Therefore, such contention raised by the appellant is rejected.

No liberty to approach the Jurisdictional Court : The counsel appearing for the appellant requested the Court to grant liberty to the appellant to approach the High Court of Andhra Pradesh. No such liberty can be granted to the appellant except to observe that the appeal before this Court was presented on 10.04.2006, within the period of limitation and admitted on 13.04.2006. It is open to the appellant to move the High Court of Andhra Pradesh, if he is so advised. It is made clear that the appeal has been dismissed solely on the ground of territorial jurisdiction of this High Court to entertain the appeal and the merits of the appellant's case has not been dealt with in this Judgment.

(See 2014-TIOL-304-HC-MAD-CUS)