Karnataka High Court
M/S Rajesh Exports Limited vs Chairman on 10 July, 2015
Author: Subhro Kamal Mukherjee
Bench: Subhro Kamal Mukherjee
IN THE HIGH COURT OF KARNATAKA
AT BENGALURU
Dated this the 10th day of July, 2015
R
PRESENT:
THE HON'BLE MR SUBHRO KAMAL MUKHERJEE,
THE ACTING CHIEF JUSTICE
AND
THE HON'BLE MRS JUSTICE B V NAGARATHNA
Writ Appeal No 1482 of 2015 (T-TAR)
BETWEEN:
M/S RAJESH EXPORTS LIMITED
NO. 4, BATAVIA CHAMBERS
KUMARA KRUPA ROAD
KUMARA PARK EAST
BANGALORE-560 001
REPRESENTED BY ITS CHAIRMAN
MR RAJESH MEHTA
AGED ABOUT 49 YEARS
S/O JASWANTHRAI MEHTA ... APPELLANT
[By Sri Kiran S Javali, Advocate]
AND:
1. CHAIRMAN
CENTRAL BOARD OF EXCISE AND CUSTOMS
NORTH BLOCK
NEW DELHI-110037
2. COMMISSIONER OF CUSTOMS
NEW CUSTOMS HOUSE
NEAR IGI AIRPORT
NEW DELHI-110037 ... RESPONDENTS
[By Sri Y Hariprasad, Advocate]
2
THIS WRIT APPEAL FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT, 1961, PRAYING TO SET ASIDE THE
ORDER PASSED IN THE WRIT PETITION No 31835 OF 2013 DATED
MARCH 18, 2015 AND ETC.
THIS APPEAL, HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT, COMING ON FOR PRONOUNCEMENT OF JUDGMENT,
THIS DAY, THE ACTING CHIEF JUSTICE PRONOUNCED THE
FOLLOWING:-
JUDGMENT
This is an appeal preferred by the writ petitioner against the judgment and order dated March 18, 2015, passed by the Hon'ble Single Judge of this Court in Writ Petition No. 31835 of 2013. By the order impugned, His Lordship, relying upon a decision of the Supreme Court of India in OIL AND NATURAL GAS COMMISSION vs UTPAL KUMAR BASU [(1994) 4 SUPREME COURT CASES 711], and holding that mere location of a registered office or receipt of communication would not give rise for cause of action, dismissed the application under Article 226 of the Constitution of India. His Lordship held that as the consignment was received at Delhi Air Cargo Complex and the writ petitioner took delivery of the said consignment at Delhi and transported to Uttarakhand, no part of cause of 3 action, either fully or in part, arose within the territorial jurisdiction of this Court so as to enable this Court to entertain the writ petition.
2. The facts leading to filing of the writ petition are summarized as under:
a) The writ petitioner is engaged in the business of manufacturing and exporting of gold jewelry and gold products. They are possessing Import-Export Code under the Foreign Trade (Development and Regulation) Act.
Using the said Import-Export Code, the writ petitioner has been doing its business of import and export.
b) Under Section 25 of the Customs Act, the Central Government is authorized to issue notifications extending the benefit of exemption from payment of the applicable rates of custom duty and additional custom duty, subject to compliance of conditions as set out in the notifications.
c) In notification No. 12/2012, authorized importable products are listed under various serial numbers. The 4 relevant serial number for the purpose of disposal of this appeal is serial No. 318 regarding importation of Gold Dore Bars (non-refined gold bars). Serial No. 318 is set out hereunder:
Chapter or Sl. Heading or sub- Description of Standard Additional Condition No. heading or tariff Goods Rate duty rate No. item Xxx Gold dore bar, 318 71 having gold 2% 5 & 34 Nil content not exceeding 95%.
d) Condition Nos. 5 and 34 of the said notification are set out herein below:
"Condition No.5 If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996.Condition No. 34
If, -
(a) the goods are directly shipped from the country in which they were produced and each bar has a weight of 5 kg. or above;5
(b) the goods are imported in accordance with the packing list issued by the mining company by whom they were produced;
(c) the importer produces before the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, an assay certificate issued by the mining company or the laboratory attached to it, giving detailed precious metal content in the dore bar;
(d) the gold dore bars are imported by the actual user for the purpose of refining and manufacture of standard gold bars of purity 99.5% and above; and
(e) the silver dore bars are imported by the actual user for the purpose of refining and manufacture of silver bars of purity 99.9% and above."
(e) The writ petitioner imported gold dore bars at Delhi Port by availing exemption under Serial No. 318 of the said notification, on fulfillment of the conditions laid down in the aforementioned condition Nos.5 and 34. 6
(f) The normal rate of duty for import of foreign branded pure refined gold bars at the relevant time was 4%. The exempted duty as per Serial No. 318 of the said notification for import of raw gold was 2% and additional 1% of excise duty was payable on such exemption. Thus, the writ petitioner paid 3% of excise duty, that is, less by 1% compared to the normal duty.
(g) The writ petitioner imported the gold dore bars from the Perth Mint formed under an Act of Parliament of Australia, that is, the Gold Corporation Act. The said Mint is fully owned by the Western Australian Government.
(h) The customs authorities sought clarification from the Central Board of Customs as to whether the list of goods and the assay certificate issued by the said Mint had fulfilled the conditions of the said notification. The Central Board of Customs and Excise issued clarification on April 15, 2013. The relevant portion of the clarification is as under:
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"2. From your letter, it is noted that the Perth Mint has prepared the packing list in accordance with the packing list issued by the mining company. You may, therefore, obtain the packing list issued by the mining company, and compare and correlate it with the packing list issued by the Perth Mint so as to satisfy yourself about the fulfillment of Condition No.34 (b) of the Notification.
"3. As regard the assay certificate issued by the Perth Mint giving detailed precious metal content in the dore bar, it is noted that this Mint is 100% owned and guaranteed by the Government of Western Australia and established under an Act of Parliament (the Gold Corporation Act, 1987). The Perth Mint has also clarified that this is a laboratory attached to/appointed by the mining company. As per condition No.34(c) of the Notification, an assay certificate issued by the laboratory attached to the mining company can be accepted."
(i) All relevant documents, including invoice, packing list and assay certificate along with the bills of entry were 8 submitted for clearing the import shipments. The customs authorities cleared the import shipment for home consumption.
(j) The Commissioner of Customs, by notice dated May 29, 2013, inter alia, directed the writ petitioner to submit the packaging list from the mining company in respect of the past imports of gold dore bars from the said Mint in respect of the concluded assessments.
(k) The writ petitioner, in the reply, submitted that it would be impossible to submit the packaging list of the mining company for the past imports as the imports had, already, been completed. Moreover, it was submitted that the said Mint was not allowed by the Gold Corporation Act of Australia from revealing any detail of the mining company.
(l) In spite of such reply by the writ petitioner, the Commissioner of Customs again issued a notice on June 9 18, 2003, once again asking the writ petitioner to submit the aforesaid documents.
(m) The writ petitioner insisted that the said notification never mandated that the import should be accompanied by the packaging list of the mining company. The writ petitioner maintained that the demand of the authorities for production of packaging list of the mining company was illegal.
(n) However, fearing precipitated action against the writ petitioner in pursuance to the aforesaid notices of the customs authorities, this writ petition was filed before this Court.
3. We have narrated above that the writ petition was dismissed by the order dated March 18, 2015, by the Hon'ble Single Judge. The petition was rejected on the ground of maintainability holding, inter alia, that the High Court of Karnataka did not have jurisdiction to maintain 10 the writ petition as no part of cause of action arose within its territorial jurisdiction.
4. The original Article 226 of the Constitution of India came up for consideration before the Supreme Court of India in ELECTION COMMISSION, INDIA vs SAKA VENKATA RAO [AIR 1953 SC 210]. It was held that the location of the respondent would give territorial jurisdiction to the High Courts under Article 226 of the Constitution of India. The situs of the cause of action was held to be material for this purpose. The Constitution (15th Amendment) Act, 1963, brought clause (1A) to provide that the High Court, within whose jurisdiction the cause of action arises, fully or partly, would, also, have the jurisdiction to entertain an application under Article 226 of the Constitution of India. The result of the amendment is that the accrual of cause of action is made an additional ground to confer jurisdiction to a High Court under the said Article. With the insertion of clause (1A), no new jurisdiction was conferred on the High Court but, it 11 provided an additional ground and extended the jurisdiction beyond the boundaries of the State if the cause of action arose within its territory. The Constitution (42nd Amendment) Act, 1976 drastically curtailed the jurisdiction of the High Courts in entertaining the applications under Article 226 of the Constitution of India. However, by the Constitution of India (44th Amendment) 1978, the powers of the High Courts have been substantially restored. Clause (1A) of the said Article was renumbered as Clause (2) by the Constitution (42nd Amendment) Act, 1976).
5. Since the phraseology used in Section 20(c) of the Code of Civil Procedure and Clause (2) of Article 226 of the Constitution of India is similar, the interpretation given to Section 20(c) of the Code shall apply to the writ petition.
6. The Supreme Court of India in OM PRAKASH SRIVASTVA vs UNION OF INDIA AND ANOTHER [(2006) 6 SUPREME COURT CASES 207] held that whether or not cause of action wholly or in part for filing an application 12 under Article 226 of the Constitution of India has arisen within the territorial limits of any High Court has to be decided in light of the nature and character of the proceedings under Article 226 of the Constitution of India. In order to maintain an application, the petitioner has to establish that a legal right claimed by him has, prima facie, either being infringed or is threatened to be infringed by the respondent within the territorial limits of the Court's jurisdiction and such infringement might take place by causing him actual injury or threat thereof.
7. In KUSUM INGOTS AND ALLOY LTD vs UNION OF INDIA AND ANOTHER [(2004) 6 SUPREME COURT CASES 254] it was held that keeping in view the expressions used in Article 226(2) of the Constitution of India, indisputedly even if a small fraction of cause of action accrued within the jurisdiction of the High Court, the High Court would have jurisdiction in the matter.
8. In NAVEEN CHANDRA N. MAJITHIA vs STATE OF MAHARASHTRA AND OTHERS [(2000) 7 SUPREME 13 COURT CASES 640], the Supreme Court of India held the High Court at Bombay should have entertained the application under Article 226 of the Constitution of India in respect of a First Information Report registered at Shillong, in the State of Meghalaya, holding that part of the cause of action arose within the territorial limits of the jurisdiction of the said High Court.
9. The consignments were received by the writ petitioner at Delhi air cargo complex. They were cleared by the authorities at Delhi, after obtaining clarification from the Board of Customs. The consignments were cleared for home consumption upon acceptance of the duties as mentioned in the said notification without any demur. The writ petitioner dispatched those gold dore bars to Uttarakhand. The shipments were refined and the refined gold bars were brought back from Uttarakhand to Bengaluru for sale and manufacture of gold jewellery. In respect of such concluded assessment, the said notices dated May 29, 2013 and June 18, 2013 were issued to the 14 writ petitioner in the Bengaluru address. The receipts of those notices at Bengaluru is not disputed. In the writ petition, the writ petitioner prayed for quashing of the notice dated June 18, 2013, apprehending coercive actions by the respondents. The jurisdiction under Article 226 of the Constitution of India can be invoked if even a fraction of the cause of action arises within the territorial jurisdiction of the High Court. Against the aforesaid background, it is difficult to uphold the view taken by the Hon'ble Judge that this court had no territorial jurisdiction to entertain the writ petition.
10. Reliance placed on OIL AND NATURAL GAS COMMISSION vs UTPAL KUMAR BASU AND OTHERS [supra] was erroneous, as Clause (2) of Article 226 of the Constitution of India did not fall for consideration in that case.
11. The impugned judgment and order are, therefore, set aside. The writ petition is restored to its original number and file.
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12. We request the Hon'ble Judge having roster to dispose of the writ petition expeditiously.
13. The appeal is, thus, allowed, as indicated hereinabove.
We make no order as to costs.
Sd/-
ACTING CHIEF JUSTICE Sd/-
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