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2005 DIGILAW 122 (KAR)

RAJOSHREE CEMENT v. STATE OF KARNATAKA

2005-02-16

S.ABDUL NAZEER

body2005
ABDUL NAZEER, J. ( 1 ) IN these petitions the question that falls for consideration is "whether passing of a Legislation by itself confers a right on the Petitioners to file a Writ Petition unless a cause of action arises thereof '? ( 2 ) PETITIONERS are Companies registered under the Companies Act, 1956. It is contended that they receive various notified goods from time to time from other States meant for use or ' consumption in their business. They have filed these Writ Petitions challenging the constitutional validity of Sections 3 and 4 of the Karnataka Special Tax on Entry of Certain Goods Act, 2004, and the notifications issued thereunder in No. FD 133 CET 2004 dated 30. 09. 2004. ( 3 ) I have heard Sri G. Sarangan, Learned Senior Counsel for the Petitioners and Niloufer Akbar, Learned High Court Government Pleader for the respondents. ( 4 ) THE State Legislature has passed a Legislation called "the Karnataka Special Tax on Entry of Certain Goods Act, 2004" (for short 'the Act') published in the Karnataka Gazette on 11th August, 2004. The said Act has been passed to provide for levy of Special Tax on Entry of Certain Goods into local areas for consumption, use or sale therein. The said Act has come into force w. e. f. 20th September 2004. Section 3 is the, Charging provision which is as follows;" Levy and collection of tax- (1 ). Subject to other provisions of this Act, there shall be levied and collected a tax on the entry of any notified goods into any local area for consumption, use or sale therein, on the value of the notified goods at the rate specified in respect of such goods under the Karnataka Sales Tax Act. (2) The tax shall be payable by an importer in accordance with the provisions of this Act or the rules made thereunder". ( 5 ) IN terms of the charging provision a Notification No. FD 133 CET 2004 dated 30. 09. 2004 has been issued effectuating charge on the goods notified therein. Another notification No. FD 147 CET 2004 dated 25. 10. 2004 has been issued in terms, of Sub Section (1) of Section 5 of the Act exempting certain persons from payment of taxes. 09. 2004 has been issued effectuating charge on the goods notified therein. Another notification No. FD 147 CET 2004 dated 25. 10. 2004 has been issued in terms, of Sub Section (1) of Section 5 of the Act exempting certain persons from payment of taxes. ( 6 ) IT is not in dispute that the authorities under the Act have not initiated any proceedings against the Petitioners for levy and collection of taxes as on the date of filing of the Writ Petitions. Therefore, the question for consideration in these Writ Petitions is whether the Petitioners have a cause of action for filing the Writ Petitions? ( 7 ) CLAUSE (2) of Article 226 of the Constitution of India states that the powers conferred under Clause (1) of Article 226 of the Constitution of India to issue directions/orders or writs 'to any Government Authority or person may also be exercised by any High Court exercising jurisdiction in relation to territories within which the cause of action wholly or in part arises for exercise of such powers. Therefore, accrual of cause of action must be antecedent to the institution of a Writ Petition. There is no statutory definition of a cause of action. Therefore, the definition of cause of, action provided in the decisions rendered on interpretation, of Section 20 (c) of the Code of Civil Procedure shall apply to the writ proceedings also since the phraseology in Section 20 (c) of the C. PC. and Clause (2) of Article 226 are similar although in view of Section 141 of the C. P. C. , the provisions of the C. P. C. would not apply to writ proceedings. In Wharton's Law Lexicon (15th Edition) a cause of action is defined as follows:"cause of Action, a right to sue. All the facts which are necessary to establish the plaintiff's right to the remedy which he claims". ( 8 ) IN Kusum Ingots And Alloys Limited. Vs. Union Of India, (2004) 6 SCC 254 , it is held as follows:"cause of action implies a right to sue. The material facts which are imperative for the suitor to allege and prove constitute the cause of action. Cause of action is not defined in any statute. ( 8 ) IN Kusum Ingots And Alloys Limited. Vs. Union Of India, (2004) 6 SCC 254 , it is held as follows:"cause of action implies a right to sue. The material facts which are imperative for the suitor to allege and prove constitute the cause of action. Cause of action is not defined in any statute. It has, however, been judicially interpreted inter alia to mean that every fact which would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. Negatively put, it would mean that everything which, if not proved, gives the defendant an immediate right to Judgment, would be part of cause of action. Its importance is beyond any doubt. For every action, there has to be a cause of action, if not, the plaint or the Writ Petition, as the case may be, shall be rejected summarily". ( 9 ) THUS, a cause of action is a bundle of facts which taken with the law applicable gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of an act no cause of action can possibly accrue. For every action, there has to be a cause of action, if not the plaint or the Writ Petition, as the case may be shall be rejected summarily. ( 10 ) SRI. G. Sarangan, Learned Senior Counsel submits, that passing of Legislation itself constitutes a cause of action and therefore, Court can entertain the Writ Petition. He submits that the provisions of the Act mandates the assesses to file returns and payment of taxes as are payable under the provisions of the Karnataka Sales Tax Act. On the other hand, Learned High Court Government Pleader submits that since the authorities have not initiated any action against the Petitioners, the petitions cannot be entertained for want of cause of action. ( 11 ) IT is to be noted here that Petitioners have challenged Section 3 and 4 of the Act and the Notification issued thereunder. They are not aggrieved by the other provisions of the Act. It is not contended in the petition that because of the machinery provisions contained in, the Act, they are required to file their returns etc. They are not aggrieved by the other provisions of the Act. It is not contended in the petition that because of the machinery provisions contained in, the Act, they are required to file their returns etc. ( 12 ) IT is well settled that a Writ Court cannot determine a constitutional question in a vacuum. The cause of action arises only when the provisions of the Act or some of them which were implemented shall give rise to Civil or evil consequences to the Petitioners. Mere passing of the Legislation by itself does not confer any such right to file a Writ Petition unless cause of action arises. In Kusum Ingots's case (supra), the Hon'ble Supreme Court while dealing with a similar question has- held as follows:" Passing of a legislation by itself in our opinion does not confer any such right to file a, writ petition unless a cause of action arises thereof. A distinction between a legislation and executive action should be come in mind while determining the said question. A Parliamentary legislation when it receive's the assent of the President of India and is published in the Official Gazette, unless specifically excluded, will apply to the entire territory of India. If passing of a legislation gives rise to a cause of action, a Writ Petition questioning the constitutionality thereof can be filed in any High Court of the country. It is not so done because a cause of action will arise only when the provisions of the Act or some of them which were implemented shall give rise to civil or evil consequences to the Petitioner. A Writ Court, it is well settled, would not determine a constitutional question in a vacuum". ( 13 ) IT is further held that framing of a statute, statutory rule or issue of a executive order or instructions would not confer jurisdiction upon a Court, only because of the situs of the office of the maker thereof. ( 14 ) LEARNED Senior Counsel has relied on the decision of Bombay High Court in the case of Union Motors (India) Ltd. , And Others Vs. The State Of Bombay And Another, 4 STC 10, in the case of Himmatlal Harilal Mehta Vs. The State Of Madhya Pradesh And Others, 5 STC P. 115 for the proposition that passing of a legislation itself constitutes a cause of action. The State Of Bombay And Another, 4 STC 10, in the case of Himmatlal Harilal Mehta Vs. The State Of Madhya Pradesh And Others, 5 STC P. 115 for the proposition that passing of a legislation itself constitutes a cause of action. ( 15 ) IN United Motors' case (supra) it is not clear as to whether any proceeding was initiated by the Revenue against the Petitioners therein. Following the decision, Hon'ble Supreme Court in the case of State Of Tripur a Vs. Province Of East Bengal, 19 ITR 132 it is held that initiation of assessment constitutes an actionable wrong which a party is entitled to prevent by an order issued by the Court. It is not in dispute that the said decision was reversed by the Hon'ble Supreme Court in the case reported in Between State Of Bombay And Another Vs. The United Motors (India) Ltd. , and Others 4 STC Page 133. ( 16 ) IN Himmat lal Harilal Mehta's case (supra), maintainability of the Writ Petition on the ground of non- accrual of cause of action has not been considered. Therefore, in my view, the said decision cannot be an authority for the proposition that passing of a legislation confers right to file a Writ Petition. ( 17 ) AT this stage, the Learned Senior Counsel submits that Kusum Ingot's case cannot be considered as a law declared by the Court for the proposition that passing of a legislation by itself does not constitute a cause of action. In this connection, reliance Js placed on the decisions of the Hon'ble Supreme Court in the case of C. I. T Vs Sun Engineering Works Pvt. Ltd. , 198 ITR 297 Union Of India Vs Amrit Lal Manchanda And Another, AIR 2004 SC 1625 And State Of Gujarat And Others Vs Akhil Gujarat Pravasi Vs. Mahamandal And Others, AIR 2004 SC 3894 . ( 18 ) IN the case of Union Of India vs. Amrit Lal Manchanda And Another (Supra) it has been held that disposal of cases blindly placing reliance on a decision is not proper. It is further held that circumstantial flexibility, one additional or different fact may make a world of difference between conclusion of cases. ( 18 ) IN the case of Union Of India vs. Amrit Lal Manchanda And Another (Supra) it has been held that disposal of cases blindly placing reliance on a decision is not proper. It is further held that circumstantial flexibility, one additional or different fact may make a world of difference between conclusion of cases. The following passage of Lord of Denning in the matter of applying precedent has been quoted with approval:"each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive. Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it". ( 19 ) IN State Of Gujarat And Others Vs. Akhil Gujarat Pravasi V. S. Mahmandal And Others (Supra), it is held that any observation made during the course of reasoning in a judgment should not be read divorced from the context in which they were used. ( 20 ) IN Commissioner Of Income Tax Vs. Sun Engineering Works Pvt. Ltd. , (Supra) it has been held that a decision of the Court takes its colour from the questions involved in the case in which it is rendered. It is held as follows:"such an interpretation would be reading that judgment totally out of context in which the questions arose for decision in that case. It is neither desirable nor permissible to pick out a word or a sentence front the judgment of this court, divorced from the context of the question under consideration and treat it to be the complete "law" declared by this court. The judgment must be re as a whole and the observations from the judgment have to be considered in the Light of the questions which were before this court. The judgment must be re as a whole and the observations from the judgment have to be considered in the Light of the questions which were before this court. A decision of this court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this court, to support their reasonings. " ( 21 ) IT is not proper to regard a word, a clause or a sentence occurring in a judgment divorced from its context as containing a full exposition of law on a question, when the question did not even fall to be answered in that judgment. The ratio of any decision must be understood in the background of the facts of that case. It is settled that a case is an authority for what it actually decides and not what logically follows from it. ( 22 ) NOW, let me find out the ratio of the decision in Kusum Ingot's case. The Petitioner in that case is a Company having its Registered Office at Mumbai and it had obtained a loan from Bhopal Branch of State Bank of India. The Bank issued a notice for repayment of the said loan from Bhopal, in terms of the provisions of the Securitisation and Reconsideration of Financial Assets and Enforcement Security Interest Act, 2002. The Petitioner challenged virus of the said Act by filing a writ petition at Delhi High Court and the Delhi High Court dismissed the petition on the ground of lack of territorial jurisdiction. It was contended that a constitutionality of a Primary Act can be questioned on the ground that the cause of action arises at a place of legislature enacting the legislation. In that background, the Hon'ble Supreme Court examined a question as to whether passing of legislation by itself confers any right to file a Writ Petition unless a cause of action arises thereof. In that background, the Hon'ble Supreme Court examined a question as to whether passing of legislation by itself confers any right to file a Writ Petition unless a cause of action arises thereof. It is categorically held that cause of action will arise only when the provisions of the Act or some of them which may implemented shall give rise to civil or evil consequences and that a Writ Court would not determine a constitutional question in a vacuum. It is also held that the Court should have requisite territorial jurisdiction. It is further held that framing of statutory rule or issue of an executive order or instructions would not confer jurisdiction upon a Court only because of the situs of the Office of the maker thereof. ( 23 ) I am of the view that the said decision is squarely applicable to the facts of the case. I am also of the view that since the authorities under the Act have not initiated any action against the Petitioner as on the date of filing of the Writ Petition, it cannot be said that they have a cause of action to file the Writ Petitions. ( 24 ) IN the result, Writ Petitions fail and they are accordingly dismissed. However, this order will not preclude the Petitioners from challenging the virus of the Act in case the Authorities initiate any action in accordance with the provisions of the Act. No costs. --- *** --- .