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2008 DIGILAW 131 (CAL)

Suresh Kumar Chauhan v. Commissioner of Customs

2008-01-29

ANIRUDDHA BOSE

body2008
JUDGMENT The Court :- In this writ petition under challenge is an order passed by the Commissioner of Customs (Import of General) New Customs House, New Delhi dated 29th January, 2007 under which penalty has been imposed upon the petitioner to the tune of Rs. 25 lacs. The main allegation against the petitioner relates to misdeclaration and suppression of the value of the goods imported. Drawing my attention to various passages of the impugned order and the show cause notice, on the basis of which the order was passed, Mr. Mehta, learned counsel for the petitioner, submitted that the goods were imported at the port at Calcutta and the charge against the petitioner is over preparation of false invoices under the cover of which the goods were imported at the port. 2. Thereafter such goods were despatched to New Delhi. The goods in question are computer parts. An investigation was conducted in several offices of the importer, including the office of Messers Vintron Industries Ltd. and seizure of certain articles was made from the office of this company in Okhla Industrial Area, New Delhi. The charge against this company again is under-invoicing of the imported materials. These facts have not been specifically pleaded in the petition, but I have been taken through the annexures to the writ petition by the learned counsel appearing for the parties and these facts do not appear to be in dispute. The petitioner’s connection with this company appears to be in his holding the post of a director, which he disputes. In the writ petition he has pleaded that since he did not attend any meeting of the company, he had ceased to be a director of the company by operation of law. 3. But these facts are not of much relevance at this stage of the present proceeding. Mr. Tilak Basu, learned counsel appearing for the respondents, has taken a preliminary objection on two counts as regards maintainability of this writ petition. His case is that this court lacks the territorial jurisdiction as none of the effective respondents have their office within the territorial jurisdiction of this court and there is efficacious alternative remedy available to the petitioner. Mr. Tilak Basu, learned counsel appearing for the respondents, has taken a preliminary objection on two counts as regards maintainability of this writ petition. His case is that this court lacks the territorial jurisdiction as none of the effective respondents have their office within the territorial jurisdiction of this court and there is efficacious alternative remedy available to the petitioner. Argument was primarily advanced on the first point of objection that this Court does not have the territorial jurisdiction to entertain the instant writ petition, and it is this question I propose to examine in this judgement. 4. Mr. Bose’s submission is that the authority who adjudicated the proceeding initiated by the show cause notice has his office in Delhi and the seizure and the connected investigation also took place in Delhi. On these counts, Mr. Basu argued that this High Court has no jurisdiction over the subject dispute. Mr. Basu has also argued for dismissal of the writ petition on the ground of forum conveniens. He submitted that since the petitioner has disclosed his place of residence in Taiwan and the major respondents have their offices in Delhi, it would be convenient for both the parties if the writ petition is heard before an appropriate forum in Delhi. 5. Contesting such plea of Mr. Basu, Mr. Mehta’s primary argument has been that since the importation took place in Calcutta and the authority who would have decided the matter under ordinary circumstances would have been the Commissioner of Customs at Kolkata, this court is the natural forum for adjudicating the subject controversy. Mr. Mehta relied on a notification issued on 24th October, 1994 appointing the Collector of Customs II Delhi as Collector of Customs, Calcutta for adjudication of the subject controversy in support of his submission that it was the Collector of Customs, Calcutta, (as this post was designated at that point of time) who was the natural adjudicating authority in respect of the show cause notice out of which the present proceeding arises, and the Collector of Customs-II, Delhi was exercising the jurisdiction of the former under special circumstances, exercising the jurisdiction of the Collector of Customs, Calcutta only.. 6. The authorities relied upon by Mr. 6. The authorities relied upon by Mr. Mehta are decisions of the Hon’ble Supreme Court in the cases of Kusum Ingots Alloys Ltd. vs. Union of India reported in 2004 (168) ELT 3 (S.C), Union of India –vs- Adani Exports Ltd., 2001(134)ELT 596(SC), Ambica Industries –vs-Commissioner of Central Excise, reported in 2007(213) ELT 323(SC), Union of India vs. Ram Narain Bishwanath reported in 1997 (96) ELT 224 (S.C), a judgment of the Hon’ble High Court of Karnataka in the case of Devilog Systems India –vs- Collector of Customs, reported in 1995(76) ELT 520(Kar.), and a decision of the Hon’ble High Court of Delhi reported in 2006 (194) ELT 264 (Delhi) in the case of Bombay Snuff Pvt. Ltd. vs. Union of India. Another judgment of this Court has been relied on by Mr. Mehta, arising out of the same importation in WP 2030 of 2004 in the case of Suresh Kumar Chauhan vs. Commissioner of Customs (Port) & Ors. In the last referred judgment, the same notice to show cause was in issue and the grievance was that the same was not supplied to the petitioner. The writ petition was however entertained by this Court and disposed of by passing certain directions. 7. Mr. Basu, appearing for the respondents, on the other hand has also relied on thedecision of the Hon’ble Supreme Court of India in the case of Ambika Industries –vs-Commissioner of Central Excise, reported in (2007) 213 ELT 323 on the aspect of jurisdiction of this Court and on the aspect of forum non-conveniens he has relied on paragraph 30 in the case of Kusum Ingots & Alloys Ltd. (supra) and also a decision of an Hon’ble Single Judge of this Court in the case of S.S. Jain & Company –vs- Union of India, reported in (1995) 76 ELT 251 . The other authority relied upon by Mr. Basu is a judgment of the Hon’ble High Court of Delhi in the case of New Horizons Ltd. –vs-Union of India, reported in AIR 1994 Delhi 126. . 8. I have considered the rival submissions. The main ground on which the maintainability of this writ petition is being questioned is that the entire proceeding commencing from the search and seizure, issuance of the notice to show cause, passing of the order of adjudication took place in Delhi. Further submission of Mr. . 8. I have considered the rival submissions. The main ground on which the maintainability of this writ petition is being questioned is that the entire proceeding commencing from the search and seizure, issuance of the notice to show cause, passing of the order of adjudication took place in Delhi. Further submission of Mr. Basu is that the records of the present proceeding are also lying in Delhi. 9. However, under Article 226 of the Constitution of India, a High Court has the jurisdiction if part of cause of action on the basis of which a writ proceeding is instituted, arises within the jurisdiction of such High Court. This basic principle is reflected in the decisions of the Hon’ble Supreme Court in the cases of Union of India –vs- Adani Exports (supra) and Kusum Ingots & Alloys Ltd.(supra). 10. What is under challenge in this writ petition is an order passed after the process of seizure, show cause and adjudication all of which took place outside the territorial jurisdiction of this Hon’ble Court. Now the question arises as to whether just by virtue of the fact that the goods had passed through the port of Calcutta, this court would retain any jurisdiction to hear out the matter or not? As regards the judgment of the Hon’ble Supreme Court in the case of Ambika Industries (supra), this case dealt with an appeal under section 35G of the Central Excise & Salt Act, 1944. Similar was the factual context in the decision of the Hon’ble Supreme Court in the case of Union of India –vs- Ram Narayan Biswanath (supra). But the latter decision is not an authority on the issue of jurisdiction of the High Court under Article 226 of the Constitution of India. In the former decision, the question of territorial jurisdiction of the High Court under Article 226(2) of the Constitution of India was not in issue, though there is an observation of the Hon’ble Supreme Court on this aspect as well to which I shall revert to in the later part of this judgment. 11. Cause of action is compendium of all the facts which would be necessary for the petitioner to prove, if traversed, in order to support the petitioner’s right to relief. 11. Cause of action is compendium of all the facts which would be necessary for the petitioner to prove, if traversed, in order to support the petitioner’s right to relief. Thus if one of such material facts occur within the jurisdiction of a particular judicial forum, such forum would have the jurisdiction to adjudicate on the dispute on the ground of part of cause of action having arisen within the jurisdiction of such forum. I am of the opinion that the fact that goods were imported through the Calcutta port, is an important factor in the series of events which resulted in passing of the order of the adjudicating authority. The basic allegation against the petitioner is underinvoicing and the factum of such underinvoicing, if what is alleged is true ought to have occurred at the port of Calcutta, as the goods were imported through the port of Calcutta. The root cause of issuance of the notice to show cause lies in importation of the goods in question. A distinction has been made by the Hon’ble Supreme Court between the jurisdiction of the appellate tribunal and the High Court in the case of Ambica Industries (supra). In this case, it was held: “41. Keeping in view the expression “cause of action” used in clause (2) of Article 226 of the Constitution of India, indisputably even if a small fraction thereof accrues within the jurisdiction of the Court, the Court will have jurisdiction in the matter though the doctrine of forum conveniens may also have to be considered.” 12. So far as the present writ peition is concerned, on the question of territorial jurisdiction of this court, an additional factor is to be considered. The petitioner had earlier moved a writ petition before this court being W.P. No.2030 of 2004. That writ petition was disposed of by an Hon’ble Single Judge of this court on 24th November 2004, directing the respondent no.1 therein (being Commissioner of Customs (Port)) to take necessary steps for supplying show cause notices to the petitioner. It was in pursuance of such direction three notices to show cause were supplied to the learned advocate for the petitioner. It was in pursuance of such direction three notices to show cause were supplied to the learned advocate for the petitioner. The petitioner’s main complaint in this writ petition is that copies of all the documents relied upon in the show cause notice have not been supplied to him, and on this basis he claims that the order of this court, passed on November 24, 2004, is being breached by the respondents. One of the prayers of the petitioner is for a direction upon the respondents to supply photocopies of all the documents relied on in the show cause notice in compliance of the order passed by this court in W.P. No.2030 of 2004. 13. Thus, if the cause of action of the petitioner arises out of violation of an order of this Court, then the fact that the earlier proceeding was instituted in this Court becomes the central factor of the petitioner’s case, forming the basis of the petitioner’s complaint. 14. Mr. Mehta contends that situs of the authority whose order is challenged is not a relevant factor for determining the territorial jurisdiction of the court, relying on the case of Kusum Ingots & Alloys Ltd.(supra). I accept this argument, with a qualification that in such a situation, at least one occurrence in the chain of events ending up in creating the cause of action should take place within the territorial jurisdiction of the Court which is sought to be set in motion by the petitioner. Mr. Mehta also sought to argue that it was the Commissioner of Customs, Calcutta who is in reality the adjudicating authority and the Commissioner of Delhi is only exercising the jurisdiction of the Commissioner of Customs, Calcutta. He relied on the decision of the Hon’ble Karnataka High Court in the case of Devilog Systems (supra) in support of his submission that it was the Collector of Customs, Calcutta who was the proper authority for adjudicating the dispute in this writ petition. But I do not think it is necessary to examine that aspect of the matter as the jurisdiction of this court is sought to invoked in this writ petition on the basis of a part of cause of action having arisen within the jurisdiction of this court. 15. But I do not think it is necessary to examine that aspect of the matter as the jurisdiction of this court is sought to invoked in this writ petition on the basis of a part of cause of action having arisen within the jurisdiction of this court. 15. As I have already observed, I am satisfied that certain important facts leading to the issuance of the show cause notice culminating in imposition of penalty have their origin within the territorial jurisdiction of this Hon’ble Court. So far as the present writ petition is concerned, the main allegation of the petitioner is that steps have been taken which are prejudicial to the petitioner’s interest, in violation of an order of this Court. Accordingly I hold that this Court has the territorial jurisdiction to entertain and hear out the present writ petition. Mr. Basu had drawn my attention to the decision of the Hon’ble Supreme Court in the case of Union of India –vs-Adani Exports Ltd. and submitted that there is practically no pleading in this writ petition as regards the basis on which the jurisdiction of this court was being invoked. But the facts which I have narrated above has been brought to my notice from the annexures to the writ petition, and the fact that the goods were imported through the Calcutta Port is not really in dispute. Thus even if it has not been specifically pleaded so, from a perusal of the writ petition in its totality and the content of the annexures clearly reveal the facts on the strength of which it can be contended that immediate or important occasion for the present action arose within the jurisdiction of this court. 16. The decision of the Hon’ble High Court of Delhi in the case of Bombay Snuff Pvt. Ltd.(supra) deals with the territorial jurisdiction of the appellate forum under section 35G of the Central Excise Act, 1944 and the ratio of this decision does not assist Mr. Basu’s clients on this issue. 17. Next comes the question of forum conveniens. The case of Mr. Basu is that the entire proceeding from the seizure and show cause stage took place in Delhi and the place of residence of the petitioner is also not within the jurisdiction of this Court. Basu’s clients on this issue. 17. Next comes the question of forum conveniens. The case of Mr. Basu is that the entire proceeding from the seizure and show cause stage took place in Delhi and the place of residence of the petitioner is also not within the jurisdiction of this Court. He submitted that these facts should inevitably lead to the conclusion that Delhi High Court is the most convenient forum for adjudicating this writ petition. 18. The decision of this Court in the case of S.S. Jain & Company, 1995(76) ET 251(Cal) and also the decision of the Hon’ble Supreme Court in the case of Kusum Ingots & Alloys Ltd. (supra) have been cited by Mr. Basu in support of such proposition. 19. But the latter authority does not lay down in absolute terms that the writ court must always exercise its discretion against entertaining a writ petition if a part of cause of action arises within its jurisdiction. In the present case, in any event, the part of cause of action which has arisen within the jurisdiction of this Court in my opinion is not so minor or inconsequential in relation to the petitioner’s complaint that on that ground alone I shall decline to exercise the jurisdiction vested on this Court under Article 226 of the Constitution of India. 20. So far as the case of S.S. Jain & Co.(supra) is concerned, that decision factually is distinguishable in that the originating events in that case took place in the port of Bombay. 21. Having considered these authorities, I am of the view that just because it may be more convenient to prosecute a writ petition in another High Court would not per se oust the jurisdiction of a court which otherwise is competent to entertain a proceeding. A petitioner has certain element of liberty to choose the forum and if the inconvenience that may result to both the parties are of such magnitude that it would be practically impossible to prosecute the writ petition in a particular court, then only the principle of forum conveniens ought to be applied. The Courts in this country have exercised the discretion in ousting a litigant on the ground of forum conveniens sparingly and I do not want to make a departure from this practice. The Courts in this country have exercised the discretion in ousting a litigant on the ground of forum conveniens sparingly and I do not want to make a departure from this practice. Moreover, the question of convenience or inconvenience is largely dependent on the facts of a given case, for which the party seeking ouster of jurisdiction of a Court must establish the reasons as to why the initiator of a proceeding would have to give up the forum of this choice. Mr. Basu’s objection in this matter is in the nature of demurrer, and adequate facts have not been pleaded by his clients as to why and how they would be placed under serious inconvenience if this proceeding is continued in this Court. In the earlier writ petition, several facts were pleaded, which are also common to the present writ petition, but no such objection was taken. 22. Under these circumstances, the preliminary objection taken on the ground of lack of territorial jurisdiction is rejected. However, since this was the point which was primarily argued before me and at present I do not have the determination for hearing revenue matters, let marking of this matter as heard in part be cancelled. Liberty is given to the petitioner to approach the regular Bench for further hearing of this matter. It shall be open to the petitioner to take up the plea of alternative remedy in resisting the maintainability of the present writ petition before the regular bench.