Holding

For appeals under Section 35G of the Central Excise Act, the High Court having territorial jurisdiction over the place where the first order (the assessing officer’s order) was made is the appropriate appellate authority, not the High Court of the tribunal’s seat.

Summary

Ambica Industries, carrying on business in Lucknow, was assessed to central excise there and appealed to the Central Excise and Service Tax Appellate Tribunal (CESTAT) in Delhi, which has jurisdiction over Uttar Pradesh, Delhi and Maharashtra. The appellant filed a further appeal under Section 35G of the Central Excise Act in the Delhi High Court, which dismissed the appeal for lack of territorial jurisdiction. The Supreme Court examined whether the High Court’s jurisdiction should be determined by the situs of the Tribunal, the cause‑of‑action doctrine, or the location of the assessing officer. It held that when a tribunal’s jurisdiction spans multiple states, the appropriate High Court is the one having jurisdiction over the place where the first order (the assessing officer’s order) was made, not the High Court of the tribunal’s seat. Consequently, the Delhi High Court was correct in refusing jurisdiction and the appeals were dismissed.

Issues considered

The proper basis for determining the High Court with jurisdiction under Section 35G of the Central Excise Act when the appellate tribunal’s jurisdiction covers more than one State.
Whether the cause‑of‑action or dominus‑litus doctrines apply to appeals under Section 35G.
Whether Section 35G(9), which incorporates CPC provisions, influences the jurisdictional analysis.
The relevance of the situs of the Tribunal versus the situs of the Assessing Officer in deciding jurisdiction.

Legislation cited

Central Excise Act, 1944s. 35G, s. 35H, s. 36B
Code of Civil Procedure, 1908s. 100, s. 20(c)
Companies Act, 1956s. 1OF
Income Tax Act, 1961s. 66

Subjects

Central ExciseSection 35GHigh Court jurisdictionTribunal jurisdictionCause of actionDominus litusForum shoppingCivil Procedure Code

Judgment

MIS. AMBICA INDUSTRIES
.., 1 A
v.
COMMISSIONER OF CENTRAL EXCISE

MAY 18, 2007

[S.B. SINHA AND MARKANDEY KA TJU, JJ.] B

Central Excise Act, I 944-Section 35G-Territorial jurisdiction of High
i
Court in appeal from orders of Central Excise and Service Tax Appellate
Tribunal (CESTAT) having jurisdiction in respect of cases arising within
territorial limits of more than one State-Held-High Court situated in State c
where first court is located is to be considered an appropriate appellate
authori~ode ofCivil Procedure, 1908 did not contemplate such a situation
and Section 35G (9) was inapplicable-Cause of action and dominus litus
doctrines were inapplicable as they lead to more than one High Court
having jurisdiction-This was impermissible as not only it could not said to
have been contemplated when Parliament thought of one High Court while
D
providing for appeal, but also lead to judicial anarchy as decision of High
Court is binding only on authorities which are within its jurisdiction, and
is only of persuasive value for other High Courts or Courts or Tribunals
outside its territorial jurisdiction-It would also give rise to problem of
forum shopping. E
Appellant carries on business at Lucknow and assessed to Central
Excise duty there. The matter came up in appeal before Central Excise and
Service Tax Appellate Tribunal (CESTAT), New Delhi. This Tribunal exercises
jurisdiction in respect of cases arising within the territorial limits of the
States of Uttar Pradesh, National Capital Territory of Delhi and the State of F
Maharashtra. Having regard to the situs of the Tribunal, an appeal in terms
~
of Section 35G (1) of the Central Excise Act, 1944 was filed before the Delhi
High Court. It dismissed the appeal holding that it did not have territorial
jurisdiction in the matter. Hence the present appeal.

Appellant contended that High Court was wrong as it did not consider
G
(i) the effect of Section 35G(9), which made Code of Civil Procedure, 1908
applicable to appeals under that section; (ii) in terms of Section 100(1) of the
Code, the order of the First Appellate Court being a decree, a Second Appeal
I lies before the High Court to which it is subordinate.
685 H
686 SUPREME COURT REPORTS [2007) 7 S.C.R.

A Respondent contended that to decide the situs of the High Court to which (
,....
an appeal lies under section 35G (i) the determinative factor would be the _,
situs of the Assessing Officer and not the situs of the Tribunal alone (ii) the
term 'cause of action', as applicable in relation to a suit or a writ petition,
was not relevant.

B Dismissing the appeals, the Court

HELD: I.I. In terms of Article 227 of the Constitution oflndia as also
Clause (2) of Article 226 thereof, the High Court would exercise its t-
discretionary jurisdiction as also power to issue writ of certiorari in respect
of the orders passed by the Subordinate Courts within its territorial ,

c jurisdiction or if any cause of action has arisen there within but the same
tests cannot be applied when the appellate court exercises a jurisdiction over
Tribunal situated in more than one State. In such a situation, the High Court
situated in the State where the first court is located should be considered to
be appropriate appellate authority. (Para 17) (685-C-DJ

D Commissioner of Income Tax, Madras v. S. Sivaramakrishna Iyer AIR,
(1969) Mad 300, Seth Banarsi Dass Gupta v. Commissioner of Income Tax,
(1978) 11 DLT 14, Suraj Woolen Mills v. Collector of Customs, (2000) 123 -r
ELT 471 (Del), Commissioner of Central Excise, Delhi v. Enkay HWS India
Ltd, (2002) 139 E.L.T. 2land Big Apple Computers v. Commissioner of
Customs & Central Excise, Hyderabad, (2007) 207 ELT 36, approved.
E
1.2. Code of Civil Procedure did not contemplate such a situation. It
provides for jurisdiction of each court. Even a District Judge must exercise
its jurisdictio~ only within the territorial limits of a State. It is inconceivable
under the Code of Civil Procedure that the jurisdiction of the District Court
would be exercisable beyond the territorial jurisdiction of the District, save
F
and except in such matters where the law specifically provides therefor.
r-
(Para 17) (685-D-EJ
1.3. Sub-section 9 of Section 35G does not answer the question placed
before the Court. (Para 16J (685-8)

G 2.1.'When an appeal is provided 11nder a statute, Parliament must have
thought of one High Court. It is 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 l
before the High Court, that appeals may be filed before different High Courts
H
AMBICA INDUSTRIES v. COMMNR. OF CENTRAL EXCISE 687

at the sweet will of the party aggrieved by the decision of the Tribunal. A
~ .. !Para 141 (684-GI

2.2. In a case of this nature, therefore, the cause of action doctrine may
not be invoked. (Para 15) (684-H; 685-A)

Kusum Ingots & Alloys Ltd. v. Union of India, (2004) 168 ELT 3, B
Nasiruddin v. S. T.A. Tribunal, AIR (1976) SC 331, Stridewe/l Leathers (P)
Ltd. & Ors. v. Bhankerpur Simbhao/i Beverages (P) Ltd., (1994) 1 SCC 34
and, held inapplicable.
i
Gurdit Singh & Ors. v. Munsha Singh & Ors., AIR (19771SC640 and
Mis. M Ramnarain Pvt. Ltd & Anr. v. State Trading Corpn. of India Ltd, c
(19831 3 sec 75, relied on

2.3. lfthe cause of action doctrine is given effect to, invariably more
than one high Court may have jurisdiction, which is not contemplated.
(692-BI (Para 301
D
3.1. The Tribunal exercises jurisdiction over all the three States. In all
the three States there are High Courts. In the event, the aggrieved person is
.,. treated to be the dominus litus, as a result whereof, he elects to file the appeal
before one or other High Court, the decision of the High Court shall be binding
only on the authorities which are within its jurisdiction. It will only be of
E
persuasive value on the authorities functioning under a different jurisdiction.
If the binding authority ofa 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.
(684-D-EI (Para 131 F

-;
3.2. It would also give rise to the problem of forum shopping.
(Para 38} (694-Cl

Suresh Desai and Associates v. CIT, (1998) 230 ITR 912 and CCE v. Ml
s. Technological Institute o/Textile, in 76 (1998) DLT 862 (DB), referred to. G
3.3. The doctrine of dominus litus or doctrine of situs of the Appellate
Tribunal do not go together. Domin us litus indicates that the suitor has more
than one option, whereas the situs of an Appellate Tribunal refers to only one
High Court wherein the appeal can be preferred. (Para 1811685-Fl
H
3.4. It is possible that a case of emergency while the Tribunal holding
688 SUPREME COURT REPORTS [2007) 7 S.C.R.

A its sitting at Allahabad or Bombay may entertain a matter where the cause of
action had arisen at Delhi. But that would not mean that when the Tribunal
pronounces its judgment at Allahabad or Bombay, although the cause of action
had initially arisen at Delhi, the Delhi High Court would have no jurisdiction
in relation thereto. !Para 19) 1685-H; 686-A)

B 3.5. The situs of a Tribunal may vary from time to time. It could be Delhi
or some other place. Whether its jurisdiction would be extending to 3 States
or more or less would depend upon the Executive order which may be issued.
Determination of the jurisdiction of a High Court on the touchstone of Section t

35G and 35H of the Act should be considered only on the basis of statutory
C provisions and not anything else. While defining High Court in terms of
Section 36B of the Act, the Parliament never contemplated to have a situation
of this nature. !Para 20) 1686-B)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2749 of2007.

D From the final Judgment and Order dated 14.9.2006 of the High Court
of Delhi at New Delhi in Central Excise Act Case No. 8 of 2005.

WITH

C.A. Nos. 2751 & 2750 of2007.
E
C. Hari Shankar, Jagdish. N., S. Sunil, Pinaki Mohapatra, C.M. Jaykumar,
Pankaj Kumar Singh, Satish Pandey and K.L. Janjani for the Appellant.

G.E. Vahanvati, Solicitor, General oflndia, Hrishikesh Baruah, Devdatt
F Kamat, Chinmoy Pradip Sharma, Mrinalini Sen and B. Krishna Prasad for the
Respondent.

The Judgment of the Court was delivered by

S.B. SINHA, J. l. Leave granted.

G 2. The issue which arises for our consideration in these appeals relates
to determination of situs of the High Court in which appeals would lie under
Section 35G(l) of the Central Excise Act.

3. Appellant herein carries on business at Lucknow. It was assessed at
H the said place. The matter, however, ultimately came up before Central Excise
• and Service Tax Appellate Tribunal (CESTA T), New Delhi in Appeal
AMBICA INDUSTRIES v. COMMNR. OF CENTRAL EXCISE [S.B. SINHA, J.] 689

No.E/2792/02-NBC. The said Tribunal exercises jurisdiction in respect of A
cases arising within the territorial limits of the Statje of Uttar Pradesh, National
Capital Territory of Delhi and the State of Maharashtra.

4. Having regard to the situs of the Tribunal, an appeal in tenns of
Section 3 SG of the Central Excise Act, 1944 was filed before the Delhi High
Court. A Division Bench of the said Court relying on or on the basis of an B'
earlier Division Bench judgment in Bombay Snuff Pvt.. Ltd. v. Union of India,
(2006) 194 EL T 264 opined that it had no territorial jurisdiction in the matter.

5. Mr. C. Hari Shankar, learned counsel appearing on behalf of the
appellant would submit that despite the fact that sub-section (9) of Section C
35G of the Act was brought to the notice of the High Court, the court refused
to consider the effect thereof in determining the question of its jurisdiction.
Had the said provision been taken into consideration for determination of the

-
issue, it was possible to hold that its decision in Bombay Snuff (supra) had
' been rendered per incurium. Referring to the development of law governing
the field, by reason of the amendment carried out by Parliament in the said D.
Act as also other pari materia statutes, the teamed counsel would submit
that the High Court was wrong in arriving at the said conclusion.

6. Mr. G.E. Vahanvati, learned Solicitor General of India, on the other
hand, would submit that the term 'cause of action' applicable in relation to
a suit or a writ petition before the High Court having regard to clause 2 of E
Article 226 of the Constitution of India cannot be the basis for detennining
the situs of the High Court to which an appeal shall lie under section 35G of
the Act. It was submitted that the situs of the Assessing Officer would be
the determinative factor for the High Court to exercise its territorial jurisdiction
in entertaining appeal thereunder and not the situs of the Tribunal alone.
F
7. We may, at the outset, notice some provisions of the Act which are
relevant for our purpose:-

"35G. Appeal to High Court

(l) An appeal shall lie to the High Court from every order passed in G
appeal by the Appellate Tribunal on or after the 1st day of July, 2003
(not being an order relating, among other things, to the determination
of any question having a relation to the rate of duty of excise or to
the value of goods for the purposes of assessment), if the High Court
is satisfied that the case involves a substantial question of law. H
690 SUPREME COURT REPORTS (2007) .7 S.C.R.

A (2) The Commissioner of Central Excise or the other party aggrieved
by any order passed by the Appellate Tribunal may file an appeal to
the High ·Court and such appeal under this sub-section shall be- '

(9) Save as otherwise provided in this Act, the provisions of the Code
of Civil Procedure, 1908(5 of 1908), relating to appeals to the High
B Court shall, as far as may be, apply in the case of appeals under this
section."

8. In terms of the said provision, the questions involving "rate of duty
of excise or the value of the goods" may be subjected to an appeal before

C
the High Court, subject of course to its satisfaction that the matter iitvolves
a substantial question of law. Sub-section (9) of Section 35G, prior to'1999,
.,.
provided for application of the procedure of Code of Civil Procedure, 1908
mutatis mutandis to the appeals to the High Courts, recourse to which could

-
be taken for challenging the final orders of the Tribunal before the High Court. ,
Post 1999, two provisions, namely, Section 35G and Section 35H were made
.D available, the relevant provisions whereof are as under :-

"35G. Statement of case to High Court.~

(I) The Commissioner of Central Excise or the other party may, within
sixty days of the date upon which he is served with notice of an order
under section 35C passed before the 1st day of July, 1999 (not being
E an order relating, among other things, to the determination of any
question having a relation to the rate of duty of excise or to the value
of goods for purposes of assessment), by application in the prescribed
form, accompanied, where the application is made by the other party,
by a fee of two hundred rupees, require the Appellate Tribunal to refer
F to the High Court any question of law arising out of such order and,
subject to the other provisions contained in this section, the Appellate
Tribunal shall, within one hundred and twenty days of the receipt of
such application, draw up a statement of the case and refer it to the
High Court:

G Provided that the Appellate Tribunal may, if it is satisfied that the
applicant was prevented by sufficient cause from presenting the
application within the period herein before specified, allow it to be .
presented within a further period not exceeding thirty days" ;

9. The Finance Act of 2003, however, did away with the remedy of
H reference to the High Court, altogether, except in the case of final orders
,_
}

692 SUPREME COURT REPORTS [2007] 7 S.C.R.

A IO. Similar problems have arisen in respect of the decisions rendered by
Tribunals constituted under different Acts, for example Income Tax Act. We
are also not unmindful of a catena of decisions rendered by some High Courts
.-
that situs of the Tribunal is the determinative factor for reference and/or '

appeal before the High Court. ~

B I I. The question incidentally came up for consideration before a 5
Judge Bench of this Court in Nasiruddin v. S. TA. Tribunal AIR (1976) SC 331
wherein, inter alia, it was held :-

"37. To sum up, our conclusions are as follows. Fitst, there is no
permanent seat of the High Court at Allahabad; The seats at Allahabad
•
c and at Lucknow may be changed in accordance with the provisions
!
of the Order. Second, the Chief Justice of the High Court has no power ;.
to increase or decrease the areas in Oudh from time to time. The areas
in Oudh have been determined once by the Chief Justice and, therefore,
t
· there is no scope for changing the areas. third, the Chief Justice has
D power under th~ second proviso to paragraph 14 of the Order to direct
in his discretion that any case or class of cases arising in Oudh areas ,
shall be heard at Allahabad. Any case or class of cases are those
which are instituted at Lucknow. The interpretation given by the High
Court that the word "heard" confers powers on the Chief Justice to
order that any case or class of cases arising in Oudh areas shall be
E instituted "r filed at Allahabad instead of Lucknow is wrong. The
word "heard" means that cases which have already been instituted or
filed at Lucknow may in the discretion of the Chief Justice under the
second proviso to paragraph 14 of the Order be directed to be heard
at Allahabad. Fourth, the expression "cause of action" with regard to
a civil matter mea~s that it should be left to the litigant to institute
F
cases at Lucknow Bench or at Allahabad Bench according to the
cause of action arising wholly or in part within either of the areas. If -r-
the cause of action arises wholly within Oudh areas then the Lucknow
Bench will have jurisdiction. Similarly, if the cause of action arises
wholly outside the specified areas in Oudh then Allahabad will have
G jurisdiction. If the cause of action in part arises in the specified Oudh
areas and part of the cause of action arises outside the specified
areas, it will be open to the litigant to frame the case appropriately to
attract the jurisdiction either at Lucknow or at Allahabad. Fifth, a -
)

H
criminal case arises where the offence has been committed or otherwise
as provided in the Criminal Proceduce Code. That will attract the '
~
AMBICA INDUSTRIES v. COMMNR. OF CENTRAL EXCISE (S.B. SINHA, J.] 693

- 1 jurisdiction of the Court at Allahabad or Lucknow. In some cases A
depending on the facts and the provision regarding jurisdiction, it
may arise in either place."

12. The said decision proceeded on the basis that part of the cause of
action may arise at the forum where the appellate order or the revisional order
is sourced. If, *us, a cause of action arises within one or the other High B
Court, the petititmer shall be the dominus litis. Indisputably, if this set of
reasoning is to be accepted, the impugned judgment as also the decision
rendered in Bombay Snuff (supra) would not be correct. Before dilating on
the said proposition of law it may be noticed that the decision of a Tribunal
would be binding on the Assessing Authority. If the situs of the appellate C
Tribunal should be consid~red to be the detenninative factor, a decision
rendered by the Tribunal shall be binding on all the authorities exercising its
jurisdiction under the said Tribunal.

13. The Tribunal, as noticed hereinbefore, exercises jurisdiction over all
the three States. In all the three States there are High Courts. Jn the event, tJ
the aggrieved person is treated to be the 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. It will only be of persuasive value on the authorities functioning
under a different jurisdiction. If the binding authority of a High Court does
not extend beyond its territorial jurisdiction and the decision of one High E
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. 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 thus he p
would be able to successfully evade the law laid down by the High Court at
Bombay.

14. Furthennore, when an appeal is provided under a statute, Parliament
must have thought of one High Court. It is a different matter that by way
of necessity, a Tribunal may have to exercise jurisdiction over several States G
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
1t\buna\.
15. In a case of this nature, therefore, the cause of action doctrine may H
694 SUPREME COURT REPORTS (2007) 7 S.C.R.

A not be invoked.
16. Sub-section 9 of Section 35G, whereupon Mr. C. Hari Shankar,
learned counsel places strong reliance, in our opinion, does not answer the
question placed before us. Learned counsel contends that in tenns of sub-
section I of Section 100 of the Code of Civil Procedure, the order of the First
.B Appellate Court being a decree, a Second Appeal shall lie before the High
Court subordinate thereto.

17. There cannot be any doubt whatsoever that in tenns of Article 227
of the Constitution of India as also Clause (2) of Article 226 thereof, the High
C Court would exercise its discretionary jurisdiction as also power to issue writ
of certiorari in respect of the orders passed by the Subordinate Courts wjthin
its territorial jurisdiction or if any cause of action has arisen therewithin but
the same tests cannot be applied when the appellate court exercises a
jurisdiction over Tribunal situated in more than one State. In such a situation,
in our opinion, the High Court situated in the State where the first court is
'
D located should be considered to be the appropriate appellate authority. Code
of Civil Procedure did not contemplate such a situation. It provides for ·~
jurisdiction of each court. Even a District Judge must exercise its jurisdiction
. · only within,the territorial limits of a State. It is inconceivable under the Code
·of Civil Procedure that the jurisdiction of the District Court would be exercisable
beyond the territorial jurisdiction of the District, save and except in such
E matters where the law specifically provides therefor.
18. The submission of Mr. C. Hari Shankar, learned counsel, as noticed
hereinbefore, is inconsistent and contradictory. The doctrine of dominus litus
or doctrine of situs of the Appellate Tribunal do not go together. Dominus
F litus indicates that the suitor has more than one option, whereas the situs of
an Appellate Tribunal refer~ to only one High Court wherein the appeal can
be preferred. We may consider two hypothetical cases in order to enable us
to find out an answer. A Tribunal may hear out a matter either at Allahabad
or at Bombay and pass a judgment at that place. Only because the head
office is situated at Delhi, would it mean that a judgment delivered at Allahabad
G or at Bombay would not attain its finality then and there.

19. We may notice some incongruities ifthe contention of the appellant
is taken to its logical conclusion. It is possible that in a case of emergency
while the Tribunal holding its sitting at Allahabad or Bombay may entertain -..
a matter where the cause of action had arisen at Delhi. But that would not
H mean that when the Tribunal pronounces its judgment at Allahabad or Bombay,
AMBICA INDUSTRIES v. COMMNR. OF CENTRAL EXCISE [S.B. SINHA, J.] 695

~ ~ although the cause of action had initially arisen at Delhi, the Delhi High Court A
would have no jurisdiction in relation thereto.

20. The situs of a Tribunal may vary from time to time. It could be Delhi
or some other place. Whether its jurisdiction would be extending to 3 States
or more or less would depend upon the Executive order which may be issued.
Determination of the jurisdiction of a High Court on the touchstone of Sections B
35G and 35H of the Act, in our opinion, should be considered only on the
basis of statutory provisions and not anything else. While defining High
Court in terms of Section 36B of the Act, the Parliament never, in our opinion,
contemplated to have a situation of this nature.

21. An appeal may have to be filed by the Commissioner of Central C
Excise. His office may be located in a different State. If he has to prefer an
appeal before the High Court, he would be put to a great inconvenience
whereas, the assessee would not be.

22. We may, keeping in view the aforementioned backdrop, notice a few D
decisions. In CommissiOner of Income Tax, Madras v. S. Sivaramakrishna
Iyer, AIR (1969) Mad 300, it was held :-

"On that view, we think that where a Tribunal has jurisdiction over
more States than one, and it has got to make a choice, in the absence
of a statutory provision, relating to the matter it must be guided by E
the principles of Section 64, that is to say, the place where the
assessee carries on his business, profession or vocation or resides.
On that test, it is the High Court of Kerala which will have jurisdiction.
There is also another approach to the question, namely, the subject-
matter test As we mentioned, the penalty proceedings were originally
initiated by the Income-tax Officer at Trichur and it was because of F
a directive by Section 274(2) he made a reference to the Inspecting
Assistant Commissioner. But in effect, as we think, the penalty
proceedings are but a continuation of the original assessment orders
and the subsequent proceedings started by the Income-tax Officer at
Trichur for levy of penalty. On that basis too, we are inclined to think G
that this court wili have no jurisdiction under Section 66(2)."

23. A Division Bench of Delhi High Court in Seth Banarsi Dass Gupta
v. Commissioner of Income Tax, ( 1978) 11 DLT 14, while construing Section
66 of the Income Tax Act, 1922, held as under :-
H
696 SUPREME COURT REPORTS [2007] 7 S.C.R.

A "The question then arises as to which High Court the Delhi Bench
could refer the questions of law proposed in the applications under
section 66( I) of the Act.

The only relevant provisions in the Act are those in Section 66.
Section 66(1) merely states that within the time mentioned therein, the
B assessee or the Commissioner may require the Appellate Tribunal ~o
refer to "the High Court" any question of law arising out of an order
under Section 33, and that the Appellate Tribunal shall within the time
prescribed in the sub-section draw up ~ statement of case and refer
the question to "the High Court" Section 66(2) provides that if the
Appellate Tribunal refuses to state a case on an application under
c Section 66(1) on the ground that no question of law arises, the
assessee or the Commissioner, as the case maybe, may, within the time
mentioned in the sub-section, apply to "the High Co1Jft", and "the
High Court" if it is not satisfied with the correctnessof the decision
of the Appellate Tribunal, require the Appellate Tribunal to state the
D case and refer it. Section 66(8) provides that for the purposes of
Section' 66, "the High Court" means - (a) in relation to any State, the
High Court of the State, and (b) in relations to the Union TerritOry of
Delhi, the High Court of Delhi. The aforesaid provisions do not clearly
indicate to which particular High Court the Appellate Tribunal has.to
make a reference under Section 66( I) or which High Court can call for
E a reference under Section 66(2), in a case where a Bench of the
Appellate Tribunal has jurisdiction over more than one State."

24. Referring to a judgment of Madras High Court, namely; dti'tmissioner
of Income Tax v. S. Sivaramakrishna Iyer, (1968) 70 ITR 860, the learned
F Judge opined :-

"The said provisions show that in a case where a reference is made I'
to a High Court by a Bench of the Appellate Tribunal under section
66 of the Act the reference is just an intermediate stage, and the case
(appeal before the Bench) would be finally disposed of by the Bench
after receiving the judgment of the High Court in the reference. So,
G
instead of adopting a different basis for that intermediate stage, if
would be quite appropriate to adopt the same basis as the one adopted
for determining the jurisdiction of the Bench. Thus, it would be
appropriate and in consonance with the aforesaid provisions of the
Act and the Standing Orders if the basis for the jurisdiction of the
H Bench is adopted, instead of adopting the basis mentioned in Section
AMBICA INDUSTRIES v. COMMNR. OF CENTRAL EXCISE [S.B. SINHA, J.) 697

64 of the Act, as suggested in the decision of the Madras High Court A
in the case. Commissioner of Income-tax, Madars v. S.
Sivaramakrishna Iyer."

25. Yet again in Suraj Woolen Mills v. Collector of Customs, (2000) 123·
EL T 471 (Del), Lahoti, J. as the learned Chief Justice of India then was, noticed
the aforementioned decision as also other decisions operating in the field and B
held:-

"10. The Division Bench decision in the case of Seth Banarsi Dass
Gupta has been followed by another Division Bench in Bir/a Cotton
& Spg Mills Ltd.v. CIT Rajasthan. (1980) 123 ITR 354. The assessee
carried on business in Jaipur. It had its registered office in Delhi. The C
assessment orders were passed by ITO at Jaipur and appeals were
disposed by the C at Jaipur. The matter came up before the Tribunal
at Delhi and was heard by the Central Bench of the Income-true
Appellate Tribunal as there was no Tribunal at Jaipur. The Division
Bench held that the court to which reference should be made would D
be the court having jurisdiction over the territory in which the office
of the ITO was situated.

11. Recently the same principle has been followed by this Court in
Suresh Desai & Associates v. CIT ( 1991) 230 ITR 912. In this judgment,
the Divi- sion Bench has assigned yet another reason why the High E
Court of that State wherefrom the matter arises would only be
competent to hear the reference. A decision of one High Court is a
binding authority within its territorial jurisdiction; but it is not a
binding precedent for another High Court or Tribunal outside its
territorial jurisdiction. The Division Bench has held as under :
F
"On account of the abovesaid doctrine of precedents and the rule
of binding efficacy of the law laid down by the High Court within its
territorial jurisdiction, the questions of law arising for decision in a
reference should be determined by the High Court which exercises
territorial jurisdiction over the situs of the Assessing Officer. Else it
would result .in serious anomalies. An assessee affected by an G
assessment order at Bombay may invoke the jurisdiction of the Delhi
High Court to take advantage of the law laid down by it and suited
to him and thus get rid of the law laid down to the contrary by the
High Court of Bombay not suited to the assessee. This cannot be
allowed."
H
698 SUPREME COURT REPORTS (2007) 7 S.C.R.

A 12. Having made a careful comparative reading of the provisions of
the Income-tax Act and the Customs Act, as also the relevant rules
and orders of the Tribunal we are unhesitatingly of the opinion that
the principles laid down in the abovesaid three Division Bench
decisions of Delhi High Court can be applied and do apply to the facts
and circumstances of the present case.
B
13. The present case arises out of the State of Bombay. The petitioner
may have its factory establishment at Panipat in the State of Haryana
but that is irrelevant. The adjudicating authority is at Bombay.
Obviously it is bound by the law laid down under the provisions of
the Customs Act or any other law as interpreted by the High Court
c of Bombay. For the purpose of the case at hand, the petitioner must
be held bound by the law as applicable and as prevailing in the State
of Mahrashtr~ whereat the goods were to be imported and whereat the
proceeclings under the Act were concluded. In the case at hand if the
CEGA T would have stated the case then the reference would have
D been made to the High Court of Bombay and in the event of the
application for statement of case having been refused it is the High
Court of Bombay whjch the petitioner should have approached for
issuing a requi- sition to the Tribunal to state the case."

26. In Commissioner of Central Excise, Delhi v. Enkay HWS India Ltd.,
E (2002) 139 E.L.T. 21, Arijit Pasayat & D.K. Jain, JJ. in a case arising under
section 35H of the Central Excise Act opined :-

"2. When the matter was placed for admission, we pointed out to
learned counsel for the petitioner that this High Court does not have
jurisdiction to deal with the matter, in view of the decision of this (
F Court in Seth Banarsi Dass Gupta v. Commissioner of Income Tax,
(Central) ( 1978) 113 ITR 817. In the said case, white dealing with the r'· I
scope of entertaining reference under the Income Tax Act, 1961 (in
short, 'the l.T Act'), it was observed that this High Court, that the
State within whose territorial jurisdiction origfoal adjudicating authority
G functions would have jurisdiction to deal with the reference under the
concerned Statute. The view was again reiterated in Suresh Desai and
Associates v. Commissioner of Income Tax, 71 (1968) DLT 772. That
was also a case under Section 256 (2) of the l.T. Act. In a petition for
reference arising under the Act in Central Excise Case No. 5 of 1997
(Commissioner of Central Excise v. Technological Institute of Textile,
H decided on 9-11-1998, it was held that the High Court within whose
AMBICA INDUSTRIES v. COMMNR. OF CENTRAL EXCISE [S.B. SINHA, J.] 699

"'t
jurisdiction adjudicating authority functions would have territorial A
1
jurisdiction to entertain the matter. We have also expressed similar
view in Central Excise Act Case No. 7 of 2000 disposed of on 30-10-
2000 taking note of decision of the Apex Court in Stridewell leather
(P) Ltd v. Bhankerpur Simbhao/i Beverages (P) Ltd., AIR (\944) SC
158, while dealing with the scope of expression "the High Court"
under Section !OF of the Companies Act, 1956 (in short, the Companies B
Act').

3. We find no substance in the plea of learned counsel for petitioner
that site of the Commissionerate or appellate authority determines the
jurisdiction in view of what has been stated in the aforesaid decision."
c
27. The said decisions were followed by the Division Bench of the High
Court of Bombay in Bombay Snuff (supra) to hold:-

"6. The only difference in the legal position that existed at the time
the above decision was rendered and the position that prevails today
is that instead of the law envisaging a reference from the Tribunal to D
the High Court, the law now provides for an appeal from every order
... passed by the Appellate Tribunal. That difference does not however
affect the reasoning underlying the view taken by this Court in regard
to its jurisdiction to entertain a petition under Section 35G. If a petition
seeking reference under Section 35G was not maintainable in this E
court, there is no reason why an appeal under the said provision after
its amendment can be said to be so maintainable. On the reasoning
adopted by this court in Technological Institute of Textile's case
(supra), an appeal under Section 35G must also be filed only in the
High Court who has jurisdiction over the authority from whose order
the proceedings have originated. The fact that the main seat of the F
CEST AT is situated in Delhi or that the appeal was heard and decided
at Delhi would not mean that all appeals arising from cases so decided
regardless from Page 2522 which State the case has originated can be
maintained in this court."

28. Before the High Court, the decision of this Court in Kusum Ingots G
& Alloys Ltd v. Union of India, (2004) 168 ELT 3, wherein one of us was a
member, was strongly relied upon. Therein, this Court while construing the

.. provisions of clause 2 of Article 226, held:-

"25. The said decision is an authority for the proposition that the
H
700 SUPREME COURT REPORTS (2007) 7 S.C.R.

A place from where an appellate order or a revisional order is passed
may give rise to a part of cause of action although the original order
was at a place outside the said area. When a part of the cause of·
action arises within one or the other High Court, it will be for the
petitioner to choose his forum."

B 29. The decisions operating in the field, which have been taken note of
in Kusum Ingots & Alloys ltd (supra), would clearly go to show how the
situs doctrine had been given a go-bye by making constitutional amendments.
At one point of time writ petitions against the Union of India were being filed
t
only before the Punjab & Haryana High Court as the said Court exercised
C territorial jurisdiction over Delhi, which was the seat of the Central Government.
Experiencing difficulties, clause IA of Article 226 was introduced. The
Constitution again underwent a change by way of insertion of clause 2 of
Article 226. Bombay Snuff (supra) has been followed by Kamataka High
Court in Big Apple Computers Vs. Commissioner of Customs & Central
Excise, Hyderabad 2007 (207) EL T 36, wherein it was held :-
D
"IO. This judgment clearly applies to the facts of this case. We also ,
see a subsequent judgment of the Delhi High Court 2006 (194) ELT
264. In the said case, the High Court was considering~ to whether
in terms of Section 35(G)3, of the Customs Act the Delhi High Court
could consider the appeal, filed by the assessee. The tribunal in para
E 6 noticed as under;

6. The only difference in the legat[losition that existed at the time the
above decision was rendered and the position that prevails today is
that instead of the law envisaging a reference from the tribunal to the
High Court, the law now provides for an appeal from every order
F passed by the appellate tribunal. That difference does not however
affect the reasoning underlying the view taken by this court in regard
to its jurisdiction to entertain a petition under Section 35G. If a petition
seeking reference under Section 35G was not maintainable in this
court, there is no reason why an appeal under the said provision after
its amendment can be said to be maintainable. On the reasoning
G
adopted by this amendment can be said to be so maintainable. On the
reasoning adoptea by this court in Technological Institute of Textile's
case (supra), an appeal under Section 35G must also be filed only in '>-
the High Court who has jurisdiction over the authority from whose
order the proceedings have originated. The fact that the main seat of
H the CESTAT is situated in Delhi or that the appeal was heard and
AMBICA INDUSTRIES"· COMMNR. OF CENTRAL EXCISE [S.B. SINHA, J.) 70}

decided at Delhi would not mean that all appeals arising from cases A
..., l
so decided regardless from which State the case has originated can
be maintained in this court."

30. In Nasiruddin (supra) and Kusum Ingots & Alloys ltd. (supra), the
court was not dealing with a question of this nature. Therefore, the same are
not authorities for the proposition that the High Court, which is situated at B
the same place as the situs of the Tribunal, alone will have jurisdiction. If the
cause of action doctrine, as analysed hereinbefore is given effect to, invariably
more than one high Court may have jurisdiction, which is not contemplated.
i

31. The teamed Solicitor General relies upon the decision in Stridewell
leathers (P) ltd. & Ors. v. Bhankerpur Simbhaoli Beverages (P) ltd [1994) C
l SCC 34 wherein construing Section 1OA vis-a-vis Section l OF of Companies
Act, 1956, it was held that the High Court would mean the High Court having
jurisdiction in relation to a place at which the registered office of the Company
concerned is situated as indicated in Section 2(11) read with Section IA
thereof. D
32. We are, however, of the view that in terms of the Companies Act,
"the High Court" was clearly intended to specify the particular High Court
identified by Section 1OF itself, and therefore, it was held not to be a High
Court indicated by the place at which Company Law Board passes the order
under appeal. E
33. However, our attention has been drawn to Gurdit Singh & Ors. v.
Muns ha Singh & Ors., AIR ( 1977) SC 640, wherein this Court opined that no
distinction could legitimately been drawn between the right to sue and cause
of action unless so indicated in the relevant statute. Yet again in Mis. M
Ramnarain Pvt. ltd. & Anr. v. State Trading Corpn. Of India ltd, [1983J 3 F
SCC 75, a right to appeal was held to be carrying with it distinct cause of
action stating :-

"It is his submission that in considering the provisions of Order 23,
Rule I, the relevant fact to be borne in mind is the subject matter of
the appeal and if the subject matter of the appeal b~ different, as in G'
the present case it is the earlier appeal No. 36 of 1981 being confined
to the subject matter of instalment and the subsequent appeal No. 44
of 1981 being against the decree on the merits of the claim,the
withdrawal of the earlier ap~l"'C:~~not, in any way, be a bar to the
maintainability of the subsequent appeal. Mr. Nariman has in this
702 SUPREME COURT REPORTS (2007) 7 S.C.R.
;
A connection referred to the decision of this Court in Vallabhdas v. Dr.
-1"
l
Madan Lal and Ors. in which this Court "equated the meaning of the
words "subject matter" in Order 23 Rule I with the meaning of the
words "cause of action" in Order 23 Rule 2. Relying on this decision,
Mr. Nariman has argued that the "subject matter" of the appeal within
the meaning of Order 23, Rule I, must be considered in the light of
B the meaning of the words "cause of action" in Order 2, Rule 2; and
it is his argument that as the "cause of action" in respect of the claim
for instalment
.
is entirely different from the "cause of action" in respect
.
of decree whi,ch embraces within its fold the 'subject matter" of the r-
respective claims of the parties in the suit, the withdrawal of the earlier
c appeal No. 36 of 1981 against the instalments cannot in any way affect
the maintain ability of the appeal No. 44 of 1981 against the decree
on the merits of the claim. Mr. Nariman has next contended that the
provisions of Order 2, Rule 2 of the Civil Procedure Code do not in

D
any way affect the maintainability and the merits of the present appeal
No. 44 of 1981. He has submitted that the said provisions have no
application to an appeal and in any event, the cause of action and the
-
subject matter of the present appeal are entirely different from the
cause of action and the subject of the earlier appeal.

34. As against this, the submission of the learned Attorney General
was as under:
E
"It is his argument that the right of appeal which is no doubt a
statutory right will also necessarily be governed by the provisions of
Order 2, Rule 2 and as the appeal is filed not against the entire subject
matter of appeal arising out of the cause of action in the appeal, the
right to file another appeal against the decree is cli::arly lost."
F
35. Accepting Mr. Nariman's submissions, this Hon'ble Court ruled ,...
thus:

"Even if the principles underlying Order 2, Rule 2 can be considered
to apply to an appeal, the maintainability of the instant case cannot
G be held to be affected in any way as the cause of action in respect
of the present appeal is entirely different from the cause of action on
the basis of which the earlier appeal had been filed." (Emphasis }
'
supplied)

36. In that case the jurisdiction of the High Court was not to be
H
AMBICA INDUSTRIES v. COMMNR. OF CENTRAL EXCISE [S.B. SINHA, J.) 703
determined in order to give effect to the doctrine of 'cause of action' envisaged A
under the Code of Civil Procedure.

37. However, we are not oblivious of another line of authority where the
situs of the Tribunal was held to be the basis for determination of the
jurisdiction of the High Court. In the said decisions, however, the contentions
which have been raised before us did not arise for consideration. B
38. We have noticed hereinbefore that ifthe decision of the High Court
in the aforementioned question is taken to its logical conclusion, the same
would lead to a great anomaly. It would also give rise to the problem offorum
shopping. We may notice some examples to show that the determination of C
the appellate forum based upon the situs of the Tribunal would lead to an
anomalous result. For example, 'an assessee affected by an assessment order
in Bombay may invoke the jurisdiction of the Delhi High Court to take
advantage of the law laid down by it which may be contrary to judgments
of the High Court of Bombay. This cannot be allowed. [See Suresh Desai and
Associates v. CIT, (1998) 230 ITR 912 at 915-917 and CCEv. M's. Technological D
Institute of Textile, in 76 (I 998) DLT 862 (DB].

39. Section 20(c) of the Code of Civil Procedure reads as under:

"20. Other suits to be instituted where defendant reside or cause of
action arises. Subject to the limitation aforesaid, every suit shall be E
instituted in a court within the local limits of whose jurisdiction

(c) the cause of act5ion, wholly, or in part, arises."

40. Although in view of Section 141 of the Code of Civil Procedure the
provisions thereof would not apply to writ proceedings, the phraseology F
used in Section 20(c) of the Code of Civil Procedure and Clause (2) of Article
226, being in pari materia, the decisions of this Court rendered on interpretation
of Section 20(c) of CPC shall apply to the writ proceedings also. Before
proceeding to discuss the matter further it may be pointed out that the entire
bundle of facts pleaded need not constitute a cause of action, as what is
necessary to be proved, before the petitioner can obtain a decree, is material G
facts. The expression material facts is also known as integral facts.
-(
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 H
704 SUPREME COURT REPORTS (2007) 7 S.C.R.

A have to be considered.
42. In Mussummat Chand Kour v. Partap Singh, (15 IA 156), it was
held:-

" ....the cause of action has no relation whatever to the defence which
B may be set up by the defendant, nor does it depend upon the character
of the relief prayed for by the plaintiff. It refers entirely to the ground
set forth in the plaint as the cause of action, or, in other words, to the
media upon which the plaintiff asks the court to arrive at a conclusion
in his favour."

C For the reasons aforementioned, we are of the opinion that the High
Court was correct in its view. These appeals, therefore, being devoid of any
merit, deserve to be dismissed. However, in the facts and circumstances of
this case, there shall be no order as to costs.

vs Appeals dismissed.
D