The Bombay High Court has held that the aggrieved tax litigants have right to choose forum, does not amount to forum shopping.
The bench of Justice K. R. Shriram and Justice Jitendra Jain has observed that prior to the amendment of Article 226 and the insertion of Article 226(2), the Supreme Court has specifically held that on account of the principle of the doctrine of merger, a writ against an order of the Appellate Authority, would lie only before the High Court within whose territorial jurisdiction the Appellate Authority is located. This principle would continue to hold the field today. By the insertion of Article 226(2), jurisdiction was bestowed upon the High Courts to issue writs to authorities located outside their territorial jurisdiction as long as the cause of action arose within their territorial jurisdiction. Consequently, even the High Court within whose jurisdiction the original cause of action arose could now issue writs to the Appellate Authority located outside its territorial jurisdiction. However, this would not in any way denude the powers of the High Court within whose territorial jurisdiction the Appellate Authority is located to issue writs. The fact remains that the appellate order is a significant part of the cause of action for the petitioner.
The petitioners have approached the Court against order passed by the Revisionary Authority constituted under Section 35EE of the Central Excise Act, 1944. The petitioners sought to challenge the legality and validity of orders passed by the Revisionary Authority rejecting the rebate claim filed by petitioners. The Petitioners had filed a rebate claim for rebate of customs duty paid on the raw material purchased under Rule 18 of the Central Excise Rules, 2002 read with Notification No.21/2004- CE(NT) dated 6th September 2004. The show cause notices were issued rejecting the rebate claim on various grounds.
In matters relating to excise duty and service tax, most appeals against orders of the Departmental Authorities lie before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) under Section 35B of the Excise Act. The Proviso to Section 35B(1), however, carves out certain exceptions. It says orders relating to the subjects specified in the proviso of Section 35B (1) would not be appealable to the CESTAT under Section 35B. Those orders would be amenable to revision under Section 35EE by the Central Government. One such order would be relating to matters of rebate. Those will not be appealable to the CESTAT but would go before the Central Government under Section 35EE.
Rule 10 of the Central Excise (Appeals) Rules, 2001 provides that all revisions under Section 35EE would lie before the jurisdictional Principal Commissioner (Revisionary Authority).
The Revisionary Authority sits only in two locations, i.e., in Delhi and in Mumbai. Hence, rebate matters arising from all of the States of southern India would lie before the Revisionary Authority sitting in Mumbai. All writ petitions pertain to issues relating to rebate wherein the Revisionary Authority has denied petitioners’ claims for rebate. Furthermore, no statutory appeal has been provided for against an order passed under Section 35EE of the Excise Act. Therefore, an aggrieved assessee possesses no alternate remedy other than challenging an order under Section 35EE via a writ petition under Article 226 of the Constitution of India.
The department contended that petitioners should file writ petitions challenging the orders of the Revisionary Authority before the Madras High Court, Karnataka High Court, Goa Bench of this Court or the Nagpur Bench of this Court.
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The petitioner contended that the order of the Revisionary Authority constitutes a part of cause of action. A writ petition would be maintainable in the High Court within whose jurisdiction it is situated which will be this Court having regard to the fact that the order of the Revisionary Authority is also required to be set aside and as the order of the original authority merges with that of the order of Revisionary Authority.
The petitioner argued that once an appeal is decided by an Appellate Authority, the order of the original authority gets merged with the order of the Appellate Authority by principles of doctrine of merger. In effect, the order of the original authority no longer remains, and it is the order of the Appellate Authority which prevails and is amenable to challenge.
The court has held that the petitions are maintainable before the Principal Seat of this High Court since the orders of the adjudicating authorities have merged into the impugned orders of the Revisionary Authority who is located in Mumbai.
Case Title: Volvo Group India Pvt Ltd. Versus UOI
Case No.: Writ Petition No.2837 Of 2021
Date: 05/09/2024
Counsel For Petitioner: Sriram Sridharan
Counsel For Respondent: Karan Adik
