TaxTMI 
TaxTMI 
2004 (6) TMI 47
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....tion 25 of the Customs Act, 1962, issued a notification in the public interest thereby exempting the vegetable fat imported from Nepal from the whole of the duty of customs to the extent indicated therein. (b) The Government of India, Ministry of Commerce and Industries prescribed the procedure for duty free import of vanaspati up to 1,00,000 mt. on annual quota basis and further directed that such import should be made only by the Central Warehousing Corporation (C.W.C.). (c) Subsequently by way of issue of further notification, such right was given jointly to the C.W.C. and State Trading Corporation (S.T.C). Ultimately another notification was issued conferring such right exclusively to the S.T.C. (d) The S.T.C., however, in stead of importing the commodities by itself, entered into agreements with various private agents authorizing them to import vanaspati on payment of some amount of money to the S.T.C. by way of "service charge". The S.T.C. by the so-called "import contract" sold the commodities to those agents before actual arrival of those goods in....
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....se have been made on behalf of S.T.C. According to such authority, the exemption of duty, pursuant to the treaty with Nepal, was granted, inter alia, only to the goods viz. vanaspati and not to any personnel and the total quantity of goods fixed under the notification is 1,00,000 mt per annum. It is further asserted that by relying on the said procedure, and after being satisfied that all those importations were done on behalf of S.T.C., the Customs Authority cleared those duty-free goods. Apart from the aforesaid defence, the Customs Authority has also questioned the territorial jurisdiction of this court to entertain this writ application. The locus standi of the petitioners to maintain the writ application has also been challenged. 6.In its affidavit, the S.T.C. has virtually adopted the stance taken by the Customs Authority. It has been, however, reiterated that this court has no territorial jurisdiction to entertain this writ application inasmuch as the office of the S.T.C. is situated beyond the territorial limit of this court and at the same time, the alleged irregularities committed by the Customs Authority have taken place in Bihar and Uttar Pradesh. It is further stated ....
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....of India (UOI) & Another (decided by Supreme Court on 28-4-2004 in Civil Appeal No. 9159 of 2003 unreported [since reported in 2004 (168) E.L.T. 3 (S.C.)]. 9.Mr. Sengupta, the learned Counsel appearing on behalf of the petitioners has vehemently opposed the aforesaid preliminary objections raised on behalf of the respondents. As regards the question of want of territorial jurisdiction, Mr. Sengupta contends that the grievance of the petitioners in this writ application, precisely, is that the customs authority and the S.T.C., both "states", within the meaning of Article 12 of the Constitution, have violated the law of the land and such violation has affected the fundamental right of the petitioners to have equality before law, the moment the duty-free vanaspati illegally cleared by the customs authority in favour of the so-called associate distributors of the S.T.C. had entered the market of the West Bengal because those agents are favoured with the selfsame commodities at 30% lesser price, whereas the petitioners are obliged to purchase the vanaspati at a higher price. Mr. Sengupta, thus, contends that a part of cause of action has definitely arisen within the State of West Benga....
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....rted in 1992 Supp (2) SCC 351]. 11.Therefore, the first question that falls for determination is whether this court has territorial jurisdiction to entertain this writ application. 12.The law relating to the territorial jurisdiction of a High Court in relation to an application under Article 226 of the Constitution of India is now well settled. A High Court can issue appropriate order in exercise of power conferred under the aforesaid Article upon any person or authority situated within the territories in relation to which such court exercises jurisdiction, if such person or authority interferes with the legal or fundamental right of the petitioner. Even if such person or authority is not stationed within such territorial limit, the High Court can exercise its jurisdiction under the aforesaid Article if the cause of action for filing such application arises wholly, or in part, within its territorial jurisdiction. 13.In the present case, except the respondent Nos. 2 and 6, namely, the Commissioner of Customs, West Bengal and the Director of Revenue and Intelligence, respectively, all other respondents are situated beyond the territorial limit of this court. Even in the writ appli....
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....d) 16.If we apply the aforesaid principle to the fact of the present case, as soon as the customs authority illegally cleared the commodities in the Bihar border of Nepal, although the illegality complained of is accomplished, such impropriety committed by the customs officers at Bihar did not give rise to any cause of action for filing any writ application in favour of the petitioners so long such act did not invade any of the rights of the petitioners. But the moment those duty-free goods intruded into the zone of the business of the petitioners, such intrusion gave rise to "evil consequence" to the petitioners causing infringement of their rights guaranteed by Article 14 of the Constitution of India and thus, a cause of action accrued in favour of the petitioners and such cause of action has arisen within the State of West Bengal, the place where the petitioners are carrying on their business notwithstanding the fact the illegalities were really committed by the customs officers at Bihar. As pointed out by the Apex Court in the case of Kusum Ingots and Alloys Limited (supra), although the petitioner therein wanted to challenge an enactment passed by the Parliament, they were no....
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....h entry had an adverse consequence and thus cause of action for filing the present writ application complaining illegal entry of those goods arose. Therefore, the said decision cannot have any application to the fact of the present case. 20.The other decision namely Kusum Ingots & Alloys Ltd. (supra) has already been discussed and I am of the view that the principles laid down therein rather support the petitioners' contention that the cause of action has arisen within the territorial limit of this court. 21.I, thus, find that the cause of action of filing the present writ application has accrued within the territorial limit of this court and as such, this court has jurisdiction to entertain this writ application. 22.The next question is whether this application should fail for want of necessary parties. 23.I have already pointed out that the writ petitioners have prayed for direction upon the Customs Authority not to allow any other person than S.T.C. to avail the benefit of the notification granting exemption issued by the Union of India pursuant to the treaty between Nepal and India and their specific case is that the so-called associate distributors of the S.T.C. cannot get....
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.... To arrange payment to Nepalese exporter directly A/C. The S.T.C. of India Ltd. Alternatively, S.T.C. will make payment to Nepalese Exporter after receipt of advance payment from Associate Distributor. (6) _________________________________ (7) S.T.C. will sell the goods (vanaspati) to Associate Distributor in course of import. For the purpose, document of title i.e. RRS/GRs will be endorsed in favour of Associate Distributor before the goods cross Customs frontier of India. The Associate Distributor will arrange clearance of cargo through the designated customs after paying all relevant and statutory duties, levies and taxes. S.T.C. will not be responsible for payment of customs duty, levy and taxes, claims expenses, if any, whatsoever in the operation. S.T.C. will issue sale invoice showing "Sale during the course of import" ex-Indian border point duly PFA cleared as per Indian laws. The sale invoice will indicate value of goods and the S.T.C.'s service margin. (8)________________________________ ……………………………………………… ………………………………………………. (16) _____________________________" "PUBLIC NOTICE NO. 30(RE-2003)/2....
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.... Associate Distributors fulfil the requirements of the said definition and the S.T.C. cannot come within the purview of the same as it is neither the owner of the goods nor does it hold itself out as importer, having specifically declared that it would not take the responsibility of complying with the formalities required under the law relating to customs. In the Bill of Entry presented before the customs authority, the name of the Associate Distributor has been shown as that of the importer, although he has also been described as "associate distributor of S.T.C"; but the code number of such importer appears to be that of the distributor himself and not of the S.T.C. 27.From the aforesaid materials it is clear that the S.T.C. had neither held itself as importer nor was the S.T.C. owner of the goods at the time of importation and as such, the customs authority illegally cleared those goods without imposing any duty, as if, the S.T.C. was the importer. Merely because the owner of the goods, for the purpose of illegally getting the benefit of relaxation of customs duty, described himself as the "Associate Distributor of the S.T.C.", the customs authority could not grant such benefit ....
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....immaterial. The individual members are definitely prejudiced by the unfair treatment of the respondents and in the process, those members are deprived of the protection guaranteed by Article 14 of the Constitution of India. Therefore, they can maintain this writ application praying for a direction upon the respondents to comply with the obligations arising out of the notification. 31.In the case of National Textile Corp. Ltd. & Others v. M/s. Haribox Swalram & Others reported in J.T. 2004 (4) SC 508, the question was whether liabilities in respect of a taken-over textile undertakings could be enforced against the Central Government through a writ of mandamus at the instance of the persons who entered into contract with the said undertakings for supply of material and making payment. According to the case set up by the writ petitioners, money was paid by them to the textile mills before the appointed day but they had failed to supply the cloth. In such a situation, the Supreme Court was of the view that after receipt of money, the textile mills having incurred a liability, were under an obligation to supply the cloth to the writ petitioners, but such liability having been incurred ....