1. Challenge to GST notifications levying tax on lotteries — Application for deletion of a respondent state on grounds of lack of territorial jurisdiction under Article 226. (Para 2 , 5 , 9 , 10 )
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2023 Supreme(SC) 222
SUPREME COURT OF INDIA
S. RAVINDRA BHAT, DIPANKAR DATTA, JJ.
The State of Goa – Appellant
Versus
Summit Online Trade Solutions (P) Ltd. and Others – Respondents
Civil Appeal No. 1700 of 2023, SLP (C) No. 29890 of 2018
WITH
The State of Goa – Appellant
Versus
Future Gaming and Services (P) Ltd. and Others – Respondents
Civil Appeal No. 1701 of 2023, SLP (C) No. 29891 of 2018
WITH
The State of Goa – Appellant
Versus
Pan India Network Ltd. and Others – Respondents
Civil Appeal No. 1702 of 2023, SLP (C) No. 29892 of 2018
Decided On : 14-03-2023
Advocates appeared:
For the Appellant(s) : Mr. Ravindra A. Lokhande, Adv. Mr. Baban Jeet Singh Mew, Adv. Ms. Niyati Sharma, Adv. Mr. Nring Chamwibo Zeliang, Adv. Mr. Sudarsh Menon, AOR
For the Respondent(s): Mr. Mukesh Kumar Maroria, AOR Mr. Raj Bahadur Yadav, AOR Mr. Sameer Abhyankar, AOR Ms. Nishi Sangtani, Adv. Mr. Vani Vandana Chhetri, Adv. Mr. Narendra Kumar, AOR Mrs. Anisha Mathur, Adv. Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR Mr. Bharat Bagla, Adv. Mr. Dheeraj Teware, Adv. Mr. Sourav Singh, Adv. Mr. Nishant Ramakantrao Katneshwarkar, AOR Ms. Ranjeeta Rohatgi, AOR Mr. Abhimanyu Tewari, AOR Ms. Eliza Barr, Adv. Ms. K. Enatoli Sema, AOR Ms. Limayinla Jamir, Adv. Mr. Amit Kumar Singh, Adv. Ms. Chubalemla Chang, Adv. Mr. Prang Newmai, Adv.
For the Appellant(s) : Mr. Ravindra A. Lokhande, Adv. Mr. Baban Jeet Singh Mew, Adv. Ms. Niyati Sharma, Adv. Mr. Nring Chamwibo Zeliang, Adv. Mr. Sudarsh Menon, AOR
For the Respondent(s): Mr. Mukesh Kumar Maroria, AOR Mr. Raj Bahadur Yadav, AOR Mr. Sameer Abhyankar, AOR Ms. Nishi Sangtani, Adv. Mr. Vani Vandana Chhetri, Adv. Mr. Narendra Kumar, AOR Mrs. Anisha Mathur, Adv. Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR Mr. Bharat Bagla, Adv. Mr. Dheeraj Teware, Adv. Mr. Sourav Singh, Adv. Mr. Nishant Ramakantrao Katneshwarkar, AOR Ms. Ranjeeta Rohatgi, AOR Mr. Abhimanyu Tewari, AOR Ms. Eliza Barr, Adv. Ms. K. Enatoli Sema, AOR Ms. Limayinla Jamir, Adv. Mr. Amit Kumar Singh, Adv. Ms. Chubalemla Chang, Adv. Mr. Prang Newmai, Adv.
Important Points
For jurisdiction under Article 226(2), a material part of the cause of action must arise within the High Court's territory. Mere residence of the petitioner is insufficient; there must be a nexus between the pleaded facts and the subject matter of the challenge.
Subject
Jurisdiction - Territorial Jurisdiction
Act Referred
Headnote
(1) Constitution of India - Art. 226 (2) -- tax levied by Government of Goa in respect of business carried on within territory of Goa -- such tax not in respect of business carried on in territory of Sikkim -- company cannot move High Court of Sikkim merely because it has office in Sikkim. (1873) 8 CP 187 and (2004) 9 SCC 786 relied on. [Paras 16, 17 & 19]
(2) Jurisdiction -- assumption of small part of cause of action arising within territorial jurisdiction of any High Court -- not determinative factor compelling High Court to keep writ petitions alive against respondents -- concept of 'forum conveniens' will apply. (2006) 4 SCC 254 and (2007) 6 SCC 769 relied on. [Para 18]
Legal Category Hierarchy
Table of Contents
2. Respondent state contends no cause of action arose within the High Court's jurisdiction — Petitioners argue jurisdiction exists based on their location within the state. (Para 2 , 12 )
3. Mere location of the petitioner's office does not constitute a cause of action — Tax liability arising from business in another state does not create jurisdiction. (Para 13 , 14 , 16 , 17 )
4. Cause of action under Article 226(2) requires material facts essential to the relief to arise within the court's jurisdiction, excluding irrelevant or non-germane facts. (Para 15 )
5. Appeals allowed — Impugned judgment set aside — Respondent state deleted from the array of respondents in the writ petitions. (Para 19 , 20 )
6. What constitutes cause of action for invoking writ jurisdiction under Article 226(2)?
Cause of action comprises every material fact necessary for the petitioner to prove to obtain the claimed relief. To attract Article 226(2), these integral facts must have a nexus with the subject matter of the challenge and arise, at least in part, within the High Court's territorial jurisdiction. (Para 15 )
7. Does the residence or location of the petitioner's office establish territorial jurisdiction under Article 226(2)?
No. The mere fact that a petitioning company has its office within the territorial jurisdiction of a High Court does not, by itself, form an integral part of the cause of action authorizing the invocation of that court's jurisdiction. (Para 16 )
8. How is jurisdiction determined when a tax is levied by one state on business conducted within its own territory?
Jurisdiction is determined by where the legal wrong or adverse consequence is felt. If tax is levied by a state for business conducted within its territory, the cause of action arises there, not in the state where the petitioner is headquartered. (Para 16 )
9. What is the role of forum conveniens in determining the maintainability of a writ petition?
Even if a small part of the cause of action arises within a High Court's jurisdiction, the concept of forum conveniens may be considered to determine if that court is the appropriate forum to decide the matter on merit. (Para 18 )
JUDGMENT :
DIPANKAR DATTA, J.
1. Leave granted.
2. The appellant is one of multiple respondents in W.P. (C) No. 36 of 2017, W.P. (C) No. 38 of 2017 and W.P. (C) No. 59 of 2017, pending on the file of the High Court of Sikkim (hereafter ‘the High Court’ for short). Separate applications in the said three writ petitions were filed by the appellant seeking its deletion from the array of respondents. The appellant had pleaded in the said applications that, inter-alia, a notification issued by it was under challenge in the writ petitions and that if, at all, such notification could be made a subject matter of challenge, the High Court of Bombay at Goa is the appropriate court where remedy ought to be pursued. According to the appellant, a notification issued under a statute enacted by a State legislature cannot be subjected to judicial scrutiny within the jurisdiction of a high court of a different State, more so when no cause of action has arisen within the jurisdiction of that high court. It was further pleaded that since no part of the cause of action for invocation of the writ jurisdiction had arisen within the territorial limits of the High Court, the writ petitions ought not to proceed against the appellant. One other fact brought to the notice of the High Court by the appellant was that the same notification was under challenge in W.P. (C) No. 759/2017 instituted by Serenity Trades Private Limited before the High Court of Bombay at Goa and that such writ petition after admission was pending for final hearing. It was urged by the appellant that to avoid conflict of opinions, the writ petitioners could either independently challenge the notification before the High Court of Bombay at Goa or apply for intervention in W.P. (C) No. 759/2017.
3. The High Court, by a common judgment and order dated 6th June, 2018, has dismissed the three applications. These three appeals, by special leave, are directed against such judgment and order.
4. Since a common judgment and order is under challenge, we propose to decide these appeals by this common judgment and order.
5. Various notifications issued under the Central Goods and Services Tax Act, 2017 (hereafter ‘CGST Act’ for short) and the Integrated Goods and Services Tax Act, 2017 (hereafter ‘IGST Act’ for short) are under challenge in all the three writ petitions together with rate-notifications issued by the States of Goa, Maharashtra, Punjab and Sikkim. Inter-alia, the challenge is to a notification stated to bear “No. 01/2017” dated 30th June, 2017 issued by the Government of Goa in exercise of power conferred by sub-section (1) of section 11 of the Goa Goods and Services Tax Act, 2017 (hereafter ‘GGST Act’ for short) levying tax @ 14% on “Lottery authorized by State Governments.” The writ petitioners have invoked the high prerogative writ jurisdiction of the High Court to seek a declaration that the impugned notification is unconstitutional and illegal.
6. The short question that arises for a decision on these appeals is, whether the High Court was justified in returning the finding that “at least a part of the cause of action has arisen within the jurisdiction of this Court” and premised on such a finding, to dismiss the applications.
7. Notice was issued by this Court on 12th November, 2018, after condonation of delay in presentation of the petitions for special leave to appeal.
8. None has appeared for the writ petitioners despite service of notice. We have heard counsel for the appellant and the Additional Solicitor General appearing for the Union of India as well as counsel for the other appearing parties.
9. For the purpose of a decision on these appeals, the petition averments in W.P. (C) No. 38 of 2017 may be noticed. A private limited company, “engaged in the business of purchase and sale of lottery tickets run, conducted and organized by the Government of Sikkim both within the State of Sikkim as well as outside the State” is the writ petitioner. The petitioning company sells lottery
