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High Court Of Calcutta
B. C. RAY
HINDUSTHAN SUGAR MILLS - Appellant
Versus
UNION OF INDIA - Respondent
Civil Rule 12165 (W) With 12166 (W) Of 1983
Decided On : 05/04/1984
ARTICLE 226 - WRIT JURISDICTION - MAINTAINABILITY - PART OF CAUSE OF ACTION - EXEMPTION OF EXCISE DUTY - CIRCULAR ISSUED BY CENTRAL GOVERNMENT - SELLING CENTRE IN CALCUTTA - NO PART OF CAUSE OF ACTION ARISES WITHIN TERRITORIAL JURISDICTION OF COURT.
Fact of the Case:
The petitioner, a sugar mill, challenged the non-grant of exemption of excise duty on excess sugar production as per circulars issued by the Central Government. The petitioner had a selling center in Calcutta and argued that the non-grant of exemption would affect the price of sugar sold from the center and thus impact the value of the company's shares.
Finding of the Court:
The court held that the subject matter of the challenge was the non-application of the circular in exempting excise duty on excess sugar production. The challenge did not relate to the fixation of any price by the authorities. The court found that the entire cause of action did not arise within the territorial limits of its jurisdiction and that the respondents' offices and records were also not within its jurisdiction.
Issues: Whether the writ application was maintainable in the court's jurisdiction.
Ratio Decidendi: The court held that under Article 226 of the Constitution, it had jurisdiction to issue writs only if the cause of action wholly or in part arose within its territorial jurisdiction. In this case, the cause of action relating to the circular's non-application and its impact on the sugar mill's business and share value did not arise within the court's jurisdiction. The court relied on its earlier decision in Bharat Sugar Mills Ltd. (AIR 1984 Cal 102) and distinguished the cases cited by the petitioner.
Final Decision: The court held that the writ application was not maintainable in its jurisdiction and discharged the rule nisi. The interim order granted earlier was vacated, and the contempt application filed was also disposed of.
( 1 ) THIS is an application for vacating the interim order passed by this Court on 12th December, 1983, which was in the following terms :-"there will be an interim order in terms of prayer (e) of the petition till the disposal of the Rule upon the petitioner No. 1 furnishing a Bank guarantee for a sum of Rs. 38,67,578. 58 as mentioned in paragraph 22 of the petition of any Nationalised Bank at Calcutta in favour of the Registrar. Appellate Side of this Court within two weeks after Christmas vacation. On furnishing such Bank guarantee the respondents are restrained from realising the said amount of Rs. 38,67,578. 58 from the petitioner No. 1 and shall permit the petitioner No. 1 to have the said amount credited in the personal Ledger Account maintained for the purpose of Central Excise clearance".
( 2 ) IT has been stated in the application itself that the Rule that has been issued on the basis of the Writ application that was moved on behalf of the petitioners is not maintainable in this jurisdiction on two grounds. Firstly the impugned order that has been assailed in the Writ petition is an order regarding the exemption of excise duty on the basis of the circulars that have been annexed as annexures- A, B and C which were issued in 1981, 1982 and 1983 in respect of the sugar production made by the Hindusthan Sugar Mills Ltd. For the relevant years the challenge that has been made or tried to be made by the Excise authorities is not in accordance with the orders issued by the authorities concerned and that there has been a breach of the equality clause envisaged in Art. 14 as well as the fundamental rights guaranteed under Art. 19 (1) (g) of the Constitution of India inasmuch as by referring to the circular issued in 1982 it has been tried to submit that a sugar mill which has not produced any sugar at all and has produced for the first time sugar after the enforcement of the second circular in 1982 still gets the benefit of the amended circular, namely, it will be exempted totally in respect of the Excise duty as envisaged in the circular issued in 1981, annexure - 'a' to the Writ application. The other attack was that it has thereby tried to make a discrimination that the object tried to be achieved by the amendment of the circular brought in 1982 between the Sugar Mill which has commenced production in 1982 for the first time after enforcement of the amended circular and the Sugar Mill which commenced production before the coming into force of the said amended circular. On hearing Dr. Pal. the instant Rule was issued and interim order as quoted hereinbefore was granted by this Court. The application as has been stated earlier, for variation or modification of the interim order has been made mainly on the ground that this Court has got neither any territorial jurisdiction nor any part of the cause of action has arisen within the territorial limits of this Court. It has, therefore, been pleaded in this application that on this preliminary ground the Rule should be discharged and the interim order should be vacated.
( 3 ) AN affidavit-in-opposition to this application for variation of interim order has been filed sworn by one Sitaram Agarwal, the Sales Manager of the petitioner No. 1. In para 6 of the said affidavit-in-opposition it has been denied and/or disputed that this Court has not the territorial jurisdiction to entertain the Writ application as has been wrongly alleged in the said application. It has also been stated therein that the petitioner No. 2 is a shareholder of the petitioner No. 1 and the purported circular which has been challenged in the Writ application has vitally affected the interest of the petitioners, inasmuch as, it will affect the price of sale of sugar in Calcutta where the respondent No. 1 has got selling centre for sale of free sugar. It has also been stated in the said paragraph 6 that if the exemption is not granted in accordance with the provision of the circular, then the pe
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