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).
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. Inter alia, the challenge is to a notification stated to bear “No.01/2017” dated 30 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 “(L)ottery authorized by State Governments”. 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.
It is the pleaded case that the lottery tickets, which are supplied by the petitioning company, are “lotteries which is being run by the State Government of Sikkim, it is not a lottery authorized by the State Government requiring to discharge GST under a higher rate of taxation of 28%”. (iii) Set aside the impugned Notifications 01/2017
Also Read: https://newslaw.in/supreme-court/appellant-convicted-for-culpable-homicide-not-amounting-to-murder/
Central Tax (Rate), 01/2017 Integrated Tax (Rate) 01/2017 and the State rate Notifications of the States of Sikkim, Goa, Punjab and Maharashtra to the extent it levies tax on the face value of the lottery ticket without abating the prize money, component of the lottery ticket when the said amount never forms part of the income of the Petitioner the lottery trade.”
The High Court further noted that it was not the actual incidence of GST under the GGST Act which is impugned in the writ petitions but the provisions of law made by the Parliament as well as the respective State Governments including the State of Goa by which they sought to levy GST on lotteries.
From the above, it is clear that according to the petitioning company the cause of action has arisen in Sikkim only, meaning thereby the whole of the cause of action and not part of it; additionally, it is stated that all the respondents are located within the territorial jurisdiction of the High Court which is factually incorrect.
While dealing with an objection as to lack of territorial jurisdiction to entertain a writ petition on the ground that the cause of action has not arisen within its jurisdiction, a high court essentially has to arrive at a conclusion on the basis of the averments made in the petition memo treating the contents as true and correct. Determination of the question as to whether the facts pleaded constitute a part of the cause of action, sufficient to attract clause (2) of Article 226 of the Constitution, would necessarily involve an exercise by the high court to ascertain that the facts, as pleaded, constitute a material, essential or integral part of the cause of action. Hence, merely because the petitioning company has its office in Gangtok, Sikkim, the same by itself does not form an integral part of the cause of action authorizing the petitioning company to move the High Court.
The long and short of the matter is that the petitioning company has to bear the liability of paying tax @ 14% levied by the Government of Goa for selling lottery tickets in the State of Goa under Schedule IV of the impugned notification. In our opinion, the High Court ought not to have dismissed the applications of the appellant without considering the petition memo which has no semblance of a case having been made out as to how part of cause of action arose within the territorial limits of the High Court or without any pleading as to how any right has been affected within the territory of Sikkim.
Also Read: https://newslaw.in/supreme-court/ownership-dispute-commissioners-order-and-revenue-documents/
This order shall, however, not preclude the respective writ petitioners from approaching the appropriate court to assail the notification dated 30 June, 2017 in accordance with law, if so advised.
Case Title: THE STATE OF GOA Vs. SUMMIT ONLINE TRADE SOLUTIONS (P) LTD (2023 INSC 229)
Case Number: C.A. No.-001700-001702 / 2023
