In case of conflicts between two High Courts, the decision of the High Court in whose jurisdicti​on the cause of action arose is to be followed

In case of conflicts between two High Courts, the decision of the High Court in whose jurisdiction the cause of action arose is to be followed.

Narayan Builders vs. Commissioner of central Exsicse, Jaipur. - 2013 (31) STR 174 (Tri-Del)

Facts:

The Appellants entered into an agreement with Kota Thermal Power Station (KTPS) for execution of works for coal handling system including clearing under coal handling operation circle.

In view of the clarification issued in the RegionalAdvisory Committee meeting on 06-09-2004, the revenue contended to levy tax on the said activity under cargo handling services. The department further relied on the decision of Coal Carriers vs. CCE2011 (24) STR 395 (Ori.) which held such service to be taxable.

The Appellants relied on various judgments of the Delhi Tribunal and Rajasthan High Court decision in case of S B. ConstructionCompany vs. Union of India 2006 (4) STR 545 (Raj.) wherein the activity of the Appellants were held not to be cargo handling services u/s. 65(23) of the Finance Act, 1994.

Held:

The Hon. Tribunal at New Delhi which was neither inthe jurisdiction of the Rajasthan High Court nor the Orissa High Court. The tribunal relied on the Full Bench decision of Delhi Tribunal in Madura Coats vs. CCE 1996 (82) ELT 512 which clarified that in case of conflicting decisions amongst High Courts relating to interpretation of statutory provisions or notifications, the decision of the jurisdictional High Court from where the matter was adjudicated earlier, must be followed.

Accordingly, since the cause of action had arisen within the jurisdiction of the Rajasthan High Court and the Appellants were assessed to service tax by Jurisdictional Commissioners and the Appellate Commissioner within the territorialjurisdiction of Rajasthan High Court; the Tribunal followed the decision of Rajasthan High Court in case of S. B. Construction (Supra) and decided the matter in favour of the Appellants.