Since you have a web application, you may have a client and a server.
If you have only your browser, and you want to read a local file from a javascript that is running in your browser, that means that you have only a client. For security reasons, the browser should not let you do such thing.
However, as lauhub explained above, this seems to work:
http://www.html5rocks.com/en/tutorials/file/dndfiles/
Other solution is to setup somewhere in your machine a web server (tiny in windows or monkey in linux) and with an XMLHttpRequest or D3 library, request the file from the server and read it. The server will fetch the file from the local filesystem, and serve it to you through the web.