1997 (9) TMI 604 - SC - Indian Laws

Supreme Court invalidates Bihar forest taxation law for lack of legislative competence

The Supreme Court upheld the High Court's decision that the Bihar Forest Restoration and Improvement of Degraded Forest Land Taxation Act, 1992, was ... - Issues Involved:1. Legislative competence of the State Legislature to enact the Bihar Forest Restoration and Improvement of Degraded Forest Land Taxation Act, 1992.2. Whether the Act is repugnant to the Indian Forest Act, 1927 and the Forest Conservation Act, 1980.3. Constitutionality of the Act concerning Articles 14, 19, 240, 265, and 300A of the Constitution.4. Validity of the Act's provisions concerning vagueness, uncertainty, and arbitrary powers.Issue-wise Detailed Analysis:1. Legislative Competence of the State Legislature:The primary issue was whether the Bihar Forest Restoration and Improvement of Degraded Forest Land Taxation Act, 1992, fell within the legislative competence of the State Legislature. The respondents argued that the Act was beyond the legislative competence of the State of Bihar as it encroached upon the domain of the Parliament, specifically Entry 54 List I concerning the regulation of mines and mineral development. The State Government contended that the Act was a tax on land under Entry 49 List II.The Supreme Court upheld the High Court's decision that the Act was beyond the legislative competence of the State Legislature. The Court noted that the tax in question was not a tax on land but on the activity of excavation and use of forest land for non-forest purposes. The tax was levied on the void created by mining activities, not on the land itself. Therefore, it could not be justified under Entry 49 List II.2. Repugnancy to Indian Forest Act, 1927, and Forest Conservation Act, 1980:The respondents argued that the Act was repugnant to the Indian Forest Act, 1927, and the Forest Conservation Act, 1980. The High Court found that the Act impinged on the provisions of the Forest Conservation Act, 1980, which contains comprehensive provisions for reclamation and rehabilitation of forest land.The Supreme Court agreed with the High Court's finding that the clauses (d), (e), and (f) of the Schedule in the impugned Act directly impinged on the analogous provisions of the Forest Conservation Act, 1980. The Act's provisions for taxing the use of forest land for non-forest purposes and for rehabilitating forest land were found to overlap with the Forest Conservation Act, 1980.3. Constitutionality Concerning Articles 14, 19, 240, 265, and 300A:The respondents contended that the Act was ultra vires Articles 14, 19, 240, 265, and 300A of the Constitution. The High Court declared the Act unconstitutional and void for being vague, uncertain, and conferring arbitrary power without providing a proper machinery for levy, imposition, and assessment of the tax.The Supreme Court, having found that the State Legislature lacked legislative competence to enact the Act, did not find it necessary to delve into the issues concerning the constitutionality of the Act under the mentioned Articles.4. Vagueness, Uncertainty, and Arbitrary Powers:The High Court held that the Act and the Ordinance were unconstitutional and void as they were vague and uncertain and conferred naked and arbitrary power. No machinery was provided for the purpose of levy, imposition, and assessment of the tax.The Supreme Court did not address this issue in detail as it had already determined that the legislative competence was lacking.Conclusion:The Supreme Court dismissed the appeals, upholding the High Court's decision that the Bihar Forest Restoration and Improvement of Degraded Forest Land Taxation Act, 1992, was beyond the legislative competence of the State Legislature. The Act was found to be a tax on the activity of excavation and use of forest land for non-forest purposes, not a tax on land itself, and thus could not be justified under Entry 49 List II. The Court did not find it necessary to address other constitutional issues raised. The appeals were dismissed with costs.