2023 (9) TMI 1082 - HC - Indian Laws

Goa Green Cess Act Valid: Upheld by Court

South Port Limited, Shri. K.S.N Shriram, Shareholder of South West Port Limited, M/s BMM Ispat Limited, M/s. Vedanta Limited Mr. Jagdish Agarwal, M/s Goa Carbon Limited Company, Zuari Agro Chemicals Limited, Versus State of Goa, Director of Department of Science, Technology & Environment, Government of Goa, The Commissioner of Commercial Taxes, The Assistant Commercial Tax Officer, Goa

South Port Limited, Shri. K.S.N Shriram, Shareholder of South West Port Limited, M/s BMM Ispat Limited, M/s. Vedanta Limited Mr. Jagdish Agarwal, M/s Goa ... Issues Involved:1. Constitutional Validity of The Goa Cess on Products and Substances Causing Pollution (Green Cess) Act, 2013 (Green Cess Act)2. Legislative Competence of the State3. Nature of Levy: Tax vs. Fee4. Demand Notices and Competent Authority5. Violation of Articles 14 and 304(a) of the ConstitutionSummary:1. Constitutional Validity of the Green Cess Act:The primary challenge was to the constitutional validity of the Green Cess Act, 2013. Petitioners argued that the Act, in pith and substance, related to the field of 'environment' which falls under the residuary entry (Entry 97 of List I) and thus beyond the legislative competence of the State. The Court, analyzing the Act's preamble and provisions, concluded that the Act's objective was to levy and collect cess on products and substances causing pollution within Goa, under the 'polluter pays principle,' and to reduce the carbon footprint. The Court held that the Act related to public health, sanitation, water, land, and gas, which are within the State List (Entries 6, 17, 18, 25 of List II).2. Legislative Competence of the State:The Court rejected the contention that the field of 'environment' or 'environmental pollution' exclusively falls under the residuary Entry 97 of List I. It held that several entries in the State List and Concurrent List have a close nexus with the environment. The Court referred to the Water (Prevention and Control of Pollution) Act, 1974, which was enacted by Parliament based on resolutions from State Legislatures under Article 252, indicating that the subject of water pollution was within the legislative competence of the State.3. Nature of Levy: Tax vs. Fee:Petitioners argued that the cess was a tax and not a fee, as there was no quid pro quo. The Court held that the distinction between tax and fee has been substantially effaced in constitutional jurisprudence. The Court found that the cess had the attributes of a fee, as it was levied to augment state revenue for measures to reduce the carbon footprint and combat pollution, which indirectly benefited the petitioners.4. Demand Notices and Competent Authority:In W.P. 393/2016, it was contended that the demand notice issued by the Captain of Ports was without authority. The Court found that the notice merely called upon the petitioner to comply with the statutory obligation under the Act and did not usurp the powers of the competent authority.5. Violation of Articles 14 and 304(a) of the Constitution:In W.P. 206/2021, the petitioner argued that the cess discriminated against goods manufactured outside Goa, violating Articles 14 and 304(a). The Court found no proper pleadings to support this challenge and held that the impugned Act did not discriminate between goods imported into the State and those manufactured within the State.Conclusion:The Court dismissed the petitions, upheld the constitutional validity of the Green Cess Act, and vacated interim orders restraining the respondents from taking coercive measures. The rule in each petition was discharged with no order as to costs.