TaxTMI 
TaxTMI 
2017 (9) TMI 1901
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....ng out of SLP (C) Nos. 2213-2220/2012) , T.P. (C) No. 76/2012, T.P. (C) No. 77/2012) , C.A. No. 14485/2017 (Arising out of SLP (C) No. 1697/2012) , C.A. No. 14486/2017 (Arising out of SLP (C) No. 2082/2012) , C.A. No. 14492/2017 (Arising out of SLP (C) No. 2236/2012) , C.A. No. 14493/2017 (Arising out of SLP (C) No. 2081/2012) , C.A. No. 14495/2017 (Arising out of SLP (C) No. 2399/2012) , C.A. Nos. 14497-14509/2017 (Arising out of SLP (C) Nos. 3152-3164/2012) , C.A. Nos. 14510-14523/2017 (Arising out of SLP (C) Nos. 2938-2951/2012) , C.A. Nos. 13122-13129/2017 (Arising out of SLP (C) Nos. 3192-3199/2012) , C.A. No. 13300/2017 (Arising out of SLP (C) No. 1822/2012) , C.A. No. 13301/2017 (Arising out of SLP (C) No. 4832/2012) , C.A. Nos. 13313-13319/2017 (Arising out of SLP (C) Nos. 4002-4008/2012) , C.A. No. 13320/2017 (Arising out of SLP (C) No. 6144/2012) , C.A. Nos. 13346-13358/2017 (Arising out of SLP (C) Nos. 3512-3524/2012) , C.A. Nos. 13360-13378/2017 (Arising out of SLP (C) Nos. 3320-3338/2012) , C.A. Nos. 13386-13395/2017 (Arising out of SLP (C) Nos. 3490-3499/2012) , C.A. Nos. 13405-13408/2017 (Arising out of SLP (C) Nos. 13019-13022/2012) , C.A. Nos. 13411-13426/2017 (Ari....
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.... out of SLP (C) No. 7491/2012) , C.A. Nos. 14076-14078/2017 (Arising out of SLP (C) Nos. 8465-8467/2012, Conmt. Pet. (C) Nos. 199-201/2014 in SLP (C) Nos. 31530-31532/2011) , C.A. Nos. 13760-13770/2017 (Arising out of SLP (C) Nos. 2776-2786/2014) , C.A. Nos. 14080-14100/2017 (Arising out of SLP (C) Nos. 15501-15521/2012) , C.A. Nos. 14101-14117/2017 (Arising out of SLP (C) Nos. 15611-15627/2012) , C.A. Nos. 14118-14132/2017 (Arising out of SLP (C) Nos. 15430-15444/2012) , C.A. Nos. 14134-14145/2017 (Arising out of SLP (C) Nos. 15405-15416/2012) , C.A. No. 13544/2017 (Arising out of SLP (C) No. 12578/2013) , C.A. No. 14146/2017 (Arising out of SLP (C) No. 12176/2012) , C.A. No. 13606/2017 (Arising out of SLP (C) No. 12657/2014) , C.A. Nos. 14157-14176/2017 (Arising out of SLP (C) Nos. 15446-15465/2012) , C.A. Nos. 14178-14190/2017 (Arising out of SLP (C) Nos. 16987-17001/2012) , C.A. Nos. 14192-14193/2017 (Arising out of SLP (C) Nos. 15543-15544/2012) , C.A. Nos. 14194-14206/2017 (Arising out of SLP (C) Nos. 15417-15429/2012) , C.A. No. 13545/2017 (Arising out of SLP (C) No. 13521/2013) , C.A. Nos. 14207-14225/2017 (Arising out of SLP (C) Nos. 15466-15484/2012) , C.A. Nos. 14227-142....
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....987-16988/2012) , C.A. Nos. 14414-14423/2017 (Arising out of SLP (C) Nos. 16975-16984/2012) , C.A. Nos. 14426-14444/2017 (Arising out of SLP (C) Nos. 16951-16969/2012, SLP (C) No. 13656/2012 (XI) ) , C.A. No. 14447/2017 (Arising out of SLP (C) No. 13640/2012) , C.A. Nos. 14449-14451/2017 (Arising out of SLP (C) Nos. 34773-34775/2012) , C.A. No. 13574/2017 (Arising out of SLP (C) No. 18665/2013) , C.A. Nos. 14454-14463/2017 (Arising out of SLP (C) Nos. 23589-23598/2012) , C.A. Nos. 14466-14467/2017 (Arising out of SLP (C) Nos. 19075-19076/2012) , C.A. No. 13576/2017 (Arising out of SLP (C) No. 18664/2013) , C.A. No. 14272/2017 (Arising out of SLP (C) No. 11923/2009) , C.A. No. 5652/2008 (Arising out of SLP (C) No. 15721/2012) , C.A. No. 13781/2017 (Arising out of SLP (C) No. 11392/2013) , C.A. No. 14477/2017 (Arising out of SLP (C) No. 17003/2012) , C.A. No. 13379/2017 (Arising out of SLP (C) No. 24106/2007) , C.A. Nos. 2739-2762/2008) , C.A. No. 14177/2017 (Arising out of SLP (C) No. 17666/2008) , C.A. No. 14191/2017 (Arising out of SLP (C) No. 22322/2008) , C.A. No. 14248/2017 (Arising out of SLP (C) No. 20675/2008) , C.A. No. 14226/2017 (Arising out of SLP (C) No. 22629/2008) , C....
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....t of SLP (C) Nos. 33163-33169/2012) , C.A. No. 1008/2011 (X) ) , C.A. No. 13130/2017 (Arising out of SLP (C) No. 2294/2008) , C.A. Nos. 14487-14491/2017 (Arising out of SLP (C) Nos. 33170-33174/2012) , C.A. No. 14280/2017 (Arising out of SLP (C) No. 29725/2009) , Conmt. Pet. (C) Nos. 585-587/2016 in SLP (C) Nos. 31530-31532/2011) , C.A. No. 14494/2017 (Arising out of SLP (C) No. 30535/2012) , C.A. No. 14293/2017 (Arising out of SLP (C) No. 27511/2011) , C.A. No. 14308/2017 (Arising out of SLP (C) No. 27487/2011) , C.A. No. 14496/2017 (Arising out of SLP (C) No. 32133/2012) , C.A. No. 14524/2017 (Arising out of SLP (C) No. 34384/2012) , C.A. No. 14310/2017 (Arising out of SLP (C) No. 27840/2011) , C.A. No. 14075/2017 (Arising out of SLP (C) No. 32029/2012) , C.A. Nos. 14525-14531/2017 (Arising out of SLP (C) Nos. 36975-36981/2012) , C.A. No. 14532/2017 (Arising out of SLP (C) No. 30185/2012) , C.A. Nos. 13719-13720/2017 (Arising out of SLP (C) Nos. 34637-34638/2014) , C.A. No. 13345/2017(Arising out of SLP (C) No. 24804/2017 (Arising out of S.L.P.(C) ... (CC) No. 22596/2015)), Conmt. Pet. (C) No. 251/2008 in C.A. Nos. 2797/2008 (III-A) ) , C.A. No. 14281/2017 (Arising out of SLP (C)....
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....amshad, Mishra Saurabh, Pankaj Bhatia, Kailash Chand, Syed Shahid Hussain Rizvi, Advs. for AP & J Chambers, Sharmila Upadhyay, Abhishek Chaudhary, E.C. Agrawala, Piyush Sharma, Pawanshree Agrawal, Pawan Kumar, R.N. Pareek, Rachana Srivastava, Monika, Sukrit R. Kapoor, Nitya Madhusoodhanan, Arun Kumar Sinha, Mukti Chowdhary, Manish Kumar Saran, Aniruddha P. Mayee, Samir Ali Khan, K.V. Sreekumar, Shamik Shirishbhai Sanjanwala, Sunil Kaundal, Abhijit Sengupta, Arvind Kumar, E.R. Sumathy, Garvesh Kabra, K.V. Bharathi Upadhyaya, Nirnimesh Dubey, Mridula Ray Bhardwaj, K.K. Mohan, Baij Nath Patel, Sweta, Romila, C.D. Singh, Prateek Rusia, Jitendra Mohan Sharma, Ajit Sharma, Kamal Mohan Gupta, Ravindra S. Garia, Kaushal Yadav, N. Annapoorani, Anita Bafna, T. Harish Kumar, Praveen Jain, Prashant Kumar, Rahul Kaushik, Aruna Gupta, M.A. Chinnaswamy, Shrish Kumar Mishra, Gaurav Dhingra, Pramod Dayal, Abha Jain, Jaivir Singh, Gaurav Jain, Anupam Mishra, Shiv Prakash Pandey, Pragati Neekhra, R.P. Gupta, Jitendra Kumar, R.D. Upadhyay, Abha R. Sharma, Anil Kumar Jha, Aftab Ali Khan, Neeraj Shekhar, Nishit Agrawal, T.A. Rehman, Vipin Kumar Jain, Santosh Kumar Tripathi, Nipun Goel, Dhruv Surana, Ash....
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....as been granted, challenging the judgments of the High Courts in so far as writ petitions filed by the writ Petitioners were allowed. The State of Madhya Pradesh has also filed appeals challenging the common judgment dated 14.05.2007. The writ Petitioners whose writ petitions were dismissed by the Allahabad High Court has also filed SLPs against the said judgment in which leave has been granted. 5. The entire bunch of cases before us can be described in four groups. First group consists of appeals filed by the State of U.P. as well as State of Uttarakhand challenging various judgments of Uttarakhand High Court by which writ petitions filed by the different writ Petitioners for quashing the levy of transit fee were allowed. The second group of appeals consists of appeals filed by the State of U.P. challenging the judgment of Allahabad High Court dated 11.11.2011 and few other judgments by which writ petitions filed by the writ Petitioners have been allowed. Third group of appeals has been filed by the writ Petitioners whose writ petitions filed before the High Court either have been dismissed or the reliefs claimed in their writ petitions have not been granted. The fourth group o....
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.... State of Uttarakhand and State of U.P. aggrieved by aforesaid judgments have filed the above noted several appeals. (2) JUDGMENT DATED 30.03.2005 IN WRIT PET. No. 310 OF 2005, M/s. Kumaon Pea Gravel Aggregated Manufacturing Co. v. State of Uttarakhand and Ors. [Giving rise to Civil Appeal (arising out of SLP No. 23547 of 2005 and Civil Appeal (arising out of SLP No. 24106 of 2007) ] 11. Writ Petitioners, proprietary firms were carrying on the business of manufacturing & sale of finished produce of washed and single pea gravel and bajri. The Writ Petitioner used to purchase river bed material from the lessee of query on payment of royalty and trade tax on which Transit Fee is charged from the State of Uttarakhand. But when the writ Petitioners transport their finished products from their factory to customers, Transit Fee is charged by State of Uttarakhand and further, when it crosses the border of Uttarakhand and enter into the State of U.P., the Transit Pass issued by the State of Uttarakhand is to be surrendered and again Transit Passes are to be taken by making payment of the Transit Fee. 12. High Court allowed the writ petition vide its judgment dated 30.03.2005 hol....
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....e to different other Civil Appeals, which are Civil Appeal No. 1010 of 2011, Civil Appeal (arising out of SLP No. 18094 of 2011) and Civil Appeal (arising out of SLP No. 26285 of 2011). II. CIVIL APPEALS ARISING OUT OF JUDGMENTS OF ALLAHABAD HIGH COURT 17. A large number of Civil Appeals have been filed. Four Transfer Petitions and seven Contempt Petitions have also been filed. Civil appeals have been filed by the aggrieved parties against the various judgments of the Allahabad High Court. All the civil appeals filed by the writ Petitioners as well as by the State of U.P. centre around leviability of transit fee on different forest produces as per 1978 Rules. 18. Apart from various other judgments against which appeals have been filed, two judgments delivered by two Division Benches need to be specially noted by which judgments bunch of writ petitions numbering more then 100 have been decided. We shall notice these two judgments first before referring to facts of other cases. CIVIL APPEAL Nos. 2739-2762 OF 2008 (KUMAR STONE WORKS and Ors. v. STATE OF U.P. and Ors.) (arising out of judgment dated 27.04.2005 in Writ Petition No. 975 of 2004, Kumar Stone Works and Or....
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....ourt held that validity of the Rules have already been upheld by this Court in State of U.P. v. Sitapur Packing Wood Suppliers, 2002 (4) SCC 566. The Court upheld the 2004 Amendment. The High Court also held that the words "brought from forest" as occurring in Section 2 (4) (b) of the 1927 Act, necessarily implies that it passes through the forest. It also held forest must be understood according to its dictionary meaning. This description covers all statutory recognised forest, whether designated as reserve, protected or otherwise. The Court held that all goods are passing through forest, hence, Petitioners cannot deny liability to pay transit fee. The increase of transit fee to Rs. 38/- can neither be said to be excessive or exorbitant or prohibitive. 22. The several civil appeals have been filed against the above judgment where the Appellants reiterate their claim as they raised before the High Court. Civil Appeal arising out of SLP (C) No. 1675 of 2012 State of U.P. and Ors. v. M/s. Ajay Trading (Coal) Co. and Ors. (arising out of the judgment dated 11/21.11.2011) in Writ Petition No. 963 of 2011-M/s. Ajay Trading (Coal) Co. and Ors. v. State U.P. and Ors.) 23. By judg....
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....f U.P. has come up in appeals whereas writ Petitioners who were denying the liability to pay transit fee have filed appeals against the judgment dated 11.11.2011 reiterating their claim that they are not liable to pay transit fee on various grounds as raised in their writ petitions. The claims in various writ petitions are different and also founded on different grounds. It is neither necessary nor desirable to notice the facts and claim in each case separately. The writ petitions which have been decided by both the judgments dated 27.04.2005 as well as 11.11.2011 consisted of different nature of writ petitions which can be broadly described in few groups. It shall suffice to notice facts and claims as raised in few cases of each group: Group (A) This represents Petitioners who have obtained mining leases under U.P. Minor Minerals (Concession) Rules, 1963 as well as leases of major minerals for mining of various minerals. Some of the mining lease holders are also transporting the minerals. There are other categories of Petitioners who are only transporting the minerals from their factories. Stone crusher, dealers who are crushing the minerals and transporting finished mate....
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....aforesaid articles are not forest produce since they undergo chemical process. 28. In so far as writ petition included in group 'A' is concerned, we have noticed above the facts of Writ Petition No. 26273 of 2004, M/s. Kumaon Stone Crusher, decided on 01.07.2004. Group 'B' consisting of Petitioners who are dealing in coal/hard coke/coal briquettes/soft coke/cinder (rejected coke) , etc. C.A. No. 2706 of 2008 (M/s. Krishna Kumar Jaiswal v. State of U.P. and Ors., is one of such writ petitions which was dismissed by the High Court on 27.04.2005. 29. In group 'B' reference is made to Civil Appeals arising out of SLP (C) Nos. 34909-34916 of 2012 (M./s. Anand Coal Agency and Ors. etc. etc. v. State of U.P. and Ors. etc. etc.) . The writ Petitioners-Appellants are involved in trading of coal. Petitioners get coal after the acceptance of their bid by the Coal India Limited for the coal field concern. The Petitioners imports coal from the outside the State of U.P. by road and do not use forest roads. The coal is transported only by National highways and PWD roads. It was stated that collection of transit fee on coal is illegal and without jurisdiction. Levy on....
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....estone, that contain calcium carbonate in a lime kiln which is accomplished by heating the material to above 825 degree centigrade. These products were also purchased from registered traders/manufacturers of the State of Rajasthan after obtaining invoices and passes. On such transportation the State of U.P. is levying transit fee. The product manufactured and purchased by the Petitioners is not forest produce and no transit fee can be levied. 33. In group 'D', one of the cases is Civil Appeal arising out of SLP (C) No. 30185 of 2012 (Arvind Kumar Singh and Anr. v. State of U.P. and Ors.) , the writ Petitioner-Appellant carries on the business of supplying bamboo, waste of plywood and small twigs/debarked jalawani lakdi of eucalyptus and poplar trees to paper manufacturing units. The paper manufacturing units, to which the Petitioner supplies are situate in the State of Haryana, Punjab, Uttar Pradesh and Madhya Pradesh. Waste of plywood is a waste product obtained from the plywood industries, which is processed to obtain chips. The purchases are not made by the Petitioner inside any forest of Uttar Pradesh or any other State. The loaded trucks of the Petitioner do not pas....
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....t Petition filed by the Petitioner be transferred and heard along with the aforesaid Special Leave Petition. 38. Transfer Petition No. 44 of 2012 has been filed to transfer Writ petition (tax) No. 1629 of 2007 to hear it with SLP (C) No. 11367 of 2007. The Petitioner has set up coal based thermal power plant at Renusagar for captive generation of power which it supplies continuously to the aluminium manufacturing unit of the Petitioner at Renukoot. In the process of generation of power the said thermal power plant produces the fly ash which needs to be disposed of as per the directions of the Central Government. 39. The Petitioner has entered into agreement with various cement manufacturers for lifting, disposal of fly ash. From November 2007, the forest department of the State started demanding transit fee from each Truck/Dumper. Even though the payment of any levy is the responsibility of contractors who are lifting the fly ash. The Petitioner filed Writ Petition No. 1629 of 2007 challenging the aforesaid demand of transit fee on fly ash in which the interim order was passed by the High Court on 29.11.2007. In the aforesaid background it was prayed that Writ Petition be tra....
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..... Applicants are engaged in the business of transportation of sand, stones, polish stones, rough stones, crushed stones, stone grits, stone marbles etc. Applications claimed that whenever their vehicles entered in the State of U.P., Transit fee is demanded. It is contended that in SLP (C) filed by the applicants this Court on 02.12.2012 stayed the recovery of transit fee. Applicants case is that despite the knowledge of interim order dated 02.12.2012 the same is not being complied with, hence, the Contempt Petition has been filed. In Contempt application, no notice has been issued. 44. One Writ Petition (C) No. 203 of 2009 (M/s. Pappu Coal Master and Ors. v. State of U.P. and Anr.) has also been filed where Petitioners have prayed that Respondent may be restrained from charging any fee from Petitioners under the 1978 Rules as amended by Amendment Rules dated 14.06.2004. This writ petition was directed to be listed along with SLP (C) No. 11367 of 2007. V. CIVIL APPEALS AGAINST THE JUDGMENT DATED 14.05.2007 OF THE MADHYA PRADESH HIGH COURT 45. The State of Madhya Pradesh has filed appeals against a common judgment dated 14.05.2007 of the High Court of Madhya Pradesh. Civil A....
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....he State of Madhya Pradesh has filed these appeals. 50. We have heard learned Counsel appearing for the States as well as learned Counsel appearing for various writ Petitioners. 51. While referring the respective submissions of the learned Counsel, submissions on behalf of the writ Petitioners have been referred to as submissions of writ Petitioners and the submissions on behalf of the States have been referred to as on behalf of the State. VI. Submissions with regard to the judgment of Uttarakhand High Court 52. As noted above both the State of Uttarakhand and State of U.P. have challenged the judgment of Uttarakhand High Court. Shri Dinesh Dwivedi, learned senior Counsel questioning the judgment dated 01.07.2004 of Uttarakhand High Court in M/s. Kumaon Stone Crusher v. State of Uttarakhand, submits that boulders crushed into grits retain same characteristic that is forest produce. By obtaining grits, stone chips and dust no new material is obtained. Challenging the judgment of Uttarakhand High Court in M/s. Gupta Builders dated 26.06.2007, it is submitted that the mere fact that royalty has been paid by the writ Petitioners in accordance with the Uttar Pradesh Minor M....
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....er contended that levy of Transit Fee on Transit Pass does not have any relationship with the distance of the destination of the transit and the Transit Pass originally issued at the time of First Sale of transit required only on endorsement and the insistence of levy of Transit Fee at the time of second transit is irrational and unreasonable. 55. Learned Counsel for the State of U.P, challenging the judgment of High Court of Uttarakhand has also raised the similar submissions as has been raised by the learned Counsel for the State of Uttarakhand. VII. SUBMISSIONS RELATING TO JUDGMENTS OF THE ALLAHABAD HIGH COURT. 56. Following are various submissions on behalf of several writ Petitioners and their reply by State: (i) (a) The products which are being transited by them or on their behalf are not Forest Produce since they have undergone manufacturing process resulting into a new commodity. All the writ Petitioners supported the judgment of Uttarakhand High Court dated 01.07.2004 in M/s. Kumaon Stone Crusher wherein, the High Court has held that no levy of Transit Fee can be made on the finished items of stone i.e. stone grits, sand grits & chips etc. They submitted ....
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.... is submitted that parliamentary enactments regarding coal are on different subjects and has no effect on the Act, 1927 and the Rules framed therein. (e) Learned Additional Advocate General of the State of U.P., during his submission has submitted that in so far as, fly ash, clinker and synthetic gypsum are concerned, the State does not claim them to be Forest Produce and no Transit Fee shall be charged on fly ash, clinker and synthetic gypsum. He, however, submitted that gypsum is a naturally mined Forest Produce and what is excluded is only synthetic gypsum. (f) For veneer and plywood, it is submitted that veneer is small pieces of timber which remains a Forest Produce and plywood is also a kind of timber which retains its natural character of Forest Produce. With other articles, with regard to which, it is claimed that by manufacturing process and chemical treatment they are transformed to new commercial commodity is refuted by counsel for the State. (ii) (a) One of the main planks of attack of learned Counsel for the writ Petitioners to the 1927 Act & 1978 Rules is based on 1957 Act. It is submitted that 1957 Act is enacted by the Parliament in refere....
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....orest wealth whereas 1957 Act deals with mines and minerals wealth. He further submits that 1957 Act does not impliedly overrule the 1927 Act, both the legislations being under different subjects. It is submitted that argument of implied repeal could have arisen only where there is no option. To take a view that 1957 Act shall impliedly overrule 1927 Act regarding transit of forest-produce, the control of the State Under Section 41 shall be lost and the very purpose and object of the Forest Act shall be defeated. An activity of mining held in a forest cannot be regulated and prevented by mining officers in the forest area, they cannot enter into forest area and exercise their powers. The machinery for enforcement of forest laws and the mining laws are different. Their powers are different, officers are different, consequences of breach are different and both provisions operate in different fields. It is thus submitted that the provisions of Indian Forest Act, 1927 in so far as Section 41 of 1927 Act and 1978 Rules are concerned, shall not stand impliedly overruled by Parliamentary enactment of 1957 Act. (iii) (a) It is submitted that Division Bench of the Allahabad High Co....
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....unsel for the State has refuted the aforesaid submission. It is submitted that the Division Bench of the Allahabad High Court in Kumar Stone Works has correctly held that the term 'brought from a forest' must be read to mean 'brought through a forest'. It is submitted that any other interpretation would render the term to be in conflict with the term 'found in a forest'. It is submitted that the High Court has referred to various dictionary meanings of word 'brought' and after relying on said definition the Division Bench held that the words 'brought from' mean 'brought through forest'. (iv) (a) One more submission which has been raised by the writ Petitioners is that the word 'forest' as used in 1927 Act as well as in Transit Fee Rules, 1978 has to be read as 'forest' as enumerated in the 1927 Act, i.e., a reserved forest, a village forest and a protected forest. Thus, transit fee can be charged only when forest produce transit through a reserved forest, a village forest or a protected forest. It is submitted that the Division Bench in its judgment dated 11.11.2011 has adopted a very expansive definition of f....
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....charging of a fee. It is submitted that transit fee is chargeable on transit pass issued under Rule 4 (b) which is required to be checked under Rule 6 (4) only. Referring to Rule 5, it is submitted that Rule 5 contemplates charging a fee in those cases in which transit is done on the transit pass issued under Rule 4 (1) (b) and checked under Rule 6 (4) . (b) It is submitted that fee cannot be charged in any other case. The above submissions have been refuted on behalf of the State. It is contended that on all transit pass issued under the Rule 1978 transit fee is required to be paid. (vii) The Petitioners further submitted that although no final notification has been issued Under Section 20 of 1927 Act but still the Forest Department treats several areas in the District of Sonebhadra and other Districts as forest area and transit fee is asked for treating the said areas as forest area. It is submitted that Section 4 notification is only a preliminary notification which cannot be treated as notification declaring the area as reserved forest. (viii) (a) Learned Counsel for the Petitioners submitted that the Constitution Bench judgment of this Court in State....
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....h and Fifth Amendments cannot be held to be arbitrary or excessively disproportionate. The finding of the High Court that the State had not provided any data to justify the increase in transit fee is incorrect since the State had in fact by a table which itself has been noted in paragraph 85 of the judgment has mentioned the income and expenditure related to transit fee, a perusal of which could indicate that the expenditure of State Government was much more than collection of transit fee even after Fifth Amendment. The value of timber and other forest-produce has increased manifold. The increase in levy of transit fee had become necessary to meet the ever increasing expenditure incurred by the State. The High Court committed error in striking down Fourth and Fifth Amendments without there being any sufficient and valid ground. 58. Learned Counsel for the writ Petitioners have vehemently opposed the above submission and supported the judgment of the High Court striking down the Fourth and Fifth Amendment Rules. It is submitted that Jindal Stainless (2) overruled by the judgment of 9-Judges constitution Bench does not have much bearing in the facts of the present case. The High C....
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.... obtained. The Allahabad High Court, in its judgment in Kumar Stone Works (Supra) decided on 27.04.2005 has given a detailed reasoning for not accepting stone grits, stone chips and stone dust as a new commodity. It held that the character of Forest Produce is not lost by such crushing of the stone. High Court of Uttarakhand has taken a contrary view in its judgment dated 01.07.2004 in Kumaon Stone Crusher (Supra) , as noted above. 62. Learned Counsel for the writ Petitioners have relied on few judgments of this Court which need to be noticed. Reliance is placed on Two Judge Bench in Suresh Lohiya v. State of Maharashtra and Anr. (1996) 10 SCC 397. In the above case, the question for consideration was, as to whether, the Bamboo mat is a Forest Produce. The definition of 'Timber' and 'tree', given in sub Clause 6 and sub Clause 7 of Section 2 was noticed which is to the following effect: 2. (6) 'timber' includes trees when they have fallen or have been felled, and all wood whether cut up or fashioned or hollowed out for any purpose or not; and 2. (7) 'tree' includes palms, bamboos, stumps, brushwood and canes. 63. The abo....
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....in the market, yet it cannot be presumed that Entry 40 of the notification is intended to describe the same as not stone at all. In fact the term "stone" is wide enough to include the various forms such as gitti, kankar, stone ballast. In that view of the matter, we think that the view taken by the majority of the Tribunal and affirmed by the High Court stands to reason. We are, therefore, not inclined to interfere with the same. 65. The above judgment held that the nature and character of the stone remains the same, even after, crushing the boulders into small stones, dust etc. Reliance by the writ Petitioner is also placed on judgment in (2003) 3 SCC 122, Tej Bahadur Dube (Dead by L.Rs.) v. Forest Range Officer F.S. (S.W.), Hyderabad. In the above case, the Appellant was charged for violation of Rule 3 to 7 of the A.P. Sandalwood and Red Sanderswood Transit Rules, 1969. The Assessee was found transporting finished sandalwood products. He was charged with the violation of aforesaid rules. Assessee's case was that he has obtained permission of the authorities for converting sandalwood purchased by him into various types of handles which are ultimately used in other sandalwoo....
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.... obtained permission of the competent authority for converting the sandalwood into various types of handles hence, the transportation was not found violative of rules. 67. In this context, it is necessary to refer to a Three Judge Bench judgment of this Court in Karnataka Forest Development Corporation Ltd. v. Cantreads Private Limited and Ors. (1994) 4 SCC 455. This Court had occasion to consider Karnataka Forest Act, 1963. Caoutchouc or latex covers natural covering sheets of various grades or not, was the question under consideration. After noticing the various dictionary meanings of caoutchouc, it was held that since processing does not result in bringing out a new commodity but it preserves the same and rendered it fit for markets, it does not change its character hence, it remained a Forest Produce. Thus rubber sheets converted from caoutchouc continue to be a Forest Produce. In the above case, this Court has also held that a 'test of commercial parlance' by considering entries in sales tax is not applicable while considering the definition of Forest Produce. 68. The Court observed that the definition of Forest Produce is in technical or botanical sense. The abo....
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....e blocks after it became marble slabs or tiles loses its nature or character of Forest Produce. The said judgment does not help in the present case. 72. This Court in Akbar Badrudin Giwani v. Collector of Customs, Bombay, (1990) 2 SCC 203, again reiterated that the general principle of interpretation of tariff entries according to any tax statutes of a commercial nomenclature can be departed from where the application of commercial meaning or trade nomenclature runs counter to the statutory context. In the present case statutory context of Forest Produce as defined in Act, 1927 has to be taken in its botanical and scientific sense. 73. We thus conclude that the Transit Fee on marble slabs and tiles cannot be denied and the State did not commit any error in demanding the Transit Fee on transit of aforesaid goods. 74. It goes without saying that on forest produce which are exempted by notification issued under Proviso to Rule 3 of 1978, no transit fee is leviable. One of such notification dated 29.03.2010 has been brought on record. X. Whether coal (and its various varieties) , lime stone, dolomite, fly ash, clinker, gypsum, veneer and plywood are forest produce? 75. C....
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....d in the natural form, hence it is a forest produce. Veneer and waste plywood 81. The veneer is nothing but thin sheets of wood which are cut from existing logs & planks, which is then again glued upon planks of wood. The essential nature of the product of veneer is merely sliced/cut up wood. Hence, it continues to be a forest produce. 82. The waste plywood that is remains of plywood and veneer are nothing but cut-up logs. The process of manufacturing involves placing logs and wood into a specialized machine, which cuts out thin sheets of wood from the log. That when the logs reaches a certain diameter of thickness, the same can no longer be suitable for extraction by the machines and unutilized wood is left behind in the process of slicing as well. Essential character of the product does not change, hence, it comes within the definition of timber and forest produce. XI. FOREST ACT 1927 & MMDR ACT, 1957 83. We now proceed to consider the impact of 1957 Act on Forest Act, 1927 and the Transit Fee Rules 1978 framed Under Section 41 of 1927 Act. The Indian Forest Act, 1927 is a pre-constitutional legislation enacted by Indian legislature as per Section 63 of Government ....
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.... stated following: 23...... If Parliament by its law has declared that Regulation and development of mines should in public interest be under the control of the Union, to the extent of such declaration the jurisdiction of the State Legislature is excluded. In other words, if a Central Act has been passed which contains a declaration by Parliament as required by Entry 54, and if the said declaration covers the field occupied by the impugned Act the impugned Act would be ultra vires, not because of any repugnance between the two statutes but because the State Legislature had no jurisdiction to pass the law. The limitation imposed by the latter part of Entry 23 is a limitation on the legislative competence of the State Legislature itself. This position is not in dispute. 88. The validity of 1957 Act was considered in the context of Industries (Development and Regulation) Act, 1951 and Mines and Minerals (Development and Regulation) Act, 1948. This Court repelled challenge to the 1957 Act on the ground that the declaration under 1948 Act was not referable to Entry 54. 89. The next judgment which needs to be considered is State of Orissa v. M.A. Tulloch and Co., 1964 (4) ....
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.... this Constitution of the enactments referred to in Article 395 but subject to the other provisions of this Constitution, all the laws in force in the territory of India immediately before the commencement of this Constitution shall continue in force therein until altered or repealed or amended by a competent legislature or other competent authority. 93. The law which has been continued in force by virtue of Article 372 is to continue until altered or repealed or amended by a competent legislature. Several pre-constitutional laws which have been continued Under Article 372 came before this Court for consideration wherein Article 254 was also considered. 94. A Constitution Bench of this Court in B.V. Patankar and Ors. v. C.G. Sastry AIR 1961 SC 272, had occasion to consider Mysore House Rent and Accommodation Control Order, 1948, which was a pre-constitution law and by Part B States (Laws) Act, 1951 extended the operation of Transfer of Property Act, 1882 in the State of Mysore. In the above case arguments were raised that the House Rent and Accommodation Control Order, 1948 as extended in Mysore from April, 1951 became repugnant and was repealed. It was held that the pre-cons....
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....is an existing law continued by virtue of Article 372 of the Constitution of India. If at all, it is Article 372 (1) alone that would apply to such law which is to continue in force until altered or repealed or amended by a competent legislature or other competent authority. We have already found that since Section 97 (1) of the Code of Civil Procedure (CPC) (Amendment) Act, 1976 has no application to Section 41 of the Punjab Courts Act, it would necessarily continue as a law in force. Shri Viswanathan's reliance upon this authority, therefore, does not lead his argument any further. 96. Thus, to find out as to whether the 1927 Act and Rules, 1978 framed thereunder survive even after enforcement of 1957 Act, we have not to look into Article 254 but we have to find out as to whether the above pre-constitutional law is altered or repealed or amended by a competent legislature. To find out this competent legislation as contemplated by Sub-clause (1) of Article 372 in the context of pre-constitutional law the nature and content of pre-constitutional law has to be found out. There cannot be any dispute that Act, 1927 was enacted to consolidate the law relating to forests, the tra....
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....nd a repeal is inferred by necessary implication when the provisions of the later Act are so inconsistent with or repugnant to the provisions of the earlier Act 'that the two cannot stand together'. But, if the two may be read together and some application may be made of the words in the earlier Act, a repeal will not be inferred... 100. This Court in Municipal Council, Palai through the Commissioner of Municipal Council, Palai v. T.J. Joseph in AIR 1963 SC 1561, has elaborated the concept of implied repeal in following words: 9. It is undoubtedly true that the legislature can exercise the power of repeal by implication. But it is an equally well-settled principle of law that there is a presumption against an implied repeal. Upon the assumption that the legislature enacts laws with a complete knowledge of all existing laws pertaining to the same subject the failure to add a repealing Clause indicates that the intent was not to repeal existing legislation. Of course, this presumption will be rebutted if the provisions of the new act are so inconsistent with the old ones that the two cannot stand together. As has been observed by Crawford on Statutory Construction....
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....on like the one which the court did not choose to answer in the Commissioners of Sewers case would arise for decision. 10. It must be remembered that at the basis of the doctrine of implied repeal is the presumption that the legislature which must be deemed to know the existing law did not intend to create any confusion in the law by retaining conflicting provisions on the statute book and, therefore, when the court applies this doctrine it does no more than give effect to the intention of the legislature ascertained by it in the usual way i.e. by examining the scope and the object of the two enactments, the earlier and the later. 101. The question of repeal by implication arises when two statutes become inconsistent to the extent that competence of one is not possible without disobedience to other. 102. The principles for ascertaining the inconsistency/repugnancy between two statutes were laid down by this Court in Deep Chand v. State of U.P and Ors. AIR 1959 SC 648. K. Subba Rao, J. speaking for the Court stated following in paragraph 29: 29......Repugnancy between two statutes may thus be ascertained on the basis of the following three principles: ....
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....ubject of the legislation under the 1927 Act was the forest, transit of forest-produce and the duty leviable on timber and other forest-produce. 105. It is sine qua non that both the sets of laws must deal with "the same subject matter". In the instant case, under the Forest Act "transit of forest-produce" itself is subject of primary legislation as can be seen from the preamble and the provisions to Section 41 & 42 of the Act. In contrast, the 1957 Act in view of Section 2 thereof, gives control of the "Regulation of Mines and Development of Minerals" to the Union. The detailed provisions as primary legislation, deal with Regulation of mines and development of minerals (Section 4 to 17 and Section 18) . For the purposes of Regulation of Mines and Development of Minerals, it is provided that no mining operation can be undertaken without the license or permit as per Section 4. Provisions relating to transport or storage are only incidental and ancillary in nature. But the main point of difference in the subject matter of legislation under the 1957 Act is "Regulation of Mines and Development of Minerals". 106. When the minerals are forest-produce by definition under the 1927 Ac....
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....sued by the Ministry of Environment & Forests, one of the basic objectives if the State is to 'encourage efficient utilization of forest produce and maximizing substitution of wood' and states that "the principal aim of Forest Policy must be to ensure environmental stability and maintenance of ecological balance including atmospheric equilibrium, which are vital for sustenance of all life forms, human, animal and plant. The derivation of direct economic benefit must be subordinated to this principal aim." 115. The subjects of 1927 Act and 1957 Act are thus distinct and separate. The 1957 Act was on development and Regulation of mines and minerals. Mines and minerals are also found in forests. The definition of forest-produce as contained in Section 2 Sub-section (4) of the Act includes peat, surface oil, rock and minerals (including lime-stone, laterite, mineral oils, and all products of mines or quarries) . 116. The State has been empowered to regulate transit of forest-produce Under Section 41 of the Act. Regulation of transit of forest-produce is a larger activity covering transit of different kinds of forest-produce including minerals. Both the legislations being ....
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....12. This point arose directly for decision before the Privy Council in Prafulla Kumar Mukherjee v. The Bank of Commerce, Ltd. [1946 74 I.A. 23 There, the question was whether the Bengal Money-Lenders Act, 1940, which limited the amount recoverable by a money-lender for principal and interest on his loans, was valid in so far as it related to promissory notes. Money-lending is within the exclusive competence of the Provincial Legislature under Item 27 of List II, but promissory note is a topic reserved for the center, vide List I, Item 28. It was held by the Privy Council that the pith and substance of the impugned legislation begin money-lending, it was valid notwithstanding that it incidentally encroached on a field of legislation reserve for the center under Enter 28. After quoting its approval the observations of Sir Maurice Gwyer C.J. in Subrahmanyan Chettiar v. Muttuswami Goundan, (supra) above quoted, Lord Porter observed: Their Lordships agree that this passage correctly describes the grounds on which the Rule is founded, and that it applies to Indian as well as to Dominion legislation. No doubt experience of past difficulties has made the provisions of the....
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.... on a matter assigned to the legislature then it must be held to be valid in its entirety even though it might incidentally trench on matters which are beyond its competence. In order to examine the true character of the enactment, the entire Act, its object, scope and effect, is required to be gone into. The question of invasion into the territory of another legislation is to be determined not by degree but by substance. The doctrine of "pith and substance" has to be applied not only in cases of conflict between the powers of two legislatures but in any case where the question arises whether a legislation is covered by particular legislative power in exercise of which it is purported to be made. 120. Thus, even it is assumed that, in working of two legislations which pertain to different subject matters, there is an incidental encroachment in respect of small area of operation of two legislations. Legislation cannot be struck down as being beyond legislative competence nor it can be held that one legislation repeals the other. Thus, when we look into the pith and substance of both the legislations, it is clear that they operate in different field and the submission cannot be ac....
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....time, a place or a period. Both the words 'found in or brought from' have been used before word 'forest'. Both the words that is 'found in' and 'brought from', has clear nexus with forest. The true meaning of the words 'brought from' has to be appreciated when read in the context of word 'found in'. The word 'brought from' is an expression which conveys the idea of the items having their origin in the forests and they have been taken out from the forest. The word 'from' refers to the place from which the goods have been moved out that is from the place of their original location. The forest is birth place, the origin of the items mentioned in Sub-clauses (1) to (iv) of sub-clause (b) of Section 2 (4) . The 'found in' means that the item which has origin from the forest, is found in the forest while 'brought from' means that items having origin in forest have moved out from the forest. 125. The 1978 Rules framed Under Section 41 of the 1927 Act also reflect that Rule making authority has also understood the meaning of word 'brought from' in the above sense. As per Rule 3 no forest produce shal....
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.... The expression at the commencement of Clause (b) of Section 2 (4) should be compared with the expression at the commencement of Clause (a) of Section 2 (4) . The articles listed under Clause (a) become forest-produce by virtue of their own nature, whether they are found in a "forest or not, or brought from a forest or not. On the other hand, the articles listed under Clause (b) become forest-produce, not by virtue of their nature alone, but by virtue of the fact that they are found in or brought from a forest. The term 'found in' a forest does not necessarily, in our opinion, require an actual discovery of those items by a living person before those items can become forest-produce. In our opinion, the term 'found in' actually refers to things growing in a forest like timber trees, fuel trees, fruits, flowers etc. or mineral deposits or stones existing in the forest. The distinctive feature is either the existence or the growth or deposit within the area of a forest and not their discovery by some living person. The idea underlying the expression 'brought from' is equally emphatic of the source of the thing so brought being within the area of a forest. Th....
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....and", occurring in Section 2, will not only include "forest" as understood in the dictionary sense, but also any area recorded as forest in the Government record irrespective of the ownership. This is how it has to be understood for the purpose of Section 2 of the Act. The provisions enacted in the Forest Conservation Act, 1980 for the conservation of forests and the matters connected therewith must apply clearly to all forests so understood irrespective of the ownership or classification thereof... 131. Thus, forest shall include all statutorily recognised forests, whether designated as reserve, protected or otherwise. The term "forest land", occurring in Section 2, will not only include "forest" as understood in the dictionary sense, but also any area recorded as forest in the Government records irrespective of the ownership. The restrictive meaning of forest as given by the Uttarakhand High Court in M/s. Gupta Builders cannot be approved. 132. It is relevant to note that even before this Court's definition in T.N. Godavarman case (supra) in expansive manner, the forest was understood by the State legislature in a very wide manner. This is reflected by definition of for....
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....r Sub-section (3) of Section 29 of the Indian Forest Act 1927 (Act No. XVI of 027) , will occupy such length of time as in the meantime to endanger the rights of the State Government, now therefore, in exercise of the powers conferred by the proviso to the aforesaid Sub-section and by the Sub-section (1) of the said section, read with Section 80A of the aforesaid Act, the Governor of Uttar Pradesh is pleased to declare that pending such enquiry and record the provisions of Chapter IV of the said Act to be applicable to the lands specified in the Schedule here to: A) Schedule 135. A perusal of the Schedule indicates that in 48 Districts as they existed in 1960, different roads have been declared to be protected forests from mileage to mileage. A perusal of the Schedule which is part of notification issued by the State of U.P. indicates that in the various roads mentioned in the Schedule National highways are also included. 136. For finding the consequences of notification dated 10.02.1960 proviso to the Sub-section (3) of Section 29 read with Section 80A, referred in the notification needs to be looked into. Section 29 contained in Chapter IV (deals with protected forests) ....
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....tion dated 10.02.1960 declared that provisions of Chapter IV of the Act shall be applied. Thus land mentioned in the Schedule is declared as protected forest. 139. Section 80A delineates the legislative scheme of declaring protected forests on banks of canals or the sides of roads. The State while issuing notification Under Section 80A can only effectuate, the object and purpose of Section 80A as enacted by the State legislature. 140. The notification dated 10.02.1960 has to be read in the light of the substantive provisions contained Under Section 80A. When Section 80A empowers the State to declare any land on the banks of canals or the sides of roads as protected forests State can do only which is permitted by the State and no more. Section 80A read with notification dated 10.02.1960 shall only mean that both the sides of the roads which have been mentioned in the Schedule are now declared protected forests. The purpose for such declaration is not far to seek. Both sides of canals or both sides of the roads can be declared as protected forests for maintenance and management of the same by applying the different provisions of the Act. Maintenance of forests on both sides of ....
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....tain a transit pass or authorization to issue passes under Clause (b) of Sub-rule (1) above shall apply in the form in Schedule 'B' and the Divisional Forest Officer may, before issuing the transit pass or authorization to issue such passes, conduct such inquiry and call for such information as considered necessary; (ii) Such authorization shall specify the period during which it shall remain in force, and shall also specify the route to be adopted and check Chawki or depot through which to produce must pass; and (iii) Any authorization may at any time be changed (on request or otherwise) or cancelled by the Division Forest Officer or Conservation of Forests. 142. Now we come to Rule (5) which provides for fees payable for different passes. Rule 5 along with its Marginal note (as originally framed) is as follows: Fees Payable for different classes of passes 5. At the check Chawki or depot established under Rule 15 and specified under proviso (ii) to clause (b) , Sub-rule (1) of Rule 4, the forest produce along-with the two copies of the pass (duplicate and triplicate) shall be produced for examination Under Sub-rule (4) of Rule 6 and f....
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....Thus Marginal Note clarifies that transit fee is payable at all kinds of passes and submission is incorrect that leviability of fee is only on one category of passes as referred to in Rule 4 (1) (b) . Marginal note has been held to be an internal aid to statutory interpretation of a statute. Justice G.P. Singh in Principles of Statutory interpretation 14th Edition regarding marginal note states as follows: ...Marginal notes appended to Articles of the Constitution have been held to constitute part of the Constitution as passed by the Constituent Assembly and therefore they have been made use of in construing the Articles, e.g. Article 286, as furnishing 'prima facie', 'some clue as to the meaning and purpose of the Article'. A note appended to a statutory provision or subordinate legislation is merely explanatory in nature and does not dilute the rigour of the main provision. Notes under the Rules cannot control the Rules but they can provide an aid for interpretation of those rules. Further, a note which is made contemporaneously with the Rules is part of the rule, and is not inconsistent with the rule, but makes explicit what is implicit in the rule. ....
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.... be accepted. Pay ability of transit fee is attached with transit pass issued under form A except in cases where no transit pass is required for the removal of forest produce as enumerated in proviso to Rule 3. We thus do not accept the interpretation of Rule 3, 4, 5 & 6 as contended by learned Counsel for the Petitioner in respect of pay ability of transit fee on transit passes issued under 1978 Rules. XVI. Non-issuance of Section 20 Notification after Section 4 Notification of 1927 Act 149. At this juncture, it is also necessary to notice one submission raised by the learned Counsel for the Petitioners. It is contended that the State of Uttar Pradesh although issued notification Under Section 4 of 1927 Act proposing to constitute a land as forest but no final notification having been issued Under Section 20 of 1927 Act the land covered by a notification issued Under Section 4 cannot be regarded as forest so as to levy transit fee on the forest produce transiting through that area. With reference to above submission, it is sufficient to notice Section 5 as inserted by Uttar Pradesh Act 23 of 1965 with effect from 25.11.1965. By the aforesaid U.P. Act 23 of 1965 Section 5 has....
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....e been resorted to for realising the transit fee at the rate of Rs. 38/-. The Petitioners relying on judgments of Firm A.T.B. Mehtab Majid and Co. v. State of Madras and Anr. AIR 1963 SC 928; B.N. Tiwari v. Union of India AIR 1965 SC 1430 and State of U.P. and Ors. v. Hirendera Pal Singh, 2011 (5) SCC 305, have submitted that the earlier Rule does not revive even when substituted Rule is struck down by the Court. Shri D.K. Singh, learned Additional Advocate General has refuted the submission and placed reliance on judgment of this Court in Supreme Court Advocate-on-record Association v. Union of India, 2016 (5) SCC 1. This Court in the interim order dated 29.10.2013 has expressly directed that "the State shall be free to recover transit fee for forest produce removed from within the State of U.P. at the rate stipulated in the Third amendment to the Rules mentioned in the earlier part of this order." Further, after noticing the striking down of Fourth and Fifth Amendment Rules by the High Court, this Court in the same interim order permitted the State to recover transit fee in terms of the Third Amendment Rules. 154. It is, further, relevant to note that the High Court in its jud....
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....ench of the High Court dated 11.11.2011, the State was fully competent to recover the transit fee as per Third Amendment Rule, which direction of the High Court we duly affirm. XVII. VALIDITY OF FOURTH AND FIFTH AMENDMENT RULES 156. We now proceed to consider the respective contentions of the parties on the Fourth and Fifth Amendment Rules. Before we proceed to consider the rival contentions, it is necessary to have broad over-view of the concept of fee and tax. Further, the nature of regulatory fee and its essential characteristic also needs to be looked into. 157. The locus classicus on the concept of fee and tax is the judgment of this Court in The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt AIR 1954 SC 282, B.K. Mukherjea, J. speaking for 7-Judge Bench has elaborately defined the tax and fee in paragraphs 43 and 44 which are quoted below: 43. A neat definition of what "tax" means has been given by Latham C.J. of the High Court of Australia in Matthews v. Chicory Marketing Board (60 C.L.R. 263, 276.) . "A tax", according to the learned Chief Justice, "is a compulsory exaction of money by public....
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....ondary to the primary motive of Regulation in the public interest (Vide Findlay Shirras on "Science of Public Finance" Vol. I, p. 202.) . Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives. As Seligman says, it is the special benefit accruing to the individual which is the reason for payment in the case of fees; in the case of a tax, the particular advantage if it exists at all is an incidental result of State action (Vide Seligman's Essays on Taxation, p. 408.). 46. If, as we hold, a fee is regarded as a sort of return or consideration for services rendered, it is absolutely necessary that the levy of fees should, on the face of the legislative provision, be co-related to the expenses incurred by Government in rendering the services. As indicated in Article 110 of the Constitution, ordinarily there are two classes of cases where Government imposes 'fees' upon persons. In the first class of cases, Government simply grants a permission or privilege to a person to do something, which otherwise that person would not be competent to do and extracts fees either heavy or moderate from tha....
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....the mining area and to meet the welfare of the labour employed and other persons residing or working in the area of the mines. Here again there is no element of control but the services resulted in real benefit specially accruing to the persons on whom the levy was imposed. These decisions of this Court clearly establish that in order to make a levy a fee for services rendered the levy must confer special benefit on the persons on whom it is imposed. No case has been brought to our notice in which it has been held that a mere control exercised on the activities of the persons on whom the levy is imposed so as to make these activities more onerous, is service rendered to them making the levy a fee. 160. The nature of transit fee came for consideration before this Court in State of Tripura and Ors. v. Sudhir Ranjan Nath, 1997 (3) SCC 665. The Tripura Transit Rules levy the transit fee. The High Court has declared Rule 3 which provided for charging of transit fee as unconstitutional. In appeal against the said judgment, referring to the judgment of the Corporation of Calcutta and Anr. v. Liberty Cinema (supra) it was held that expression 'licence fee' does not necessarily m....
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....en to the State Government to levy transit fee by rendering service as quid pro quo. Rules 3 and 5 of 1978 Rules as well as provisions of Section 41 of Forest Act, 1927 were considered by this Court. This Court relying on the judgments of this Court in State of Tripura v. Sudhir Ranjan Nath, Corporation of Calcutta v. Liberty Cinema and Secunderabad Hyderabad Hotel Owners' Assn. v. Hyderabad Municipal Corporation held transit fee under Rule 5 as clearly regulatory and it was held that it was not necessary for the State to establish quid pro quo. Following was held in paragraphs 8, 9 and 10: 8. The distinction between tax and fee is well settled and need not be restated herein. It is clear from the afore-noticed provisions of the Act and the Rules that the transitory fee is regulatory in nature. The question of quid pro quo is necessary when a fee is compensatory. It is well established that for every fee quid pro quo is not necessary. The transit fee being regulatory, it is not necessary to establish the factum of rendering of service. Thus, there is no question of a levy of transit fee being invalidated on the ground that quid pro quo has not been established. ....
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....ttar Pradesh by Uttar Pradesh Act 23 of 1965 with effect from 23.11.1965 after Sub-section (2) of Section 41 inserted Sub-sections (2A) and (2B) . Sub-section (2A) is as follows: (2A) The State Government may by notification in the Gazette delegate, either unconditionally or subject to such conditions as may be specified in the notification, to any Forest-officer, not below the rank of Conservator, the power to prescribe fees under Clause (c) of Sub-section (2). 166. The State of U.P. in exercise of power Under Section 41 framed Rules, namely, the Uttar Pradesh Transit of Timber and other Forest Produce Rules, 1978. Rule 3 provided for Regulation of transit of forest-produce by means of passes which is to the following effect: 3. Regulation of transit of forest produce by means of passes. - No forest produce shall be moved into, or from, or within, the State of Uttar Pradesh except as hereinafter provided, without a transit pass in the form in Schedule A to these Rules, from an officer of the Forest Department or a person duly authorised by or under these Rules to issue such pass or otherwise than in accordance with the conditions of such pass or by any route o....
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....10 dated 20.10.2010, the fee which was Rs. 38/- for per tonne per lorry load of timber or other forest produce was increased as Rs. 200/- per cubic meter of capacity other than of Khair, Sal and Sagaun (Teak) , Shisham, Sandal Wood and Red Sanders. Then comes to Fifth Amendment Rules, 2011 dated 04.06.2011. Rule 5 was amended where the basis of levy of fee was changed into advalorem at the rate of 5% or minimum Rs. 2,000/- for per lorry load of timber or other than of Khair, Sal and Sagaun (Teak) , Shisham, Sandal Wood and Red Sanders. Relevant extract of Rule 5 as amended by Fifth Amendment is as follows: 169. Before we proceed further with the discussion it is necessary to note the actual impact on Transit Fee of Fourth and Fifth Amendment Rules. We have already noted that initially when Transit Fee Rules were framed in 1978, Transit Fee on per lorry load of timber was Rs. 5 per tonne of capacity. By 3rd amendment with effect from 14.06.2004 Rs. 5/- was increased as Rs. 38 per tonne of capacity. By 4th amendment rules, the Transit Fee was increased as Rs. 200/- per cubic meter with regard to timber, Khair, Sal & Sagaun, Shisham, Sandal wood and Red Sanders and with regard to o....
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....n Transit Fee by 4th & 5th amendment by producing relevant material? (c) Whether by adoption of ad-valorem basis by 5th amendment Rules the Transit Fee no longer remains a fee and has changed into character of a tax? 175. We have already noticed the pronouncement of this Court that for regulatory fee, State is not to prove any quid pro quo. Regulatory Fee can be charged, even if, no services are rendered by the State in lieu of fee realised. This Court in few more cases had occasion to advert to the aforesaid issue which need to be noted. In The State of Maharashtra and Ors. v. Salvation Army, Western India Territory, (1975) 1 SCC 509, this Court had occasion to consider the provisions of Bombay Public Trust Act, 1950 wherein, two per cent contribution was required to be paid to Public Trust Administration Fund. This Court noticed the essential elements to characterise the payment as a fee. In para 14 following was stated: 14...Thus, two elements are essential in order that a payment may be regarded as a fee. In the first place, it must be levied in consideration of certain services which the individuals accept either willingly or unwillingly and in the second ....
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....he amount of the levy as unreasonable and expropriatory or excessive... 178. Thus the issue (a) as noted above, has to be answered holding that although, the State is not required to prove any quid pro quo for levy or increase in fee but a broad correlation has to be established between expenses incurred for Regulation of Transit and the fee realised. 179. The issue (b) that whether State has satisfactorily justified the increase in Transit Fee by Fourth and Fifth Amendment Rules by producing any material has to be answered on the basis of material which has been produced by the State before the High Court and has been adverted to before us by learned senior Counsel Shri Ravindra Srivastava. The submission of learned Counsel for the State is that the High Court has not adverted to the relevant material produced by the State which was filed before the Court by means of a counter affidavit. The above submission is not correct since in para 85 of the judgment, the High Court has noticed the figures which were placed by the State in its affidavit regarding amount of collection of Transit Fee and the expenses incurred by the State on the establishment and other miscellaneous expen....
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....kh in year 2004-05 to 32205.16 lakh in year 2010-11. The license fee/renewal of saw mills and veneer/plywood are thus regulatory in nature and the same has been enhanced with a view to balance and meet the enhanced expenditure being incurred on enforcement/Regulation of the Forest Department.. 182. From the above it is clear that the submission of learned Counsel for writ Petitioners is correct that the expenditure which is claimed by the State as noticed in paragraph 85 of the impugned judgment of the High Court is the expenditure not confined to Regulation of transit but other expenditures of the forest department as well. Thus, the correlation sought to be established by the State on account of transit fee raised and those expenditures as claimed is unfounded and has rightly not been accepted by the High Court. 183. The High Court after considering the stand of the State has held the following in paragraphs 141 and 142: 141....The increase of the transit fees by the 4th Amendment on cubic feet basis and thereafter by impugned 5th Amendment on ad valorem basis on movement of forest produce on the ground that the value of the forest produce has increased, h....
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....tly or indirectly to facilitate the trade or transit of forest produce. There is no averment, nor it is argued by learned Counsel appearing for the State that any facility or services are to be provided or are contemplated for the trade. 185. The High Court thus held, after considering the material brought by the State for increase in transit fee, that increase in transit fee was excessive and the character of the fee has changed from simple regulatory fee to a fee which is for raising revenue. 186. The High Court in para 181 has returned the finding that "The revenue to be generated by the transit fee, would thus be at least 10 times more than the cost in collection of fees." 187. A three-judges Bench in Calcutta Municipal Corporation and Ors. v. Shrey Mercantile (P) Ltd. and Ors. 2005 (4) SCC 245 had considered provisions of Calcutta Municipal Corporation (Taxation) Regulations, 1989 whether levy was made on advalorem basis. The Court examined the issue as to whether such levy is a "fee" or a "tax". The Court held the levy in the nature of tax and also held it arbitrary and discriminatory, violative of Article 14. The following was held in paragraph 16 by the High Court:....
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....hat it is a tax and not a fee. The analysis of the various provisions of the Act and the impugned Regulations shows that the impugned levy is in exercise of power of taxation under the said Act to augment the revenues primarily and not as a part of regulatory measure. 189. Shri Ravindra Srivastava, learned senior Counsel, appearing for the State has submitted that no exception can be taken to the adoption of advalorem basis for imposition of transit fee by means of Fifth Amendment Rules. He submits that when a State is competent to levy fee, what shall be the yardstick of such levy depends on facts of each case and the State can find its own basis for determining the extent of fee. He has relied on three-Judges Bench judgment in P.M. Ashwathanarayana Sefty and Ors. v. State of Karnataka and Ors. 1989 Supp. (1) SCC 696. He submits that this Court in the above case was considering the levy of Court fee under Karnataka Court Fee Valuation Act, 1958. The Court fee was leviable on advalorem basis and the Court proceeded to examine the issue as to whether Court fee can be levied on advalorem basis. This Court in the above case has also held that a fee may shed its complexion as a fee ....
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.... aforesaid imposition as arbitrary and upheld the judgment striking down the above provision. Paragraph 90 to 93 of the judgment are relevant and are extracted below: 90. In the appeal of the State of Maharashtra arising out of the Bombay Court Fees Act, 1959, the High Court has struck down the impugned provisions on the ground that the levy of court fee on proceedings for grant of probate and letters of administration ad valorem without the upper limit prescribed for all other litigants--the court fee in the present case amounts to Rs. 6,14,814 --is discriminatory. The High Court has also held that, there is no intelligible or rational differentia between the two classes of litigation and that having regard to the fact that what is recovered is a fee, the purported classification has no rational nexus to the object. The argument was noticed by the learned Single Judge thus: Petitioners next contend that the impugned Clause discriminates as between different types of suitors and that there is no justification for this discrimination. Plaintiffs who go to civil courts claiming decrees are not required to pay court fees in excess of Rs. 15,000. This is irrespective ....
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....or levy of transit fee was not appropriate and such levy changed the character of fee into a tax which has rightly been so held by the High Court. We are, thus, of the view that the High Court has given cogent and valid reason for striking down the Fourth and Fifth Amendment Rules which decision was rendered by the High Court after elaborate and proper consideration of material brought before the Court after analysing the purpose and object of the imposition of transit fee. We, thus, affirm the judgment of the High Court striking down Fourth and Fifth Amendment Rules. Transfer Petitions 193. This Court vide its order dated 19.11.2012 had already directed the transfer petitions to be heard along with SLP (C) No. 11367 of 2007. The Transfer Petitions, thus, deserve to be decided in terms of the Civil Appeal arising out of SLP (C) No. 11367 of 2007. Contempt Petitions 194. The seven Contempt Petitions have been filed in which notices have not yet been issued. All the Civil Appeals being decided by this order, the contempt petitions deserve to be dismissed. XVIII. Interim orders passed against the judgment of the Allahabad High Court 195. In this batch of appeals in s....
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.... shall be free to recover transit fee in respect of such forest produce at the rate stipulated in the fourth amendment to aforesaid Rule 5. (4) Any such recovery shall remain subject to the ultimate outcome of present petitions pending in this Court. (5) In the event of writ Petitioners/private parties succeeding in their cases, the amount deposited/recovered 27 from them shall be refunded to them with interest @ 9% per annum from the date of deposit till actual refund. (6) The State shall maintain accurate amount of recovery made and the nature/quantity of the produce removed by the private party is concerned. (7) These modified directions shall come into effect on and from 1st May 2016. (8) This modification shall not apply to exempted goods or industrial by-products like Klinker fly ash. 197. This Court directed that State shall be free to recover transit fee within the State of U.P. at the rate stipulated in the Fifth Amendment to Rule 5. 198. The Court also held that such recovery shall remain subject to the ultimate outcome of present cases pending in this Court. With further condition that in the event of writ Petitioners/pr....
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....ith Mineral Transit Pass Regulations, 1996 (hereinafter referred to as 'Regulations, 1996') , which specifically provides for issue of transit pass and charging of fee covers the field and State Government cannot frame any Rule of the present nature effecting the transportation of mineral. Rule 5 of Rules, 2000 as well as Notification dated 28.05.2001 are contrary to Section 41 of Act, 1927. The Act, 1927 being a pre-constitutional statute enacted by the dominion legislature and Act, 1957 being a parliamentary enactment will have overriding effect over the provisions of the earlier statute. The State Government has put the fee on Transit Pass qua tonnage which makes it colourable piece of exercise of power. 202. The State contested the Writ Petition by filing counter-affidavit and contended that the Act, 1927 has been designed to protect and increase the forest wealth and Notification dated 28.05.2001 has been issued in exercise of power under Rule 5 of Rules, 2000, which were framed Under Section 41 of the Act, 1927. The Regulatory Fee is not charged on extraction of mineral and there is no encroachment on the provisions of Act, 1957. The Regulatory Fee is charged only ....
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....ch were pressed before the High Court. It is submitted that even though the Respondent-Petitioners has not filed any Special Leave Petition challenging the judgment of the High Court dated 14.05.2009, they are entitled to urge the grounds which were pressed before the High Court in support of the Writ Petition. 207. It is submitted that Petitioner does not mine coal but buys it from Northern Coal Fields Ltd. or from other coal fields. Petitioner also reimburses the royalty etc on the coal purchased from different coal fields as per the provisions of Act, 1957. The impugned demand is illegal and without jurisdiction as the field is fully occupied by Rules made thereunder. The Transit Fee of Rs. 7 per tonne fixed by Notification dated 28.05.2001 is Transit Fee on minerals which is illegal and without jurisdiction. 208. We have considered the submissions raised by learned Counsel for the parties and perused the record. Before we proceed to consider the submission, it is necessary to notice the finding given by the Division Bench of the High Court in the impugned judgment on various contentions raised before it. The Division Bench of the High Court considered the submission of le....
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....itioners reiterated before us on the basis of Act, 1957 and Rules framed thereunder including Section 4 (1A) and Section 23C of Act, 1957 have already been considered by us, while considering the submission raised with regard to Civil Appeals arising from the judgment of the Allahabad High Court. The above submission having already noted and considered, it needs no repetition here. Hence, submission raised by learned Counsel for the writ Petitioners on the basis of Act, 1957 is thus rejected. 211. Now, we come to the reason on the basis of which Division Bench of the High Court has allowed the Writ Petition by quashing the Notification dated 28.05.2001. The High Court held that the Notification dated 28.05.2001 is contrary to the provisions of Section 41 of the Act, 1927 and the notification transgresses Rule 5 of Rules, 2000 because Rule 5 provides that State Government or an authorised officer by it, from time to time, shall fix the rate of the fee for issue of Transit Pass. The fee is to be issued for issue of Transit Pass and Transit Pass by no stretch of imagination can have any nexus with unit of minerals. Thus in fact, it is a fee pertaining to the minerals and not a fee ....
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....notification has to be lanceted and accordingly we so hold. 212. Whether the above view of the High Court, holding that State could not have asked for payment of fee on Forest Produce on the basis of quantity/volume of the Forest Produce is correct ? We revert back to provision of Section 41 of the Act, 1927. Section 41 empowers the State to make Rules to regulate the transit of Forest Produce. The Rules thus can very well regulate the transit of the Forest Produce. Sub-Section 2 of Section 41 provides that "in particular and without prejudice to the generality of the foregoing provision such Rules may,.... (c) provide for the issue, production and return of such passes and for the payment of fees therefore." Thus, power given to State is to regulate the transit of all timber and other Forest Produce and the Rules may provide for issue of passes and for the payment of fees, therefore, fee for issue of the passes has correlation with the Forest Produce which is clear from the scheme of Rules, 2000. According to Rule 3 no Forest Produce shall move into or outside or within the State of Madhya Pradesh except in the manner as provided without a Transit Pass in Form A, B and C. The F....
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....Rules framed by State of U.P. Under Section 41 of 1927 Act. Rule 5 of the U.P. Transit of Timber and Other Forest Produce Rules, 1978, provided for payment of transit fee on the forest produce calculated on the rates as mentioned therein. High Court had upheld the competence of the State in providing fee as set out in Rule 5 which was noticed by this Court in paragraph 7 of the judgment, which is to the following effect: 7. Having found that the constitutional competence in providing fee as set out in Rule 5 is not lacking, the High Court accepted the challenge to the validity of levy on the ground that the fee is not supported by the principle of quid pro quo. It held that no service is provided in lieu of the fee to any person much less to the person from whom the transit fee is charged. In the view of the High Court, reasonable relationship between the levy of the fee and the services rendered had not been established. 217. High Court although upheld the competence of the State to provide fee but held that fee is not supported by principles of quid pro quo. On that ground transit fee was held to be invalid. The view of the High Court was reversed and this Court held ....
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....wing conclusions: I. (a) The crushing of stones, stone boulders into stone grits, stone chips and stone dust does not result into a new commodity different from forest produce. The crushed materials continue to be stone and retain their nature of forest produce. (b) Coal with its various varieties, limestone, hydrated lime, quick limestone, slake lime, veneer and plywood waste are all forest produce. (c) Marble blocks, marble slabs, marble chips are all forest produce. (d) Flay ash, clinker, synthetic gypsum are not forest produce. Gypsum, however, is a forest produce. II. The Indian Forest Act, 1927 and the Rules framed Under Section 41 are neither overridden nor impliedly repealed, altered or amended by Mines and Minerals (Development and Regulation) Act, 1957 and the Rules framed thereunder. Both the above legislations operate in different spheres and fields. III. The words "brought from" as occurring in Section 2 (4) (b) of 1927 Act means brought from forest from where forest produce has originated. The words 'brought from forest' cannot be read as "brought through forest". We, however, clarify that for an item to be treated as forest produce, its orig....
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....owed. The impugned judgments are set aside and the writ petitions stand dismissed. (2) All the Civil Appeals filed by the State of U.P. against the judgment dated 11.11.2011 and subsequent judgments following judgment dated 11.11.2011 are dismissed. (3) The Civil Appeals filed by the writ Petitioners against the judgment of the Allahabad High Court dated 27.04.2005 and the subsequent judgments following the judgment dated 27.04.2005 as well as the Civil Appeals filed by the writ Petitioners against the judgment dated 11.11.2011 and other subsequent judgments following the judgment dated 11.11.2011 are disposed of in terms of our conclusion as recorded in paragraph 221 (I to VIII) . (4) The transfer petitions are disposed of in terms of our conclusion as recorded in paragraph 221 (I to VIII) and Writ Petition (C) No. 203 of 2009 (M/s. Pappu Coal Master and Ors. v. State of U.P. and Anr.) is also disposed of in terms of our conclusion as recorded in paragraph 221 (I to VIII) . (5) The writ Petitioners from whom the transit fee was realised with effect from 01.05.2016 in accordance with the Fifth Amendment to 1978 Rules shall be entitled to claim for refund along with inte....
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.... Red Sanders or other forest produce Sagaun (Teak), Shisham, Sandal Wood and Red Sanders ΟΙ other forest produce except as mentioned in (i)c) (c) per lorry Advalorem at the load of other rate of 15 % of forest produce minimum Rs.400/- coming from mines, e.g., coal, lime, stone, sand, Bajari, and other minerals. Document 3 Vehicle As per As S TRANSIT FEE CHARGED per As per G. O. dt. As per G. O. Dt. 1978 G.O. Dt. 20.10.2010 Rules 16.04.20 (a) Rs. 200/- per 04.06.2011 Rs. 5/- 04 Rs. Cubic Meter per 38/- per Capacity Ton Ton (b)Rs. Cubic 75/- Per Meter capacity 6 9 Ton 9 Ton x (a) 28.57 Cubic (a) wheele x r 5/- = = Rs. Rs. 5714/- Lorry Ad-Valor at Per Rs. Rs. 38/- Meter x Rs. 200/- load of timber em of Khair, Sal the rate Rs. 342/- 45/- and Sagaun of 5% or (Teek), minimu Shisham, m Rs. Sandal wood 2000/- and Red Sandaers 10-12 15 Ton 15 Ton x 36.50 wheele X Rs. Rs. Cubic (b) Per lorry Ad-valor r 5/- == Rs. 38/- Meter x Rs. 200/- load of timber ....