TaxTMI 
TaxTMI 
2025 (11) TMI 498
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....and Samba directing seizure of vehicles transporting bricks imported from outside the Union Territory of Jammu and Kashmir and imposing penalties under the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010 and the Jammu and Kashmir Brick Kiln (Regulation) Rules, 2017. 02. The petitioners, who are dealers and not manufacturers of bricks contended that the said Act and Rules apply only to brick kiln owners engaged in manufacturing within the Union Territory, and not to dealers dealing in finished bricks imported from other States. They allege that the impugned orders are arbitrary, without jurisdiction, and violative of their fundamental right to trade and commerce under Article 19(1)(g) of the Constitution. 03. The respondents, however, justify the action on the ground that the regulatory framework under the Act covers the entire brick trade, including sale, storage, and transportation, and that the impugned orders were passed to curb illegal and unlicensed trade activities in accordance with law. SUBMISSIONS ON BEHALF OF PETITIONERS 04. Mr. Vikram Sharma, learned senior counsel appearing for the petitioners, submitted that the Jammu and Kashmir Brick Kiln (Regulation)....
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....icense, therefore, Rule 3 of the 2017 Rules is inconsistent with and contrary to the provisions of the parent Act. 09. Mr. Sharma also argued that the petitioners are registered Goods and Services Tax (GST) payers and their trade in bricks is duly regulated under the Goods and Services Tax Act, hence, the imposition of an additional licensing requirement under the Brick Kiln Act would amount to double regulation and violation of Article 19(1)(g) of the Constitution. The impugned orders, therefore, are ultra vires, arbitrary, and deserve to be quashed. SUBMISSIONS ON BEHALF OF THE RESPONDENTS: 10. Per contra, learned Sr. AAG Mrs. Monika Kohli, appearing on behalf of the respondents, at the very outset, referred to paragraph 2 of the petition, wherein the petitioners have specifically admitted that they are dealers operating in various parts of the Union Territory of Jammu and Kashmir and have been engaged in the trade of procurement and sale of building materials, such as iron, construction material, and bricks for several years. In view of this categorical admission, it does not lie in the mouth of the petitioners to contend that they are merely dealers and, therefore, out....
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.... Rules, 2017. The said Rule, she submits, comprehensively encompasses three distinct contingencies, namely, the manufacture, sale, and storage of bricks. Thus, the scope of Rule 3 is not confined solely to manufacturers but extends equally to dealers engaged in the process of manufacturing, selling, offering for sale, storing for sale, or possessing bricks for the purpose of sale or disposal, or for consigning the same to any person for sale or storage. Accordingly, the ambit of Rule 3, by necessary implication, applies both to manufacturers and dealers alike. 16. Upon a specific query from this Court as to whether the restrictions imposed under the impugned orders constitute reasonable restrictions under Article 19(1)(g) as per the constitutional mandate or otherwise, Ms. Kohli submitted that the respondents have not imposed a blanket prohibition upon the petitioners preventing them from importing bricks into the Union Territory, selling them to consumers, or stocking them therein. Rather, the respondents have merely required that such activities be undertaken only upon obtaining a valid license from the competent authority. It is submitted that in the absence of such a license....
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.... valuable assistance in the matter. 21. Mr. Rahul Pant, at the very outset has referred to various statutory provisions including Sections 13, 14, 15, 18, 21, and 22 of the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010, which provide a complete mechanism regarding various aspects of regulation, including fixation of the size and quality of bricks, restrictions on the sale of manufacturers and dealers, as well as provisions relating to the issuance of sale bills and maintenance of accounts. He further referred to the penalty provision contained in Section 21 of the said Act. 22. He also referred to Section 22, which provides that no court shall take cognizance of any offence punishable under the Act except upon a written report of facts constituting such offence made by the Licensing Authority or by any other person duly authorised by the Government in that behalf. 23. Lastly, learned Senior Counsel submitted that, in view of the object and regulatory scheme of the Act and the Rules framed thereunder, the petitioners were required to obtain a valid licence before carrying on the said activity. He contended that the very purpose of the Act and the Rules framed thereund....
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....reflected in its preamble, "to regulate and control the establishment of brick kilns in the Union Territory of Jammu and Kashmir and to provide for matters connected therewith or incidental thereto." The provisions of the Act are thus designed to ensure proper regulation of the brick kiln industry, prevent unauthorized operations, and maintain environmental, economic, and industrial balance. 27. Section 2(e) of the Act defines a "dealer" to mean a person engaged in the business of selling bricks. The very inclusion of this definition indicates that the legislature consciously brought dealers within the ambit of regulation. It reflects the intent that all participants in the brick trade, including dealers, must function under the same regulatory supervision as manufacturers. 28. A reference to Sections 5 and 6 of the Act, which are reproduced below, makes the position clear: Section 5: Appointment of Licensing Authority.- The Government may, by notification in the Government Gazette,- (a) appoint such officers of the Government as it thinks fit to be the licensing authorities for the purposes of this Act; and (b) define the limits within whi....
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....the existing kiln grant of licence for continuous brick manufacturing operations in that kiln, on such conditions (including such conditions as to the improvements to existing machinery, replacement of existing machinery and use of such improved methods of brick manufacturing as may be necessary to eliminate air and water pollution) as may be prescribed. (6) Before granting licence under sub-section (5), the licencing authority shall make or shall cause to be made a full and complete investigation in the prescribed manner in respect of the application having due regard to the following, namely:- (a) the suitability of the locality wherein the proposed kiln is to be established; (b) the number of kilns operating in the area; (c) whether such kiln is not detrimental to the health of general public, habitations, water resources, fauna and flora in close proximity; (d) whether such kiln is proposed to be set up on land which is or was put to agricultural use, save as that the existing brick kilns, if set up on such land, though categorized as "Banjar Kadim", should be relocated within a period of [seven years] and punitive action shall be ta....
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....re, it will not be proper to ascribe to it the meaning which is not consistent with the context of Section 3. It is a matter of common knowledge that the word "or" is at times used to join terms when either one or the other or both are indicated. Section 3 is an empowering section and depending upon the necessity the Government has to appoint Special Judges for an area or areas or case or group of cases. Even in the same area where a Special Judge has already been appointed, a necessity may arise for appointing one more Special Judge for dealing with a particular case or group of cases because of some special features of that case or cases or for some other special reasons. We see no good reason to restrict the power of the Government in this behalf by giving a restricted meaning to the word "or". In our opinion, the word "or" as used in Section 3 would mean that the Government has the power to do either or both the things. Therefore, the first contention raised on behalf of the appellants has to be rejected." 32. The regulatory framework is therefore designed to cover the entire chain from manufacture to sale to safeguard public interest, maintain quality standards, and prevent....
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....e sense, requiring the fulfilment of all the conditions that it joins together, and herein it is the antithesis of or. Sometimes, however, even in such a connection, it is, by force of a contexts, read as "or". Similarly in Maxwell on Interpretation of Statutes, 11th Edn., it has been accepted that "to carry out the intention of the legislature it is occasionally found necessary to read the conjunctions 'or' and 'and' one for the other". 36. It was further contended by the petitioners that the Form 'A' and Form 'B' appended to the Rules to show that the license format is specific to brick kiln owners covering establishment, operation, or recommencement of brick kilns and does not cover dealers. In view of the same, Rule 3 or Section 6 cannot be applied to dealers who are merely importing or selling bricks. 37. Perusal of Forms reveal that there are four forms, i.e., Form 'A', Form 'B', Form 'C', and Form 'D' appended to the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010. While Form 'A' pertains to the license for the establishment of a brick kiln, Form 'B' relates to the license for manufacture, sale, and supply of bricks. Therefore, Form 'B' would also encompass dealers....
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....ommissioners. 42. Rule 4 of the Jammu and Kashmir Brick Kiln (Regulation) Rules, 2017 expressly provides that "for the purpose of section 5 of the Act, the Deputy Commissioner of the concerned District shall exercise the powers of Licensing Authority within their respective territorial jurisdiction." 43. Section 5 of the Act specifically empowers the Government to appoint such officers as it deems fit to act as the Licensing Authority for the purposes of the Act. In exercise of this power, the Government has duly notified the Deputy Commissioners of the respective districts as Licensing Authorities. Once such delegation stands validly made, the Deputy Commissioners are vested with all statutory powers that the Act confers upon the Licensing Authority, including those under Sections 6 and 12 of the Act. For the facility of reference, section 12 of the Act is reproduced hereunder: "12. Power of inspection. - The licensing authority or, any other person authorized by the Government in this behalf shall have the right,- (i) to enter and inspect any brick kiln; (ii) to seize or order the production of any document, books, register or records in the posse....
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....ion of the Deputy Commissioners, being in consonance with Section 12 of the Act and supported by statutory authority, cannot be termed arbitrary or illegal. The impugned directions of the statutory authority of seizure of vehicles and confiscation of bricks besides imposing penalties are, therefore, upheld as lawful measures taken in furtherance of the regulatory object of the Act. 48. Issue 2 is accordingly answered. ISSUE 3. Whether registration under the Goods and Services Tax (GST) Act, 2017 exempt the petitioners from the requirement of licensing under the Brick Kiln Act; 49. The petitioners have sought to draw a parallel between their registration under the Goods and Services Tax Act and the licensing requirement under the Brick Kiln Act, contending that compliance with the former should suffice for carrying on trade. This contention is vitiated by a fundamental misconception of the true nature and object of the two statutes. 50. The Goods and Services Tax (GST) Act is a fiscal enactment concerned with taxation of supplies of goods and services. It regulates revenue collection, not the legality of the trade itself. Licensing statutes, on the other hand, are regula....
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....would lead to an absurd result effectively allowing tax compliance to override statutory prohibitions or public welfare measures. 57. Accordingly, the plea raised by the petitioners that registration under the GST Act, 2017, exempts them from obtaining a licence under the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010, is wholly misconceived and untenable in law. 58. Therefore, the issue No.(III) is answered accordingly in favour of respondents and against petitioners. iv) Whether the writ petition is maintainable in view of the availability of an alternative statutory remedy under the Jammu & Kashmir Brinck Kiln Act, 2010. 59. It is trite law that when a statute provides an efficacious remedy by way of appeal or review, a writ petition should not ordinarily be entertained unless exceptional circumstances exist. The doctrine of exhaustion of remedies is founded upon judicial discipline and respect for legislative intent. 60. Section 20 of the Act makes it clear that any person aggrieved by a decision of the licensing authority may, within a period of thirty days from the date on which the decision is communicated to him, prefer an appeal to Appellate Authority a....
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....for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion" 64. In the present case, the Brick Kiln (Regulation) Act provides for an administrative hierarchy where grievances against licensing decisions can be addressed. The petitioners have neither applied for a licence nor availed any statutory remedy. Instead, they have directly invoked the extraordinary jurisdiction of this Court. The writ petition is thus premature. 65. This Court does not find any extraordinary circumstance warranting interference at this stage. The petitioners have an adequate statutory remedy available to them. Judicial review cannot be used to bypass administrative procedures unless the impugned action is patently without jurisdiction or in violation of natural justice, neither of which is demonstrated here. v) Whether the statutory requirement of obtaining a licence for dealing in bricks infringe the petitioners' fundamental right to carry on trade or business under Article 19(1)(g) of the Co....
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....the making of, any discrimination between one State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule. (2) Nothing in clause (1) shall prevent Parliament from making any law giving, or authorising the giving of, any preference or making, or authorising the making of, any discrimination if it is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India. 71. Article 303(1) of the Constitution commences with a prohibitory clause, providing that neither Parliament nor the Legislature of a State shall have power to make any law giving, or authorising the giving of, any preference to one State over another, or making, or authorising the making of, any discrimination between one State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule. In effect, the Article circumscribes the legislative competence of both Parliament and the State Legislatures to ensure that no enactment in relation to trade and commerce results in preferential treatment or discriminator....
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....ing dealers would frustrate the very object of the Act, rendering it ineffective and encouraging unregulated brick trading operations that evade quality checks, environmental standards, and lawful taxation. 77. Further, the contention of the petitioners that the registration under the Goods and Services Tax Act, 2017, exempts them from the requirement of obtaining a license under the Brick Kiln Act, is misconceived and is hereby rejected. The two enactments operate in distinct spheres while GST registration pertains to fiscal compliance and tax collection, the Brick Kiln Act is a regulatory statute aimed at environmental protection and land use control. Compliance in conformity with one statute does not dispense with the mandatory requirements of another statute operating in a different field. 78. Further, the contention that the said rule is violative of Article 19(1)(g) of the Constitution is not tenable in the eyes of law, in light of the fact that the licensing framework neither prohibits the carrying on of trade nor imposes unreasonable restrictions thereon, rather it merely regulates the same. The conditions prescribed under the Rules are regulatory in nature, intended ....