1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 14874 OF 2017
(ARISING OUT OF SLP(C)No.19445 of 2004)
STATE OF UTTARAKHAND ORS. … APPELLANTS
VERSUS
KUMAON STONE CRUSHER … RESPONDENT
WITH
C.A. No. 14446/2017 @ SLP(C) No.3189/2012
C.A. No. 14448/2017 @ SLP(C) No.1675/2012
C.A. No. 14922/2017 @ SLP(C) No.8713/2008
C.A. No. 14924/2017 @ SLP(C) No.10601/2008
C.A. No. 14923/2017 @ SLP(C) No.9523/2008
C.A. No. 14920/2017 @ SLP(C) No.6959/2008
C.A. No. 14921/2017 @ SLP(C) No.6958/2008
C.A. No. 14452/2017 @ SLP(C) No.950/2012
C.A. No. 14453/2017 @ SLP(C) No.1031/2012
C.A. No. 14464/2017 @ SLP(C) No.948/2012
C.A. No. 14465/2017 @ SLP(C) No.1169/2012
C.A. No. 14468/2017 @ SLP(C) No.1197/2012
C.A. No. 14469-14476/2017 @ SLP(C) No.2213-2220/2012
T.P.(C) No.76/2012
T.P.(C) No.77/2012
C.A. No. 14485/2017 @ SLP(C) No.1697/2012
C.A. No. 14486/2017 @ SLP(C) No.2082/2012
C.A. No. 14492/2017 @ SLP(C) No.2236/2012
C.A. No. 14493/2017 @ SLP(C) No.2081/2012
C.A. No. 14495/2017 @ SLP(C) No.2399/2012
C.A. No. 14497-14509/2017 @ SLP(C) No.3152-3164/2012
C.A. No. 14510-14523/2017 @ SLP(C) No.2938-2951/2012
C.A. No. 13122-13129/2017 @ SLP(C) No.3192-3199/2012
C.A. No. 13300/2017 @ SLP(C) No.1822/2012
C.A. No. 13301/2017 @ SLP(C) No.4832/2012
C.A. No. 13313-13319/2017 @ SLP(C) No.4002-4008/2012
C.A. No. 13320/2017 @ SLP(C) No.6144/2012
C.A. No. 13346-13358/2017 @ SLP(C) No.3512-3524/2012
C.A. No. 13360-13378/2017 @ SLP(C) No.3320-3338/2012
C.A. No. 13386-13395/2017 @ SLP(C) No.3490-3499/2012
C.A. No. 13405-13408/2017 @ SLP(C) No.13019-13022/2012
C.A. No. 13411-13426/2017 @ SLP(C) No.12808-12823/2012
C.A. No. 13448-13463/2017 @ SLP(C) No.3624-3639/2012
C.A. No. 13488/2017 @ SLP(C) No.6822/2012
C.A. No. 13427/2017 @ SLP(C) No.11395/2013
Signature Not Verified C.A. No. 13518/2017 @ SLP(C) No.6614/2012
Digitally signed by
C.A. No. 13542/2017 @ SLP(C) No.6807/2012
BALA PARVATHI
Date: 2017.09.20 C.A. No. 13559/2017 @ SLP(C) No.5965/2012
16:53:17 IST
Reason: C.A. No. 13575/2017 @ SLP(C) No.4761/2012
C.A. No. 13578-13580/2017 @ SLP(C) No.4882-4884/2012
C.A. No. 13602-13605/2017 @ SLP(C) No.6047-6050/2012
C.A. No. 13621/2017 @ SLP(C) No.5911/2012
C.A. No. 13430-13446/2017 @ SLP(C) No.11917-11933/2013
2
C.A. No. 13465-13487/2017 @ SLP(C) No.16261-16283/2013
C.A. No. 13489-13517/2017 @ SLP(C) No.16316-16344/2013
C.A. No. 13627/2017 @ SLP(C) No.6715/2012
C.A. No. 13428/2017 @ SLP(C) No. 21930/2009
C.A. No. 13385/2017 @ SLP(C) No. 12318/2009
C.A. No. 13397/2017 @ SLP(C) No. 12530/2009
C.A. No. 13520-13533/2017 @ SLP(C) No.16285-16298/2013
C.A. No. 13645/2017 @ SLP(C) No.5760/2012
C.A. No. 13675-13699/2017 @ SLP(C) No.6147-6171/2012
C.A. No. 13714-13718/2017 @ SLP(C) No.8991-8995/2012
C.A. No. 13409/2017 @ SLP(C) No. 11846/2009
C.A. No. 13536/2017 @ SLP(C) No.12577/2013
C.A. No. 13741/2017 @ SLP(C) No.6532/2012
C.A. No. 13786/2017 @ SLP(C) No.6588/2012
C.A. No. 13787/2017 @ SLP(C) No.6937/2012
C.A. No. 13788/2017 @ SLP(C) No.5558/2012
C.A. No. 13792-13813/2017 @ SLP(C) No.12967-12988/2012
C.A. No. 13816-13828/2017 @ SLP(C) No.12989-13001/2012
C.A. No. 13829/2017 @ SLP(C) No.7199/2012
C.A. No. 13830/2017 @ SLP(C) No.7702/2012
C.A. No. 13745-13759/2017 @ SLP(C) No.16846-16860/2013
C.A. No. 13935/2017 @ SLP(C) No.8775/2012
C.A. No. 13936/2017 @ SLP(C) No.10499/2012
C.A. No. 13537-13541/2017 @ SLP(C) No.16299-16303/2013
C.A. No. 13937/2017 @ SLP(C) No.7491/2012
C.A. No. 14076-14078/2017 @ SLP(C) No.8465-8467/2012
CONMT.PET.(C)No.199-201/2014 In SLP(C)No.31530-31532/2011
C.A. No. 13760-13770/2017 @ SLP(C) No.2776-2786/2014
C.A. No. 14080-14100/2017 @ SLP(C) No.15501-15521/2012
C.A. No. 14101-14117/2017 @ SLP(C) No.15611-15627/2012
C.A. No. 14118-14132/2017 @ SLP(C) No.15430-15444/2012
C.A. No. 14134-14145/2017 @ SLP(C) No.15405-15416/2012
C.A. No. 13544/2017 @ SLP(C) No.12578/2013
C.A. No. 14146/2017 @ SLP(C) No.12176/2012
C.A. No. 13606/2017 @ SLP(C) No.12657/2014
C.A. No. 14157-14176/2017 @ SLP(C) No.15446-15465/2012
C.A. No. 14178-14190/2017 @ SLP(C) No.16987-17001/2012
C.A. No. 14192-14193/2017 @ SLP(C) No.15543-15544/2012
C.A. No. 14194-14206/2017 @ SLP(C) No.15417-15429/2012
C.A. No. 13545/2017 @ SLP(C) No.13521/2013
C.A. No. 14207-14225/2017 @ SLP(C) No.15466-15484/2012
C.A. No. 14227-14247/2017 @ SLP(C) No.15522-15542/2012
C.A. No. 14249-14264/2017 @ SLP(C) No.15485-15500/2012
C.A. No. 14266/2017 @ SLP(C) No.16970/2012
C.A. No. 14268/2017 @ SLP(C) No.12948/2012
C.A. No. 13622/2017 @ SLP(C) No.12659/2014
C.A. No. 13626/2017 @ SLP(C) No.13683/2014
C.A. No. 13637/2017 @ SLP(C) No.12658/2014
C.A. No. 13646/2017 @ SLP(C) No.12661/2014
C.A. No. 13700/2017 @ SLP(C) No.13684/2014
C.A. No. 14270-14271/2017 @ SLP(C) No.15401-15402/2012
C.A. No. 14274-14275/2017 @ SLP(C) No.15795-15796/2012
C.A. No. 14277-14278/2017 @ SLP(C) No.13776-13777/2012
C.A. No. 14282/2017 @ SLP(C) No.13774/2012
C.A. No. 14147-14148/2017 @ SLP(C) No. 9093-9094/2008
C.A. No. 14284-14291/2017 @ SLP(C) No.15547-15554/2012
C.A. No. 14294-14306/2017 @ SLP(C) No.15591-15603/2012
3
C.A. No. 14307/2017 @ SLP(C) No.14738/2012
C.A. No. 14309/2017 @ SLP(C) No.15804/2012
C.A. No. 14311/2017 @ SLP(C) No.13148/2012
W.P.(C) No.203/2009 (X)
C.A. No. 2797/2008 (III-A)
C.A. No. 14315-14322/2017 @ SLP(C) No.15555-15562/2012
C.A. No. 13771-13780/2017 @ SLP(C) No.11380-11389/2013
C.A. No. 14328-14339/2017 @ SLP(C) No.15571-15582/2012
C.A. No. 14348-14355/2017 @ SLP(C) No.15583-15590/2012
C.A. No. 14357-14364/2017 @ SLP(C) No.15563-15570/2012
C.A. No. 14368-14374/2017 @ SLP(C) No.15604-15610/2012
C.A. No. 14376/2017 @ SLP(C) No.15445/2012
C.A. No. 14378/2017 @ SLP(C) No.16973/2012
C.A. No. 14381/2017 @ SLP(C) No.16972/2012
C.A. No. 14382-14392/2017 @ SLP(C) No.17016-17026
C.A. No. 14393-14404/2017 @ SLP(C) No.17004-17015/2012
C.A. No. 2821/2008
C.A. No. 14406-14407/2017 @ SLP(C) No.15545-15546/2012
C.A. No. 14292/2017 @ SLP(C) No. 15896/2010
C.A. No. 13558/2017 @ SLP(C) No.18661/2013
C.A. No. 14409-14410/2017 @ SLP(C) No.16987-16988/2012
C.A. No. 14414-14423/2017 @ SLP(C) No.16975-16984/2012
C.A. No. 14426-14444/2017 @ SLP(C) No.16951-16969/2012
SLP( C) No.13656/2012 (XI)
C.A. No. 14447/2017 @ SLP(C) No.13640/2012
C.A. No. 14449-14451/2017 @ SLP(C) No.34773-34775/2012
C.A. No. 13574/2017 @ SLP(C) No.18665/2013
C.A. No. 14454-14463/2017 @ SLP(C) No.23589-23598/2012
C.A. No. 14466-14467/2017 @ SLP(C) No.19075-19076/2012
C.A. No. 13576/2017 @ SLP(C) No.18664/2013
C.A. No. 14272/2017 @ SLP(C) No. 11923/2009
C.A. No. 5652/2008
SLP (C) No.15721/2012
C.A. No. 13781/2017 @ SLP(C) No.11392/2013
C.A. No. 14477/2017 @ SLP(C) No.17003/2012
C.A. No. 13379/2017 @ SLP(C) No. 24106/2007
C.A. No. 2739-2762/2008
C.A. No. 14177/2017 @ SLP(C) No. 17666/2008
C.A. No. 14191/2017 @ SLP(C) No. 22322/2008
C.A. No. 14248/2017 @ SLP(C) No. 20675/2008
C.A. No. 14226/2017 @ SLP(C) No. 22629/2008
C.A. No. 2734/2008
C.A. No. 13535/2017 @ SLP(C) No. 18094/2011
C.A. No. 13106-13116/2017 @ SLP(C) No. 26555-26565/2012
C.A. No. 13302-13312/2017 @ SLP(C) No.2812-2822/2014
C.A. No. 13546-13557/2017 @ SLP(C) No. 27709-27720/2012
C.A. No. 13560-13571/2017 @ SLP(C) No. 23599-23610/2012
C.A. No. 14273/2017 @ SLP(C) No. 17572/2009
C.A. No. 2737/2008
C.A. No. 2820/2008
C.A. No. 2706/2008
C.A. No. 13577/2017 @ SLP(C) No.22760/2013
C.A. No. 13464/2017 @ SLP(C) No. 22363/2010
C.A. No. 13447/2017 @ SLP(C) No. 21868/2010
C.A. No. 13321-13344/2017 @ SLP(C) No.2788-2811/2014
C.A. No. 13581-13600/2017 @ SLP(C) No. 24075-24094/2012
C.A. No. 13607-13620/2017 @ SLP(C) No. 23682-23695/2012
4
C.A. No. 2862-2863/2008
C.A. No. 13623-13624/2017 @ SLP(C) No. 21030-21031/2012
C.A. No. 13543/2017 @ SLP(C) No. 26825/2011
C.A. No. 13628-13636/2017 @ SLP(C) No. 24065-24073/2012
C.A. No. 13638-13644/2017 @ SLP(C) No. 26464-26470/2012
C.A. No. 13601/2017 @ SLP(C) No.22761/2013
C.A. No. 13647-13674/2017 @ SLP(C) No. 26610-26637/2012
C.A. No. 13701-13713/2017 @ SLP(C) No. 26662-26674/2012
C.A. No. 13721-13740/2017 @ SLP(C) No. 26639-26658/2012
C.A. No. 13359/2017 @ SLP(C) No. 23547/2005
C.A. No. 2732/2008
C.A. No. 14276/2017 @ SLP(C) No. 18760/2009
C.A. No. 14279/2017 @ SLP(C) No. 18843/2009
C.A. No. 13118/2017 @ SLP(C) No. 26273/2004
C.A. No. 13121/2017 @ SLP(C) No. 24889/2004
C.A. No. 13938/2017 @ SLP(C) No. 27324/2012
C.A. No. 2819/2008
C.A. No. 14265/2017 @ SLP(C) No. 22635/2008
C.A. No. 13939-14074/2017 @ SLP(C) No. 30398-30533/2012
C.A. No. 14267/2017 @ SLP(C) No. 21844/2008
C.A. No. 14269/2017 @ SLP(C) No. 24768/2008
C.A. No. 14079/2017 @ SLP(C) No. 27326/2012
C.A. No. 14133/2017 @ SLP(C) No.17217/2009
C.A. No. 1007/2011 (X)
C.A. No. 14478-14484/2017 @ SLP(C) No.33163-33169/2012
C.A. No. 1008/2011 (X)
C.A. No. 13130/2017 @ SLP(C) No. 2294/2008
C.A. No. 14487-14491/2017 @ SLP(C) No.33170-33174/2012
C.A. No. 14280/2017 @ SLP(C) No. 29725/2009
CONMT.PET.(C)No.585-587/2016 In SLP(C)No.31530-31532/2011
C.A. No. 14494/2017 @ SLP(C) No.30535/2012
C.A. No. 14293/2017 @ SLP(C) No. 27511/2011
C.A. No. 14308/2017 @ SLP(C) No. 27487/2011
C.A. No. 14496/2017 @ SLP(C) No. 32133/2012
C.A. No. 14524/2017 @ SLP(C) No. 34384/2012
C.A. No. 14310/2017 @ SLP(C) No. 27840/2011
C.A. No. 14075/2017 @ SLP(C) No. 32029/2012
C.A. No. 14525-14531/2017 @ SLP(C) No.36975-36981/2012
C.A. No. 14532/2017 @ SLP(C) No.30185/2012
C.A. No. 13719-13720/2017 @ SLP(C) No.34637-34638/2014
C.A. No. 13345/2017@ SLP(C)No.24804/2017@S.L.P.(C)…(CC)No.22596/2015
CONMT.PET.(C) No. 251/2008 In C.A. No. 2797/2008 (III-A)
C.A. No. 14281/2017 @ SLP(C) No. 27771/2009
C.A. No. 13105/2017 @ SLP(C) No. 29549/2016
C.A. No. 14283/2017 @ SLP(C) No. 31868/2009
C.A. No. 14534-14536/2017 @ SLP(C) No.37685-35687/2012
C.A. No. 14537/2017 @ SLP(C) No.37683/2012
C.A. No. 13519/2017 @ SLP(C) No. 33180/2010
C.A. No. 13131/2017 @ SLP(C) No.24803/2017 @ SLP(c)…(CC)22210/2016
C.A. No. 14538/2017 @ SLP(C) No.37576/2012
C.A. No. 13117/2017 @ SLP(C) No. 35807/2016
C.A. No. 1010/2011 (X)
C.A. No. 14312-14314/2017 @ SLP(C) No. 31530-31532/2011
C.A. No. 14323-14326/2017 @ SLP(C) No. 32620-32623/2011
C.A. No. 13398/2017 @ SLP(C) No. 35680/2015
C.A. No. 13410/2017 @ SLP(C) No. 35673/2015
C.A. No. 13429/2017 @ SLP(C) No. 35682/2015
5
C.A. No. 14919/2017 @ SLP(C) No. 6956/2008
C.A. No. 13119/2017 @ SLP(C) No.35813/2016
C.A. No. 13380-13384/2017 @ SLP(C) No.4943-4947/2013
C.A. No. 14327/2017 @ SLP(C) No. 1398/2012
C.A. No. 14340-14347/2017 @ SLP(C) No. 34909-34916/2011
C.A. No. 13396/2017 @ SLP(C) No.4461/2013
C.A. No. 14356/2017 @ SLP(C) No. 36272/2011
C.A. No. 14365-14367/2017 @ SLP(C) No. 134-136/2012
C.A. No. 14375/2017 @ SLP(C) No. 1684/2012
C.A. No. 14377/2017 @ SLP(C) No. 2433/2012
C.A. No. 14379/2017 @ SLP(C) No. 1874/2012
T.P.(C) No. 18/2012
C.A. No. 14380/2017 @ SLP(C) No. 1198/2012
C.A. No. 14405/2017 @ SLP(C) No. 1074/2012
T.P.(C) No. 44/2012
C.A. No. 14408/2017 @ SLP(C) No. 652/2012
C.A. No. 14411/2017 @ SLP(C) No. 738/2012
C.A. No. 14412-14413/2017 @ SLP(C) No. 146-147/2012
C.A. No. 14424-14425/2017 @ SLP(C) No. 877-878/2012
C.A. No. 14445/2017 @ SLP(C) No. 981/2012
C.A. No. 13399-13404/2017 @ SLP(C) No.8204-8209/2013
C.A. No. 13104/2017 @ SLP(C)No. 3457/2016
C.A. No. 2047/2006
J U D G M E N T
ASHOK BHUSHAN, J.
Delay condoned. Leave granted.
2. This batch of cases relates to levy of transit fee.
Transit fee levied by three States, i.e., State of Uttar
Pradesh, State of Uttarakhand and State of Madhya Pradesh
is in question.
3. In exercise of power under Section 41 of Indian Forest
Act , 1927 (hereinafter referred to as “1927 Act) rules
have been framed by different States. State of U.P. has
framed the Rules, namely, the Uttar Pradesh Transit of
Timber other Forest Produce Rules, 1978 (hereinafter
6
referred to as “1978 Rules”). After formation of the
State of Uttarakhand in the year 2000, the above 1978
Rules were also extended by the State of Uttarakhand by
2001 Rules. State of Madhaya Pradesh has framed Rules,
namely, the Madhya Pradesh Transit (Forest Produce)
Rules, 2000(hereinafter referred to as “2000 Rules”).
4. Several writ petitions were filed in the Allahabad
High Court, Uttarakhand High Court and High Court of
Madhya Pradesh challenging the levy of transit fee,
validity of transit fee Rules and for other reliefs. The
writ petitions filed by the writ petitioners were allowed
by the Uttarakhand High Court whereas Allahabad High
Court dismissed some writ petitions and allowed others.
The Madhya Pradesh High Court has allowed the writ
petitions by a common judgment dated 14.05.2007. The
State of Uttarakhand and State of Uttar Pradesh has filed
SLPs, in which leave has 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
7
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 of appeals has been filed by
the State of Madhya Pradesh against the judgment dated
14.05.2007 by which writ petitions filed by the writ
petitioners in the Madhya Pradesh High Court have been
8
allowed quashing the notification fixing the transit fee
and directing for refund of the transit fee.
6. For comprehending the issues which have come for
consideration in this batch of appeals, we shall first
notice the facts in some of the writ petitions which have
been decided by three High Courts, i.e., Uttarakhand,
Allahabad and Madhya Pradesh.
7. The parties shall be hereinafter referred to as
described in the writ petitions filed before the High
Court.
FACTS
I. CIVIL APPEALS ARISING OUT OF JUDGMENTS OF UTTARAKHAND
HIGH COURT.
8. There are nineteen appeals arising out of judgments
rendered by Uttarakhand High Court. There are only three
main judgments rendered by Division Bench of the High
Court which have been followed in other cases. It is
thus necessary to note the facts giving rise to above
mentioned three judgments.
(1) Judgment dated 01.07.2004 in Writ Petition No.
1124 (MB) of 2001, M/s Kumaon Stone Crusher vs.
9
State of U.P. Ors.
[Giving rise to Civil Appeal (arising out of SLP
No. 19445 of 2004, State of Uttaranchal Ors.
vs. State of Kumaon Stone Crusher and Civil Appeal
(arising out of SLP No. 26273 of 2004, the State of U.
P. Ors. vs. M/s. Kumaon Stone Crusher.]
9. M/s Kumaon Stone Crusher filed a writ petition
praying for quashing the order dated 14.06.1999 issued by
Conservator of Forest and order dated 01.06.1999 issued
by Divisional Forest Officer directing for making
recovery and levy of Transit Fee upon the finished item
of stone i.e. stone grits, stone chips etc from the writ
petitioner. Petitioners case was that its stone crusher
which collects the boulders from the bank of Sharda
River, which is a Forest Produce, Transit Fee is charged
and paid. After taking the boulders to the crushing
centre and involving manufacturing process, boulders are
converted into the commercial commodity, namely, stone
grits and chips. It is pleaded that after it becomes a
commercial commodity, it ceases to be as Forest Produce
and no Transit Fee can be charged and recovered
thereafter.
10. The Division Bench vide its judgment dated
10
01.07.2004 allowed the writ petition and quashed the
orders dated 14.03.1999 and 21.06.1999. Both 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 Company vs. 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
11
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 holding that after river bed
material is converted into the Washed Single Pea Gravel
and Bajri after involving manufacturing process, a new
commercial commodity comes into existence and same ceases
to be a Forest Produce. High Court allowed the writ
petition holding that no Transit Fee can be realised. It
was further observed that even if, same is treated as
Forest Produce, Transit Fee can not be realised twice on
the same material under 1978 Rules. Both State of U.P.
and Uttarakhand had filed Civil Appeals against the
aforesaid judgment.
(3) Judgment dated 26.06.2007 in Writ Petition No.
993 of 2004, M/s Gupta Builders vs. State of
Uttaranchal Ors.
13. The writ petitioner in the writ petition has prayed
for issuing a writ of certiorari, quashing 1978 Rules
as applicable in State of Uttaranchal (now Uttarakhand)
12
so far the 1978 Rules provides for Transit Pass and
Transit Fee for boulders, sand and bajri, further not to
enforce 1978 Rules as amended by the State of U.P. vide
amendment Rules 2004.
14. Writ Petitioner, a Registered Partnership Firm was
engaged in the business of purchase sale of natural
stones, boulders, sand bajri and supplying the same to
the various Government Departments including PWD. Writ
Petitioner purchased boulders, sand, bajri from the Kol
river bed from Uttaranchal Forest Development Corporation
which is lessee. Writ Petitioner makes payment of royalty
and other charges to the lessee. The Uttar Pradesh Minor
Minerals (Concession) Rules, 1963 (hereinafter referred
to as ‘Rules, 1963’) has been adopted by the State of
Uttarakhand, as Uttaranchal Minor Minerals (Concession)
Rules, 2001(hereinafter referred to as ‘Rules, 2001’).
Uttaranchal Forest Development Corporation issues Form
MM11 to the writ petitioner.
15. Writ Petitioner pleaded that since royalty and other
charges are being paid in accordance with the minor
13
mineral rules framed under the Mines and Minerals
(Development Regulation) Act, 1957 (hereinafter
referred to as ‘MMDR Act, 1957′), no Transit Fee can be
levied on the writ petitioner. The High Court allowed the
writ petition holding that Transit Fee under Rules, 1978
can not be applicable on the transit of minor minerals.
The levy of Transit Fee was held to be illegal.
16. Following the aforesaid judgment dated 26.06.2007
several other writ petitions were decided giving rise 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
14
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.27392762 OF 2008
(KUMAR STONE WORKS Ors. VS. STATE OF U.P. ORS.)
(arising out of judgment dated 27.04.2005 in Writ
Petition No.975 of 2004, Kumar Stone Works Others vs.
State of U.P. Ors.)
19. Several writ petitions were filed challenging the
realisation of transit fee on transport of stone chips,
stone grit, stone ballast, sand, morrum, coal, lime
stone, dolomite etc. The writ petitioners have also
challenged the validity of notification dated 14.06.2004
by which 1978 Rules were amended increasing the transit
fee from Rs.5/ to Rs.38/ per tonne of lorry load of
timber and other forest produce. By judgment dated
15
27.04.2005 bunch of writ petitions was decided consisting
of petitions dealing with different materials. The High
Court in its judgment has noticed details of few of the
writ petitions facts of only leading petition which need
to be briefly referred:
20. Writ Petition No.975 of 2004, which was stated to be
leading writ petition:
Petitioners have been granted mining lease by the
District Magistrate, Sonebhadra, for excavation of
boulders, rocks, sand and morrum in the District of
Sonebhadra from the plots situated on the land owned by
the State Government which do not come within any forest
area. The petitioners’ case was that they do not carry
any mining operation in the forest area. After excavation
they transport the goods from the site to the destination
by truck. The petitioners convert the stone and boulder
into Gitti. It was further pleaded that while
transporting the goods, they do not pass through the
forest area and they are not using any forest road for
the purpose of transportation of their goods. They pay
16
royalty to the State Government under the provisions of
the U.P. Minor Minerals (Concession) Rules, 1963. The
State’s case was that the petitioners are procuring the
grit, boulder etc. from the land of village Billi
Markundi notified under Section 4 of the Indian Forest
Act, 1927. The petitioners are carrying out mining
operations in the forest land. With regard to some of the
petitioners it was alleged that they are carrying
business in the area which had already been notified as
forest area under Section 4 of 1927 Act. It was pleaded
by the State that grit, boulder etc. are being procured
and transported from the forest which are the forest
produce. The Transit Rules, 1978 has already been upheld
by this Court.
21. The Division Bench after hearing the parties
dismissed all the writ petitions holding the liability of
the petitioners to pay transit fee. The High Court held
that validity of the Rules have already been upheld by
this Court in State of U.P. vs. Sitapur Packing Wood
Suppliers, 2002 (4) SCC 566. The Court upheld the 2004
Amendment. The High Court also held that the words
17
“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. Ors. vs. M/s. Ajay Trading
(Coal)Co. Ors.
(arising out of the judgment dated 11/21.11.2011) in Writ
Petition No.963 of 2011 M/s. Ajay Trading (Coal)Co.
Ors. vs. State U.P. Ors.)
23. By judgment dated 11.11.2011, two batches of writ
petitions were decided. First batch consisted of Writ
(Tax) No.327 of 2008(NTPC Limited another vs. State of
U.P. and others) and other connected matters and second
18
batch consisted of Writ (Tax) No.963 of 2011 (M/s. Ajay
Trading (Coal) Co. and others vs. State of U.P. Ors.).
24. The first group of writ petitions of which Writ (Tax)
No.327 of 2008 was treated as leading writ petition, was
filed against the imposition of transit fee on the
transportation of soil(mitti) and coal. NTPC Limited is
a Government of India undertaking engaged in generation
of electricity in its various units, one of them being
Singrauli Super Thermal Power Station at Shakti Nagar,
District Sonebhadra which is a Coal Based Thermal Power
Station. For disposal of fly ash, soil is excavated from
nonforest areas and it is transported by the route,
which does not fall within the forest area. The
Divisional Forest Officer has demanded transit fee on
transportation of soil. By amendments the petitioners
were also permitted to challenge Fourth and Fifth
Amendment Rules, 1978.
25. The second group of writ petitions of which Writ
(Tax) No.963 of 2011(M/s. Ajay Trading((Coal) Co. and
others vs. State of U.P. ors.) was treated as leading
petition. That petitioners are incorporated as Public
19
Limited Co./Private Lt. Co./Proprietor Firm Manufacturers
and Traders of goods made of forest produce, the miners,
as transporters of forest produce who challenged the
applicability of Indian Forest Act, 1927 on mines and
minerals and other forest produce. The validity of Fourth
and Fifth Amendment Rules by which transit fee was
increased was also challenged. Both the above batch of
writ petitions consisted of a large number of writ
petitions dealing with various materials raising various
facts and grounds, some common and some different.
26. The Division Bench by its judgment dated 11.11.2011
has set aside the Fourth and Fifth Amendment Rules
increasing the transit fee. The Court recorded its
conclusion in paragraph 187 of the judgment on various
submissions raised by the learned counsel for the parties
before it.
27. The claim of various writ petitioners that they are
not liable to pay transit fee was, however, not accepted.
Aggrieved against the judgment dated 11.11.2011 in so far
as it struck down Fourth and Fifth Amendment Rules, the
State of U.P. has come up in appeals whereas writ
20
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 by their factories. Stone
crusher, dealers who are crushing the minerals and
21
transporting finished materials, all these petitioners
denied their liability to pay transit fee.
Petitioners claim that the stone ballasts and grit,
boulders etc. are minerals which are covered under MMDR
Act, 1957 and no transit fee can be charged under 1978
Rules. Some of the petitioners say that they are
transporting the minerals through State and National
Highways by paying toll tax. Petitioners further state
that the transit fee is charged twice that is on raw
material as well as on finished goods which is not
permissible. Check posts have been put on State and
National Highways which are illegal.
Group(B) Petitioners in this group deal with coal/
hard coke/coal briquettes /softcoke /cinder (rejected
coke). Petitioners claim that coal is not forest produce
and it is governed by various Parliamentary Acts which
covers the field. Petitioners further pleaded that they
are not mining coal from forest area rather they are
purchasing from Coal India Ltd. after payment of
necessary expenses. They are not using any forest land
and rather are using State and National highways and PWD
22
roads. Some petitioners obtained coal from a company or
dealer by paying necessary charges. The petitioner is
using U.P. roads as a passage only and going out of State
of U.P. that is to Delhi and Haryana. Some petitioners
also rely on exemption notification dated 29.03.2010.
Group(C) This group consisted of limestone, calcium
hydroxide, marble, calcium oxide, dolomite, pawdis, etc.
Petitioners claim that the aforesaid items are not forest
produce. They further pleaded that they are using State
and National highways as well as PWD roads and not using
any forest road. They further pleaded that twice transit
fee is charged, firstly on raw material and secondly on
the finished products by Fourth and Fifth Amendment.
Group(D) This group consists of petitioners who are
dealers in plywood, imported timber/wood, bamboo, veneer,
waste of plywoods, wood charcoal. Petitioners claim that
they are not passing through forest area in U.P. They are
not transporting any forest produce rather are
transporting finished goods. Petitioners are purchasing
timber which is coming out of the country.
Group(E) This group consists of petitioners dealing
23
in fly ash, clinkers and gypsum. Petitioners claim to
obtain the aforesaid material by manufacturing process.
Petitioners claim that the 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 vs. State of
U.P. 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.3490934916 of 2012 (M./s. Anand
Coal Agency Ors. etc.etc. vs. State of U.P. Ors.
etc.etc.). The writ petitionersappellants 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
24
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
schedule minerals is exclusively subject matter of MMDR
Act.
30. Another case in this context is Civil Appeal arising
out of SLP(C)No.981 of 2012 (Lanco Anpara Power Ltd. vs.
State of U.P. Ors.). The writ petitionerappellant is a
Company carrying on the business in generation,
distribution and sale of electricity in the State of U.P.
Transit fee is charged on transportation of coal from the
colliery to the thermal power unit of the petitioner at
Anpara. The petitioner contends that condition precedent
for applicability of transit fee with regard to forest
produce as referred to in Section 2(4)(b)(iv) is that
genesis of the produce in question must be traceable to
forest. In the present, coal brought by the petitioner
does not owe its genesis to a forest. The transit fee
thus cannot be levied.
31. In group ‘C’, one of the cases is Civil Appeal
arising out of SLP(C)No.36272 of 2011 (Agra Stone Traders
25
Association Ors. vs. State of U.P. Ors., the writ
petitionersappellants are engaged in the business of
purchasing and selling of marbles, marbles goods, marble
chips, stone chips, stone powder, dolomite, limestone
chips and pawdis from the State Rajasthan, Madhya
Pradesh, Karnataka, Andhra Pradesh, Orissa, etc. from
various wholesale shopkeepers, industries/factories
situated in the above said States. After purchasing the
above said materials/finished goods the same are
transported by them within the State of U.P. for sale to
the consumers from the shops of the writ petitioners. The
above materials are not directly transported from mines
nor the same are in original form of mines and minerals.
The petitioners have all necessary passes and invoices
from different States. However, when petitioners’
vehicles enter into the State of U.P. transit fee is
being charged under 1978 Rules. The petitioners denied
their liability to pay transit fee.
32. One of such cases is Civil Appeal No.1697 of 2012
(M/s. Aditya Birla Chemicals (India) Limited vs. State of
U.P. Ors.). The writ petitionerappellant is a public
26
limited company who is engaged in the business of
manufacture of chemicals and uses calcium hydroxide and
calcium oxide. The petitioner pleads that calcium
hydroxide is manufactured by treating lime with water at
a particular temperature and calcium oxide is made by
thermal decomposition of materials such as limestone,
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 Anr. vs. State of U.P. Ors.), the writ
petitionerappellant 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
27
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 pass through any forest
road. The waste of plywood and veneer is neither timber
nor any kind of forest produce. They are products of
human/mechanical effort and labour and a result of a
manufacturing process. There is no liability to pay
transit fee on the above items.
34. In group ‘E’, one of the cases is Civil Appeal
arising out of SLP(C)No.5760 of 2012 (Ambuja Cements
Limited vs. State of U.P. Ors.). The writ
petitionerappellant is an ISO Co. for manufacturing of
cement. The fly ash (a by product of Thermal Power
Plants, purchased by the petitioners); and gypsum (a raw
material used in the manufacture of cement and purchased
by the petitioner) and clinker is not a forest produce.
Clinker/fly ash is an industrial produced and cannot fall
28
in the ambit of forest produce as defined under Section
2(4) of 1927 Act. The manufacture of clinker comprises of
two stages. In stage one raw material like lime stone,
clay, bauxite, iron ore and sand are mixed in specific
proportion and raw mix is obtained and in stage second
the raw material is fed into kiln whereby at high
temperature, chemical reaction occurs and the product
obtained is ‘alite’ which is commercially sold as
clinker. The petitioner though was not a party in the
writ petition before the High Court but has filed the SLP
with the permission of the Court granted on 10.02.2012.
III. TRANSFER PETITIONS
35. Transfer Petition No.18 of 2012 has been filed under
Article 139A for transferring the Writ Petition No.40 of
2000 pending in the High Court of Judicature at
Allahabad. The writ petitioner is engaged in business of
manufacturing and dealing in aluminium and semis.
Hindalco owns and operates the Aluminium plant at
Renukoot and captive thermal power plant is at Renusagar.
Hindalco uses both bauxite and coal in the production of
aluminium.
29
36. In December, 1999, the State of U.P. demanded transit
fee on transport of minerals (bauxite and coal).
Aggrieved thereby Writ Petition(C) No 40 of 2000 was
filed. An Interim order was passed on 18.01.2000
restraining forest department from charging transit fee.
This interim order continued till 29.10.2013 when this
court passed detailed interim order.
37. The petitioner’s case is that in SLP(C) No.11367 of
2007, Kanhaiya Singh Anr. Versus State of U.P., the
same question is engaging attention of this Court, hence,
the Writ 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
30
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 transferred and heard along
with SLP(C) No.11367 of 2007.
40. Transfer Petition No.76 of 2012 has been filed by
Aditya Birla Chemicals (India) Ltd. for transfer of Writ
Petition no.101 of 2008 pending in the Allahabad High
Court. The Petitioner is engaged in the business of
manufacturing and sale of chemicals, casting soda,
bleaching powder, sodium chloride etc. at its factory
situated at Renukoot, District Sonebhadra. For continuous
31
supply of power to the manufacturing unit petitioner has
set up coal based thermal power plant at Renusagar. Fly
ash is generated from thermal power plant which needs to
be disposed of. Petitioner made available the fly ash to
seven cement industries free of cost. The petitioner
maintained its own roads which is connecting National
Highway No. 76E which goes one side to Madhya Pradesh and
to Mirzapur on other side. From November 2007, forest
department of U.P. Started demanded transit fee on supply
of fly ash. After filing the Writ petition the various
developments took place including decisions of bunch of
writ petitions of 11.11.2011.
41. The petitioner case is that similar issues are
pending in SLP(C) No.11367 of 2007 and Writ Petition be
transferred and heard along with the aforesaid Special
Leave Petition. This Court in all the above three
Transfer Petitions, on 19.11.2012 passed an order to
take up these matters along with the SLP(C) No.11367 of
2007.
IV. CONTEMPT PETITIONS
32
42. Contempt Petition No.251 of 2008 in I.A.No.7 of 2008
in Civil Appeal No.2797 of 2008, the members of
applicants association are plying public transport truck
carrying minor minerals like boulders, sand, stone, dust,
etc. Trucks do not enter into any forest area or do not
uses any forest road. In C.A.No.2797 of 2008 an interim
order was passed by this court directing that there shall
be stay of demand by way of transit fee in the meantime.
Applicants case is that the applicant’s association has
also been impleaded in C.A. No. 2797 of 2008. It is
pleaded that despite the knowledge of interim order of
this court the respondent at different check posts are
demanding transit fee. Prayer has been made to issue Show
Cause Notice and initiate contempt proceedings. No Notice
has been issued in the contempt proceeding as yet.
43. Contempt Petition(C) No.199201 of 2014 in SLP(C)
No.31530 of 2011 and other two Special Leave Petitions.
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
33
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 Ors. vs. State of U.P. 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 Appeal arising out of
SLP(C)No.6956 of 2008 has been filed against the common
judgment rendered in six writ petitions which also
34
included Writ Petition No.2309 of 2002 (Northern
Coalfields Limited vs. State of Madhya Pradesh and ors.
46. The writ petitionersNorthern Coalfields Limited is
engaged in excavation and sale of coal. The State of M.P.
framed M.P. Transit (Forest Produce) Rules, 2000 for
imposing transit fee. The writ petitioner pleaded in the
writ petition that the State of M.P. has no legislative
competence for imposing any tax on coal. It was further
pleaded that fee can be imposed only if there is any quid
pro quo between the services rendered and fee charged.
Notification dated 28.05.2001 issued by the State of M.P.
fixing fee of Rs.7/ per metric tonne was challenged.
Following reliefs were sought in the writ petition:
“i) Issue on appropriate writ/writs,
order/orders, direction/directions to
quash the authorisation of imposing
transit passes on movement of coal under
M.P. Transit pass (Forest Rule) 2000
ANNEXUREP/1.
ii) To quash the fixation of rates of
fees for issuance of transit passes
ANNEXUREP/2.
iii) To quash the demand for payment of
fees for transit of coal ANNEXUREP/3
iv) To grant such other appropriate
35
relief as deemed and fit and proper in
the facts and circumstances of the case.”
47. More or less similar reliefs were claimed in the
other writ petitions before the M.P. High Court. In some
of the writ petitions prayer was also made for issuing
writ of mandamus declaring Section 2(4)(b)(iv) and
Section 41 of the 1927 Act as unconstitutional and ultra
vires to the extent it relates to minerals. Prayer was
also made to declare M.P. Transit (Forest Produce) Rules,
2000 and notification dated 28.05.2001 as ultra vires to
the power of the State under 1927 Act.
48. Counteraffidavit was filed by the State contending
that as per Section 41 of 1927 Act, the State is
conferred with a power to make rules to regulate the
transit of all timer and other forestproduce.
49. The High Court after hearing the parties and
considering the submissions by the impugned judgment
quashed the notification dated 28.05.2001 by which fee of
Rs.7/ was fixed. The High Court also directed refund of
the amount in a phased manner with a period of five
years. Aggrieved by the judgment dated 14.05.2001 the
36
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 vs. 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
37
submitted that the mere fact that royalty has been paid
by the writ petitioners in accordance with the Uttar
Pradesh Minor Minerals (Concession) Rules, 1963 as
adopted in Uttarakhand by Uttarakhand Minor Minerals
(Concession) Rules, 2001 shall have no effect on the
entitlement of the State to levy transit fee. The
judgment of the High Court that no transit fee can be
levied on the minerals is erroneous. It is further
submitted that the High Court erred in adopting a very
restrictive meaning of word ‘forest’ whereas the forest
has to be understood in a wide sense. It is contended
that Forest Act, 1927 and MMDR Act, 1957 operate in
different fields. In so far as the case of the writ
petitioners is that transit fee is being charged for
second transit also. It is submitted that transit pass
has its destination and after it reaches its destination,
the pass comes to an end, the transit fee can be validly
charged.
53. Replying the above submission of State, learned
counsel for writ petitioners submits that main challenge
in the writ petitions filed by petitioners was that no
38
Transit Fee can be levied on finished products from the
stone crusher. It is contended that river bed materials
i.e. boulders and bajri by applying mechanical process
are converted into small size stone grits, chips and dust
which become a commercial commodity and ceases to be a
Forest Produce therefore no Transit Fee can be charged.
It is further contended that in Section 2(4)(b) of the
1927 Act the words ‘found in’ and ‘brought from’ are
qualified by word ‘when’, which denotes the time factor.
The word ‘when’ signifies that the item while leaving the
forest is in continuous process of transit from the point
where it is said to be found in. But once, the continuous
transit of forest produce terminates at any point of
place which is not a forest item included in Clause B(4)
(2), shall cease to be a Forest Produce and further
transit of such material being material not brought from
forest shall not attract tax under Section 41 of Act,
1927.
54. The stone or sand which is in its primary or
dominantly primary state is subjected to a manufacturing
process for making it marketable product, which is not a
39
Forest Produce. Act, 1927 does not provide for any
definition of term ‘Manufacturing Process’. The term
‘Manufacturing Process’ is to be given a liberal
interpretation. The process of stone crushing have to be
held to be Manufacturing Process. It is further 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
40
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 that in the stone crusher,
factories, boulders and stones obtained from different
mining lessees are subjected to a process by which
different items are formed thereby losing their
character of Forest Produce. Several other materials
like lime stone, fly ash, clinker, calcium hydrooxide
and calcium oxide, cinder, gypsum are also obtained
after undergoing a manufacturing process, which are no
longer a forest produce. Another group of petitioners
who deal with marble stone, stone slabs and tiles also
raise similar submission that marble slabs are finished
goods which are different from Forest Produce and no
Transit Fee can be demanded.
(b)Another group of petitioners who deal with in
41
veneer, plywood also claimed that after undergoing
manufacturing process veneer and plywood are no longer
a Forest Produce hence, no Transit Fee can be charged.
Last category of articles for which nonleviability of
transit fee is claimed comprises of coal, hard coke,
finished coal, coal briquettes, softcoke. With regard
to coal it is submitted that coal is not a Forest
Produce at all, since it is obtained from collieries
which are not in forest. It is further submitted that
in view of Mines and Minerals (Development
Regulation) Act, 1957 (hereinafter referred to as ‘MMDR
Act, 1957) and Coal Bearing Areas (Acquisition
Development) Act, 1957, the regulation of coal is
outside the Indian Forest Act, 1927 (hereinafter
referred to as ‘Act, 1927’).
(c)The above submissions of writ petitioners have
been refuted by learned counsel appearing for State of
U.P. and State of Uttarakhand. It is submitted that
stone boulders and stone ballasts after being subjected
to crushing by which stone grits, sand grits chips
are obtained, does not in any manner change the nature
42
of product. Stone grits, sand grits chips obtained
after crushing are still a Forest Produce on which
Transit Fee is charged. Accepting the aforesaid
argument will lead to a situation where State shall
lose its regulatory power on Forest Produce on mere
facial change of the Forest Produce. With regard to
other articles the State has refuted the submission and
it is submitted that all the articles claimed by the
writ petitioners are Forest Produce which are subject
to Transit Fee.
(d)With regard to parliamentary enactments relating
to coal as claimed by the writ petitioners, it 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
43
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 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 reference to Entry 54 of
List I of Seventh Schedule of the Constitution of India.
It relates to regulation of mines and the development of
minerals to the extent to which such regulation and
development under the control of the Union is declared by
the Parliament by law. The legislative competency of the
State with regard to mines and minerals development is
contained in Entry 23 of List II which Entry is subject
44
to provisions of List I with respect of mines and
minerals development under the control of the Union of
India. It is submitted that in so far as transit fee on
minerals is concerned, the entire field is covered by
1957 Act wherein there is a declaration by the Parliament
that Union shall take under its control the regulation of
mines and the development of minerals to the extent
provided therein. The entire regulation of minerals
including its transport being covered under 1957 Act, the
State is denuded of any jurisdiction to legislate. It
is further contended that 1957 Act is a special enactment
which shall override the 1927 Act which is a general
enactment. It is further contended that provisions of
1978 Rules and the provisions of Section 41 of Forest
Act, due to the repugnancy to the provisions of 1957 Act
shall stand overridden. The transit and transportation of
minerals is an integral part of regulation and
development of minerals and the Parliament having
unequivocally enacted the law it is to occupy the entire
field regarding the transit and transportation of
minerals and development of mines. No other law can
45
trench upon occupied field. The provision of Forest Act,
1927 including Section 41 and Transit Fee Rules, 1978
framed thereunder shall stand impliedly repealed after
enactment of 1957 Act, especially after insertion of
Section 4(1A) and Section 23C by Act 38 of 1999 with
effect from 18.12.1999.
(b)Learned counsel for the State refuting the above
submissions contends that repugnancy between a
parliamentary statute and a statute of State
legislature arises when the two laws operate in the
same field, they collide with each other. It is
submitted that subject matters of 1927 Act and 1957 Act
are distinct and different. In 1927 Act provisions
relating to transport of forest produce is only
incidental and ancillary in nature. The object of two
legislations is entirely different. Forest Act, 1927
comprehensively deals with forest and forest 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
46
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 Court in Kumar Stone Works and others by
its judgment dated 27.04.2005 has misinterpreted the
words ”brought from” as contained in Section 2(4)(b) of
47
1927 Act. It is submitted that there is no issue with
regard to the words ”found in”. The words “found in”
clearly mean found in a forest. The word “when” signifies
the physical presence of the item. The word ‘when’ also
qualifies the words “brought from a forest”. Thus when a
forest produce is brought from a forest, the things
mentioned in subclause (1) of subsection (4) of Section
2 will be treated as forest produce. The thrust of the
submission is that the words ‘brought from forest’, mean
that the forest produce originated from forest. For any
produce to be forest to be brought from forest means it
is starting point of transit and not in transit. The
Division Bench of the High Court in its judgment dated
27.04.2005 erred in equating the words “brought from
forest” as “brought through forest”. The High Court has
held that even forest produce passes through forest area
it shall be liable to payment of transit fee.
(b)It is further submitted by the learned counsel
for the writ petitioners that in fact the Division Bench
of the Allahabad High Court wide its order dated
04.03.2008 in M/s. Nagarjuna Construction Ltd. has
48
already expressed its disagreement with the Division
Bench judgment in Kumar Stone Works and others v. State
of U.P. and others, 2005 (3) AWC 2177, and referred
following two questions for consideration of the larger
Bench:
(i) Whether the words ‘brought from’
used in section 2(4)(b) of the
Indian Forest Act would cover such
items mentioned in subclauses (i)
to (iv) of Section 2(4) (b) which
though did not have origin in the
forest but they are transported
through a forest?
(ii) Whether the interpretation of the
words ‘brought from’ given by
Division Bench in Kumar Stones
Case(Supra) is correct? Let the
papers be placed before the
Hon’ble Chief Justice for
appropriate orders.”
(c)It is submitted that the Division Bench of
Allahabad High Court while delivering the judgment dated
11.11.2011 although noticed that the above questions have
been referred to for consideration of a larger Bench did
not await the judgment of larger Bench rather chose to
follow the Division Bench judgment in Kumar Stone Works.
(d)Learned counsel for the State has refuted the
49
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
expensive definition of forest when it held that the
50
forest has to be understood as a large track of land
covered with trees and undergrowth usually of
considerable extent, on the principles of sound
ecological and scientific basis reflecting sociological
concerns. Learned counsel for the petitioners submits
that the definition of forest as adopted by the Division
Bench of Uttarakhand High Court in M/s. Gupta Builders in
Writ Petition No.993 of 2004 giving rise to C.A.No. 1008
of 2011(State of Uttar Pradesh vs. M/s. Gupta Builders
Ors.) is a correct definition of forest. It is submitted
that Uttarakhand High Court has rightly adopted a
restrictive meaning of forest in the Forest Act, 1927.
(b)The above submission of learned counsel for the
petitioners is opposed by the State of U.P. It is
submitted by learned senior counsel that the word
‘forest’ has to be understood broadly and the definition
of forest as given by this Court in T.N. Godavarman
Thirumulkpad vs. Union of India and others, 1997 (2) SCC
267, is to be followed and the Division Bench in its
judgment dated 11.11.2011 has correctly interpreted the
word ‘forest’.
51
(v) (a)Some of the writ petitioners have submitted that
although they are not passing through any forest but
still transit fee is charged by the State on the ground
that several State highways, PWD roads and several roads
have been declared protected forests by the State of U.P.
by issuing notification under the provisions of 1927 Act.
It is submitted that passing through National highways
and State highways cannot be treated akin to passing from
any kind of forest so as to attract leviability of
transit fee.
(b)Learned Additional Advocate General for the
State of U.P. submits that the roads from which the
petitioners claim to have passed are roads which have
been declared as protected forests. Hence, forest
produces transiting from the above roads are liable to
pay transit fee. In support of his submission he refers
to notification dated 10.02.1960 issued under proviso
to subsection (3) of Section 29 as well as Section 80A
of 1927 Act.
(vi) (a)One of the submissions raised by learned
counsel for the petitioner is that Rule 3 read with
52
Schedule A of 1978 Rules is totally independent of Rule
5 and same has no correlation with each other. Rule 3
and Schedule A nowhere contemplates or has a column
prescribing 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
53
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 of West Bengal vs. Keshoram Industries and ors,
(2004) 10 SCC 201 where Constitution Bench held that
Union’s power to regulate and control does not result in
depriving the States of their power to levy tax or fees
within their legislative competence without trenching
upon the field of regulation and control of the Union,
need not be relied on.
(b)The Constitution Bench also interpreted Seven
Judge Bench decision in Synthetics and Chemicals Ltd etc
vs. State of U. P. and ors., (1990) 1 SCC 109. It is
submitted that with regard to the interpretation put by
the Constitution Bench in State of West Bengal vs.
Keshoram Industries (supra) a reference has already been
made to a Nine Judge Bench by reference order dated
30.03.2011 in Mineral Area Development Authority vs.
Steel Authority and India Ors., (2011) 4 SCC 450.
54
(ix) The State of U.P. cannot realize transit fee as
per Third Amendment Rules dated 09.09.2004. Third
Amendment Rules having been substituted by Fourth
Fifth Amendment Rules and Fourth Fifth Amendment
Rules having been struck down by judgment dated
11.11.2011, Third Amendment Rules shall not revive.
Third Amendment Rules are not in existence.
VIII. Following are the submissions on behalf of
State of U.P. in support of Civil Appeals
filed by them and their reply by the writ
petitioners thereto:
57. Shri Ravindra Srivastava, learned senior counsel
leading the arguments on behalf of the State of U.P.
contends that this Court in State of U.P. and others vs.
Sitapur Packing Wood Suppliers and others, 2002(4)SCC
566, has upheld the validity of 1978 Rules and has
pronounced that transit fee is a regulatory in nature and
for regulatory fee quid pro quo is not necessary. The
High Court for its judgment has relied on Jindal
Stainless Ltd.(2) and Anr. Vs. State of Haryana and Ors.,
2006 (7) SCC 241, which has been overruled by 9Judges
Constitution Bench in Jindal Stainless Ltd. Anr. v.
55
State of Haryana Ors., 2016(1) Scale 1, the very basis
of the judgment of the High Court is knocked out. The
State being entitled to levy transit fee it can change
the basis of levy of transit fee. That option on the
basis of advalorem is also permissible both for fee and
tax and no exception can be taken to the Fifth Amendment
on the ground that the Fifth Amendment adopts advalorem
basis for fixing the fee. The increase in transit fee by
Fourth 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
forestproduce 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
56
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 9Judges
constitution Bench does not have much bearing in the
facts of the present case. The High Court independent of
reliance placed on Jindal Stainless (2) has held that
transit fee is excessive in nature and the State of U.P.
had not produced data for justifying the increase in the
transit fee. It is true that for regulatory fee quid pro
quo is not to be proved but the State was obliged to
prove a broad correlation between the levy of transit fee
and the expenditure incurred by the State on the transit
of forestproduce. The High Court in paragraph 177 to 186
has considered the issue in detail and has returned
findings to support its conclusion that exorbitant
increase in transit fee has robbed the regulatory
57
character of the transit fee which has become
confiscatory and has partaken character of tax. The
figures given in paragraph 85 of the judgment are figures
of expenditure of the entire forest department which can
have no correlation with the collection of transit fee.
The entire expenditure of the forest department cannot be
met by collection of transit fee. The State does not give
any detail of expenditure which it has actually incurred
in regulation of transit of the forestproduce.
59. Learned counsel for the writ petitioners have
demonstrated by different charts of the respective
increase in the transit fee by Fourth and Fifth
Amendment Rules as compared to fee which was being
charged under Third Amendment Rules. It is submitted
that regulatory fee could not have been charged on
advalorem basis which is generally adopted for levying
a tax and not a fee. The charging of transit fee by
Fourth and Fifth Amendment Rules, is for the purposes
of augmenting the Revenue of the State and not for
regulation of transit which changes the character of
transit fee into a tax, which is not permissible under
58
law.
60. After noticing the respective submissions of both
parties, we now proceed to consider them in the same
seriatum.
IX. Whether by Manufacturing process/chemical
Treatment as claimed by the writ petitioners,
the forest produce looses its character of
forest produce.
61. We first take the case of writ petitioners of stone
boulders which are crushed into stone grits, stone
chips and stone dust etc. Stone boulders are obtained
from riverbed, stone rocks stone mines. After
crushing of the stone boulders, stone grits, stone
chips and stone dust are obtained which does not
transform into any new commodity, except that the stone
in smaller pieces and shapes are 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
59
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 vs. State of Maharashtra and another,
(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 hol
lowed out for any purpose or not; and
2.(7) ‘tree’ includes palms, bamboos,
stumps, brushwood and canes.”
63. The above judgment of this court was based on ‘con
sideration of definition of timber and tree’ as given
in Section 2 (6) 2 (7). This Court held that defini
tion of timber included tree and all wood whether cut
or fashioned or hollowed out for any purposes. This
60
Court held that said definition of timber cannot be
read in definition of tree which includes Bamboo hence,
fashioned Bamboos are not included in the definition of
tree. The Bamboo mat was thus held, not to be a Forest
Produce. The above judgment was based on its own facts
and does not help the writ petitioner in the present
case.
64. In CST vs. Lal Kunwa Stone Crusher (P) Ltd.,
(2000) 3 SCC 525, the Court was considering liability
of Trade Tax on stone chips, gittis and stone ballast.
The question raised before the Court was, as to
whether, the stone gittis, sand chips and dust continue
to be stone grits, chips and dust or after crushing
them, they get converted into a new commercial prod
ucts, so as to attract the tax on their sale. The case
of dealer was that at the time of purchase of goods
sales tax has been paid hence, goods emerging out of
same are not liable to be taxed again. This Court held
that the word ‘stone’ is wide enough to accept various
forms of grits, gitti, kankar and ballast hence, no tax
61
was leviable on the sand chips, grits dust etc. In
para 5 following was held:
“5. The view taken by the Tribunal as af
firmed by the High Court is that the goods
continue to be stone and they are not com
mercially different goods to be identified
differently for the purposes of sales tax.
The decision relied on by the minority
view in the Tribunal in Reliable Rocks
Builders Suppliers v. State of Karnataka
turned on the concept of consumption of
goods for the purpose of bringing into ex
istence new goods. In that case the Court
was not concerned with an entry of the na
ture with which we are concerned in the
present case. Where the dealer had brought
into existence new commercial goods by
consuming the boulders to bring out small
pieces of stone, it was held that such ac
tivity attracted purchase tax. In the
present case, however, stone, as such, and
gitti and articles of stones are all of
similar nature though by size they may be
different. Even if gitti, kankar, stone
ballast, etc. may all be looked upon as
separate in commercial character from
stone boulders offered for sale in the
market, yet it cannot be presumed that En
try 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.”
62
65. The above judgment held that the nature and charac
ter 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 Lrs.) vs.
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 transport
ing 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
sandalwood handicrafts. This Court held that sandalwood
products which have been converted into such products
after obtaining proper permission was not prohibited,
in para 6 following was held:
“6. As noticed above, the original appel
lant was a holder of a licence to deal in
and stock sandalwood. From the material on
record, it is seen that the said appellant
63
had obtained necessary permit from the
competent authorities for converting the
sandalwood purchased by him into various
types of handles which are ultimately used
in other sandalwood handicrafts which per
mission was valid up to 31121982 period
covering the period of seizure. The appel
lant had contended that it is pursuant to
the said permission he had converted the
sandalwood pellets into handles to be used
in the other sandalwood artefacts and he
had informed the authorities concerned
about such conversion as per Exts. P18 to
P27. It is also the case of the appellant
that converted sandalwood artefacts or
parts thereof do not require any transit
permit and it is only sandalwood in its
original form or chips and powder of san
dalwood which requires a transit permit.
The trial court has agreed with this sub
mission of the appellant. We also notice
under the Rules and the Act what is pro
hibited is the transportation of sandal
wood as defined in Section 2(o) of the Act
and not sandalwood products which have
been converted into such products after
obtaining proper permission from the au
thorities. Such converted sandalwood prod
ucts under the Rules do not require any
transit permit. We say so because the
Rules referred to in these proceedings do
not contemplate such transit permit and
the respondents have not produced any
other Rules to show such transit permit is
required. On the contrary, the respondent
argues that even converted sandalwood
products require transit permit because
they remained to be sandalwood as contem
plated under Section 2(o) of the Act. In
the absence of any specific rules or pro
visions in the Act to this effect, we are
64
unable to agree with this argument. We are
of the opinion that once sandalwood is
subjected to a certain process from which
a sandalwood product is lawfully obtained,
then such product ceases to be sandalwood
as understood in Section 2(o) of the Act.”
66. The above case also does not lend any support to
the case of writ petitioners. In the above case, appel
lant had obtained permission of the competent authority
for converting the sandalwood into various types of
handles hence, the transportation was not found viola
tive 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. vs. Cantreads Pri
vate Limited and others (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 consider
ation. 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 pre
serves the same and rendered it fit for markets, it
65
does not change its character hence, it remained a For
est 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 above
judgment fully supported the contention of the State
that while considering the definition of the Forest
Produce, scientific and botanical sense has to be taken
into consideration and commercial parlance test may not
be adequate in such cases.
69. We thus are of the view that judgment of Division
Bench of the Allahabad High Court dated 27.04.2005 in
Kumar Stone Works deserved to be approved and judgment
of Uttarakhand dated 01.07.2004 in Kumaon Stone Crusher
deserves to be set aside in so far as above aspect is
concerned.
66
70. Now, we come to the case of marble slabs tiles,
chips etc. Writ Petitioners have placed reliance on
Three Judge Bench Judgment in Income Tax Officer,
Udaipur vs. Arihant Tiles and Marbles Private Limited,
(2010) 2 SCC 699. The question of consideration in the
above case was that whether conversion of raw marbles
blocks into final products or polished marble slabs or
tiles in factory constitute ‘manufacture or production’
so as to entitle the assessee relief under 801A(2)
(iii). This Court held that process which was applied
by the assessee will come in the category of ‘manufac
ture or production’. In para 16 of the judgment follow
ing was stated:
“16. In the present case, we have ex
tracted in detail the process undertaken
by each of the respondents before us. In
the present case, we are not concerned
only with cutting of marble blocks into
slabs. In the present case we are also
concerned with the activity of polishing
and ultimate conversion of blocks into
polished slabs and tiles. What we find
from the process indicated hereinabove is
that there are various stages through
which the blocks have to go through before
they become polished slabs and tiles. In
the circumstances, we are of the view that
67
on the facts of the cases in hand, there
is certainly an activity which will come
in the category of “manufacture” or “pro
duction” under Section 80IA of the Income
Tax Act.”
71. In the above view, this Court held that assessee
was entitled for the benefit of Section 801A of the
Income Tax Act, 1961. The above case was directly con
cerned as to what was the ‘manufacture or production’,
which was defined in the Act itself and the marble
slabs or tiles were held to be covered by ‘manufacture
or production’. The case was on its own facts and the
Court was not concerned, as to whether, the marble
blocks after it became marble slabs or tiles loses its
nature or character of Forest Produce. The said judg
ment does not help in the present case.
72. This Court in Akbar Badrudin Giwani vs. 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
68
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 tran
sit 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. Coal is formed from plant substances preserved from
complete decay in a normal environment and later altered
by various chemical and physical agencies. There are four
stages in coal formation: peat, lignite, bituminous and
anthracite. The stage depends upon the conditions to
which the plant remains are subjected after they were
69
buried – the greater the pressure and heat, the higher
the rank of coal. Higherranking coal is denser and
contains less moisture and gases and has a higher heat
value than lowerranking coal.
76. The formation of coal itself is due to large tracts
of forest getting buried under the ground due to natural
processes such as floods and sedimentation. Further, a
major portion of the coal reserves of the country are
situated beneath forest lands and clearance for mining of
the same from forest lands. Coal, thus, is clearly a
forest produce.
77. Hard coke and soft coke are made from coal. Coke can
be formed naturally as well as by synthetic method. Hard
coke, soft coke, coal briquettes are all different
variations of coal which do not shed their natural
characteristic and are all forest produce.
78. Limestone is expressly mentioned in definition of
forest produce, slake lime/quick line/hydrated line are
all produce of limestone. Further, produce known
quicklime is produced by heating of limestone, upon which
limestone breaks down into Calcium oxide (quicklime) and
70
carbon dioxide. That upon adding water to the same, the
quicklime is converted into slaked lime and thereafter,
upon being carbonated, the produce will revert to its
natural state of being limestone. Hence, the said process
does not change the nature of the product, as the basic
ingredient is essentially limestone, and merely upon
heating and addition of water, the nature of the produce
i.e. limestone, does not change. Hence, limestone is a
forest produce.
79. Dolomite is a sedimentary rock. Dolomite is formed
by the post depositional alteration of lime mud and
limestone by magnesiumrich ground water. Dolomite and
limestone are very similar stones and are forest produce.
80. Coming to fly ash, clinker and gypsum, learned
Additional Advocate General has submitted before us that
the State has accepted that fly ash, clinker an synthetic
gypsum are not forest produce. Thus, fly ash, clinker and
synthetic gypsum are not forest produce. Gypsum is
naturally found and obtained in the natural form, hence
it is a forest produce.
71
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 ve
neer are nothing but cutup logs. The process of manufac
turing 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 thick
ness, 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 defi
nition 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
72
is a preconstitutional legislation enacted by Indian
legislature as per Section 63 of Government of India Act,
1915. 1927 Act was the law enforced in the territory of
India immediately before the commencement of the
Constitution and by virtue of Article 372 of the
Constitution of India, 1927 Act continues in force until
altered or repealed by a competent legislation. The 1927
Act was enacted to consolidate the law relating to
forests, the transit of forestproduce and the duty
leviable on timber and other forestproduce. The 1957 Act
was enacted for regulation of mines and development of
minerals under the control of the Union. The 1957 Act was
enacted under Entry 54 of List I of the Constitution
which is to the following effect:
“Regulation of mines and mineral
development to the extent to which such
regulation and development under the
control of the Union is declared by
Parliament by law to be expedient in the
public interest.”
84. List II also contains Entry 23 which relates to
regulation of mines and mineral development. Entry 23
List II is as follows:
73
“Regulation of mines and mineral
development subject to the provisions of
List I with respect to regulation and
development under the control of the
Union.”
85. Entry 23 of List II has been made subject to
provisions of List I. The Parliamentary legislation in
reference to Entry 54 to the extent regulation and
development of minerals declared under control of the
Union of India is extracted from the legislative field of
the State.
86. The writ petitioners contend that State is denuded
with legislative competence regarding mineral, its
regulation or transportation. Learned counsel for the
writ petitioners have referred and relied on the various
pronouncements of this Court in reference to
Parliamentary enactment 1957. It is not necessary to
refer to a large number of cases of this Court on the
subject, the reference of only few of such cases shall
serve the purpose for the present case.
87. The Constitution Bench judgment of this Court in
HingirRampur Coal Co., Ltd. and others vs. The State of
74
Orissa and others, AIR 1961 SC 459, needs to be noted.
The State of Orissa has enacted Orissa Mining Areas
Development Fund Act, 1952 by which levy and demand was
raised. The appellant challenged the enactment on the
ground that legislation covers the same field which was
occupied by 1957 Act referable to Entry 54 of List I.
Considering the submission of the appellant, the
Constitution Bench 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)
75
Act,1951 and Mines and Minerals(Development and
Regulation) Act, 1948. This Court repelled challenge to
the 1952 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 vs. M.A. Tulloch and Co., 1964(4)SCR 461.
Orissa Mining Areas Development Fund Act, 1952 came for
consideration in reference to Mines and Minerals
(Development and Regulation) Act, 1957. This Court held
that 1952 Act was enacted by virtue of legislative power
under Entry 52 of List II whereas 1957 Act was enacted in
reference to Entry 54 of List I. This Court held that
Central Act 1957 contained a declaration as contained in
Section 2 which is to the following effect:
“Section 2.Declaration as to the
expediency of Union control. It is hereby
declared that it is expedient in the
public interest that the Union should take
under its control the regulation of mines
and the development of minerals to the
extent hereinafter provided.”
90. After noticing the above declaration, this Court
laid down following:
76
“It does not need much argument to realise
that to the extent to which the Union
Government had taken under “its control”
the regulation and development of
minerals” so much was withdrawn from the
ambit of the power of the State
Legislature under Entry 23 and legislation
of the State which had rested on the
existence of power under that entry would
to the extent of that “control” be
superseded or be rendered ineffective, for
here we have a case not of mere repugnancy
between the provisions of the two
enactments but of a denudation or
deprivation of State legislative power by
the declaration which Parliament is
empowered to make and has made.”
91. This Court further held that intention of the
Parliament was to cover the entire field. The Court held
that after enactment of 1957 Act, 1952 Act shall
disappear. This Court, thus, upheld the demands which
were raised for the period upto June, 1958.
92. There cannot be any dispute to the proposition as
laid down in the above noted cases and several other
subsequent judgments of this Court reiterating the above
proposition. The ratio laid down above, however, is not
attracted in the facts of the present case. The present
is not a case where the legislation, 1927 Act and Rules
77
1978 are referable to Entry 23 of List II. The present is
a case where we are concerned with a preconstitutional
legislation which is 1927 Act which has been continued as
per Article 372 of the Constitution. Article 372
subclause (1) is as follows:
“372.Continuance in force of existing laws
and their adaptation. (1) Notwithstanding
the repeal by 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
preconstitutional laws which have been continued under
Article 372 came before this Court for consideration
wherein Article 354 was also considered.
94. A Constitution Bench of this Court in B.V. Patankar
and others vs. C.G. Sastry, AIR 1961 SC 272, had occasion
to consider Mysore House Rent and Accommodation Control
78
Order, 1948, which was a preconstitution 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 preconstitutional law
which was saved by Article 372 remained unaffected by
Article 254. Following was stated in paragraph 7:
“7. ….The argument, therefore, that as
from April 1, 1951, as a result of
repugnancy the House Rent Control Order of
1948 stood repealed must be repelled as
unsound and cannot be sustained, because
it was an existing law which was saved by
Article 372 of the Constitution and
remained unaffected by Article 254….”
95. In Pankajakshi (Dead) Through Legal Representatives
and others vs. Chandrika and others, 2016 (6) SCC 157, a
Constitution Bench of this Court had occasion to consider
a preconstitutional law, i.e., TravancoreCochin High
Court Act in the context of Code of Civil
Procedure(Amendment) Act, 1976. In the above case an
earlier judgment of this Court, namely, Kulwant Kaur and
79
others vs. Gurdial Singh Mann (Dead) by Lrs. And others,
2001 (4) SCC 262, came to be considered wherein this
Court had occasion to consider Section 42 of Punjab
Courts Act, 1918. This Court held that Article 254 of the
Constitution would have no application to such a law for
the simple reason that it is not a law made by the
legislature of a State but is an existing law continued
by virtue of Article 372 of the Constitution of India. In
paragraph 27 following has been held:
“27. Even the reference to Article 254 of
the Constitution was not correctly made by
this Court in the said decision in Kulwant
Kaur case. Section 41 of the Punjab Courts
Act is of 1918 vintage. Obviously,
therefore, it is not a law made by the
Legislature of a State after the
Constitution of India has come into force.
It is a law made by a Provincial
Legislature under Section 80A of the
Government of India Act, 1915, which law
was continued, being a law in force in
British India, immediately before the
commencement of the Government of India
Act, 1935, by Section 292 thereof. In
turn, after the Constitution of India came
into force and, by Article 395, repealed
the Government of India Act, 1935, the
Punjab Courts Act was continued being a
law in force in the territory of India
immediately before the commencement of the
Constitution of India by virtue of Article
372(1) of the Constitution of India. This
80
being the case, Article 254 of the
Constitution of India would have no
application to such a law for the simple
reason that it is not a law made by the
Legislature of a State but 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 (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
preconstitutional law is altered or repealed or amended
by a competent legislature. To find out this competent
legislation as contemplated by subclause (1) of Article
372 in the context of preconstitutional law the nature
and content of preconstitutional law has to be found
out. There cannot be any dispute that Act, 1927 was
81
enacted to consolidate the law relating to forests, the
transit of forestproduce and the duty leviable on timber
and other forestproduce. Essentially the 1927 Act is
related to the forest. In the Constitution initially the
forest was in Entry 19 of List II. Thus, it was the State
legislature which was competent to alter or repeal or
amend the said law. Various amendments in the 1927 Act
were made by the State of U.P. in different provisions of
1927 Act in exercise of its legislative power as
conferred by List II.
97. By the Constitution (Fortysecond Amendment) Act,
1976, with effect from 03.01.1977 Entry 19 was omitted
from List II and transferred in List III as Entry 17A.
Entry 17A is “Forests”. Thus, with effect from
03.01.1977, both the Parliament and the State legislature
are competent legislature within the meaning of Article
372 subclause (1). The question to be answered thus is
as to whether a competent legislature has altered or
repealed or amended 1927 Act.
98. Writ Petitioners have also contended that 1927 Act
in so far as Section 41 and Transit Fee Rules, 1978 are
82
concerned, stand impliedly repealed by virtue of 1957 Act
and in any view of the matter after amendment of 1957 Act
by Act 38 of 1999 by which specific provisions regarding
transport of minerals were inserted in 1957 Act, Section
4(1A) and Section 23C which were inserted with effect
from 18.12.1999.
99. Justice G.P. Singh in Principles of Statutory
Interpretation, 14th Edition, explained the implied repeal
as follows:
“There is a presumption against a repeal
by implication; and the reason of this
rule is based on the theory that the
Legislature while enacting a law has
complete knowledge of the existing laws on
the same subjectmatter, and therefore,
when it does not provide a repealing
provision, it gives out an intention not
to repeal the existing legislation. When
the new Act contains a repealing section
mentioning the Acts which it expressly
repeals, the presumption against implied
repeal of other laws is further
strengthened on the principle expressio
unius est exclusio alterius. Further, the
presumption will be comparatively strong
in case of virtually contemporaneous Acts.
The continuance of existing legislation,
in the absence of an express provision of
repeal, being presumed, the burden to show
that there has been a repeal by
implication lies on the party asserting
the same. The presumption is, however,
83
rebutted and 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 vs. 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 wellsettled 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, p. 631, para 311:
“There must be what is often
called ‘such a positive
repugnancy between the two
provisions of the old and the
84
new statutes that they cannot be
reconciled and made to stand
together’. In other words they
must be absolutely repugnant or
irreconcilable. Otherwise, there
can be no implied repeal … for
the intent of the legislature to
repeal the old enactment is
utterly lacking.”
The reason for the rule that an implied
repeal will take place in the event of
clear inconsistency or repugnancy, is
pointed out in Crosby v. Patch and is as
follows:
“As laws are presumed to be
passed with deliberation, and
with full knowledge of all
existing ones on the same
subject, it is but reasonable to
conclude that the Legislature,
in passing a statute, did not
intend to interfere with or
abrogate any former law relating
to the same matter, unless the
repugnancy between the two is
irreconcilable. Bowen v. Lease
(5 Hill 226). It is a rule, says
Sedgwick, that a general statute
without negative words will not
repeal the particular provisions
of a former one, unless the two
acts are irreconcilably
inconsistent. ‘The reason and
philosophy of the rule,’ says
the author, ‘is, that when the
mind of the legislator has been
turned to the details of a
subject, and he has acted upon
it, a subsequent statute in
85
general terms, or treating the
subject in a general manner, and
not expressly contradicting the
original act, shall not be
considered as intended to effect
the more particular or positive
previous provisions, unless it
is absolutely necessary to give
the latter act such a
construction, in order that its
words shall have any meaning at
all.”
For implying a repeal the next thing to be
considered is whether the two statutes
relate to the same subjectmatter and have
the same purpose. Crawford has stated at
p. 634:
“And, as we have already
suggested, it is essential that
the new statute cover the entire
subject matter of the old;
otherwise there is no indication
of the intent of the legislature
to abrogate the old law.
Consequently, the later
enactment will be construed as a
continuation of the old one.”
The third question to be considered is
whether the new statute purports to
replace the old one in its entirety or
only partially. Where replacement of an
earlier statute is partial, a question
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
86
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 vs. State of U.P and
others, 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:
(1) Whether there is direct
conflict between the two
provisions;
87
(2) Whether Parliament intended
to lay down an exhaustive code
in respect of the subjectmatter
replacing the Act of the State
Legislature and
(3) Whether the law made by
Parliament and the law made by
the State Legislature occupy the
same field.”
103. The Constitution Bench in State of Kerala and
others vs. Mar Appraem Kuri Company Limited and another,
2012 (7) SCC 106, had occasion to consider when by a
subsequent enactment the case of pro tanto repeal can be
read. In the above case State of Kerala had enacted
Kerala Chitties Act, 1975. The Seventh Schedule of the
Constitution, List III Entry 7 pertains to contracts
including special forms of contracts. The Parliament
enactment, Chit Funds Act, 1982 and State legislature
Kerala Chitties Act, 1975, the subject being under
concurrent list, in paragraph 27, the Court held that
when there is a conflict in respect of a matter in the
concurrent list between Parliamentary and the State
legislations, Parliamentary legislation will predominate
by virtue of non obstante clause of Article 254 and by
88
reason of Article 372 subclause (1). This Court held
that the legislative intent to abrogate or wipe off the
former enactment is to be looked into to find out whether
it is a case of pro tanto repeal. Following was stated in
paragraph 19:
“19. Further, the learned counsel
emphasised on the words “to the extent of
the repugnancy” in Article 254(1). He
submitted that the said words have to be
given a meaning. The learned counsel
submitted that the said words indicate
that the entire State Act is not rendered
void under Article 254(1) merely by
enactment of a Central law. In this
connection, it was submitted that the
words “if any provision of a law” and the
words “to the extent of the repugnancy”
used in Article 254(1) militate against an
interpretation that the entire State Act
is rendered void as repugnant merely upon
enactment by Parliament of a law on the
same subject.”
104. A repeal may be brought about by subsequent
legislation without any reference to the legislation
intended to be repealed, since, it matters little as to
whether repeal is done expressly or inferentially. As
noted above, 1957 Act was enacted in reference to Entry
54 of List I to provide for the regulation of mines and
89
the development of minerals whereas the subject of the
legislation under the 1927 Act was the forest, transit of
forestproduce and the duty leviable on timber and other
forestproduce.
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 forestproduce” 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 to the Union under its control
“Regulation of Mines and Development of Minerals”. 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 is the subject
matter of legislation under the 1957 Act is “Regulation
90
of Mines and Development of Minerals”.
106. When the minerals are forestproduce by definition
under the 1927 Act under Section 2(4), validity of which
is not challenged, forestproduce and its transit is
altogether a different subject matter than the subject
matter governed by 1957 Act. The object of the two
legislations is different. The regulation is different.
The Forest Act comprehensively deals with forest and
forest wealth with a different object and the 1957 Act
deals with mines and mineral wealth.
107. Much emphasis has been given by the counsel for the
writ petitioners on Section 4(1A) and Section 23C.
Section 4(1A) is couched in negative as follows:
“No person shall transport or store or
cause to be transported or stored any
mineral otherwise than in accordance with
the provisions of this Act and the rules
made thereunder.”
108. Section 23C provides power of State Government to
make rules for preventing illegal mining, transportation
and storage of minerals.
109. The Rules may cover inspection, checking and search
91
of minerals at the place of excavation as well as transit
of the minerals. The Rules under Section 23C are only
incidence of regulation of minerals which is the subject
matter of the 1957 Act.
110. The 1927 Act is a comprehensive statute relating to
transit of forestproduce and the duty leviable on timber
and other forestproduce.
111. The 1927 Act provides comprehensive provisions with
regard to reserved forest, village forest and protected
forest. The forests are directly linked with environment
and ecological balance but because of large human
development, exploitation of forests and other natural
resources and deforestation, the international community
has been alarmed, several international conventions and
treaties were made including Kyoto Protocol and Paris
Convention to which India is a signatory.
112. Article 48A also inserted by the Fortysecond
Amendment Act, 1976 which is to the following effect:
“48A. Protection and improvement of
environment and safeguarding of forests
and wild life. The State shall endeavour
to protect and improve the environment
and to safeguard the forests and and wild
92
life of the country.”
113. Article 51A of the Constitution lays down as one of
the fundamental duties that every citizen to protect and
improve the natural environment including forests, lakes,
rivers and wild life, and to have compassion for living
creatures.
114. As per the National Forest Policy, 1988 issued 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
lifeforms, 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
93
are also found in forests. The definition of
forestproduce as contained in Section 2 subsection (4)
of the Act includes peat, surface oil, rock and
minerals(including limestone, laterite, mineral oils,
and all products of mines or quarries).
116. The State has been empowered to regulate transit of
forestproduce under Section 41 of the Act. Regulation of
transit of forestproduce is a larger activity covering
transit of different kinds of forestproduce including
minerals. Both the legislations being on different
subject matters the provisions relating to transportation
of minerals as contained in 1957 Act can at best be said
to be incidentally affecting the 1927 Act, incidental
encroachment of one legislation with another is not
forbidden in the constitutional scheme of distribution of
legislative powers.
117. This Court has time and again emphasised that in
the event any overlapping is found in two Entries of
Seventh Schedule or two legislations, it is the duty of
the Court to find out its true intent and purpose and to
examine the particular legislation in its pith and
94
substance. In Kartar Singh vs. State of Punjab, 1994 (3)
SCC 569, paragraphs 59, 60 and 61 following has been
held:
“59….But before we do so we may briefly
indicate the principles that are applied
for construing the entries in the
legislative lists. It has been laid down
that the entries must not be construed in
a narrow and pedantic sense and that
widest amplitude must be given to the
language of these entries. Sometimes the
entries in different lists or the same
list may be found to overlap or to be in
direct conflict with each other. In that
event it is the duty of the court to find
out its true intent and purpose and to
examine the particular legislation in its
‘pith and substance’ to determine whether
it fits in one or other of the lists.
[See : Synthetics and Chemicals Ltd. v.
State of U.P.; India Cement Ltd. v. State
of T.N.”
60. This doctrine of ‘pith and
substance’ is applied when the
legislative competence of a legislature
with regard to a particular enactment is
challenged with reference to the entries
in the various lists i.e. a law dealing
with the subject in one list is also
touching on a subject in another list.
In such a case, what has to be
ascertained is the pith and substance of
the enactment. On a scrutiny of the Act
in question, if found, that the
legislation is in substance one on a
matter assigned to the legislature
enacting that statute, then that Act as
95
a whole must be held to be valid
notwithstanding any incidental trenching
upon matters beyond its competence i.e.
on a matter included in the list
belonging to the other legislature. To
say differently, incidental encroachment
is not altogether forbidden.
118. In A.S. Krishna and others vs. State of Madras, AIR
1957 SC 297 this Court laid down following in paragraph
12:
“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
MoneyLenders Act, 1940, which limited the
amount recoverable by a moneylender for
principal and interest on his loans, was
valid in so far as it related to
promissory notes. Moneylending 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 moneylending, 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 :
96
“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 Indian Act
more exact in some particulars, and the
existence of the Concurrent List has made
it easier to distinguish between those
matters which are essential in determining
to which list particular provision should
be attributed and those which are merely
incidental. But the overlapping of
subjectmatter is not avoided by
substituting three lists for two, or even
by arranging for a hierarchy of
jurisdictions. Subjects must still
overlap, and where they do, the question
must be asked what in pith and substance
is the effect of the enactment of which
complaint is made, and in what list is its
true nature and character to be found. If
these questions could not be asked, must
beneficent legislation would be satisfied
at birth, and many of the subjects
entrusted to Provincial legislation could
never effectively be dealt with.”
119. Further in Union of India and others vs. Shah
Govedhan L. Kabra Teachers’ College, 2002 (8) SCC 228 in
paragraph 7 following was laid down:
“7. It is further a wellsettled principle
that entries in the different lists should
be read together without giving a narrow
meaning to any of them. Power of
97
Parliament as well as the State
Legislature are expressed in precise and
definite terms. While an entry is to be
given its widest meaning but it cannot be
so interpreted as to override another
entry or make another entry meaningless
and in case of an apparent conflict
between different entries, it is the duty
of the court to reconcile them. When it
appears to the court that there is
apparent overlapping between the two
entries the doctrine of “pith and
substance” has to be applied to find out
the true nature of a legislation and the
entry within which it would fall. In case
of conflict between entries in List I and
List II, the same has to be decided by
application of the principle of “pith and
substance”. The doctrine of “pith and
substance” means that if an enactment
substantially falls within the powers
expressly conferred by the Constitution
upon the legislature which enacted it, it
cannot be held to be invalid, merely
because it incidentally encroaches on
matters assigned to another legislature.
When a law is impugned as being ultra
vires of the legislative competence, what
is required to be ascertained is the true
character of the legislation. If on such
an examination it is found that the
legislation is in substance one 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
98
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 accepted
that 1957 Act impliedly repeals the 1927 Act in so far as
Section 41 and 1978 Rules are concerned.
121. We, thus, conclude that the submission of learned
counsel for the writ petitioners that in view of the 1957
Act especially as amended by Act 38 of 1999, the
provisions of 1927 Act 1978 Rules have become void,
inoperative and stand repealed, cannot be accepted.
99
XII. Interpretation of Section 2(4)(b) of 1927 Act
122. The meaning of words ‘brought from’ as used in
Section 2 subsection (4) subclause (b) has become very
significant in the present case since it is a case of
large number writ petitioners that the goods which they
are transiting did not originate from any forest area
rather they have been taken from nonforest area, hence,
there is no liability to pay transit fee. Whether forest
produce as defined in Section 2 subsection (4)
subclause (b) should be forest produce which originated
from forest or even the forest produces which are merely
passing through a forest area shall attract the liability
of transit fee is the question to be answered.
123. The Division Bench judgment of the Allahabad High
Court in Kumar Stone Works, although has referred to
various definitions of meaning of word ‘brought’ but it
did not advert to the fact as to what meaning has to be
attributed to word ‘from’ with which word the word
‘brought’ is prefixed. The word ‘from’ has been defined
in Advanced Law Lexicon by P. Ramanatha Aiyar, 3rd
100
Edition in following words:
“From: As used as a function word, implies
a starting point, whether it be of time,
place, or condition; and meaning having a
starting point of motion, noting the point of
departure, origin, withdrawal, etc., as he
travelled “from” New York to Chicago. Silva V.
MacAuley, 135 Cal App. 249, 26 P.2d 887. One
meaning of “from” is “out of.” Word “from” or
“after” and event or day does not have an
absolute and invariable meaning but each
should receive an inclusion or exclusion
construction according to intention with which
such word is used. Acme Life Ins. CO. v.
White, Tex. Civ. App. 99 SW 2d 1059, 1060.
Words “from” and “to”, used in contract, may
be given meaning to which reason and sense
entitles them, under circumstances of case.
Woodruff v. Adams, 134 Cal App.490, 25 P, 2d
529.”
124. The word ‘from’ is used to denote a point of 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
101
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 subclauses (1) to (iv)
of subclause(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 shall be
moved to or from or within the State of U.P. except or
without a transit pass in the form in the Schedule A. The
Schedule A of the Rules contains the form. Item No.1 of
the form is as follows:
“1. Locality of origin;
(a) name and situation of forest,
(b) name of forest owner.”
126. The above Item No.1 also thus clearly refers to
locality of origin of the produce and form requires name
102
and situation of forest and name of the forest owner.
Thus, locality of origin is related to a forest which
supports the interpretation as placed by us.
127. Learned counsel for the writ petitioners have also
placed reliance on a judgment of the Division Bench of
the Karnatka High Court in Yeshwant Mony Dodamani and
Ors. (1962 CRLJ 832). The Division Bench had occasion to
consider the definition of forest produce as contained in
subsection (4) of Section 2 of the Act. In paragraph 6
of the judgment following has been stated:
“6. On a plain reading of these expressions
‘found in’ or ‘brought from’, there can hardly
be any doubt that both of them indicate the
forest to be the source or original depository
of the forest produce in question. The learned
Government Pleader has very strenuously
contended that the expression ‘found in’ a
forest merely means ‘come across’ or
‘discovered’ in a forest irrespective of the
fact whether the article or goods so
discovered were originally sourced or
deposited or grown in a forest or some other
place which is not a forest. All that is
necessary, according to the learned Government
Pleader, is that somebody (meaning apparently
a forest officer or a forest guard or other
person acting under the authority of the Act
or Rules) finds or discovers these goods
within, the area of a forest Same argument,
however, is not available nor is it pressed
with, reference to other expression ‘brought
103
from’ a forest. It is conceded that the
expression ‘brought from’ a forest certainly
excludes the idea of a thing being brought
from outside the forest but taken through it.
It is, however, contended that if an article
so brought from outside the forest is ‘found’
i.e., discovered by somebody within a forest,
it would come within the definition. We find
it difficult to accept this argument which
places extreme strain both on the language and
upon logic. 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
forestproduce 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 forestproduce, 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 forestproduce.
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. The conveyance or
transport involved in the idea of a thing
being brought undoubtedly has its beginning in
the forest by virtue of the use of the
104
expression ‘from.’”
128. We are of the view that Gujarat High Court has
correctly interpreted the word “brought from” as
occurring in clause (b) of Section 2(4). We are, thus, of
the view that the word ‘brought from’ has to be
understood in the above manner. We, however, may clarify
that the origin of forest produce may be in any forest
situate within the State of U.P. or outside the State of
U.P. Since, transit pass is necessary as per Rule 3 for
moving a forest produce into or from or within the State
of U.P. Any produce, goods entering within or the outside
the State which is the forest produce having originated
in the forest requires a transit pass for transiting in
the State of U.P. Conversely, any goods which did not
originate in forest whether situate in the State of U.P.
or outside the State but is only passing through a forest
area may not be forest produce answering the description
of forest produce within the meaning of Section 2(4)(b).
XIII. Meaning of ‘Forest’
129. Safeguarding of forest has also been recognised by
105
our Constitution under Article 48A which oblige the State
to protect and improve the environment and to safeguard
the forests and wild life of the country. Article 51A
subclause(g) enumerates the fundamental duty of every
citizen of India to protect and improve the natural
environment including the forests, lakes, rivers,
wildlife.
130. The Forest Conservation Act, 1980 is another
Parliamentary enactment which has been specifically
enacted to provide for the conservation of the forest and
for matters connected therewith. The definition of forest
cannot be confined only to reserved forests, village
forests and protected forests as enumerated in 1927 Act.
This Court has already held in T.N. Godavarman
Thirumulkpad vs. Union of India and others, 1997 (2) SCC
267, that the word “forest“ must be understood according
to its dictionary meaning, in paragraph 4 following is
stated:
“4….The word “forest” must be understood
according to its dictionary meaning. This
description covers all statutorily recognised
forests, whether designated as reserved,
protected or otherwise for the purpose of
106
Section 2(i) of the Forest Conservation Act.
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
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
expensive manner, the forest was understood by the State
legislature in a very wide manner. This is reflected by
107
definition of forest and forest land as given in Section
38A inserted by Uttar Pradesh Amendment Act 5 of 1956
with effect from 3.12.1955. The definitions of ‘forest’
as given in Section 38A(b) and ‘forest land’ in 38A(c) of
1927 Act are as follows:
“38A(b) “forest” means a track of land covered
with trees, shrubs, bushes or woody vegetation
whether of natural growth or planted by human
agency, and existing or being maintained with
or without human effort, or such tract of land
on which such growth is likely to have an
effect on the supply of timber, fuel,
forestproduce, or grazing facilities, or on
climate, streamflow, protection of land from
erosion, or other such matters and shall
include
(i) land covered with stumps of trees of
a forest;
(ii) land which is part of a forest or
was lying within a forest on the
first day of July, 1962;
(iii)such pasture land, waterlogged or
noncultivable land, lying within,
or adjacent to, a forest as may be
declared to be a forest by the State
Government.
38A(c) “forest land” means a land covered
by forest or intended to be utilized
as a forest;”
133. The definition of forest as contained in Section
108
38A(b), as noticed above, gives very wide definition of
forest and giving restrictive meaning of forest in view
of the wide definition given by the State legislature
cannot be accepted. We, thus, are of the view that the
interpretation of forest as given by the Division Bench
in its judgment dated 11.11.2011 has to be approved and
the restrictive definition as given by the Uttarakhand
High Court in its judgment dated 26.6.2007 in M/s. Gupta
Builders cannot be approved. We, thus, reject the
submission of learned counsel for the petitioners to
adopt a restrictive meaning of word ‘forest’.
XIV. Whether Notification dated 10.02.1960
declares Roads as Protected Forest
134. Whether passing through the roads as notified by
notification dated 10.02.1960 can be treated to be
passing through a protected forest is the question to be
answered. The notification which has been relied by
learned Additional Advocate General is notification dated
10.02.1960. It is useful to extract the contents of the
said notification:
“February 10, 1960
109
No.1115/XIV33150,Whereas the Governor Uttar
Pradesh, is of the opinion that the making of
enquiry and record contemplated under
subsection(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 subsection and by the
subsection(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
Dis Ser Na Mile Description of boundary
tri ial me age
ct No of to
. Ro be
ad decl
, ared
as
Rese
rved
or
Prot
ecte
d
Fore
st
4 4
F To
r
o
m
f f f f
110
M g t M g t
. . . .
1.Me 1 Mee 3 0 0 3 2 0 The
erut rut 1 boun
. Ba dary
ghp of
at the
Roa land
d has
been
dema
rcat
ed
on
the
grou
nd
by
ston
e
pill
ars
…. … …. … … … … … ……..
.
………… ………… ………… ………”
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.
111
136. For finding the consequences of notification dated
10.02.1960 proviso to the subsection (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) is quoted below:
“29. Protected Forests.(1) The [State
Government] may, by notification in
the [official gazette], declare the
provisions of this Chapter applicable
to any forestland or wasteland which
is not included in a reserved forest
but which is the property of the
Government, or over which the
Government has proprietary rights, or
to the whole or any part of the
forestproduce of which the Government
is entitle.
(2) The forestland and wastelands
comprised in any such notification
shall be called a “protected forest”.
(3) No such notification shall be made
unless the nature and extent of the
rights of Government and of private
persons in or over the forestland or
wasteland comprised therein have been
inquired into and recorded at a survey
or settlement, or in such other manner
as the [State government] thinks
sufficient. Every such record shall be
presumed to be correct until the
contrary is proved.
Provided that, if, in the case of any
forestland or waste land, the [State
Government] thinks that such inquiry
and record are necessary, but that
112they will occupy such length of time
as in the meantime to endanger the
rights of Government, the [State
Government] may, pending such inquiry
and record, declare such land to be a
protected forest, but so as not to
abridge or affect any existing rights
of individuals or communities.”
137. Section 80A which has been referred in the
notification is a provision which has been inserted by
U.P. Act 18 of 1951 with effect from 06.10.1951. Section
80A is as follows:
“80A. The State Government may, by
notification in the Official Gazette,
declare that any of the provisions of
or under this Act, shall apply to all
or any land on the banks of canals or
the sides of roads which are the
property of the State Government or a
local authority, and thereupon such
provisions shall apply accordingly.”
138. Under Section 80A the State Government may, by
notification declare that any of the provisions of Act
shall apply on the banks of canals or the sides of roads
which are the property of the State Government or a local
authority. Section 80A is included in Chapter XIII which
is a miscellaneous Chapter. Section 80A empowers the
113
State to declare any land on the banks of canals or the
sides of roads as protected forest on which any other
provisions of the Act can be applied. Notification 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 of 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
114
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 canals is with the object and purpose of
environment protection. Maintenance of protected
forests on both the sides of the road is for the same
purpose and object, and also with object to combat the
vehicular pollution and to improve the environment and
ecology. By notification under Section 80A, it cannot
be accepted that road itself has been declared as
protected forest. The object is not to declare the road
as protected forest so as to apply different provisions
of 1927 Act on the roads itself. The interpretation put
by the State that roads declared by notification dated
10.02.1960 have become protected forests is not
compatible with provisions of Chapter IV. The State
cannot exercise its power under Section 30 nor any
Rules under Section 32 can be framed by the State for
the roads itself. The maintenance and regulation of
115
roads are governed by different statutes and principles
of law. We, thus, reject the submissions of learned
counsel for the the State that merely because both
sides of roads are declared protected forests, the
roads itself have become protected forests. We, thus,
conclude that merely passing through the roads as
included in the notification dated 10.02.1960, it
cannot be held that the goods or forest produce are
passing through the protected forests.
XV. Whether Rule 3 is independent of Rule 5
141. Rule 3 is couched in negative term providing that
“……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……”. Thus transit of forest produce is permissible only
with a transit pass. Rule 4(1) contains provisions
regarding officers and persons who issue passes. Rule
4(1) is as follows:
Officers “Rule 4.(1):The following officers and
Persons and persons shall have power to to
issue issue passes under these rules:
passes
116
(a) For forest produce belongings to Government
or not owned by any other person, the
Conservator of Forest, the Divisional
Forest Officer, the SubDivisional Forest
Officer or any other officer
authorized in this behalf in
writing by conservator of Forest
or the Divisional Forest Officer;
(b) For forest produce owned by any person,
such person or his agent if so
authorized in writing by the Divisional
Forest Officer
(i) Provided that any person who
desires to obtain a transit pass
or authorization to issue passes
under clause (b) of subrule(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
117
Marginal note (as originally framed) is as follows:
Fees Payable 5. At the check Chawki or depot
for established under rule 15 and specified
different under proviso (ii) to clause(b),
classes subrule (1) of rule 4, the forest
of passes produce alongwith the two copies of
the pass(duplicate and triplicate)
shall be produced for examination under
subrule(4) of rule 6 and for payment
of transit fee on the forest produce
calculated at the following rates;
corresponding receipt shall be granted
in the form given in Schedule C
(i) per lorry load of timber or other
forest produce ……Rs.5.00 per
tonne of
capacity
(ii) per cart load of timber or other
forest produce ……Rs. 2.50
(iii) per camel load of timber or other
forest produce ……Rs.1.25
(iv) per pony load of timber or other
forest produce ……Rs.0.50
(v) per head load of timber or other
forest produce ……Rs. 0.25”
143. Referring to Chawki or depot established under Rule
15 and specified under proviso(ii) to clause(b), subrule
(1) of Rule 4, learned counsel contends that transit
passes as referred to under proviso (ii) to clause(b) of
subrule (1) of Rule 4 are only to be charged with
transit fees.
144. Rule 4 as noticed above contains provisions
118
regarding officers and persons who have power to issue
passes. Under Rule 4(1)(a) for the forest produce
belonging to government or not owned by any other person
various officers of the forest department are authorized
to issue passes. Rule 4 clause (b) relates to various
produce own by any person. Pass can be issued by such
persons or his agents if so authorized in writing by the
Divisional Forest Officer. Any person who is referred to
in Rule 4(b) has to apply in the form in Schedule B to
the Divisional Forest Officer whereon authorization has
to be issued by the authorized Divisional officer. The
words in Rule 5 namely “…Chawki or depot established
under Rule 15 and specified under proviso(ii) to
clause(b), subrule (1) of Rule 4” are the words
qualifying the words chawki or depots. The fee has to be
paid for different passes at chawki or depot where it
shall be produced for examination and payment of transit
fees. All forest produces are to be produced at chawki or
depot for payment of transit fee. Reading of Rule 5 does
not indicate any intention that only one category of
passes as referred to in Rule 4(1)(b) are leviable with
119
transit fee. The words“…specified under proviso(ii) to
clause(b), subrule(1) of Rule 4 only refer to check
Chawki or depot where forest produce is to be produced
for examination. The Marginal Note of Rule 5 also
clarifies the intent of the Rule. The Marginal note reads
as “Fees payable for different classes of passes.” Thus
Marginal Note clarifies that transit fee is payable at
all kinds of passes and submission is incorrect that
leviablity 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
120dilute 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.”
145. This Court has also occasion to consider the value
of marginal note in several cases. In 2004 (2) SCC 579,
N.C.Dhoundial versus Union of India Ors., It was laid
down in paragraph 15 that heading or marginal note can be
relied upon to clear any doubt or ambiguity in the
interpretation of the provision and to listen the
legislative intent. Following was laid down in para 15:
“15….The language employed in the
marginal heading is another indicator
that it is a jurisdictional limitation.
It is a settled rule of interpretation
that the section heading or marginal note
can be relied upon to clear any doubt or
ambiguity in the interpretation of the
provision and to discern the legislative
intent (vide Uttam Das Chela Sunder Das
v. Shiromani Gurdwara Parbandhak
Committee and Bhinka v. Charan Singh).”
146. In event the interpretation as put by learned
counsel for the petitioner is accepted that fee under
Rule 5 is chargeable only on passes obtained under Rule
121
4(1)(b) only, the easiest manner to avoid payment of
transit fee is not to apply in form B for obtaining the
booklet for issuance of pass by the person or from its
authorized representative, which cannot be the intent of
the Rule. Rule 4 is a rule made with regard to the
persons and officers who have power to issue passes that
has nothing to do with payment of fee which is separately
provided in Rule 5 and is applicable to all kinds of
passes.
147. Rule 6(4) on which also emphasis has been given by
learned counsel for the petitioner only provides that the
first copy of the triplicate forms of pass shall form the
counterfoil and second and third parts shall be given to
the person incharge of the produce under transit and
shall be produced whenever required by any checking
officer. Schedule A which is appended to the Rules also
use the word counterfoil and all passes are to be issued
in form A as required by Rule 3 as well as Rule 6(1).
When all transit passes have to be in same form and in
triplicate we fail to see that how it can be read that
only on one category of passes fee is leviable and Rule 5
122
is not applicable and is completely independent of Rule
3.
148. We thus are of the view that the submissions of
learned counsel of the petitioner that transit fee is
payable only with regard to passes issued under Rule 4(1)
(b) which are required to be checked under Rule 6(4),
cannot 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. Nonissuance 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
123
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 been
substituted to the following effect:
“Section 5. Bar of accrual of forest
rights. After the issue of the
notification under section 4 no right
shall be acquired in or over the land
comprised in such notification, except
by succession or under a grant or a
contract in writing made or entered
into by or on behalf of the Government
or some person in whom such right was
vested when the notification was
issued; and no fresh clearings for
cultivation or for any other purpose
shall be made in such land, nor any
tree therein felled, girdled, lopped,
tapped, or burnt, or its bark or
leaves stripped off, or the same
otherwise damaged, nor any
forestproduce removed therefrom,
except in accordance with such rules
as may be made by the State Government
in this behalf.”
124
150. Section 5 clearly provides that after the issue of
the notification under Section 4 no forest produce can be
removed therefrom, except in accordance with such rules
as may be made by the State Government in this behalf.
The regulation by the State thus comes into operation
after the issue of notification under Section 4 and thus
the submission of the petitioners that since no final
notification under Section 20 has been issued they can
not be regulated by Rules 1978 cannot be accepted.
151. We, however, make it clear that we have not entered
into the issue as to whether actually after Section 4
notification State has taken any further steps including
notification under Section 20 or not.
152. In so far as submission of learned counsel for the
writ petitioner that Constitution Bench judgment in State
of West Bengal vs. Keshoram Industries (surpa) having
been referred to a Nine Judge Bench which reference
having not been answered, the interpretation given by the
Five Judge Bench of Synthetics and Chemicals vs. State of
U. P. and ors cannot be relied, suffice it to say for the
purposes of this batch of cases it is not necessary for
125
us to rest our decision on the preposition as laid down
in Keshoram Industries. Independent of preposition as
laid down by the Constitution Bench in Keshoram
Industries there are clear pronouncement of this court
as noticed above by us for deciding the issues raised in
this batch of cases.
153. The writ petitioners have contended that in view of
striking down Fourth and Fifth Amendment Rules to 1978
Rules, the Third Amendment dated 09.09.2004 could not
have 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. vs. State of Madras
and another, AIR 1963 SC 928; B.N. Tiwari vs. Union of
India, AIR 1965 SC 1430 and State of U.P. and others vs.
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 Advocateonrecord Association vs.
Union of India, 2016(5)SCC 1. This Court in the interim
126
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 judgment dated 11.11.2011 has issued
following directions in the last paragraph of the
judgment which contained operative portion as below:
“188. All the writ petitions are
consequently allowed. The Notifications dated
20.10.2010, by which the ‘U.P. Transport of
Timber and Other Forest Produce Rules, 1978’,
was amended by the 4th Amendment; and the
Notification dated 4.6.2011, by which the ‘U.P.
Transport of Timber and Other Forest Produce
Rules, 1978’ was amended by the 5th Amendment,
are quashed. It will be open to the
Respondents to impose and collect the transit
fees on such forest produce prevailing on such
rates as it was being charged prior to the 4 th
Amendment to the Rules notified on 20.10.2010,
i.e. at the rate of Rs.38/ per tonne of
capacity per lorry load of timber or other
127forest produce; Rs. 19/ per tonne of capacity
per cart load of timber or other forest
produce; Rs. 1.25 per camel load of timber and
other forest produce; Rs.4/ per pony load of
timber or other forest produce and Rs.2/ per
head load of timber or other forest produce.
We also declare that the imposition of transit
fee on ‘Sponge Iron’ which is not a forest
produce after undergoing the process of
manufacture, converting it into a commercially
different commodity than forest produce, and
‘Tendu Patta’, the trade and transportation of
which is monopolized by the State Government,
is not valid in law, and restrain Respondents
from requiring transit passes and transit fees
on it. The costs are made easy.
Petitions allowed.
155. The High Court has thus even though had struck down
Fourth and Fifth Amendment Rules but has clearly
permitted the State to recover transit fee in accordance
with the rate as was applicable prior to Fourth Amendment
Rules. We, thus, do not find any infirmity in the State’s
recovery of transit fee at the rate of Third Amendment
Rules. There being express order by the High Court on
11.11.2011 as well as interim order by this Court on
29.10.2013 permitting the State to recover transit fee as
per the rate as was prevalent by Third Amendment Rules
prior to enforcement to Fourth Amendment Rules, we are of
the view that the question as to whether by striking
128
down Fourth and Fifth Amendment Rules, Third Amendment
Rule does not revive need not be gone into in the present
case. In view of the order of the Division Bench of the
High 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 overview 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 vs. Sri Lakshmindra Thirtha
Swamiar of Sri Shirur Mutt, AIR 1954 SC 282, B.K.
Mukherjea, J. speaking for 7Judge Bench has elaborately
defined the tax and fee in paragraphs 43 and 44 which are
129
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 authority
for public purposes enforceable by law
and is not payment for services
rendered”.
This definition brings out, in our opinion,
the essential characteristics of a tax as
distinguished from other forms of
imposition which, in a general sense, are
included within it. It is said that the
essence of taxation is compulsion, that is
to say, it is imposed under statutory power
without the taxpayer’s consent and the
payment is enforced by law (Vide Lower
Mainland Dairy v. Orystal Dairy Ltd. 1933
AC 168.).
The second characteristic of tax is that it
is an imposition made for public purpose
without reference to any special benefit to
be conferred on the payer of the tax. This
is expressed by saying that the levy of tax
is for the purposes of general revenue,
which when collected form part of the
public revenues of the State. As the object
of a tax is not to confer any special
benefit upon any particular individual,
there is, as it is said, no element of quid
pro quo between the taxpayer and the public
authority (See Findlay Shirras on “Science
of Public Finance”, Vol. p. 203.). Another
feature of taxation is that as it is a part
of the common burden, the quantum of
130imposition upon the taxpayer depends
generally upon his capacity to pay.
44. Coming now to fees, a ‘fee’ is
generally defined to be a charge for a
special service rendered to individuals by
some governmental agency. The amount of fee
levied is supposed to be based on the
expenses incurred by the Government in
rendering the service, though in many cases
the costs are arbitrarily assessed.
Ordinarily, the fees are uniform and no
account is taken of the varying abilities
of different recipients to pay (Vide Lutz
on “Public Finance” p. 215.). These are
undoubtedly some of the general
characteristics, but as there may be
various kinds of fees, it is not possible
to formulate a definition that would be
applicable to all cases.”
158. Further, on distinction between tax and fee
following was stated in paragraphs 45 and 46:
“45…The distinction between a tax and a
fee lies primarily in the fact that a tax is
levied as a part of a common burden, while a
fee is a payment for a special benefit or
privilege. Fees confer a special capacity,
although the special advantage, as for
example in the case of registration fees for
documents or marriage licences, is secondary
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
131
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 corelated 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 that person in return
for the privilege that is conferred.
A most common illustration of this type
of cases is furnished by the licence fees
for motor vehicles. Here the costs incurred
by the Government in maintaining an office
or bureau for the granting of licences may
be very small and the amount of imposition
that is levied is based really not upon the
costs incurred by the Government but upon
the benefit that the individual receives. In
such cases, according to all the writers on
public finance, the tax element is
predominant (Vide Seligman’s Essays on
Taxation, p. 409.), and if the money paid by
licence holders goes for the upkeep of roads
and other matters of general public utility,
the licence fee cannot but be regard as a
tax.”
132
159. In another Constitution Bench in Corporation of
Calcutta and Anr. vs. Liberty Cinema, AIR 1965 SC 1107,
following was stated in paragraphs 16 and 17:
“16. Both these cases discussed other tests
besides the requirement of the rendering of
services for determining whether a levy is a
fee, but with these we are not concerned in
the present case. These cases also discussed
the correlation of the costs of the services
to the levy but with also we are not
concerned as it is not sought to uphold the
present levy on the ground of such
correlation. We have referred to these cases
only for showing that to make a levy a fee
the services rendered in respect of it must
benefit, or confer advantage on, the person
who pays the levy.
20. The other case to which we wish to refer
in this connection is The HingirRampur Coal
Co., Ltd. v. The State of Orissa and ors.,
[1961]2SCR537 . There the imposition by a
certain statute of a levy on lessees of coal
mines in a certain area and the creation of
a fund with it, was called in question. It
was held that the levy was a fee in return
for services and was valid. It was there
said at p. 549, “If the special service
rendered is distinctly and primarily meant
for the benefit of a specified class or
area, the fact that in benefiting the
specified class or area the State as a whole
may ultimately and indirectly be benefited
would not detract from the character of the
levy as a fee.” It may be mentioned that the
levy there went to meet expenditure
necessary or expedient for providing
133amenities like communication, water supply
and electricity for the better development
of 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 others vs.
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. vs. Liberty Cinema (supra) it was held that
expression ‘licence fee’ does not necessarily mean a fee
in lieu of services and that in the case of regulatory
134
fees, no quid pro quo need be established. Following was
held in paragraph 15:
“15. This decision has been followed in
several decisions, including the recent
decisions of this Court in Vam Organic
Chemicals Ltd. v. State of U.P., 1997 (2)
SCC 715 and Bihar Distillery v. Union of
India, 1997 (2) SCC 727. The High Court was,
therefore, not right in proceeding on the
assumption that every fee must necessarily
satisfy the test of quid pro quo and in
declaring the fees levied by subrules (3)
and (4) of Rule 3 as bad on that basis.
Since we hold that the fees levied by the
said subrules is regulatory in nature, the
said levy must be held to be valid and
competent, being fully warranted by Section
41.”
161. This Court held that transit fee is a regulatory
fee in nature.
162. In Secunderabad Hyderabad Hotel Owners’ Assn. v.
Hyderabad Municipal Corpn., 1999 (2) SCC 274, where this
Court held that a fee which is charged for regulation for
such activity would be validly classified as a fee and
not a tax although no service is rendered. In paragraph 9
following was stated:
“9. It is, by now, well settled that a
licence fee may be either regulatory or
135compensatory. When a fee is charged for
rendering specific services, a certain
element of quid pro quo must be there between
the service rendered and the fee charged so
that the licence fee is commensurate with the
cost of rendering the service although exact
arithmetical equivalence is not expected.
However, this is not the only kind of fee
which can be charged. Licence fees can also
be regulatory when the activities for which a
licence is given require to be regulated or
controlled. The fee which is charged for
regulation for such activity would be validly
classifiable as a fee and not a tax although
no service is rendered. An element of quid
pro quo for the levy of such fees is not
required although such fees cannot be
excessive.”
163. The Uttar Pradesh Transit of Timber and other
Forest Produce Rules, 1978, itself came for consideration
before this Court in State of U.P. vs. Sitapur Packing
Wood Suppliers, 2002 (4) SCC 566. The High Court had held
the Rules to be constitutionally valid but levy of
transit fee was invalidated. In absence of quid pro quo,
the High Court did not strike down the Rules and observe
that it is open 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
136
Court relying on the judgments of this Court in State of
Tripura v. Sudhir Ranjan Nath, Corpn. of Calcutta v.
Liberty Cinema and Secunderabad Hyderabad Hotel Owners’
Assn. v. Hyderabad Municipal Corpn. 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 aforenoticed
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.
9. In State of Tripura v. Sudhir Ranjan
Nath almost similar question came up for
consideration in relation to the State of
Tripura. It was held that Sections 41 and 76
of the Act vest total control over the
forest produce in the State Government and
empower it to regulate the transit of all
timber or other forest produce for which
purpose the State Government is also
empowered to make the Rules. The decision of
the High Court invalidating the levy of
application fee in the said case on the
137ground that the State had not established
that the services were rendered in lieu of
the said fee, was reversed by this Court
holding that the fee was regulatory and not
compensatory. Reference may be made to the
decision in the case of Corpn. of Calcutta
v. Liberty Cinema wherein it was held that
the expression licence fee does not
necessarily mean a fee in lieu of services
and in case of regulatory fee no quid pro
quo need be established. Following Liberty
Cinema case2 similar views have been
expressed in Secunderabad Hyderabad Hotel
Owners’ Assn. v. Hyderabad Municipal Corpn.
and P. Kannadasan v. State of T.N.
10. The transit fee under Rule 5 is
clearly regulatory and, thus, it was not
necessary for the State to establish quid
pro quo. The High Court was in error in
holding that transit fee is invalid in
absence of quid pro quo. As a consequence
the penalty would also be valid. The penalty
was held to be invalid by the High Court in
view of its conclusion about the invalidity
of the transit fee. The penalty, however,
cannot be beyond what is permissible in the
Act. That aspect, however, is not under
challenge in these appeals as the State
Government after the impugned judgment of
the High Court realizing its mistake amended
the Rule so as to bring the provision of
penalty in accord with the provisions of the
Act.”
.
164. In view of the foregoing discussion, it is now well
settled that transit fee charged under 1978 Rules is
regulatory fee in character and further the State is not
138
to prove quid pro quo for levy of transit fee. After
having noticed the nature and character of the transit
fee as envisaged in 1978 Rules, we now proceed to notice
various provisions of 1978 Rules as well as Fourth and
Fifth Amendment Rules.
165. Section 41 of the Forest Act, 1927 empowered the
State to make Rules to regulate transit of forest
produce. The State of Uttar Pradesh by Uttar Pradesh Act
23 of 1965 with effect from 23.11.1965 after subsection
(2) of Section 41 inserted subsections (2A) and (2B).
Subsection (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 Forestofficer, not
below the rank of Conservator, the power to
prescribe fees under clause (c) of
subsection (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
forestproduce by means of passes which is to the
139
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 or to any destination other
than the route or destination specified in
such pass :
Provided that no transit pass hall be
required for the removal
(iii) of any forest produce which is
being removed for bona
fide consumption by any person
in exercise of a privilege
granted in this behalf by the
‘State Government’ or of a
right recognised under this
Act, within the limits of a
village in which it is
produced;
(iv) of forest produce by
contractor’s agency from the
forests managed by the Forest
Department, in which case the
movement shall be regulated by
the relevant conditions of sale
and terms of the corresponding
agreement deed executed by the
buyer;
(v) of such forest produce as may
140
be exempted by the State
Government from the operation
of these rules by notification
in the official Gazette.”
167. Rule 5 prescribes for fees payable for different
classes of passes. Rule 5(as originally framed) is as
below:
“5. Fees payable for different classes of
passes. At the Check Chowki or depot
established under Rule 15 and specified
under proviso (ii) to clause (b) of subrule
(1) of Rule 4, the forest produce alongwith
the two copies of the pass (duplicate and
triplicate) shall be produced for
examination under subrule (4) of Rule 6 and
for payment of transit fee on the forest
produce calculated at the following rates;
corresponding receipt shall be granted in
the form given in Schedule ‘C’
(i)per lorry load of .Rs.
timber or other 5.00 per
forest produce tonne of
capacity
(ii)per cart load of .Rs. 2.50
timber or other
forest produce
(iii)per camel load .Rs. 1.25
of timber or other
forest produce
(iv)per pony load of .Re. 0.50
141
timber or other
forest produce
(v)per head load of .Re. 0.25
timber or other
forest produce
Note. In respect of resin and
resin products, the provisions of
the Uttar Pradesh Resin and Other
Forest Produce (Regulation of
Trade) Act, 1976 and the rules
framed thereunder, shall apply.”
168. By the Uttar Pradesh Transit of Timber and other
Forest Produce (Third Amendment) Rules, 2004 fee
prescribed in Rule 5 was increased, for example per lorry
load of timber or other forest produce in place of Rs.5/
per tonne of capacity is shown fee of Rs.38/ per tonne
of capacity. Now, comes to Fourth Amendment Rules, 2010
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
142
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:
(i)(a) per lorry Rs.200.00 per (i)(a) per Advalorem at the
load of timber cubic Meter lorry load or rate of 5% or
other than of of capacity timber of minimum
Khair, Sal and Khair, Sal and Rs.2000/
Sagaun (Teak) Sagaun (Teak)
Shisham, Sandal Shisham,Sandal
Wood and Red Wood and Red
Sanders Sanders
(b)per lorry load Rs.75.00 per (b) per lorry Advalorem at the
of timber other cubic Meter load of timber rate of 5% or
than of Khair, Sal of capacity other than of minimum Rs.750.
and Sagaun (Teak), Khair, Sal and
Shisham, Sandal Sagaun (Teak),
Wood and Red Shisham,Sandal
Sanders or other Wood and Red
forest produce Sanders or
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
143
minerals.
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, Sisham, Sandal wood and Red
Sanders and with regard to other timber Rs. 75 per cubic
meter. 170. The same amount was leviable on other forest
produce. The chart has been given by learned Counsel for
the petitioners reflecting the effect of Third, Fourth
Fifth Amendment Rules with regard to a lorry load having
different capacities. The chart is as follows:
TRANSIT FEE CHARGED
Vehicle As per As per As per G. O. dt. As per G. O. Dt.
s 1978 G.O. Dt. 20.10.2010 04.06.2011
Rules 16.04.20 (a) Rs. 200/- per
Rs. 5/- 04 Rs. Cubic Meter
per 38/- per Capacity
144
Ton Ton (b)Rs. 75/- Per
Cubic Meter
capacity
6 9 Ton 9 Ton x (a) 28.57 Cubic (a) Per Lorry Ad-Valor
wheele x Rs. Rs. 38/- Meter x Rs. 200/- load of timber em at
r 5/- Rs. Rs. 5714/- of Khair, Sal the rate
Rs. 342/- and Sagaun of 5% or
45/- (Teek), minimu
Shisham, m Rs.
Sandal wood 2000/-
and Red
Sandaers
10-12 15 Ton 15 Ton x 36.50 Cubic (b) Per lorry Ad-valor
wheele X Rs. Rs. 38/- Meter x Rs. 200/- load of timber em at
r 5/- Rs. Rs. 7300/- other than of the rate
Rs. 570/- Khair, Sal and of 5% or
75/- Sagaun (Teek), minimu
Shisham, m Rs.
Sandal wood 750/-
and Red
Sanders and
other forest
produce as
mentioned in (i)
(c)
6 (b) 28.57 Cubic (c) Per lorry Ad-Valor
wheele Meter x Rs. 75/- load of other em at
r Rs. 2142/- forest produce the rate
coming from of 15%
mines i.e. coal, or
lime, stone, minimu
sand, bajri and m Rs.
other minerals. 750/-
10-12 36.50 Cubic
wheele Meter x Rs. 75/-
r Rs. 2737/-
145
171. The above chart indicates that by Third Amendment
Rules which was enforced from 14.06.2004 that is after 26
years of enforcement of Transit Rule, the Transit Fee was
increased 7 times. Whereas by Fourth amendment which was
imposed with effect from 20.10.2010. Transit Fee was
increased more than 16 times. As per Fifth amendment
rules, Transit Fee was based on advalorem basis and
although the minimum amount was fixed but there was no
cap on the maximum amount. Thus Transit Fee payable was
on the value of all forest produce. Whereas with regard
to timber advalorem was at the rate of 5 per cent but
with regard to coal, lime stone, sand, stone, bajri
other minerals advalorem is at the rate of 15 per cent.
172. High Court after considering the impact of Fifth
Amendment has held that by Fifth Amendment the increase
in Transit Fee is more than ten time. The Fifth Amendment
Rule was issued in six months of issuance of Fourth
Amendment Rule. In the affidavit filed before the High
Court the State has pleaded that every year expenditure
increases 10% to 20%, When every year expenditure
increases only 10 to 20%, what was necessity to increase
146
the transit several time fee by 5th Amendment, remains
unexplained.
173. Learned senior counsel Shri N. K. Kaul appearing
for the respondent, Indian Wood Products Co. has
explained the impact of increase of Transit Fee on the
basis of advalorem. According to the chart in so far as
the Transit Fee on Khair wood as paid by Indian Wood
Products Ltd, the payment was made 96.38 times by 4th
amendment and 362.33 times from 3rd amendment on the basis
of 5th amendment of the Rules dated 04.06.2011.
174. Before we arrive at any conclusion regarding
validity or otherwise of the Fourth and Fifth Amendment
Rules following three issues need to be addressed:
(a) Whether there is a broad correlation between
increase in the fee and expenses incurred in regulation
of forest produce, although the State is not liable to
prove any quid pro quo?
(b) Whether the State has satisfactorily justified the
increase in Transit Fee by 4th 5th amendment by
producing relevant material?
(c) Whether by adoption of advalorem basis by 5th
147
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 Others vs. 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 place, the
amount collected must be earmarked to meet
the expenses of rendering these services and
must not go to the general revenue of the
state to be spent for general public
148purposes.”
176. Another case which needs to be noted is Sreenivasa
General Traders and Others vs. State of Andhra Pradesh
and Others, (1983) 4 SCC 353. In this case, the Court
after referring to earlier judgments of this Court laid
down the following in para 31:
“31.The traditional view that there must be
actual quid pro quo for a fee has
undergone a sea change in the subsequent
decisions. The distinction between a tax and
a fee lies primarily in the fact that a tax
is levied as part of a common burden, while
a fee is for payment of a specific
benefit or privilege although the special
advantage is secondary to the primary motive
of regulation in public interest. If the
element of revenue for general purpose
of the State predominates, the levy
becomes a tax. In regard to fees there
is, and must always be, correlation
between the fee collected and the service
intended to be rendered. In determining
whether a levy is a fee, the true test must
be whether its primary and essential
purpose is to render specific services to a
specified area or class; it may be of on
consequence that the State may ultimately
and indirectly be benefited by it. The
power of any legislature to levy a fee is
conditioned by the fact that it must be
“by and large” a quid pro quo for the
services rendered. However, correlationship
between the levy and the services rendered
(sic or) expected is one of general
149character and not of mathematical
exactitude. All that is necessary is that
there should be a “reasonable relationship”
between the levy of the fee, and the
service rendered…”
177. In Delhi Race Club Limited vs. Union of India and
Others, (2012) 8 SCC 680, following was laid down in para
39 and 43:
“39. Dealing with such regulatory fees, this
Court in Vam Organic Chemicals Ltd. Anr.
Vs. State of U.P. observed that in case of a
regulatory fee, like the licence fee, no
quid pro quo is necessary, but such fee
should not be excessive…”“43…Hence, in our opinion, the licence fee
imposed in the present case is a regulatory
fee and need not necessarily entail
rendition of specific services in return but
at the same time should not be excessive. In
any case, the appellant has not challenged
the 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.
150
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 expenses. The following chart of expenses
and Transit Fee and the cost of enforcement by Forest
Department has been noticed by the High Court in para 85
which is to the following effect:
वन उपज अभभिवहन सस पप्राप रप्राजस्व तथप्रा इससस पप्राप करनस हसतत पवतर न पर भकयप्रा गयप्रा व्यय
वरर वन उपज वन भवभिप्राग पवतर न पर भकयप्रा गयप्रा व्यय
151
अभभिवहन सस अधधिषप्रान अन्य अनतसप्रासांभगक ययोग
पप्राप रप्राजस्व व्यय
(रूपयस लप्राख मम
)
2 3 4 5 6 7
2004-05 3867.00 10997.33 15.37 201.33 11213.93
2009-10 9086.17 27684.38 15.61 238.73 27938.72
2010-11 11288.2 31786.85 31.09 387.22 32205.16
2011-12 3848.33 11338.75 2.94 41.89 11383.58
(Upto July
2011
180. Learned counsel appearing for the writ petitioners
with regard to above collection and expenses has
submitted that by collection of Transit Fee State was
trying to meet the entire expenses of Forest Department
and the expenses of entire establishment and no details
were given of expenses incurred for regulation of Transit
Fee separately. It is submitted that Transit Fee is not
the only source of Forest Department to meet the expenses
of entire establishment of the Forest Department.
181. Shri Udit Chandra, learned counsel appearing for
some of the petitioners has referred to a Division Bench
judgment of Allahabad High Court in Civil Misc.Writ
Petition No.72465 of 2011M/s. Singh Timber Trader and
152
others vs. State of U.P. and others (reported in 2016(1)
Allahabad Daily Judgment 174). It is submitted that the
writ petitioners in the above case, the manufacturers of
plywood and veneer prayed for quashing of the
notification dated 20.10.2010 by which Rule 11 of the
U.P. Establishment and Regulation of Saw Mills Rules,
1978 had been substituted by U.P. Establishment and
Regulation of Saw Mills (Fourth Amendment) Rules, 2010.
By the said Fourth Amendment, Rules, 2010 licence fee for
Saw Mills had been enhanced by 15 times from Rs.5,000/
per year to Rs.75,000/ per year. What is submitted is
that the State in the said writ petition for justifying
the enhancement of licence fee for Saw Mills has relied
on the same figures of expenditure on
enforcement/regulation in U.P. Forest Department which
has been relied in the High Court in the impugned
judgment in support of increase in the transit fee. It is
submitted that thus the figures of expenditure which are
claimed by the State are not clearly figures of
expenditure on regulation of transit but include other
expenditures of the forest department also. It is useful
153
to extract the following portion of the above mentioned
Division Bench judgment dated 23rd December, 2014:
“The State Government in the counter
affidavit has tried to justify the
enhancement in the fee in the following
manner.
(a) Expenditure on enforcement/
regulation in U.P. Forest Department
has increased about three times i.e.
from Rs.11213.93 lakh in year 200405
to 32205.16 lakh in year 201011.
Year Expenditure on regulation
(Rupees in
Lakh)
Establish Other Incidental Total
ment expenditure
200405 10997.33 15.37 201.33 11213.93
200910 27684.38 15.61 238.73 27938.72
201011 31786.85 31.09 387.22 32205.16The 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
154is 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, has made it
unconstitutional on both the counts namely
that the cost of forest produce has no
corelation with the objects sought to be
achieved by regulation of transit, and
secondly the State has not justified the
increase on any empirical data based on
scientific evaluation of the cost of
regulation. The fee has thus changed its
character from regulatory fee, and in the
absence of any defence on quid pro quo, to a
compensatory tax, which has the effect of
augmenting the revenue of the State.142. In our opinion, considering the
arguments raised and the material placed
before us, even if the Rules of 1978 are
valid, the notifications dated 13.12.2010,
dated 4th June, 2011 under challenge,
increasing the transit fees firstly on cubic
155feet basis and thereafter item wise on ad
valorem basis linked to the price by making
distinction between the forest produce, and
the minor minerals, which are also forest
produce, and without providing justification
for such increase, converted the regulatory
fees into compensatory tax. The State has
completely failed to justify, such arbitrary
increase, both on the principle of
reasonableness and in public interest.”184. The aforesaid figures, as noticed in paragraph 85,
were expressly considered by the High Court in para 181
of the judgment where following observation has been
made:
“181....The collections in 201011, before
the 4th and 5th Amendments to the Rules of
1978 was 11288. 2 lacs, whereas the
expenditure of the establishment and other
administrative expenses on the enforcement
for the entire year 201011 on the
collection of transit fees by the department
was 32205.16 lacs. It is likely to 128
increase, as admitted by only 1020% every
year. The revenue to be generated by the
transit fee, would thus be at least 10 times
more than the cost in collection of fees. By
any conservative estimate the increase of
fees on ad valorem basis, would be far above
the entire expenses born by the department
for enforcement on collection of the fees,
and thus the large amount of the collection
of transit fees will go into the coffers of
the State to raise its revenues. Even if
entire collections are spent on maintenance
of staff, vehicles, fuel and other
156administrative expenses of forest
department, it looses its character as
regulatory fees, to regulate transit of
forest produce, with no benefit or service
directly 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 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 threejudges Bench in Calcutta Municipal Corpn.
And others vs. Shrey Mercantile (P) Ltd. and others, 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
157a “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:
“16.Therefore, the main difference between
“a fee” and “a tax” is on account of the
source of power. Although “police power” is
not mentioned in the Constitution, we may
rely upon it as a concept to bring out the
difference between “a fee” and “a tax”. The
power to tax must be distinguished from an
exercise of the police power. The “police
power” is different from the “taxing power”
in its essential principles. The power to
regulate, control and prohibit with the main
object of giving some special benefit to a
specific class or group of persons is in the
exercise of police power and the charge
levied on that class to defray the costs of
providing benefit to such a class is “a
fee”. Therefore, in the aforestated judgment
in Kesoram case1 it has been held that where
regulation is the primary purpose, its power
is referable to the “police power”. If the
primary purpose in imposing the charge is to
regulate, the charge is not a tax even if it
produces revenue for the Government. But
where the Government intends to raise
revenue as the primary object, the
imposition is a tax. In the case of
Synthetics Chemicals Ltd. v. State of
U.P.3 it has been held that regulation is a
necessary concomitant of the police power of
the State and that though the doctrine of
police power is an American doctrine, the
power to regulate is a part of the sovereign
158power of the State, exercisable by the
competent legislature. However, as held in
Kesoram case1 in the garb of regulation, any
fee or levy which has no connection with the
cost or expense of administering the
regulation cannot be imposed and only such
levy can be justified which can be treated
as a part of regulatory measure. To that
extent, the State’s power to regulate as an
expression of the sovereign power has its
limitations. It is not plenary as in the
case of the power of taxation.”188. The Court further held that since the Regulation
provides for imposition of fee on advalorem basis which
is a circumstance to show that the impugned levy is in
the nature of tax and not in the nature of a fee. In
paragraph 18 following was stated;
"18..Further, under the Regulations, the
Corporation while prescribing fees has
levied fees on ad valorem basis which is one
more cirumstance to show that the impugned
levy is in the nature of tax and not in the
nature of a fee. Further, the qunatum of
levy indicates that 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,
159appearing 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
threeJudges Bench judgment in P.M. Ashwathanarayana
Sefty and others vs. State of Karnataka and others, 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
and assume that of a tax. In paragraph 40 of the judgment
following was held:
“40. A fee which at the inception is
supportable as one might shed its complexion
as a fee and assume that of a tax by reason
of the accumulation of surpluses or the
happening of events which tend to affect and
160unsettle the requisite degree of
correlation.”190. The Court also addressed the issue as to whether
advalorem principle which is appropriate to taxation
would be inapplicable in the context of an impost which
is meant as a contribution towards the of costs of
service. The Court held that in view of the inherent
complexity of these fiscal adjustments, courts give a
larger discretion to the legislature in the matter of its
preferences of economic and social policies. The Court
further held that the question of the measure of tax or a
fee should be advalorem or ad quantum is again a matter
of fiscal policy. The Court ultimately held that although
advalorem principle which may not be an ideal basis for
distribution of a fee but no unconstitutionality or
infirmity can be incurred. However, the Court has held
that 'fee' meant to defray expenses of services cannot be
applied towards objects of general public utility. In
paragraph 96 following is stated:
“96. The power to raise funds through the
fiscal tool of a fee is not to be confused
with a compulsion so to do. While “fee”
161meant to defray expenses of services cannot
be applied towards objects of general public
utility as part of general revenues, the
converse is not valid. General public
revenues can, with justification, be
utilised to meet, wholly or in substantial
part, the expenses on the administration of
civil justice. Many States including
Karnataka and Rajasthan had, earlier,
statutory upper limits fixed for the court
fee. But later legislation has sought to do
away with the prescription of an upper
limit. The insistence on raising court fees
at high rates recalls of what Adam
Smith“Wealth of Nations” said:“There is no art which one
government sooner learns of another
than that of drawing money from the
pockets of the people.””191. In the aforesaid case, the Court, however, had
struck down Entry 20 in Schedule I of the Bombay Act
where advalorem Court fee was imposed without the benefit
of upper limit of Rs.15,000/ which was prescribed in
respect of other suits and proceedings. The Court held
the 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
162Maharashtra 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
of the amounts claimed over and above Rs 15
lakhs. As against this, persons claiming
probates have no such relief in the form of
an upper limit to fee payable.91. This contention was accepted by the
learned Single Judge who has upheld the
appeal. Indeed, where a proceeding for grant
of probate and letters of administration
becomes a contentious matter, it is
registered as a suit and proceeded with
accordingly. If in respect of all other
suits of whatever nature and complexity an
upper limit of Rs 15,000 on the court fee is
fixed, there is no logical justification for
singling out this proceeding for an ad
163valorem impost without the benefit of some
upper limit prescribed by the same statute
respecting all other litigants. Neither
before the High Court — nor before us here —
was the impost sought to be supported or
justified as something other than a mere
fee, levy of which is otherwise within the
State’s power or as separate “fee” from
another distinct source. It is purported to
be collected and sought to be justified only
as court fee and nothing else.92. The discrimination brought about by
the statute, in our opinion, fails to pass
the constitutional muster as rightly pointed
out by the High Court. The High Court, in
our opinion rightly, held:“There is no answer to this contention,
except that the legislature has not
thought it fit to grant relief to the
seekers of probates, whereas plaintiffs
in civil suits were thought deserving of
such an upper limit. The discrimination
is a piece of class legislation
prohibited by the guarantee of equal
protection of laws embodied in Article 14
of the Constitution. On this ground also
item 10 cannot be sustained.”93. We approve this reasoning of the High
Court and the decision of the High Court is
sustained on this ground alone. In view of
this any other ground urged against the
constitutionality of the levy is unnecessary
to be examined.”192. The Court thus struck down a provision of the Court
fee where there was no maximum cap on advalorem basis.
164There was no maximum cap in the Fifth Amendment Rules
although minimum fee was prescribed. Even in some of the
cases of fee advalorem principle may be applied but we
are of the considered opinion that in case of transit fee
where the object and purpose is regulation of transit of
forest produce adoption of advalorem principle for 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 wide 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,
165thus, 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 Court295. In this batch of appeals in some appeals interim
order were passed. In some of the appeals, no interim
order was passed. This Court noticing the divergent
orders passed in the batch of appeals, passed a detailed
interim order on 29.10.2013 which was to the following
effect:
“1) 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 3rd
amendment to the Rules mentioned in the earlier
part of this order.2) Any such recovery shall remain subject to the
ultimate outcome of present petitions pending in
this Court.3) In the event of writ petitioners/private
166parties succeeding in their cases, the amount
deposited/recovered from them shall be refunded to
them with interest at the rate of 9% p.a. from the
date the deposit was made till actual refund.4) The State shall maintain accurate amount of
recovery made and the nature and the
quantum/quantity of the produce removed by the
private parties concerned.5) Even in the 2nd batch of cases arising out of
Writ Petition No. 975 of 2004 whereby the High
Court has struck down the 4th and 5th amendment to
the Rules, the State shall be free to make
recoveries in terms of the 3rd amendment in regard
to the forest produce removed from within the
State of U.P. The operation of the orders passed
by the High Court shall to that extent remain
stayed.6) This modification shall not apply to exempted
goods or industrial by products like Klinker and
fly ash.”196. By a subsequent order dated 26.04.2016, this Court
further modified the interim order dated 29.10.2013. The
order dated 29.10.2013 was modified on 26.04.2016 to the
following effect:
“(1) Insofar as forest produce as defined in
subclause(a) of Clause(4) of Section 2 is
concerned, the 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 as aforesaid;(2) Insofar as forest produce originating from
167State of U.P. and covered by subclause (b) of
Clause (4) of Section 3 is concerned, the
State shall be free recover transit fee at the
rate stipulated in the fifth amendment to the
aforesaid Rule 5.(3) Insofar as forest produce covered under
subclause(b) of Clause(4) of Section 2, which
does not originate from State of U.P. but is
merely passing through the State, the State
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 1 st May 2016. (8) This
modification shall not apply to exempted goods
or industrial byproducts 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
168stipulated 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/private parties succeeding in their,
the amount deposited/recovered from them be refunded with
interest @9%.
199. We having upheld the judgment of the High Court
dated 11.11.2011 striking down Fourth and Fifth Amendment
Rules further steps needs to be taken as per interim
direction dated 26.04.2016 which came into the effect
from 01.05.2016. It is made clear that in so far as prior
to 01.05.2016 recovery was permitted as per Third
Amendment Rules which has been upheld, there is no
question of considering any claim of refund of any
transit fee prior to 01.05.2016. The transit fee is an
indirect tax and the State is entitled to consider the
claim of refund provided the Entry Tax has not passed on
to the consumer which may result into unjust enrichment.
Thus we permit the State to consider any claim of refund
169of transit fee on the condition that State shall permit
refund only after being satisfied that there is no
passing of the transit fee to the ultimate consumer and
refund may not result in unjust enrichment.
XIX. CIVIL APPEALS OF STATE OF M.P. FILED AGAINST
THE JUDGMENT DATED 14.05.2007200. The Writ Petitions were filed by the respondents
to the Civil Appeals in the High Court of Madhya Pradesh
praying for quashing the Notification dated 28.05.2001
issued by the State of Madhya Pradesh fixing the amount
of Transit Fee for issuance of Transit Pass in exercise
of power under Rule 5 of the M.P. Transit (Forest
Produce) Rules, 2000 (hereinafter referred to as 'Rules,
2000'). Writ Petitioners have also prayed for declaring
Section 2 (4)(b)(iv) and Section 41 of Indian Forest
Act, 1927(hereinafter referred to as 'Act, 1927') as
unconstitutional and ultra vires to the extent they
relate to minerals. Rule 5 of Rules, 2000 as well as
Notification dated 28.05.2001 was also sought to be
170declared as ultra vires to the powers of the State
Government under Act, 1927. In the Writ Petition the
writ petitioners raised the following contentions:
201. The Regulatory Fee with regard to transit fee on
minerals is totally illegal and without jurisdiction in
as much as the field is covered by the MMDR Act 1957.
Regulatory Fee imposed by the State of Madhya Pradesh is
a direct encroachment on the regulatory measures which
are covered within the Act, 1957. Mineral Concession
Rules, 1960(hereinafter referred to as 'Rules, 1960')
read with 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 preconstitutional statute enacted by the dominion
legislature and Act, 1957 being a parliamentary
enactment will have overriding effect over the
171provisions 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
counteraffidavit 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 on the
transportation of minerals. The method chosen by State
Government to levy the fee on the basis of quantity of
minerals would not change the nature and character of
the levy. The power of regulation and control under Act,
1957 is totally different from the imposition of
Regulatory Fee on Forest Produce by the State.
203. The Division Bench of the High Court by its
judgment dated 14.05.2007, although repelled the several
arguments of petitioner which we shall shortly notice
172hereinafter but declared the Notification dated
28.05.2001 as beyond the scope of Section 41 of Act,
1927.
204. Learned senior counsel in support of the
appellants contends that the Act, 1927, the Transit
Rules, 2000, and Act, 1957 operate in different fields
and spheres and the mere incidental trenching or
overlapping of the provisions of the State enactment
will not render the State enactment unconstitutional.
The view of the High Court that Notification dated
28.05.2001 is invalid and beyond the scope of Section 41
of Act, 1927 is erroneous. The Transit Pass is computed
on the basis of weight/volume of the Forest Produce so
as to maintain the consistency and transparency in
computation of transit fees. The computation or measure
of levy will never change the nature of the levy which
in the present case is regulatory in nature.
205. The High Court having held that the rules framed
by the State under Section 41 of the Act, 1927 operates
in different fields and spheres from the MMDR Act, 1957
and the State government has the legislative competence
173to frame the rules, holding that the computation of fee
on the basis of weight/volume of the Forest Produce is
illegal, cannot he sustained. He further contended that
the High Court has issued direction for refund of the
fees collected by the State in pursuance of the
Notification dated 28.05.2001 and it is submitted that
the direction of the High Court to refund the fees is
contrary to the law settled by this Court that in
indirect taxes the burden is already transferred to the
consumers and therefore, direction to refund the tax so
collected, the burden of which has already been
transferred, will lead to unjust enrichment of assessee.
206. Learned counsel appearing for the writ petitioner
have refuted the contention of the State and has
reiterated the submissions. Respondentpetitioners have
further raised the submissions, which were pressed
before the High Court. It is submitted that even though
the respondentpetitioners 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
174support 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 learned
counsel for the writ petitioners that Act, 1957 occupies
the field and the State had no jurisdiction to frame any
rules regarding transit of minerals. After noticing the
175various judgments of this Court, the Division Bench
concluded that two enactments i.e. Act, 1927 and Act,
1957 operate in different areas. The Division Bench
specifically rejected the argument of writ petitioners
that Section 2(4)(b)(iv) and Section 41 of the Act, 1927
be declared ultra vires. The Division Bench of the High
Court also noticed the judgment of this Court in Sudhir
Ranjan Nath (supra) and Sitapur Packing Wood Suppliers
(supra). In para 63 of the judgment following was held:
“63...We have referred to two judgments
of the Apex Court and we are of the
considered opinion on that both the
enactments operate in different areas. The
operational sphere being different we
conclude and hold that the submission that
Section 2 (4)(b)(iv) and Section 41 should
be declared ultra vires is sans substratum
and we repel the same.”209. The Division Bench of the High Court further
rejected the submission of the writ petitioners
impugning the Rule 5 of Rules, 2000 framed under Section
41 of the Act, 1927. In para 71 72 following has been
held:
“71. On a perusal of the aforesaid form it
is perceptible that there is mention of
locality of storage, name and address of the
176owner, description of produce and quantity,
name of place of transportation, route and
barrier at which forest produce would be
produced for check. On a perusal of the
aforesaid form it is manifest that it
pertains to forest produce at large. Fee can
be levied but the fee must have nexus with
the transit for checking in the context of
forest goods. Hence, we are not inclined to
accept the contention of the learned senior
counsel for the petitioners that framing of
the said rule under Section 41(2) is not
permissible.”“72....At this juncture we may
repeat at the cost of repetition
that the purpose of Section 41 of
the 1927 Act, and the purpose of the
MMDR Act are quite different...”210. The High Court thus has rejected the submission
of the writ petitioners, holding that both 1927 Act
and 1957 Act operate into different spheres. The High
Court further held that rule framed by the State under
Section 41 of the Act, 1927 i.e. Rule 5 of Rules, 2000
is valid. Various submissions of the writ petitioners
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
177regard 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 issued on Transit Pass. In
para 74 of the judgment, following has been held by
178the High Court:
“74...Hence, we have no doubt in holding
that the notification issued is contrary to
the provisions of Section 41 of the Forest
Act and in fact such issuance of
notification cannot be said to be in
consonance with the said provision. It
transgresses Rule 5 because Rule 5
stipulates that the State Government or an
officer authorised by it from time to time
shall fix the rate of fee for issue of
transit pass as per the provisions of Rule4. Thus the fee is to be fixed for issue of
a transit pass and a transit pass by no
stretch of imagination can have any nexus
with the unit of minerals in fact if we
allow ourselves to say, it is said to be a
gymnastic in the rule making process to
impose a fee on the minerals in the guise of
collection of fee on transit pass. In fact
it is a fee pertaining to minerals and not a
fee on issue of transit pass. As we have
scanned the anatomy of the provisions of
both the enactments rules framed there under
and analysed the purport and import of the
notification, the true nature and character
of levy surface something different. The
exact nature of levy cannot be marginalised
by making a sweeping statement that is a
measure of levy and the unit of minerals has
been chosen as a rational basis as there is
transportation by rope ways by land and by
other means. The units chosen really tries
to enter into the arena of regulation and
control. It may innocuous look to be a
measure or standard of fee on transit but in
essentiality it is a trespass into the area
of regulation and control. As has been
stated earlier the 1957 Act is a regulatory
Act and meant for minerals and minerals area
179development but such imposition of fee as we
are disposed to think on the basis of
foregoing analysis creates a dent and
concavity in the regulation and control.
That apart the standard or measurement does
not have any nexus with the essential
character of the levy. Therefore the
notification runs counter to the rule
because that was not the intendment of the
Rule and further that cannot be the
intendment of the language in which sections
41 and 76 of the 1927 Act have been couched.
Quite apart from the above, once we have
held that Section 41 of the 1927 Act and the
provisions of 1957 Act operate in different
spheres and judged by those parameters, the
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
180the 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 Forms
of Transit Pass are part of the rules. For example,
for ready reference, we extract the Form A of the
Rule, which is to the following effect:
FORM A
[See Rule 6(2)]
Book No. Counter foil Transit Pass Page No.
1 Locality of Storage:-(a) Range
(b) Division
2 Name and address of owner of forest produce-
3 Description of produce and quantity-4 Property mark etc.-
5 Name of place to which the produce is to be
transported-
1816 Route by which produce is to be transported-
7 Barrier at which forest produce will be produced
for check
8 Date of expiry of pass-Note: Second foil will be similar to the Counterfoil.
Signature of checking officer
Signature of issuing officer
213. Column three provides for description of produce
and quantity.
Rule 5 of Rules, 2000 provides for as follows:
s“5. Rates of fee for issue of transit
pass:The State Government or an officer
authorised by the State Government from time
to time, shall fix rates of fee for issue of
transit pass as per the provisions of Rule4.”
214. The Rule provides for fixing of rates of fee for
issue of Transit Pass. The word 'rate' has been
defined in Advanced Law Lexicon by P. Ramanatha Aiyar,
in the following words:
“Rate means a rate, cess or assessment the
proceeds of which are applicable to public
local purposes and leviable on the basis of
a valuation of property, and includes any
sum which, although obtained in the first
instance by a precept, certificate or other
instrument requiring payment from some
authority or officer, is or can be
ultimately raised out of a rate.”
182215. When the State is empowered to fix rates of fee,
it can very well fix the fee on the quantity of Forest
Produce. High Court having upheld both Section 41 of
the Act, 1927 as well as Rule 5 of Rules, 2000, we see
no reason as to how the notification issued under Rule
5 can be held to be beyond the powers of the State.
216. When the State is empowered to fix the rate of
fee, it has latitude under the statute to adopt a
basis, for fixation of rates of fee. It cannot be said
that under the statute fee can be charged only to meet
the expenses which are incurred for printing or
preparation of passes. The High Court has taken a
incorrect view of the matter while coming to the
conclusion that Notification dated 28.5.2001 is beyond
the power of the State under Rule 5 of Rules, 2000.
Rule 5 clearly empowers the State to fix the rate of
fee and the rate of fee can be fixed on the basis of
quantity/ volume of the Forest Produce. We thus are of
the view that the High Court committed error in
setting aside the Notification dated 28.05.2001. This
183Court in State of U.P. Vs. Sitapur Packing Wood
Supplier (Supra) which judgment has already been
noticed by Division Bench of High Court has considered
the 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
184by 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 that charging of transit fee
was valid. Following was held in paragraph 10 and 11:
"10. The transit fee under Rule 5 is clearly
regulatory and, thus, it was not necessary
for the State to establish quid pro quo. The
High Court was in error in holding the
transit fee is invalid in absence of quid
pro quo....11. For the aforesaid reasons, we allow
these appeals and hold that the levy of the
transit fee is valid and the judgment of the
High Court is accordingly set aside. The
parties are, however, left to bear their own
costs.”218. It is also relevant to note that although the High
Court in its judgment has held that both 1957 Act and
1927 Act operate in different fields. However, it had
also made observations that imposing fee by fixing
tonnage and cubic meter as unit had entered into
regulation and control, which is in the realm of the MMDR
Act. In paragraph 74, following has been observed:
"74....Though a stance has been taken that it
is a regulatory fee and the State has to
undertake many works for routes and
environment and, therefore, it is to be
regarded as regulatory fee but as we
185perceive, imposing fee by fixing tonnage and
cubic meters as unit, it enters into the
'regulation and control' which is in the
realm of the MMDR Act, for it has impact on
the mining activity and the primary purpose,
as is patent, is to regulate the mineral. It
is not for the purpose of regulating the
transit of minerals but to have a regulatory
measure of control of minerals. The
difference between issue of transit pass for
a fee has been galvanised into a fee on
mineral unit which has a controlling effect
on the development of minerals.”219. We have already found that 1927 Act and 1957 Act
operate in different fields. State has power to regulate
transit of forest produce under section 41 of 1927 Act
and the regulation of minerals and effect of transit
rules framed by the State is only incidental on the
regulatory control on the mineral as exercised under 1957
Act. The above observations of the Division Bench thus
cannot be approved.
220. In result, in view of the foregoing discussion, we
are of the view that High Court committed error in
quashing the order dated 28.05.2001. The Civil Appeals
filed by the State of Madhya Pradesh deserves to be
allowed.
186
XX. CONCLUSIONS
221. In view of the foregoing discussion, we arrived at
following 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
line, quick limestone, slake line, veneer and plywood
waste are all forest produce.
(c) Marble blogs, 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
187different 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 origin may be in any forest within the State
of U.P. or in a forest outside the State of U.P.
IV. The forest has to be understood according to its
dictionary meaning which covers the statutory recognised
forest and also shall include any area regarded as forest
in the Government record irrespective of the ownership.
The meaning of forest cannot be restricted only to
reserve forests, protected forests and village forests.
V. The roads notified by notification dated 10.02.1960
under Section 80A of 1927 Act cannot be read to mean that
such roads have been declared as protected forest. The
notification dated 10.2.1960 can only be read to mean
that both sides of the road have been declared as
188protected forest on which Chapter IV of the 1927 Act
shall be applicable.
VI. Rule 3 of 1978 Rules is not independent of Rule 5 of
1978 Rules. Transit fee is payable on all kinds of
transit passes and cannot be confined only to transit
passes as referred to in Rule 4(1)(b) only.
VII. After issuance of notification under Section 4 of
1927 Act, removal of forest produce therefrom shall be
governed by the Rules framed by the State in view of U.P.
Act 23 of 1965 by which original Section 5 has been
substituted in its application in the State of U.P. The
fact that no notification under Section 20 has been
issued does not mean that restriction put by the State
Government by Rules are not applicable.
VIII. The Division Bench of the Allahabad High Court
by its judgment dated 11.11.2011 has rightly struck down
Fourth and Fifth Amendment Rules to 1978 Rules as being
excessive and confiscatory in nature.
IX. The notification dated 28.05.2001 issued by the
189State of Madhya Pradesh in exercise of power under Rule 5
of 2000 Rules cannot be said to be beyond the scope of
Rule 5 of 2000 Rules and Section 41 of 1927 Act. The
State of Madhya Pradesh was fully justified in fixing
rate of transit fee at the rate of Rs.7/ and Rs.4/ per
tonne which was well within the power of the State under
Rule 5 of 2000 Rules framed under the 1927 Act.
222. In view of the foregoing discussion, we decide this
batch of cases in following manner:
(1) All Civil Appeals filed by the State of U.P. and
State of Uttarakhand challenging the judgments of the
High Court of Uttarakhand dated 01.7.2004, 20.03.2005,
26.06.2007 and subsequent judgments following the
aforesaid three judgments are allowed. 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
190against 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 Ors. vs. State of U.P. 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 interest @ 9% which shall be
considered by the State or any officer authorised by the
State. The claim of refund shall be allowed only if the
assessee alleges and establishes that he has not passed
191on the burden to any other person, since it is well
settled that the power of the Court is not meant to be
exercised for unjustly enriching a person.
(6) All the Contempt Petitions are dismissed.
(7) All the Civil Appeals filed by the State of Madhya
Pradesh against judgment dated 14.05.2007 are allowed.
The judgment of the Division Bench of the High Court
dated 14.05.2007 is set aside and the writ petitions
stand dismissed.
223. Parties shall bear their own costs.
..........................J.
( A.K. SIKRI )
..........................J.
( ASHOK BHUSHAN )
NEW DELHI,
SEPTEMBER 15, 2017.192
IN THE SUPREME COURT OF INDIA
CIVIL APPEALLATE JURISDICTIONCIVIL APPEAL NO.2047 OF 2006
STATE OF UTTARANCHAL ORS. ... APPELLANT
VERSUS
HIMALAYA STONE INDUSTRY ORS. ... RESPONDENTS
WITH SLP(C)NO.13656 OF 2002 (ADITYA BIRLA CHEMICALS (INDIA)
LTD. AND
SLP(C)No.15721 of 2012 (M/S. NANAK TRANSPORT AND COAL
SUPPLIERS OTHERS)O R D E R
C.A.NO.2047 of 2006
Order in this appeal has been reserved on
03.08.2017. This appeal does not relate to entry tax
rather the leviability of Trade Tax under the U.P.
Trade Tax Act, 1948. This appeal is detagged to be
listed after two weeks.SLP(C)Nos.13656 and 15721 of 2012
Order in these petitions has been reserved on
03.08.2017. These are detagged to be listed before a
Bench of which Hon'ble Mr. Justice Ashok Bhushan is not
a member...........................J.
( A.K. SIKRI )
........................J.
( ASHOK BHUSHAN )
NEW DELHI,
SEPTEMBER 15, 2017.193ITEM NO.1502 COURT NO.6 SECTION X
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s).14874/2017 @ Petition(s) for Special
Leave to Appeal (C)No(s)19445/2004STATE OF UTTARANCHAL ORS. Appellant(s)
VERSUS
M/S. KUMAON STONE CRUSHER Respondent(s)
WITH
C.A. No. 14446/2017 @ SLP(C) No.3189/2012
C.A. No. 14448/2017 @ SLP(C) No.1675/2012
C.A. No. 14922/2017 @ SLP(C) No.8713/2008
C.A. No. 14924/2017 @ SLP(C) No.10601/2008
C.A. No. 14923/2017 @ SLP(C) No.9513/2008
C.A. No. 14920/2017 @ SLP(C) No.6959/2008
C.A. No. 14921/2017 @ SLP(C) No.6958/2008
C.A. No. 14452/2017 @ SLP(C) No.950/2012
C.A. No. 14453/2017 @ SLP(C) No.1031/2012
C.A. No. 14464/2017 @ SLP(C) No.948/2012
C.A. No. 14465/2017 @ SLP(C) No.1169/2012
C.A. No. 14468/2017 @ SLP(C) No.1197/2012
C.A. No. 14469-14476/2017 @ SLP(C) No.2213-2220/2012
T.P.(C) No.76/2012
T.P.(C) No.77/2012
C.A. No. 14485/2017 @ SLP(C) No.1697/2012
C.A. No. 14486/2017 @ SLP(C) No.2028/2012
C.A. No. 14492/2017 @ SLP(C) No.2236/2012
C.A. No. 14493/2017 @ SLP(C) No.2081/2012
C.A. No. 14495/2017 @ SLP(C) No.2399/2012
C.A. No. 14497-14509/2017 @ SLP(C) No.3152-3164/2012
C.A. No. 14510-14523/2017 @ SLP(C) No.2938-2951/2012
C.A. No. 13122-13129/2017 @ SLP(C) No.3192-3199/2012
C.A. No. 13300/2017 @ SLP(C) No.1822/2012
C.A. No. 13301/2017 @ SLP(C) No.4832/2012
C.A. No. 13313-13319/2017 @ SLP(C) No.4002-4008/2012
C.A. No. 13320/2017 @ SLP(C) No.6144/2012
C.A. No. 13346-13358/2017 @ SLP(C) No.3512-3524/2012
C.A. No. 13360-13378/2017 @ SLP(C) No.3320-3338/2012
C.A. No. 13386-13395/2017 @ SLP(C) No.3490-3499/2012
C.A. No. 13405-13408/2017 @ SLP(C) No.13019-13022/2012
194C.A. No. 13411-13426/2017 @ SLP(C) No.12808-12823/2012
C.A. No. 13448-13463/2017 @ SLP(C) No.3624-3639/2012
C.A. No. 13488/2017 @ SLP(C) No.6822/2012
C.A. No. 13427/2017 @ SLP(C) No.11395/2013
C.A. No. 13518/2017 @ SLP(C) No.6614/2012
C.A. No. 13542/2017 @ SLP(C) No.6807/2012
C.A. No. 13559/2017 @ SLP(C) No.5965/2012
C.A. No. 13575/2017 @ SLP(C) No.4761/2012
C.A. No. 13578-13580/2017 @ SLP(C) No.4881-4884/2012
C.A. No. 13602-13605/2017 @ SLP(C) No.6047-6050/2012
C.A. No. 13621/2017 @ SLP(C) No.5911/2012
C.A. No. 13430-13446/2017 @ SLP(C) No.11917-11933/2013
C.A. No. 13465-13487/2017 @ SLP(C) No.16261-16283/2013
C.A. No. 13489-13517/2017 @ SLP(C) No.16316-16344/2013
C.A. No. 13627/2017 @ SLP(C) No.6715/2012
C.A. No. 13428/2017 @ SLP(C) No. 21930/2009
C.A. No. 13385/2017 @ SLP(C) No. 12318/2009
C.A. No. 13397/2017 @ SLP(C) No. 12530/2009
C.A. No. 13520-13533/2017 @ SLP(C) No.16285-16298/2013
C.A. No. 13645/2017 @ SLP(C) No.5760/2012
C.A. No. 13675-13699/2017 @ SLP(C) No.6147-6171/2012
C.A. No. 13714-13718/2017 @ SLP(C) No.8991-8995/2012
C.A. No. 13409/2017 @ SLP(C) No. 11846/2009
C.A. No. 13536/2017 @ SLP(C) No.12577/2013
C.A. No. 13741/2017 @ SLP(C) No.6532/2012
C.A. No. 13786/2017 @ SLP(C) No.6588/2012
C.A. No. 13787/2017 @ SLP(C) No.6937/2012
C.A. No. 13788/2017 @ SLP(C) No.5558/2012
C.A. No. 13792-13813/2017 @ SLP(C) No.12967-12988/2012
C.A. No. 13816-13828/2017 @ SLP(C) No.12989-13001/2012
C.A. No. 13829/2017 @ SLP(C) No.7199/2012
C.A. No. 13830/2017 @ SLP(C) No.7702/2012
C.A. No. 13745-13759/2017 @ SLP(C) No.16846-16860/2013
C.A. No. 13935/2017 @ SLP(C) No.8775/2012
C.A. No. 13936/2017 @ SLP(C) No.10499/2012
C.A. No. 13537-13541/2017 @ SLP(C) No.16299-16303/2013
C.A. No. 13937/2017 @ SLP(C) No.7491/2012
C.A. No. 14076-14078/2017 @ SLP(C) No.8465-8467/2012
CONMT.PET.(C)No.199-201/2014 In SLP(C)No.31530-31532/2011
C.A. No. 13760-13770/2017 @ SLP(C) No.2776-2786/2014
C.A. No. 14080-14100/2017 @ SLP(C) No.15501-15521/2012
C.A. No. 14101-14117/2017 @ SLP(C) No.15611-15627/2012
C.A. No. 14118-14132/2017 @ SLP(C) No.15430-15444/2012
C.A. No. 14134-14145/2017 @ SLP(C) No.15405-15416/2012
C.A. No. 13544/2017 @ SLP(C) No.12578/2013
C.A. No. 14146/2017 @ SLP(C) No.12176/2012
C.A. No. 13606/2017 @ SLP(C) No.12657/2014
C.A. No. 14157-14176/2017 @ SLP(C) No.15446-15465/2012
195C.A. No. 14178-14190/2017 @ SLP(C) No.16987-17001/2012
C.A. No. 14192-14193/2017 @ SLP(C) No.15543-15544/2012
C.A. No. 14194-14206/2017 @ SLP(C) No.15417-15429/2012
C.A. No. 13545/2017 @ SLP(C) No.13521/2013
C.A. No. 14207-14225/2017 @ SLP(C) No.15466-15484/2012
C.A. No. 14227-14247/2017 @ SLP(C) No.15522-15542/2012
C.A. No. 14249-14264/2017 @ SLP(C) No.15485-15500/2012
C.A. No. 14266/2017 @ SLP(C) No.16970/2012
C.A. No. 14268/2017 @ SLP(C) No.12948/2012
C.A. No. 13622/2017 @ SLP(C) No.12659/2014
C.A. No. 13626/2017 @ SLP(C) No.13683/2014
C.A. No. 13637/2017 @ SLP(C) No.12658/2014
C.A. No. 13646/2017 @ SLP(C) No.12661/2014
C.A. No. 13700/2017 @ SLP(C) No.13684/2014
C.A. No. 14270-14271/2017 @ SLP(C) No.15401-15402/2012
C.A. No. 14274-14275/2017 @ SLP(C) No.15795-15796/2012
C.A. No. 14277-14278/2017 @ SLP(C) No.13776-13777/2012
C.A. No. 14282/2017 @ SLP(C) No.13774/2012
C.A. No. 14147-14148/2017 @ SLP(C) No. 9093-9094/2008
C.A. No. 14284-14291/2017 @ SLP(C) No.15547-15554/2012
C.A. No. 14294-14306/2017 @ SLP(C) No.15591-15603/2012
C.A. No. 14307/2017 @ SLP(C) No.14738/2012
C.A. No. 14309/2017 @ SLP(C) No.15804/2012
C.A. No. 14311/2017 @ SLP(C) No.13148/2012
W.P.(C) No. 203/2009
C.A. No. 2797/2008
C.A. No. 14315-14322/2017 @ SLP(C) No.15555-15562/2012
C.A. No. 13771-13780/2017 @ SLP(C) No.11380-11389/2013
C.A. No. 14328-14339/2017 @ SLP(C) No.15571-15582/2012
C.A. No. 14348-14355/2017 @ SLP(C) No.15583-15590/2012
C.A. No. 14357-14364/2017 @ SLP(C) No.15563-15570/2012
C.A. No. 14368-14374/2017 @ SLP(C) No.15604-15610/2012
C.A. No. 14376/2017 @ SLP(C) No.15445/2012
C.A. No. 14378/2017 @ SLP(C) No.16973/2012
C.A. No. 14381/2017 @ SLP(C) No.16972/2012
C.A. No. 14382-14392/2017 @ SLP(C) No.17016-17026
C.A. No. 14393-14404/2017 @ SLP(C) No.17004-17015/2012
C.A. No. 2821/2008
C.A. No. 14406-14407/2017 @ SLP(C) No.15545-15546/2012
C.A. No. 14292/2017 @ SLP(C) No. 15896/2010
C.A. No. 13558/2017 @ SLP(C) No.18661/2013
C.A. No. 14409-14410/2017 @ SLP(C) No.16987-16988/2012
C.A. No. 14414-14423/2017 @ SLP(C) No.16975-16917/2012
C.A. No. 14426-14444/2017 @ SLP(C) No.16951-16969/2012
SLP(C) No. 13656/2012
C.A. No. 14447/2017 @ SLP(C) No.13640/2012
C.A. No. 14449-14451/2017 @ SLP(C) No.34773-34775/2012
C.A. No. 13574/2017 @ SLP(C) No.18665/2013
C.A. No. 14454-14463/2017 @ SLP(C) No.23589-23598/2012
C.A. No. 14466-14467/2017 @ SLP(C) No.19075-19076/2012
C.A. No. 13576/2017 @ SLP(C) No.18664/2013
196C.A. No. 14272/2017 @ SLP(C) No. 11923/2009
C.A. No. 5652/2008
SLP(C) No. 15721/2012
C.A. No. 13781/2017 @ SLP(C) No.11392/2013
C.A. No. 14477/2017 @ SLP(C) No.17003/2012
C.A. No. 13379/2017 @ SLP(C) No. 24106/2007
C.A. No. 2739-2762/2008
C.A. No. 14177/2017 @ SLP(C) No. 17666/2008
C.A. No. 14191/2017 @ SLP(C) No. 22322/2008
C.A. No. 14248/2017 @ SLP(C) No. 20675/2008
C.A. No. 14226/2017 @ SLP(C) No. 22629/2008
C.A. No. 2734/2008
C.A. No. 13535/2017 @ SLP(C) No. 33180/2010
C.A. No. 13106-13116/2017 @ SLP(C) No. 26555-26565/2012
C.A. No. 13302-13312/2017 @ SLP(C) No.2812-2822/2014
C.A. No. 13546-13557/2017 @ SLP(C) No. 27709-27720/2012
C.A. No. 13560-13571/2017 @ SLP(C) No. 23599-23610/2012
C.A. No. 14273/2017 @ SLP(C) No. 17572/2009
C.A. No. 2737/2008
C.A. No. 2820/2008
C.A. No. 2706/2008
C.A. No. 13577/2017 @ SLP(C) No.22760/2013
C.A. No. 13464/2017 @ SLP(C) No. 22363/2010
C.A. No. 13447/2017 @ SLP(C) No. 21868/2010
C.A. No. 13321-13344/2017 @ SLP(C) No.2788-2811/2014
C.A. No. 13581-13600/2017 @ SLP(C) No. 24075-24094/2012
C.A. No. 13607-13620/2017 @ SLP(C) No. 23682-23695/2012
C.A. No. 2862-2863/2008
C.A. No. 13623-13624/2017 @ SLP(C) No. 21030-21031/2012
C.A. No. 13543/2017 @ SLP(C) No. 26825/2011
C.A. No. 13628-13636/2017 @ SLP(C) No. 24065-24073/2012
C.A. No. 13638-13644/2017 @ SLP(C) No. 26464-26470/2012
C.A. No. 13601/2017 @ SLP(C) No.22761/2013
C.A. No. 13647-13674/2017 @ SLP(C) No. 26610-26637/2012
C.A. No. 13701-13713/2017 @ SLP(C) No. 26662-26674/2012
C.A. No. 13721-13740/2017 @ SLP(C) No. 26639-26658/2012
C.A. No. 13359/2017 @ SLP(C) No. 23547/2005
C.A. No. 2732/2008
C.A. No. 14276/2017 @ SLP(C) No. 18760/2009
C.A. No. 14279/2017 @ SLP(C) No. 18843/2009
C.A. No. 13118/2017 @ SLP(C) No. 26273/2004
C.A. No. 13121/2017 @ SLP(C) No. 24889/2004
C.A. No. 13938/2017 @ SLP(C) No. 27324/2012
C.A. No. 2819/2008
C.A. No. 14265/2017 @ SLP(C) No. 22635/2008
C.A. No. 13939-14074/2017 @ SLP(C) No. 30398-30533/2012
C.A. No. 14267/2017 @ SLP(C) No. 21844/2008
C.A. No. 14269/2017 @ SLP(C) No. 24768/2008
C.A. No. 14079/2017 @ SLP(C) No. 27326/2012
C.A. No. 14133/2017 @ SLP(C) No.17217/2009
C.A. No. 1007/2011
C.A. No. 14478-14484/2017 @ SLP(C) No.33163-33169/2012
197C.A. No. 1008/2011
C.A. No. 13130/2017 @ SLP(C) No. 2294/2008
C.A. No. 14487-14491/2017 @ SLP(C) No.33170-33174/2012
C.A. No. 14280/2017 @ SLP(C) No. 29725/2009
CONMT.PET.(C)No.585-587/2016 In SLP(C)No.31530-31532/2011
C.A. No. 14494/2017 @ SLP(C) No.30535/2012
C.A. No. 14293/2017 @ SLP(C) No.27511/2011
C.A. No. 14308/2017 @ SLP(C) No. 27487/2011
C.A. No. 14496/2017 @ SLP(C) No.32133/2012
C.A. No. 14524/2017 @ SLP(C) No.34383/2012
C.A. No. 14310/2017 @ SLP(C) No. 27840/2011
C.A. No. 14075/2017 @ SLP(C) No. 32029/2012
C.A. No. 14525-14531/2017 @ SLP(C) No.36975-36981/2012
C.A. No. 14532/2017 @ SLP(C) No.30185/2012
C.A. No. 13719-13720/2017 @ SLP(C) No.34637-34638/2014
C.A. No. 13345/2017
CONMT.PET.(C) No. 251/2008 In C.A. No. 2797/2008
C.A. No. 14281/2017 @ SLP(C) No. 27771/2009
C.A. No. 13105/2017
C.A. No. 14283/2017 @ SLP(C) No. 31868/2009
C.A. No. 14534-14536/2017 @ SLP(C) No.37685-35687/2012
C.A. No. 14537/2017 @ SLP(C) No.37683/2012
C.A. No. 13519/2017 @ SLP(C) No. 33180/2010
C.A. No. 13131/2017
C.A. No. 14538/2017 @ SLP(C) No.37576/2012
C.A. No. 13117/2017
C.A. No. 1010/2011
C.A. No. 14312-14314/2017 @ SLP(C) No. 31530-31532/2011
C.A. No. 14323-14326/2017 @ SLP(C) No. 32620-32623/2011
C.A. No. 13398/2017
C.A. No. 13410/2017
C.A. No. 13429/2017
C.A. No. 14919/2017 @ SLP(C) No. 6956/2008
C.A. No. 13119/2017
C.A. No. 13380-13384/2017 @ SLP(C) No.4943-4947/2013
C.A. No. 14327/2017 @ SLP(C) No. 1398/2012
C.A. No. 14340-14347/2017 @ SLP(C) No. 34909-34916/2011
C.A. No. 13396/2017 @ SLP(C) No.4461/2013
C.A. No. 14356/2017 @ SLP(C) No. 36272/2011
C.A. No. 14365-14367/2017 @ SLP(C) No. 134-136/2012
C.A. No. 14365-14367/2017 (III-A)
C.A. No. 14375/2017 @ SLP(C) No.1684/2012
C.A. No. 14377/2017 @ SLP(C) No.2433/2012
C.A. No. 14379/2017 @ SLP(C) No. 1874/2012
T.P.(C) No. 18/2012
C.A. No. 14380/2017 @ SLP(C) No. 1198/2012
C.A. No. 14405/2017 @ SLP(C) No. 1074/2012
C.A. No. 14405/2017
T.P.(C) No. 44/2012
C.A. No. 14408/2017 @ SLP(C) No. 652/2012
C.A. No. 14411/2017 @ SLP(C) No. 738/2012
C.A. No. 14412-14413/2017 @ SLP(C) No. 146-147/2012
C.A. No. 14424-14425/2017 @ SLP(C) No. 877-878/2012
198C.A. No. 14445/2017 @ SLP(C) No. 981/2012
C.A. No. 13399-13404/2017 @ SLP(C) No.8204-8209/2013
C.A. No. 13104/2017
C.A. No. 2047/2006Date : 15-09-2017 These matters were called on for
pronouncement of judgment today.CORAM :
HON'BLE MR. JUSTICE A.K. SIKRI
HON'BLE MR. JUSTICE ASHOK BHUSHANFor Appellant(s) Mr. M. R. Shamshad, AOR
Mr. Mishra Saurabh, AOR
Mr. Pankaj Bhatia, Adv.Mr. Kailash Chand, AOR
Mr. Syed Shahid Hussain Rizvi, AOR
M/s. AP J Chambers, AOR
Mr. Jatinder Kumar Bhatia, AOR
Mr. Sharmila Upadhyay, AOR
Mr. Abhishek Chaudhary, AOR
Mr. E. C. Agrawala, AOR
Mr. Piyush Sharma, AOR
Mr. Pawanshree Agrawal, AORMr. Pavan Kumar, Adv.
Mr. R.N. Pareek, Adv.
Ms. Rachana Srivastava, AOR
Ms. Monika, Adv.Ms. Sukrit R. Kapoor, Adv.
Ms. Nithya Madhusoodhanan, Adv.
Mr. Arun K. Sinha, AOR
Ms. Mukti Chowdhary, AOR
Mr. Manish Kumar Saran, AOR
Mr. Aniruddha P. Mayee, AOR
Mr. Samir Ali Khan, AOR
Mr. K. V. Sreekumar, AOR
Mr. Shamik Shirishbhai Sanjanwala, AOR
Mr. Sunil Kaundal, Adv.Mr. Kamlendra Mishra, AOR
Mr. Abhijit Sengupta, AOR
Mr. Arvind Kumar, AOR
Mr. E. R. Sumathy, AOR
Mr. Garvesh Kabra, AOR
Mr. K. V. Bharathi Upadhyaya, AOR
Mr. Nirnimesh Dube, AOR
Ms. Mridula Ray Bharadwaj, AOR
Mr. K. K. Mohan, AORMr. Baij Nath Patel, Adv.
Ms. Sweta, Adv.
Ms. Romila, Adv.
Mr. C.D. Singh, Adv.
199
Mr. Prateek Rusia, Adv.
Mr. Jitendra Mohan Sharma, AOR
Mr. Ajit Sharma, AOR
Mr. Kamal Mohan Gupta, AOR
Mr. Ravindra S. Garia, AOR
Mr. Kaushal Yadav, AOR
Mr. N. Annapoorani, AOR
Ms. Anita Bafna, AOR
Mr. T. Harish Kumar, AOR
Mr. Praveen Jain, AOR
Mr. Prashant Kumar, AOR
Mr. Pavan Kumar, AOR
Mr. Rahul Kaushik, AOR
Ms. Aruna Gupta, AOR
Mr. M. A. Chinnasamy, AOR
Mr. Shrish Kumar Misra, AOR
Mr. Gaurav Dhingra, AOR
Mr. Pramod Dayal, AOR
Ms. Abha Jain, AOR
Mr. Jaivir Singh, Adv.Mr. Gaurav Jain, Adv.
Mr. Anupam Mishra, Adv.
Mr. Shiv Prakash Pandey, AOR
Ms. Pragati Neekhra, AOR
Mr. R. P. Gupta, AOR
Mr. Jitendra Kumar, AOR
Mr. R. D. Upadhyay, AOR
Mr. C. D. Singh, AOR
Ms. Abha R. Sharma, AOR
Mr. Anil Kumar Jha, AOR
Mr. Aftab Ali Khan, AOR
Mr. Neeraj Shekhar, AORMr. Nishit Agrawal, Adv.
Mr. T.A. Rehman, Adv.
Mr. Vipin Kumar Jai, AOR
Mr. Pahlad Singh Sharma, AOR
Mr. Santosh Kumar Tripathi, AORMr. Pankaj Bhatia, Adv.
Mr. Nipun Goel, Adv.
Mr. Dhruv Surana, Adv.
Mr. Ashish Choudhary, Adv.
Ms. Bharti Tyagi, AOR
Mr. Ashok Kumar Singh, AOR
Mr. R. C. Kaushik, AOR
Mr. Arjun Garg, AOR
Mr. Manish Yadav, Adv.Mr. Ambhoj Kumar Sinha, AOR
Mr. Deepak Khurana, Adv.Mr. Umesh Kumar Khaitan, AOR
200Ms. Tulika Prakash, AOR
For Respondent(s) Mr. Neeraj Kishan Kaul, Sr. Adv.
Mr. Vikas Mehta, AOR
Mr. Deepak Joshi, Adv.Mr. Sanyat Lodha, Adv.
Ms. Mukti Chowdhary, AOR
Mr. S. K. Dhingra, AOR
Gp. Capt. Karan Singh Bhati, AOR
Ms. Aishwarya Bhati, Adv.Mr. Jaideep Singh, Adv.
Mr. T. Gopal, Adv.
Mr. Amit Verma, Adv.
Ms. Ritu Apoorva, Adv.
Ms. Tanuja Patra, Adv.
Ms. Hina Khan, Adv.
Mr. Vishwajeet Singh, Adv.
Ms. Vanita Bhargava, Adv.
Mr. Ajay Bhargava,Adv.
Mr. Jeevan B. Panda, Adv.
Ms. Abhisaar Bairagi, Adv.
M/s. Khaitan Co., AOR
Ms. Manjeet Kirpal, AOR
Mr. T. G. Narayanan Nair, AOR
Mr. M. R. Shamshad, AOR
Mr. Shiv Prakash Pandey, AOR
Mr. Abhishek Chaudhary, AOR
Mr. Kamlendra Mishra, AOR
Mr. Jatinder Kumar Bhatia, AOR
M/s. Ap J Chambers, AOR
Mr. Pahlad Singh Sharma, AOR
Mr. Vivek Gupta, AOR
Mr. Jitendra Mohan Sharma, AOR
Mr. Gaurav Dhingra, AORMr. Raj Singh Rana, AOR
M/s. M. V. Kini Associates, AOR
Mr. Garvesh Kabra, AOR
Mr. Rameshwar Prasad Goyal, AOR
Mr. E. C. Agrawala, AOR
Mr. Anil Kumar Jha, AOR
Mr. Sanjay Kumar Tyagi, AOR
Mr. E. C. Vidya Sagar, AOR
Ms. Sharmila Upadhyay, AOR
Ms. Bharti Tyagi, AOR
Ms. S. Usha Reddy, AOR
Mr. Adarsh Upadhyay, AOR
Mr. A. N. Arora, AOR
Ms. Rachana Srivastava, AOR
Ms. Abha Jain, AOR
201Mr. Aniruddha P. Mayee, AOR
Mr. Pradeep Misra, AOR
Dr. Harshvir Pratap Sharma, Adv.Mr. K. S. Rana, AOR
Mr. S.K. Dhingra, Adv.Ms. Shefali Mitra, Adv.
Mr. Gaurav Agarwal, Adv.
Mr. Raj Singh Rana, Adv.
Mr. Bharat Sangal, AOR
Ms. S.S. Reddy, Adv.Ms. Vidushi Garg, Adv.
Ms. Isha Gupta, Adv.
Ms. Vernika Tomar, Adv.
Ms. Anindita Deka, Adv.
Ms. Pragati Neekhra, AOR
Mr. U.A. Rana, Adv.Mr. Himanshu Mehta, Adv.
Mr. Avirat Kumar, Adv.
Gagrat And Co, AOR
Hon'ble Mr. Justice Ashok Bhushan pronounced the
judgment of the Bench comprising Hon'ble Mr. Justice A.K.
Sikri and His Lordship.
(1) All Civil Appeals filed by the State of U.P. and State
of Uttarakhand challenging the judgments of the High
Court of Uttarakhand dated 01.7.2004, 20.03.2005,26.06.2007
and subsequent judgments following the aforesaid three
judgments are allowed. The impugned judgments are set
aside and the writ petitions stand dismissed.
(2) All the Civil Appeals filed by the State of Uttar Pradesh
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
20227.04.2005 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
Ors. vs. State of U.P. 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 interest @ 9% which shall be
considered by the State or any officer authorised by the
State. The claim of refund shall be allowed only if the
assessee alleges and establishes that he has not passed on
the burden to any other person, since it is well settled
that the power of the Court is not meant to be exercised
for unjustly enriching a person.
(6) All the Contempt Petitions are dismissed.
(7) All the Civil Appeals filed by the State of Madhya
Pradesh against judgment dated 14.05.2007 are allowed. The
judgment of the Division Bench of the High Court dated
14.05.2007 is set aside and the writ petitions stand
dismissed.
203
C.A.NO.2047 of 2006
Order in this appeal has been reserved on
03.08.2017. This appeal does not relate to entry tax rather
the leviability of Trade Tax under the U.P. Trade Tax Act,
1948. This appeal is de-tagged to be listed after two weeks.
SLP(C)Nos.13656 and 15721 of 2012
Order in these petitions has been reserved on
03.08.2017. These are de-tagged to be listed before a
Bench of which Hon'ble Mr. Justice Ashok Bhushan is not a
member.
(B.PARVATHI) (MALA KUMARI SHARMA)
COURT MASTER COURT MASTER(Signed order / reportable judgment is placed on the file)