STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE CRUSHER
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- Court
- Supreme Court of India
- Decided
- Bench
- A. K. SIKRI and ASHOK BHUSHAN
- Citation
- [2017] 11 S.C.R. 591
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Headnote — Supreme Court Reports (editorial summary, not part of the judgment)
Catchwords
Forest Act, 1927: s.41 - Levy of transit fee on forest produce by three States- Uttar Pradesh, Uttarakhand and Madhya Pradesh - Validity of - C Notification dated 28.05.2001 prescribing fee for issuing pass for transit afforest produce -
Held
Levy of transit fee is valid - Notification dated 28.05.2001 issued by the Stale of Madhya Pradesh cannot be said to be beyond the scope of 1: 5 of 2000 Rules and s. 41 of the 192 7 Act - State of Madhya Pradesh was fully justified in fixing rate of transit fee at the rate of Rs. 71- and Rs.41- per tonne which was well within the power of the Stale ulr. 5 of 2000 Rules - High Court committed error in quashing the order dated 28.05.2001 - Notification prescribing fee is valid - Uttar Pradesh Transit of Timber & other Forest Produce Rules, 1978 - Madhya Pradesh Transit (Forest Produce) Rules, 2000.
Catchwords
Transit fee - Levy oj; on transit afforest produce - Stones, stone boulders converted into stone grits, stone chips and stone dust, if looses its character of.forest produce and transit fee is /eviable -
Held
Crushing of stones, stone boulders into stone grits, stone chips and stone dust does not result into a new commodity different .fi"om forest produce - Crushed materials continue to be sione and retain their nature afforest produce and transit fee is leviable.
Catchwords
Transit fee - Levy of on transit of forest produce - Marbles blocks, marble slabs, marble chips, if.forest produce and /eviability of transit fee on the said goods -
Held
Marbles blocks, marble slabs, marble chips are all forest produce - Transit Fee 011 marble slabs and tiles cannot be denied - State did not commit any error in demanding the Transit Fee on transit of the said goods.
A Flay ash, clinker. synthetic gypsum, ifforest produce -
Held
Flay ash. clinker. ;ynthetic gypsum are not forest produce - However, Gypsum is naturally found and ob1ained in the nalllral form, hence, is a forest produr;e. Coal with its various varieties, limestone, hydrated lime, quick limestone, slake lime: and veneer and p~ywood waste, ifforesl produce - Held: Formation of coal is due to large tracts of forest getting buried unrfer the ground due to natural processes, thus, is a forest produce - Since the essential character of the other products dues nut change. thus, all are forest produce. c Mines and Minerals (Development and Regulation) Act, IY57 - 1957 Act if impliedly repeals the 1927 Act - Held: Forest Act, 1927 and the Rules }i"amed 11/s. 41 are neither overridden nor impliedly repea/4d, altered or amended by the 1957 Act and the Rules framed thereunder - On looking into the pith and substance of both !he legisl41tions, it is clear that both the legislations operate in different spheres and fields - Forest Act deals with forest and forest wealth with a different object and the 1957 Act deals with mines and mineral wealth - it cannot he said that in view of the 1957 Act especially as amended by Act 38 of 1999, the provisions of' 1927 A,;·t and' 1978 Rules have become void, inoperative and stand repealed - Constitution of India - Arts. 254 and 372. s. 2(4)(b) - Words "brought jrom" ins. 2(4)(b) - Interpretation of - Held: Words "brought fi'om" in s. 2(4J(b) means brought ji-om forest Ji'om wherd forest produce has originated - Words 'brought from forest' cannot be read as "brought through forest" - For an item to be treated as forest produce, its origin may be in any forest within the State of UP. or in a forest outside the State of UP.
Catchwords
s. 38A(b) - Forest - Meaning of -
Held
Definition of forest cannot be confined only to reserved forests, village forests and protected forests 41s enumerated in 1927 Act - Forest shall include all statutorily recognised forests, whether designated as reserve, protected or othenwise and also shall include any area regarded as forest in the Government record irrespective of the ownership.
Catchwords
s. BOA - Whether goods or forest produce passing thro11gh the roads as notified by notijication dated 10.02.1960 can he treated to be passing thm11gh a protected forest -
Held
Roads notified by
Catchwords
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 593 CRUSHER notification dated 10.02.1960 uls. 80A cannot be read lo mean that such roads have been declared as protected forest - Notification can only be read to mean that both sides of the road have been declared as protected forest on which Chapter JV of the 1927 Act shall be applicable - ft cannol be said that merely because both sides of roads are declared protected forests, the roads itself have become protected forests - Thus, 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. ss. 4 and 20 - Non-issuance of s. 20 Notification after s. 4 Notification of 1927 Act - Submission that State of UP although c issued notification u/s 4 of 1927 Act propo.iing to constitute a land as forest but no final notification having been issued uls. 20 of 1927 Act, the land covered by a notificatio11 issued u/s. 4 cannot be regarded as forest so as to levy transit fee on the forest produce transiti11g through that area -
Held
Ajier the issue of the 11otification D u/s. 4 no j'orest JJroduce can be re1noved there.,fron1, except in accorclance 1vith such rules as 1nay be n?ocie b.v the State Govern1nent in this behalf- Regulation by the State thus comes into operation after the issue of notification uls. 4 and thus, the submission that si11ce 110 final notification 11/s. 20 has been issued they cannot be regulated by Rules 1978 cannot be accepted - After issuance of notification u/s. 4 of 1927 Act, removal afforest produce therefram shall be governed by the Rules fi'amed by the State - The fact that no notification u/s. 20 has been issued does not mean that restriction put by the State Government by Rules are not applicable. Uttar Pradesh Transit of Timber & other Forest Produce Rules, F 1978: rr. 3, 5 - r. 3 wherein transit of forest produce is permissible on(v with a transit pass and r. 5 providing for fees payable for different passes - r 3 if independent ~l r. 5 - Held: Rule 3 is not independent of r. 5 - Transit of forest produce is permissible only with a transit pass - Transit fee is payable on all kinds of transit passes and cannat be confined only to transit passes as referred lo in r. 4(1)(b) on(11. Faurth and Fifth Amendment Rules to 1978 Rules by which transit fee "was increased - Validity al- Held: Transit fee charged
A . under 1978 Rules is reg11lato1y fee in character -- For regulutory fee, State is n~t to prove any quid pro quo - Regulatory fee can be charged, even if. no services are rendered by the State in lieu offee realized - In 1ase of transit fee where the object and purpose is regulation oftransit afforest produce adoption of advalorem principle for levy of Transit fee was not appropriate and such levy changed the character of fee into a tax as held b_v the High Court - High Court rightly struck down Fourth and Fifih Amendment Rules to 1978 Rules ~1s being excessive and confiscatory in narure - High Court nghrly h~ld that increase in transit fee 1>as excessive and the character of the fee has changed from simple regulatory fee to a C ji!e lvhich is ji:Jr raising revenue - On j(1cts, interin1 order lvas passed by the Supreme Court for recovery offee as per third amendment ·- State tu consider the claim of refimd provided transit fee has not passeli on to th'e consun1er lvhich n1a;' result into unjust e11ric/1111e11t. Disposing of the matters, the Court
Held
1. I The crushing of stones, stone boulders into stone grits, stone chips and stone dnst docs not result into a new commodity diO'crent from forest produce. The crushed materials continue to be stone and retain their nature of forest produce. Coal with its various varieties, limestone, hydrated lime, quick limestone, slake lime, veneer and plywood waste arc all forest produce. Marble blocks, marble slabs, marble chips arc all forest produce. Flay ash, clinker, synthetic gypsum are not forest produce. Gypsum, however, is a forest produce. II. The Fbrcst Act, 1927 and the Rules framed under Section F 41 are neither overridden nor impliedly repealed, altered or amended by Mines and Minerals (Dcvclopmc,nt and Regulation) Act, 1957 and the Rules framed thereunder. Both the legislations operate in different spheres and fields. Ill. The words "brought from" as occurring in Section G 2(4)(b) of 1927 Act means brought from forest from where forest produce has o~iginated. The words 'brought from forest' cannot be read as "brought through forest". 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.
Reporter's headnote (continued) and case details
[2017] l 1 S.C.R. 591
(Civil Appeal No. 14874 of2017)
592 SUPREME COURT REPORTS [20 l 7] 11 S.C.R.
594 SUPREME COURT REPORTS [2017] l l S.C.R.
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 595 CRUSHER
IV. The forest has to be u uderstood 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. B 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 us protected forest on which Chapter IV of the 1927 Act shall be applicable. C VI. Ruic 3 of the Uttar Pradesh Transit of Timber & other Forest Produce Rules, 1978 is not independent of Ruic 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(l)(b) only. D
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 E has been issued docs not mean that restriction put by the State Government by Rules arc not applicable. VIII. The Division Bench of the High Court rightly struck down Fourth and Fifth Amendment Rules to 1978 Rules as being excessive and confiscatory in nature. F IX. The notification dated 28.05.2001 issued by the State of Madhya Pradesh in exercise of power under Rule 5 of 2000 Rules cannot be said to be beyond the scope of Ruic 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/- G ai1d Rs.4/- per tonne which was well within the power of the State under Ruic 5 of 2000 Rules framed under the 1927 Act. [Para 221] [710-D-H; 711-A-F]
596 SUPREME COURT REPORTS [2017] I l S.C.R.
A Whether by manufacturing process/chemical treatment, the forest produce looses its character of forest produce: 2.1 As regards 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 arc obtained which ldoes not transform into any ne" commodity, except that the stone in smaller pieces and shapes arc obtained. The Allahabad High Court, in its judgment in *Kumar Stone Works decided on 27.04.2005 has given a detailed reasoning for not accepting stoqc grits, stone chips and stone dust as a new c commodity. It held that the character of :Forest Produce is not lost by such crushing of the stone. High Court of Uttarakhand took a contrary view in its judgment dated 01.07.2004 in **K11111ao11 .'>to11e Crusher. The judgment of Kumar Sto11e Works is approved and judgment in K11111ao11 Sto11e Crusher is set aside. D [Paras 61, 69[ [641-B-C; 644-H] 2.2 The general principle of interpretation of tariff entries according to ariy 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. [Para E 72] [645-G-H] 2.3 The 'transit Fee on marble slabs and tiles cannot be denied and the State did not commit any error in demanding the Transit Fee on transit of the said goods. [Para 73] 2.4 The statutory context of Forest Produce as defined in F Act, 1927 has to be taken in its botanical and 1;cientific sense. On forest produce which are exempted by notification issued under Proviso to Ruic 3 of 1978, no transit fee is leviablc. One of such notification dated 29.03.2010 has been brought on record. [Paras 72, 74] [645-H; 646-A, B-C[ G *Kumar Stone Works and others '" Stale of' UP and others 2005 (3) AWC 2177 - approved. **Mis Kumaon Stone Crusher vs. State of U.P & Ors. Writ Petition No. 1124 (M-B) of 2001, Judgment dated 01.07.2004 - disapproved. H
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 597 CRUSHER
Suresh Lohiya v. State of Maharashtra and another A (1996) 10 sec 397 : (1996] 5 Suppl. SCR 130; CST v. Lal Kunwa Stone Crusher (P) Ltd. (2000) 3 SCC 525 : [2000] 2 SCR 276; Tej Bahadur Duhe (Dead by Lrs.) v. Forest Range Officer F. S. (S. W), Hyderabad (2003) 3 SCC 122; Karnataka Forest Development B Corporation Ltd. v. Cantreads Private Limited and others (1994) 4 SCC 455; Income Tax Officer. Udaipur v. Arihant Tiles and Marbles Private Limited (2010) 2 SCC 699 : [2009] (16) SCR 21; Akbar Badnidin Giwani v. Collector of Customs, Bombay (1990) 2 SCC 203: [1990] 1 SCR 369 - referred to. c Whether coal (and its ''arious varieties), lime stone, dolomite, fly ash, clinker, gvpsum, veneer and plywood arc forest produce: 3.1 Coal is formed from plant substances preserved from complete decay in a normal environment and later altered by various chemical and physical agencies. There arc four stages in coal formation: peat, lignite, bituminous and anthracite. The stage depends upon the conditions to which the plant remains arc subjected after they were buried-the greater the pressure and heat, the higher the rank of coal. Higher-ranking coal is denser and contains less moisture and gases and has a higher heat value than lower-ranking coal. [Para 75] [646-C-E] 3.2 The formation of coal itself is due to large tracts of forest getting buried under the ground due to natural processes snch as floods and sedimentation. Further, a major portion of the coal reserves of the country arc situated beneath forest lands and clearance for mining of the same from Forest lands. Coal, thus, is clearly a forest produce. [Para 76] [646-E-F] 3.3 Hard coke and soft coke arc made from coal. Coke can be formed naturally as well as by synthetic method. Hard coke, soft coke, coal.briquettes arc all different variations of cual which do not shed their natural chanictcristic and arc itll forest produce. [Para 77] [646-F-G] 3.4 Limestone is expressly mentioned in definition of forest produce, slake lime/quick lime/hydrated lime arc all produce of limestone. Further, produce known quicklime is produced by H
598 SUPREME COURT REPORTS [2017] ll S.C.R.
A heating of lim~stone, upon which limestone breaks down into Calcium oxide (quicklime) and carbon dioxide. That upon adding water to the same, the quicklime is converted into slaked lime and thereafter, $pon being carbonated, the produce will revert to its natural state of being limestone. Hence, the said process docs not change the nature of the product, as the basic ingredient is B essentially lime$tone, and merely upon heating and addition of water, the nature of the produce i.e. limestone, docs not change. Hence, limestone is a forest produce.[Para 78][646-G-H; 647-A] 3.5 Dolomite is a sedimentary rock. Dolomite is formed by the post depositional alteration of lime mud and limestone by c magnesium-rich ground water. Dolomite and limestone arc very similar stones and arc forest produce. [Para 791 [647-81 3.6 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. [Para 80] (647-C) D Veneer and waste plywood 4.1 The veneer is nothing but thin sheets of wood which arc cut from existing logs & planks, which is then again glued upon 11lanks of wood. The essential nature of the product of veneer is merely sliced/cut up wood. Hence, it continues to be a forest produce. [Para ~11 (647-DI 4.2 The waste plywood that is remains of plywood and veneer arc nothing but cut-up logs. The process of manufacturing involves placing logs and wood into a specialized machine, which cuts out thin sheets of wood from the log. That when the logs reaches a certain diameter of thickness, the same can no longer be suitable for c)l:traction by the machines and unutilizcd wood is left behind in the process of slicing as well. Essential character of the product docs not change, hence, it comes within the definition of timber and forest produce. [Para 82] (647-E-F] G Forest Act, 1927 and MMDR Act, 1957: 5.1 The l l>27 Act which has been continued in force by virtue of Article 372 is to continue until altered or repealed or ame·nded by a competent legislature. To find out as to whether the 1927 Act and Rules, 1978 framed thereunder survive even H
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 599 CRUSHER after enforcement of 1957 Act, Article 254 is not to be looked into but it is to be found as to whether the above pre-constitutional Jaw is altered or repealed or amended by a competent legislature. To find out this competent legislation as contemplated by sub- clause (I) of Article 372 in the context of pre-constitutional law the nature and content of pre-constitutional law has to be found out. There cannot be any dispute that 1927 Act was enacted to consolidate the law relating to forests, the transit of forest-produce and the duty Ieviablc on timber and other forest-produce. 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 c or amend the said law. Various amendments in the 1927 Act were made by the Slate of U.P. in different provisions of 1927 Act in exercise of its legislative power as conferred by List II. By the Constitution (Forty-second 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 l7A is "Forests". Thus, with effect from 03.01.1977, both the Parliament and the State legislature arc competent legislature within the meaning of Article 372 sub- clause (I). (Paras 93, 96, 97] (650-D-F; 652-D-GJ 5.2 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. 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. 1957 Act was enacted in reference to Entry 54 of List I to provide for the regulation of mines and the development of minerals whereas the subject of the legislation under the 1927 Act was the forest, transit of forest-produce uud the duty leviable on timher aud other forest-produce. [Paras 101, 104] (655-E; 656-F-G] 5.3 It is sine qua non that both the sets of laws must deal with "the same subject matter". Jn the instant case, under the Forest Act "transit of forest-produce" itself is subject of primary legislation as can be seen from the preamble and the provisions to Section 41 & 42 of the Act. In contrast, the 1957 Act in view of Section 2 thereof, gives control to the Union of "Regulation of H
600 SUPREME COURT REPORTS [2017] l l S.C.R.
A Mines and Development of Minerals". Provisions relating to transport or storage arc only incidental and ancillary in nature. But the main ppint of difference ls the subject matter of legislation under the 1957 Act "Regulation of Mines and Development of Minerals". [Para 105) (656-H; 657-A-BJ B 5.4 When the minerals are forest-produce by definition under the 1927 Act under Section 2(4), validity of which is not challenged, fo~est-produce and its transit is altogether a different subject mattet than the subject matter governed by 1957 Act. The object of the two legislations is different. The regulation is different. The Forest Act comprehensively d<:als with forest and c forest wealth with a different object and the 1957 Act deals with mines and mineral wealth. [Para 106] (657-C-D] 5.5 The l927 Act provides comprehensive provisions with regard to reserved forest, village forest and protected forest. The forests arc directly linked with environment and ecological D balance hut because of large human development, exploitation of forests and other natural resources and deforestation, the international ciimmunity has been alarmed, several international conventions and treaties were made including Kyoto Protocol and Paris Convention to which India is a signatory. [Para ll l) E [657-G-H; 658-A] 5.6 The subjects of 1927 Act and 1957 Act arc thus distinct and separate. The 1957 Act was on development and regulation of mines and minerals. Mines and minerals arc also found in forests. The definition of forest-produce as contained in Section F 2 sub-section (4) of the Act includes peat, surface oil, rock and minerals (including lime-stone, laterite, mineral oils, ancl all products of mines or quarries). The State has been empowered to regulate transit of forest-produce under Section 41 of the Act. Regulation of transit of forest-produce is a larger activity covering transit of different kinds of forest-produce including minerals. G 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 H legislative powers. [Paras 115, 116] (658-E-HJ
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 601 CRUSHER
5.7 In t~ event any overlapping is found in two Entries of A 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 substance. Thus, even it is assumed that, in working of two legislations which pertain to different subject matters, there is an incidental encroachment in respect B of small 11rea 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, on looking into the pith and substance of both the legislations, it is clear that they operate in different field and it cannot be accepted that 1957 Act impliedly repeals the 1927 Act in so far as Section 41 and c l 978 Rules are concerned. Thus, it cannot be said that in view of the 1957 Act especially as amended by Act 38 of I 999, the provisions of_ 1927 Act & 1978 Rules have become void, inoperative and stand repealed. [Paras 120, 121] (661-H; 662-A- C] ; D Hingir-Rampur Coal Co., Ltd. and others v. The State of Orissa and others AIR 1961 SC 459: (19611 SCR 537; State ()f Orissa v. MA. Tulloch muf Co. (19641 (4) SCR 461; B. V. Patankar and Ors. "· C.G Sastry AIR 1961 SC 272: (1961] SCR 591; Pa11kajakshi (Dead) Through Legal Representatives and others v. Cha11drika and Ors. (2016) 6 E SCC 157: (2016] 3 SCR 1018; Ku/want Kaur and others v. Gurdial Singh Mann (Dead) by Lrs. and Ors. (200 I) 4 SCC 262 : [2001] 2 SCR 525; Mu11icipal Council, Pulai through the Commissioner ofM1111icipal Council, Palai v. TJ. Joseph AIR 1963 SC 1561 : [1964] SCR 87; Deep Cha11d v. State F of UP imd Ors. AIR 1959 SC 648: (1959( Suppl. SCR 8; Slate of Kera/a and Ors. v. Mar Appraem Kuri Company Li111i1ed and Am: (2012) 7 SCC 106 : (20121 4 SCR 448: Kartar Singh v. State ofPunjab (1994) 3 SCC 569: [19941 2 SCR 375; A.S. Krishna and others"· State a/Madras AIR 1957 SC 297: [19571 SCR 399; Union oflndia and Ors. v. G Shah Govedhan L. Kabra Teachers' College (2002) 8 SCC 228 : [2002] 3 Suppl. SCR 220- referred to. Principles of Statutory Interpretation hy.Justice G.P Singh 14" Edu - referred to. H
p. 602
A Interpretation of Section 2(4)(bl of 1927 Act 6.1 The meaning of words 'brought from' as used in Section 2(4)(b) has bcc~mc very significant in the instant case since it is a case of large number writ petitioners that the goods which they arc transiting did not originate from any forest area rather they B have been take!) from non-forest area, hence, there is no liability to pay transit f¢e. [Para 122] [662-D] 6.2 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' c 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 >rord 'found in'. The word 'brought from' is an expression which conveys the idea of the items having their origin in the forests and they have been taken out from the forest. The word 'from' refers to the place from which the goods have been moved out that is from the place of their original location. The forest is birth place, the origin of the items mentioned in sub- clauses (1) to (iv) of sub-clause(b). of Section 2(4). The 'found in' means that the iiem 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. [Para 124] (663-B-D] 6.3 The 1978 Rules framed under Section 41 of the 1927 Act also rctlect that rule making authority has also understood the meaning of word 'brought from' in the above sense. As per Ruic 3 no forest produce shall be moved to or from or within the F State of ll.P. exqept or without a transit pass in the form in the Schedule A. The Schedule A of the Rules contains the form. The Item No.l of the form also clearly refers lo locality of origin of the produce and form requires name and situation of forest and name of the forest owner. Thus, locality of origin is related to a forest which supports the interpretation. [Parns 125, 126] (663- G E-G] 6.4 The word "brought from" as occurring in Section 2(4)(b) indicate forest to be source or original depository of the forest produce. Thus, the word 'brought from' has to be understood in the abovt' mann~r. However, it is clarified that the origin of forest H
STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 603 CRUSHER produce may be in any forest situate within the State of U.P. or A 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. B 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 qf forest produce within the meaning of s. 2(4)(b). [Para 128] [665-C-E] Kumar Stone Works and others v. State of U.P. and c othe1:~ 2005 (3) AWC 2177 - referred to.
Yeshwant Many Dodamani and Ors. 1962 CRLJ 832 - approved. Advanced Law Lexicon by P. Ramanatha Aiyar 3'• D Edn. - referred to. Meaning of 'Forest'
7. The Forest Conservation Act, 1980 is a Parliamentary enactment which has been specifically enacted to provide for the conservation of the forest and for matters connected therewith. E The definition of forest cannot be confined only to reserved forests, village forests and protected forests as enumerated in 1927 Act. Thus, forest shall include all statutorily recognised forests, whether designated as reserve, protected or othenvise. The term "forest land", occurring in Section 2, will not only include· F "forest" as understood in the dictionary sense, but also any area recorded as forest in the Government records irrespective of the ownership. The definition of forest as contained in Section 38A(b), 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. Thus, the interpretation of forest G as given by the Division Bench in its judgment dated 11.11.2011 has to be approved and the 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. (Paras 130, 131, 133( [665-E, G; 666-D-E, 667-C-D] H
604 SUPREME COURT REPORTS [2017] ll S.C.R.
A Mis. Ajay Trading (Coal) Co.& Ors. vs. State UP & Ors. Writ Petition No.963 of 2011 Judgment dated 11/21.11.2011 - approved. Mis Gupta Builders vs. Stale of Ut1ara11chal & Ors. Writ Petition No. 993 of 2004 Judgment dated 26.06.2007 - B disapprov~d. I Whether Notifilcation dated I 0.02.1960 declares Roads as Protected Forest 8.1 Section 80A which has been referred in the notilkalion is a provision which has been inserted by U.P. Act 18 of 1951 c with effect from 06.10.1951. Under Section 80A the State Government may, by notification declare that any of the provisions of Act shall upph 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 D miscellaneous Chapter. Section SOA empowers the 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. Notifica~ion elated 10.02.1960 declared that provisions of Chapter IV of lhe Act shall be applied. Thus land mentioned in the schedule is declared as protected forest. Section 80A E delineates the legislative scheme of declaring protected forests on banks of cam!ls or the sides of roads. The State while issuing notification under Section SOA can only effectuate, the object and purpose of Section SOA as enacted by the State legislature. [Paras 137-139] [669-D-E, F-H; 670-A] F 8.2 The notification dated 10.02.1960 has to be read in the light of the substantive provisions contained under Section SOA. When Section 80A empowers the State to declare any land on the banks of canals pr the sides of roads as proteded 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 o( the roads which have been mentioned in the Schedule arc now declared protected forests. The purpose for such declaration is not far to seek. Both sides of canals or both sides of the roads can be declared as protected forests for maintenance and management of the same by applying the different provisions of the Act. Maintenance of forests on both sides of
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 605 CRUSHER canals is with the object and purpose of environment protection. A 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 mad itself has been declared as protected forest. The object B 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 c by the State for the roads itself. The maintenance and regulation of roads are governed by different statutes and principles of law. T_he submissions that merely because both sides of roads arc declared protected forests, the roads itself have become protected forests, is rejected. Thus, merely passing through the D 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. [Para 140] [670-B-G) Whether Rule 3 is independent of Rule 5 9.1 Ruic 3 is couched in negative term pro"viding that E " ...... no forest produce shall be moved into or from or within the State of Uttar Pradesh except as provided without a transit Pass in the form in Schedule A ...... ". Thus transit of forest produce is permissible only with a transit pass. Ruic 4(1) contains provisions regarding officers and persons who issue passes. Ruic (5) provides for fees payable for diffcrcnt passes. Referring to F Chawki or depot established under Ruic 15 and specified under proviso {ii) to clause {b), sub-rule (1) of Ruic 4, it was submitted that transit passes us referred to under proviso (ii) to clause {b) of sub-rule (1) of Ruic 4 are only to be charged with transit fees. The fee has to be paid for different passes at chawki or depot G where it shall be produced for examination and payment of transit fees. All forest produces arc to be produced at chawki or depot for payment of transit fee. Reading of Ruic 5 docs not indicate any intention that only one category of passes as referred to in Ruic 4{l)(b) arc lc\iablc with transit fee. The words''. .. spcciflcd under proviso(ii) to clause{b), sub-rule(!) of Rnlc 4 only refer to H
• 606 SUPREME COURT REPORTS (2017] l l S.C.R.
A 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 classc$ of passes." Thus, Marginal Note clarifies that transit fee is pqyable at all kinds of passes and submission is incorrect that Ieviablity of fee is only on one category of passes B as referred to in Rule 4(l)(b). Marginal note hns been held to be an internal aid t" statutory interpretation of a statute. [Paras 141, 143, 144) (670-G-H; 671-A; 672-C, F-H; 673-A] 9.2 In event the interpretation as put by the petitioner is accepted that fee under Rule 5 is chargeable only on passes c obtained under ~ule 4(l)(b) only, the easiest manner to avoid payment of tran$it 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 pl)sses that has nothing to do with payment of fee which is separately provided in Ruic 5 and is applicable to all kinds of passes. When all transit passes have to be in same form and in triplicate jt cannot be seen how it can be read that only on one category of passes fee is leviablc and Ruic 5 is not applicable and is completcl~ independent of Ruic 3. The submission that transit fee is payable only with regard to passes issued under Ruic 4(1)(b) which arc required to be checked under Ruic 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 F proviso to Rule 3. Thus, the interpretation of Ruic 3, 4, 5 & 6 in respect of pay abUity of transit fee on transit passes issued under 1978 Rules cannot be accepted. [Paras 146-148] (673-G-H; 674- A, CJ Non-issuance of Section 20 Notification after Section 4 Notification G of 1927 Act IO.I Section 5 as inserted by Uttar Pradesh Act 23 of 1965 with effect from 25.04.1965 clearly provides that after the issue of the notification under Section 4 no forest produce can be removed thcrefrol;n, except in accordance with such rules as may be made by the Slate Government in this behalf. The regulation
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 607 CRUSHER by the State thus comes into operation after the issue of notification under Section 4 and thus, the submission that since no final notification under Section 20 has been issued they cannot be regulated by Rules 1978 cannot be accepted. [Para 150] [675- D] 10.2 The High Court has thus even though had struck down B Fourth and Fifth Amendment Rules but clearly permitted the State to recover transit fee in accordance with the rate as was applicable prior to Fourth Amendment Rules. Thus, no infirmity is found in the State's recovery of transit fee at the rate of Third Amendment Rules. There being express order by the High Court on C 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, the question as to whether by striking clown Fourth and Fifth Amendment Rules, Third Amendment Ruic docs not revive need not be gone into in the instant case. Jn D. view of the order of the High Court dated 11.11.2011, the State was fully competent to recover the transit ·rec as per Third Amendment Rule, which direction of the High Court is affirmed. [Para 155] [677-C-E] State of West Bengal v. Keshoram Industries and Ors. E (2004) lO SCC 201 : [2004) 1 SCR 564; Synthetics and Chemicals Ltd etc v. State of U. P. and Ors. (1990) 1 SCC 109 : [19891 l Suppl. SCR 623; Firm A.T.B Mehtab Majid and Co. v. State af Madras and anathe1; AlR 1963 SC 928: [1963) Suppl. SCR 435; B. N. Tiwari v. Union of India, AIR 1965 SC 1430 : [1965) SCR ·F 421; State of U. P. and others v. Hirendera Pal Singh (2011) 5 SCC 305: [2010) 15 SCR 854; Supreme Court Advocate-on-record Association v. Union of llldia 2016 (5) sec 1 - referred to. Validity of Fourth And Fifth Amendment Rules G 11.1 Transit fee charged under 1978 Rules is regulatory fee in character. For regulatory fee, State is not to prove any quid . pro quo. Regulatory Fee can be charged, even if, no services ure rendered by the State in lieu of fee realised. [Paras 164, 1751 [683-F-G; 689-AJ H
608 SUPREME COURT REPORTS (2017] I l S.C.R.
A 11.2 By the Uttar Pradesh Transit of Timber and other Forest Product (Third Amendment) Rules, 2004 fee prescribed in Rule 5 was lncreased, for example per lorry load of timber or other forest pr0duce in place of Rs.5/- per tonne of capacity fee of Rs.38/- pet tonne of capacity is shown. In the Fourth Amendment Rules, 2010 dated 20.10.2010, the fee which was B 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 ofKhair, Sal and Sagaun (Teak), Shisham, Sandal Wood and Red Sanders. In the Fifth Amendment Rules,2011 dated 04.06.20ll, Rule 5 was amended where the basis of levy of fee c was changed into advalorem at the rate of 5% or minimum Rs.2,000/- for per lorry load of timber or other than of Khair, Sal and Sagaun (Teak), Silisham, Sandal Wood and Red Sanders. (Para 168] [685-F-G] 11.3 Initially when Transit Fee Rules were framed in 1978, D Transit Fee on per lorry load of timber was Rs. 5 per tonne of capacity. By 3" amendment with effect from 14.06.2004 Rs. 5/- was increased a1s Rs. 38 per tonne of capacity. By 4" amendment rules, the Trans1it Fee was increased as Rs. 200/- per cubic meter with regard to timber, Khair, Sal & Sagaun, Sisham, Sandal wood and Red Sande~s and with regard to other timber Rs. 75 per cubic meter. The same amount was lcviablc on other forest produce. By Third Amendment Rules which was enforced from 14.06.2004 thllt is after 26 years of enforcement of Transit Ruic, 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 W3'S based on ad-valorem 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 ad-valore111 was at the rate of 5 per cent but with regard to coal, lime stone, sand, stone, bajri & other minerals ad-valorcm is at the rate of 15 per cent. High Court after considering the impact of Fifth Amendment has held that by Fift'/l Amendment the increase in Transit Fee is more than ten times. The Fifth Amendment Ruic was issued in six months of issuance of Fourth Amendment Ruic. In the affidavit H
STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 609 CRUSHER 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 the transit fee several times by 5'" Amendment, remains unexplained. [Paras 169-172] [686-G-H; 687-A; 688-A-D) 11.4 As regards issue 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 1111id pm q110 is 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. [Para 178] c [690-EJ 11.5 The issue 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 this Court. The submission that the J{igh Court has not adverted to the relevant material produced by the State which was filed before the Court by means of a counter affidavit, is not correct since the High Court 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 ou the establishment and other miscellaneons expenses. [Para 179) (690-F-H] 11.6 The submission is correct that the expenditure which is claimed by the State in the impugned judgment of the High F Court is the expenditure not coufincd to regulation of transit but other expenditures of the forest dcpartmcut 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. The High Court thus held, after considering the material brought by the G State for increase In transit fee, that increase in transit fee was excessive and the character of the fee has changed from simple regulatory fee to a fee which is for raising revenue. The High Court returned the finding that "the revenue to be generated by H
610 SUPRIEME COURT REPORTS [2017] 11 S.C.R.
A the transit fee, would thus be at least IO times more than the cost in collection of fees." (Paras I82, 185, 186] (692-G-H; 693- A; 694-D-E]
11. 7 In case of transit fee where the object and purpose is regulation of transit of forest produce adoption of advalorem B principle for le\ly of transit fee was not appropriate and such levy changed the character of fee into a tax which bas rightly been so held by the High Court. Thus, 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 C Court after elaborate and proper consideration of material brought before the Court after analysing the purpose and obj'cct of the imposition of t11ansit fee. Thus, the judgment of the High Court striking down fourth and Fifth Amendment Rules is affirmed. [Para 192] [698"H; 699-A-B] The Commissioner. Hindu Religious Endowments, D Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, AIR 1954 SC 282 : [1954] SCR 1005; Coq1oration of Calc111ta and Anr. v. Liberty Cinema AIR 1965 SC U07 : (1965] SCR 477; Stole of Tripura and others v. S1~dhir Ronjan Noth (1997) 3 SCC 665: [1997] E 2 SCR 291; Secunderobad Hyderabad Hotel Owners' Assn. v. Hyderabad Municipal Corpn. ( 1999) 2 SCC 274 : (1999] 1 SCR 143; R 345; Sreenivasa General Traders and Others v. State of Andhra Pradesh and Others (1983) 4 SCC 353 : (1983) 3 SCR 843; Delhi Race Club Limited v. Union of India and Others (2012) F 8 SCC 680: [2012] 8 SCR l; Calcutto Municipal Co11m. And others v. Shrey Mercantile (P) Ltd. and others, (2005) 4 sec 245 : (2005] 2 SCR 584; P. M. Ashwatha/iarayana Sefty and others v. State of Karnatako and others (1989) Supp. l SCC 696 - G referred to. Interim orders passed against the judgment of the Allahabad High Court 12.1 This Court noticing the divergent orders passed in the batch of appeals, passed a detailed interim order on H
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 611 CRUSHER
29.10.2013. By a subs,·quent order dated 26.04.2016, this Court A further modified the interim order dated 29.10.2013.This Court directed that State shall be free to recover transit fee within the State of U.P. at the rate stipulated in the Fifth Amendment to Rule 5. The Court also held that such recovery shall remain subject to the ultimate outcome of instant cases pending in this B Court. With further condition that in the event of writ petitioners/ private parties succeeding in their cases, the amount deposited/ recovered from them be refunded with interest @9%. [Paras 195- 198] [699-E-F; 700-C-D; 701-B-D] 12.2 Having upheld the judgment of the High Court dated 11.11.2011 striking down Fourth and Fifth Amendment Rules c 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 <1ucstion 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 transit fee ha·s not passed on to the consumer which may result into unjust enrichment. Thus the State is permitted to consider any daim ofrefund of 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. [Para 199] [701-D-F] Civil Appeals of State of M.P. filed against the judgment dated 14.05.2007 F 13.1 The submission that Act of 1957 occupies the field and the State had .no jurisdiction to frame any rules regarding transit of minerals is rejected. 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 G prejudice to the generality of the foregoing provision such rules may provide for the issue, production and return of such passes and for the payment of fees therefore." Thus, power given to State is to regulate the transit of all timber and other Forest H
612 SUPREME COURT REPORTS (2017] ll S.C.R.
A 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 Ruic 3 no Forest Produce shall move into or outside or within the State of Madhya Pntdesh except in the tnanncr as provided without a Iransit Pass in Form B A, B and C. The Forms of Transit Pass arc part of the rules. The Ruic provides for fixing of rates of fee for issue of Transit Pass. [Paras 212, 214) (706-G-H; 707-A-C; 708-A] 13.2 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 c having upheld both Section 41 of the Act, 1927 as well as Rule 5 of Rules, 2000, there is no reason as to how the notification issued under Rule 5 ~an be held to be beyond the powers of the State. 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 D cannot be said that under the statute fee can be charged only to meet the expenses which arc incurred for printing or preparation of passes. The High Court has taken a incorrect Yicw of the matter while coming to the conclusion that Notification dated 28.5.2001 is beyond the power of the State under Ruic 5 of Rules,
2000. Rule 5 clearly empowers the State to th the rate of fee and the rate of fee can be fixed on the basis of quantity/volume of the Forest Produce. Thus the High Court committed error in setting aside the Notification dated 28.05.2001. (Paras 215, 216( (708- C-F.1 13.3 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 foe by fixing tonnage and cubic mctfr as unit had entered into regulation and control, which is in thq realm of the MMDR Act. It has been found that the 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 obserntions of the DiYision Bench thus cannot be approved. In view thereof, the High Court committed error in quashing the order dated H 28.05.2001. (Puras 218, 219, 220] (709-E; 710-A-C)
STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 613 CRUSHER
State of UP. v. Sitapur Packing Wood Suppliers (2002) A 4 SCC 566: [2002) 3 SCR 345; T.N. Godavarman Thirumulkpad v. Union of India and others (1997) 2 SCC 267 : [1996) 9 Suppl. SCR 982; State of West Bengal >'. Kesoram Industries and Ors. (2004) lO SCC 201 : [2004] 1 SCR 564; Synthetics and Chemicals B Ltd etc v. State of U. P. and Ors. (1990) 1 SCC 109: [1989) l Suppl. SCR 623; Mineral Area Development Authority v. Steel Authority of India & Ors. (2011) 4 SCC 450 : [2011) 4 SCR 19; Jindal Stainless Ltd.(2) and Am: v. State of Haryana and Ors. (2006) 7 SCC 241 : [2006) 3 SCR 1095; Jindal Stainless Ltd. & A111: c v. State of Haryana & Ors. 2016 (1) SCALE 1 - referred to. Advanced Law Lexicon by P Ramanatha Aiyar - referred to. Case Law Reference D (2002) 3 SCR 345 referred to Para 21 [1996) 9 Suppl. SCR 982 referred to Para 56 [2004) 1 SCR 564 referred to Para 56 [1989) l Suppl. SCR 623 referred to Para 56 E [2011) 4 SCR 19 referred to Para 56 [2002) 3 SCR 345 referred to Para 57 [2006] 3 SCR 1095 referred to Para 57 2016 (1) SCALE 1 referred to Para 57 [1996] 5 Suppl. SCR 130 referred to Para 62 F [2000] 2 SCR 276 referred to Para 64 (2003) 3 sec 122 referred to Para 65 (1994) 4 sec 455 referred to Para 67 2005 (3) AWC 2177 approvecl Para 69 G [2009] 16 SCR 21 referred to Para 69 [1990] 1 SCR 369 referred to Para 72 [ 1961] SCR 537 referred to Para 87 [1964] 4 SCR 461 referred to Para 89 H
614 SUPREME COURT REPORTS [2017) l l S.C.R.
A [1961] SCR 591 referred to Para 94 [2016] 3 SCR 1018 referred to Para 95 [2001] 2 SCR $25 referred to Para 95 [1964] SCR 87 referred to Para 100 [1959] Suppl. SCR 8 referred to Para 102 B [2012] 4 SCR 448 referred to Para 103 [1994] 2 SCR 375 referred to Para 117 [1957f SCR 39P referred to Para 118 [2002] 3 Suppl. SCR 220 referred to Para 119 c 1962 CRLJ 83Z approved Para 128 [1996] 9 Suppl. SCR 982 referred to Para 130 [2003] 6 Suppl. SCR 674 referred to Para 145 [19631 Suppl. SCR 435 referred to Para 153 [1965] SCR 421 referred to Para 153 D 120101 15 SCR 854 referred to Para 153 (2016) 5 sec 1 referred to Para 153 [1954] SCR 10q5 referred to Para 157 [1965] SCR 477 referred to Para 159 E [1997] 2 SCR 29 referred to Para 160 [1999] 1 SCR 143 referred to Para 162 [2002] 3 SCR 345 referred to Para 163 [1983) 3 SCR 8.i3 referred to Para 176 [2012) 8 SCR 1 referred to Para 177 F [2005 J 2 SCR 584 referred to Para 187 [I 9891 Suppl. 1 sec 696 referred to Para 189 CIVIL APPELLATE JURISDICTION : Civil Appeal No. l 4874 of20!7 From the Judgment and Order dated l.7.2004 of the High Court G of Uttaranchal at Nainital in Writ Petition No. l l 24 (M/B) of200 l. WITH T.P(C) Nos.76. 77, l 8 an<l 44 of20!2 Contempt Petition (C) No.199-20 l of20 l 4 in SLP(C) Nos. 31530- H 31532 of20l I
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 615 CRUSHER
W.P.(C) No. 203 of2009 A C.A. Nos. 2797, 2821, 5652, 2739-2762, 2734, 2737, 2o2U, 2706, 2862-2863, 2732 and 2819 of2008 SLP(C)Nos.13656and 15721 of2012 C.A. Nos. 1007, 1008 and 1010 of20ll B Conmpt. Pet.(C)No.585-587 of2016 In SLP(C) No. 31530-31532 of20ll Conmpt. Pet. (C) No. 251 of 2008 C.A. No. 2047 of2006 c C.A.Nos.14446, 14448, 14922, 14924, 14923, 14920, 14921, 14452, 14453, 14464, 14465, 14468, 14469-14476, 14485, 14486, .14492, 14493, 14495, 14497-14509, 14510-14523, 13122-13129, 13300, 13301, 133.13- 13319, 13320, 13346-13358, 13360-13378, 13386-13395, 13405-13408, 13411-13426, 13448-13463, 13488, 13427. 13518, 13542, 13559, 13575, D 13578-13580,13602-13605,13621,13430-13446, 13465-13487, 13489- 13517, 13627, 13428, 13385, 13397' 13520-13533, 13645, 13675-13699, 13714-13718. 13409, 13536; 13741, 13786, 13787, 13788, 13792-13813, 13816-13828,13829,13830,13745-13759,13935,l3936,13537-13541, 13937, 14076-14078, 13760-13770, 14080-14100, 14101-14117, 14118- 14132, 14134-14145, 13544, 14146, 13606, 14157-14176,14178-14190, E 14192-14193, 14194-14206, 13545, 14207-14225, 14227-14247, 14266, 14249-14264, 14268, 13622, 13626,13637, 13646, 13700, 14270-14271, 14274-14275,14277-14278,14282,14147-14148,14284-14291, 14294- 14306, 14307, 14309, 1431!, 14315-14322, 13771-13780, 14328-14339, 14348-14355,14357-14364, 14368-14374,14376, 14378, 14381,14382- 14392, 14393-14404, 14406-14407, 14292, 13558, 14409-14410, 14414- F 14423, 14426-14444, 14447, 14449-14451,13574, 14454-14463, 14466- 14467,13576,14272, 13781,14477.13379,14177, 14191, 14248,14226, 13535, 13106-13116, 13302-13312, 13546-13557, 13560-13571, 14273, 13577, 13464, 13447, 13321-13344, 13581-13600, 13607-13620, 13623- 13624, 13543, 13628-13636, 13638-13644, 13601, 13647-13674, 13701- G 13713,13721-13740,13359,14276,!4279,l3118,13121,13938,14265, 13939-14074, 14267, 14269, 14079, 14133, 14478-14484, 13130, 14487- 14491, 14280, 14494, 14293,14308,14496, 14524, 14310,14075,14532, 14525-14531, 13719-13720, 13345, 14281, 13105, 14283, 14534-14536,
616 SUPREME COURT REPORTS [2017] l l S.C.R.
A 14537, 13519, 13131, 14538, 13117, 14312-14314, 14323-14326, 13398, 13410.13429, 14919, 13119,13380-13384, 14327, 14340-14347. 13396, 14356. 14365-14)67, 14375, 14377, 14380, 14405, 14408, 14411, 14412- 14413. 14424-14425. 14445, 13399-13404and13104 of2017 Neeraj Kishan Kaul, Sr. Adv.,M. R. Shamshad, Mishra Saurabh, Pankaj Bhatia. Kailash Chand, Syed Shahid l~ussain Rizvi, Mis. AP & J Chambers, Jatinder Kumar Bhatia. Sharmila Upadhyay, Abhishek Chaudhary, E. C. Agrawala, Piyush Sharma. Pawanshrce Agrawal, Pavan Kumar, R.N. Parcck, Ms. Rachana Srivastava. Ms. Monika, Ms. Sukrit R. Kapoo11, Ms. Nithya Madhusoodhanan. Arun K. Sinha, Ms. Mukti Chowdhary, Manish Kumar Saran, Aniruddha P. Mayee, Samir c Ali Khan, K. Y. Srcckumar. Shamik Shirishbhai Sanjanwala. Sunil Kaunda!, Kamlcndra Mishra. Abhijit Sengupta, Arvind Kumar, E. R. Sumathy. Garvesh Kabra, K. V. Bharathi Upadhyaya. Nirnimcsh Dube, Ms. Mridula Ray Bharadwaj, K. K. Mohan. Baij Nath Patel. Ms. Sweta, Ms. Romila, C.D. Singh, Prateck Rusia, Jitcndra lvlohan Sharma, Ajit D Sharma, Kamal Mohan Gupta, Ravindra S. Garia, Kaushal Yadav, N. Annapoorani, Ms, Anita Bafna, T. Harish Kumar. Pravccn Jain, Prashant Kumar, Pavan ij.umar, Rahul Kaushik, Ms. Aruna Gupta, M. A. Chinnasamy, Shri~h Kumar Misra, Gaurav Dhingra, Pramod Dayal, Ms. Abha Jain, Jaivir' Singh, Gaurav Jain, Anupam Mishra, Shiv Prnkash Pandey, Ms. Pragati Ncckhra, R. P. Gupta, Jitcndra Kumar, R. D. E Upadhyay, Ms. Al)ha R. Shanna.A nil Kumar Jha,AftabAli Khan, Neenij Shckhar, Nisbit Agrawal. T.A. Rehman, Vi pin Kumar Jai, Pahlad Singh Sharma, Santosh Kumar Tripathi. Pankaj Bhatia, Nipun Goel, Dhruv Surana, Ashish Choudhary, Ms. Bharti Tyagi, Ashok Kumar Singh. R. C. Kaushik,Arjun Garg, Manish Yadav,Ambhoj Kumar Sinha, Dccpak F Khurana, Umcsh Kumar Khaitan. Ms. Tulika Prakash, Vikas Mehta, Dcepak Joshi, S<inyat Lodha, S. K. Dhingra, Gp. Capt. Karan Singh Bhati. Ms. Aishwnrya Bhati. Jaidccp Singh, T. Gopal, Amit Verma, Ms. Ritu Apoorva, Ms. Tanuja Patra, Ms. Hina Khan, Vishwaject Singh, Ms. Vanita Bhargava, Ajay Bhargava, Jccvan B. Panda, Ms. Abhisaar Bairagi, Mis. Khaitan & Co .• Ms. Manjeet Kirpal, T. G. Narayanan G Nair, Abhishck Chaudhary. Kamlendra Mishra. Mis. Vivck Gupta, Jitcndra Mohan Sharma, Gaurav Dhingra, Raj Singh Rana. Mis. M. Y. Kini & Associates, Rameshwar Prasad Goyal, Anil Kumar Jha, Sanjay KumarTyagi, E. <;:. Vidya Sagar, Ms. S. Usha Rcddy,Adarsh Upadhyay, A. N. Arora, Jail), Aniruddha P. Maycc, Pradccp Misra, Dr. Harshvir H
STATE Ol'UTTARAKHAND & ORS. v. M/S. KUMAON STONE .617 CRUSHER
Pratap Sharma, K. S. Rana, Ms. Shefali Mitra, Gaurav Agarwal, Bharat A Sangal, Ms. S.S. Reddy, Ms. Vidushi Garg, Ms. Isha Gupta, Ms. Vernika Tomar, Ms. Anindita Deka, U.A. Rana, Himilnshu Mehta, Avirat Kumar, Mis. Gagrat and Co, Advs. for the appearing parties.
Judgment
The Judgment of the Court was delivered by· ASHOK BHUSHAN, J. 1. Delay con~oncd. Leave granted.· B
22. This batch of cases relates io levy .of transit fee. Transit fee levied by three States, i.e., State ofUttar Pradesh, State ofUttarakhand ahd State of Madhya Pradesh is in question.
33. In exercise of power under Section 41 oflndian Forest Act , C 1927 (hereinafter referred to as" l 927 Act) rules have b.een 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 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 ofUttarakhand by 2001 Rules. State ofMadhaya D Pradesh has framed Rules, namely, the Madhya Pradesh Transit (Forest Produce) Rules, 2000(hereinafter referred to as "2000 Rules").
44. Several writ petitions were filed in the Allahabad High Court, Uttarakband High Court and High Court of Madhya Pradesh challenging the levy of transit fee, validity of transit fee Rules and for other reliefs. E 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 Comt has allowed the writ petitions by a common judgment dated 14.05.2007. The State of Uttarakhand and State of Uttar Pradesh lias filed SLPs, in F .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 whose writ petitions were dismissed by the Allahabad High Court has. also filed SLPs against the said judgment in which leave has been granted. G 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 ofUttarakband challenging various judgments ofUttar,akband High Court by which writ petitions filed by the different writ petitioners H
618 SUPREME COURT REPORTS [2017] l l S.C.R.
A for quashing the levy of transit fee were allowed. The second group of appeals consists o~ appeals filed by the State of U.:P. challenging the judgment of Allahpbad High Court dated 11.11.20 l l and few other judgments by whiclit writ petitions filed by the writ petitioners have been allowed. Third gr11up 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 allowed quashing the notification fixing the transit fee and directing for refund of the transit fee.
66. 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 Cowts, i.e., Uttarakhand, Allahabad and Madhya Pradesh.
77. 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 E UTTARAKHAND HIGH COURT.
88. 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 juclgments. F (1) Judgment «Jated 01.07.2004 in Writ Petition No. 1124 (M- B) of 2001, M/s Kumaon Stone Crusher vs. State of U.P. & Ors. (Giving rise to Civil Appeal (arising out of SLP No. 19445 G 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.)
99. Mis Kumaon Stone Crusher filed a writ petition praying for H
STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 619 CRUSHER [ASHOK BHUSHAN, J.]
quashing the order dated 14.06.1999 issued by Conservator of Forest A 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 bankofSharda River, which is a Forest-Produce, Transit Fee is charged B 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 Fores! Produce and no Transit Fee can be charged and recovered thereafter. I 0. The Division Bench vide its judgment dated 01.07 .2004 allowed c 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. N0.310 OF 2005, M/s. Kumaon Pea Gravel Aggregated D 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)] E
1111. 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 F customers, Transit Fee is charged by State ofUttarakh.and and further, when it crosses the border of Uttarakhand and enter into the State of U.P., the Transit Pass issued by the State of Uttarakhand is to be surrendered and again Transit Passes are to be taken by making payment of the Transit Fee. G
1212. 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
620 SUPREME COURT REPORTS (2017) 11 S. C.R.
A ceases to be a Forest Produce. High Court allowed the writ petition holding that no 'Ilransit Fee can be realised. It was further observed that even if, same is t~ated as Forest Produce, Transit foe can not be realised twice on the same material under 1978 Rules. Both State ofU.P. and Uttarakhand had filed Civil Appeals against the aforesaid judgment. B (3) Judgment dated 26.06.2007 in Writ Petition No. 993 of 2004, Mis Gupta Builders vs. State of Uttaranchal & Ors.
1313. 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) so far the 1978 Rules provides for Transit c Pass and Transit Fee for boulders, sand and bajri, farther not to enforce 1978 Rules as amended by the State of U.P. vide amendment Rules 2004.
1414. Writ Petitioner, a Registered Partnership Firm was engaged in the business of purchase & sale of natural stom:s, boulders, sand & D bajri and supplylng 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 (Com:ession) Rules, 1963 (hereinaJler refenred'to as 'Rules, 1963') has been adopted by the State E of Uttarakhand, as Uttaranchal Minor Minerals (Concession) Rules, 200 l(hereinaftet referred to as 'Rules, 200 I'). Uttaranchal Forest Development Corporation issues Form MM- I I to the writ petitioner.
1515. Writ Petitioner pleaded that since royalty and other charges are being paid in accordance with the minor mineral rules framed under F the Mines and Minerals (Development & Regulation) Act, I 957 (hereinafter refe!lfed to as 'MMDR Act, 1957'), no Transit Fee can be levied on the wril petitioner. The High Court allowed the writ petition holding that Trat11sit Fee under Rules, 1978 can not be applicable on the transit of minor minerals. The levy of Transit Fee was held to be illegal.
1616. Following the aforesaid judgment dated 26.06.2007 several other writ petiticms were decided giving rise to different other Civil Appeals, which are Civil Appeal No. I 0 I 0 of 2011, Civil Appeal(arising out of SLPNo. 18094 of201 l) and Civil Appeal (arising out ofSLPNo. 26285 of2011 ). H
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 621 CRUSHER [ASHOK BHUSHAN, J.]
II. CIVIL APPEALS ARISING OUT OF JUDGMENTS OF A ALLAHABAD HIGH COURT '-
1717. A large number of Civil Appeals have been filed. Four Transfer Petitions and seven Contempt Petitions have also been filed. Civil appeals have been filed by the aggrieved parties against the various judgments of the Allahabad High Court. All the civil appeals filed by the writ B petitioners as well as by the State of U.P. centre around leviability of transit fee on different forest produces as per 1978 Rules.
1818. 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 c numbering more then 100 have been decided. We shall notice these two judgments first before referring to facts of other cases.
CIVIL APPEAL NOS.2739-2762 OF 2008 D . (KUMAR STONE WORKS & Ors. VS. STATE OF U.P. & ORS.) (arising out of judgment datc,d 27.04.2005 in Writ Petition No.975 of 2004, Kumar Stone Works & Others vs. State of U.P. & Ors.) ·
1919. 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 ofnotification dated 14.06.2004 by which 1978 Rules were amended increasing the transit fee from Rs.5/- to Rs.38/- per tonne oflorry load of timber and other forest produce. By judgment dated 27 .04.2005 bunch of writ petitions was decided consisting of petitions dealing with different materials. The High Court in its judgment bas noticed details of few of the writ petitions facts of only leading petition which need to be briefly referred:
2020. Writ Petition No.975 of2004, which was stated to be leading writ petition: G Petitioners have been granted mining lease by the District · Magistrate, Sonebhadra, for excavation of boulders, rocks, sand and morrum in the District ofSonebhadra 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 H
622 SUPREME COURT REPORTS [2017] l l S.C.R.
A in the forest area. After excavation they transport the goods from the site to the destiJllation by truck. The petitioners convert the stone and boulder into Gitt!. It was further pleaded that while transporting the goods, they do not pa$ through the forest area and they are not using any forest road for tlie pw·pose of transportation of their goods. They pay royalty to the St~te Government under the provisions of the U.P. Minor B 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 arc carrying out mining operations in the forest land. With regard to some of the petitioners it was alleged that they are carrying c 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.
2121. 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 Stqte of U.P. vs. Sitapur Packing Wood S11pp/iers, 2002 ( 4) SCC 566. Tl)c Court upheld the 2004 Amendment. The High Court also held that th~ words "brought from forest" as occurring in Section 2(4)(b) of the 1927 Act, necessarily implies that it passes through the forest. It also held forest must be understood according to its dictionary · meaning. This description covers all statutory recognised forest, whether designated as reserve, protected or otherwise. The Court held that all goods arc passing through forest, hence, petitioners cannot deny liability to pay transit foe. The increase of transit fee to Rs.38/- can neither be said to be excessive or exorbitant or prohibitive.
2222. 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 G State of U.P.& Ors. vs. Mis. Ajay Trading (Coal)Co.& Ors. (arising out of the judgment dated 11/21.11.2011) in Writ Petition No.963 of 201J - M/s. Ajay Trading (Coal)Co.& Ors. vs. State U.P. & Ors.) H
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 623 CRUSHER [ASHOK BHUSHAN, J.]
2323. By judgment dated 11.11.2011, two batches of writ petitions A were decided. First batch consisted of Writ (Tax) No.327 of2008(NTPC Limited & another vs. State of U .P. and others) and other connected matters and second batch consisted of Writ (Tax) No.963of2011 (Mis. Ajay Trading (Coal) Co. and others vs. State of U.P. & Ors.).
2424. The first group of writ petitions of which Writ (Tax) No.327 B 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 oflndia 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 c from non-forest 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 FifthAmemlment Rules, 1978.
2525. The second group of writ petitions of which Writ (Tax) No.963 D of 20ll(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 Limited Co./Privatc Lt. Co./Proprictor Firm Manufacturers and Traders of goods made of forest produce, the miners, as transporters of forest produce who challenged the applicability oflndian Forest Act, E 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 gr'ounds, some common and some different. F
2626. The Division Bench by its judgment dated 11.11.20 l l 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.
2727. The claim of various writ petitioners that they are not liable to G 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 petitioners who were denying the liability to pay transit fee have filed appeals against the judgment dated 11.11.20 l l reiterating their claim that they are not liable to pay transit fee on various grounds as raised in H i"
624 SUPREME COURT REPORTS [2017] ll S.C.R.
A 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 B and claims as rais~d in few cases of each group: Group( A) T~is 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 c categories of petitioners who are only transporting the minerals from their factories. Stone crusher, dealers who are crushing the minerals and transporting finished materials, all these petitioners denied their liability to pay transit fee. Petitioners claim that the stone ballasts and grit, bo.ulders etc. are minerals which are covered under MMDRAct, 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 /softcokp /cinder (rejected coke). Petitioners claim that coal is not forest produce and it is governed by various Parliamentary Acts F 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 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 oflimestone, calcium hydroxide, marble, calcium oxide, dolomite, pawdis, etc. Petitioners claim that the aforesaid items arc not forest produce. They further pleaded that they are using State and National highways as well as PWD roads and not
STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 625 CRUSHER [ASHOK BHUSHAN, J.]
using any forest road. They further pleaded that twice transit fee· is A cl_iarged, firstly on raw material and secondly on the finished products by Fourth and Fifth Amendnient. 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 B area in U .P. They are not transporting any forest produce rather are transporting finished goods. Petitioners are purchasing timber which is coming into the country. · Group(E) This group consists of petitioners dealing in fly ash, .clinkers and gypsum. Petitioners claim to obtain the aforesaid material c by manufacturing process. Petitioners claim that the aforesaid articles are not forest produce since they undergo chemical process.
2828. In so far as writ petition included in group 'A' is concerned, we have noticed above the facts of Writ Petition No.26273 of2004, Ml s. kumaon Stone Crusher, decided on 0 l .07 .2004. Group 'B' consisting D ?f petitioners who are dealing in coal/hard coke/coal briquettes/soft coke/ cinder(rejectedcoke), etc. C.A. No.2706 of2008 (M/s. Krishna Kumar Jaiswal vs. State ofU.P. & Ors., is one ofslich writ petitions which was dismissed by the High Cowi on 27.04.2005.
2929. In group 'B' reference is made to Civil Appeals arising out of E SLP(C)Nos.34909-34916 of 2012 (M./s. Anand Coal Agency & Ors. etc.etc. v.s. State ofU.P. & Ors. etc.etc.). The writ petitioners-appellants are involved in trading of coal. Petitioners gel 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 ofU.P. by road and do not use forest roads. The coal is transported only by National highways F 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.
3030. Another case in this 'Context is Civil Appeal arising out cif SLP(C)No.981 of2012 (Lanco Anpara Power Ltd. vs. State ofU.P. & G Ors.). The writ petitioner-appellant is a Company carrying on the business in generation, distribution and sale of electricity in the State ofU.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 H
626 SUPREME COURT REPORTS [2017] I l S.C.R.
A produce as referred to in Section 2(4)(b)(iv) is that the genesis of the produee in question must be traceable lO forest. In the present, coal brought by the petitioner does not owe its genesis to a forest. The transit fee thus cannot be levied.
3131. In group 'C', one of the cases is Civil Appeal arising out of B SLP(C) No. 36472 of201 I (Agra Stone Traders Association & Ors. vs. State of U .P. & Ors., the writ petitioners-appellants are engaged in the business of purfhasing and selling of marbles. marbles goods, marble chips, stone chi!Js. stone powder. dolomite, limestone chips and pawdis from the State of Rajasthan, Madhya Pradesh, Karnataka, Andhra Pradesh, Orissa. etc. from various wholesale shopkeepers. industries/ c factories situated in the above said States. After purchasing tbe 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 arc not directly transported from mines nor the same are in original form of mines and minerals. The petitioners D have all neccss~ry passes and invoices from different States. However, when petitioner$' vehicles enter into the State ofU.P. transit fee is being charged under 1978 Rules. The petitioners denied their liability to pay transit fee.
3232. One of such cases is Civil Appeal No.1697 of 2012 (Mis. E Aditya Birla Chemicals (India) Limited vs. State of U.P. & Ors.). The writ petitioner-appellant is a public limited company who is engaged in the business of J!nanufacture of chemicals and uses calcium hydroxide and calcium oxjde. 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 F as limestone. that contain calcium carbonate in a lime kiln which is accomplished by beating the material to above 825 degree centigrade. These products were also purchased from registered traders/ manufacturers of the State of Rajastban after obtaining invoices and passes. On such transportation the State of U.P. is levying transit fee. G The product manufactured and purchased by the petitioners is not forest produce and no transit fee can be levied.
3333. 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 petitioner-appellant carries on the business of supplying bamboo, waste of plywood and small twigs/debarked jalawani H
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 627 CRUSHER [ASHOK BHUSHAN, J.]
lakdi of eucalyptus and poplar trees to paper manufacturing units. The A paper manufacturing units, to which the petitioner supplies arc situate in the State ofHaryana, 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. B. 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 arc 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.
3434. In group 'E', one of the cases is Civil Appeal arising out of C SLP(C)No.5760 of2012 (Ambuja Cements Limited vs. State ofU.P. & Ors.). The writ petitioner-appellant 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 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. F
3535. Transfer Petition No.18 of2012 has been filed under Article I 39A for transferring the Writ Petition No.40 of 2000 pending in the High Court ofJudicatw·c at Allahabad. The writ petitioner is engaged in busine~s of manufacturing and dealing in aluminium and semis. Hindalco owns and operates the Aluminium plant at Renukoot and captive thermal G power plant is at Renusagar. Hindalco uses both bauxite and coal in the production of aluminium.
3636. In December, 1999, the State ofU.P. demanded transit fee on transport of minerals· (bauxite and coal). Aggrieved thereby Writ Pctition(C) No 40 of 2000 was filed. An Interim order was passed on H
628 SUPREME COURT REPORTS (2017] ll S.C.R.
A 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.
3737. The pcititioner's case is that in SLP(C) No.11367 of 2007, Kanhaiya Singh & Anr. Versus State of U.P., the same question is B engaging attention of this Court, hence, the Writ Petition filed by the petitioner be transferred and heard along with the aforesaid Special Leave Petition.
3838. Transfer Petition No.44 of 2012 has bt:en filed to transfer Writ petition(tax) No.1629 of2007 to hear it with SLP(C) No.11367 of c 2007. The petiti<1>ner has set up coal based thermal power plant at Renusagar for captive generation of power which it supplies continuously to the aluminium manufacturing unit of the petitioner at Renukoot. In the process of generation of power the said thermal power plant produces the fly ash which needs to be disposed of as per the directions of the Central Governm¢nl. D
3939. 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. E\len though the payment of any levy is the responsibility of contractors who are lifting the fly ash. The petitiom:r filed Writ Petition E No.1629 of2007 ~hallenging 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 of2007.
4040. Transfer Petition N o.76 of 2012 has been filed by Aditya F Birla Chemicals (India) Ltd. for transfer ofWrit Petition no. JO 1 of2008 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 supply of power to the manufacturing unit G petitioner has set lip coal based thermal power plant at Renusagar. Fly ash is generated f~om 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 H
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 629 CRUSHER [ASHOK BHUSHAN; J.]
ofU.P. Started demanded transit fee on supply of fly ash. After filing A the Writ petition the various developments took place including decisions on bunch of writ petitions ofl 1.11.2011.
4141. The petitioner case is that similar issues are pending in SLP(C) No.11367 of2007 and Writ Petition be transferred and heard along with the aforesaid Special Leave Petition. This Court in all the above three B Tnmsfer Petitions, on 19.11.2012 passed an order to take up these matters along with the SLP(C) No. ll367 of2007. IV. CONTEMPT PETITIONS
4242. Contempt Petition No.251 of2008 in I.A.No.7 of2008 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 nor use 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 illterim 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. E
4343. ContemptPetition(C) No.199-201 of2014 in SLP(C) No.31530 of201 l 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 ofU.P., Transit fee is demanded. It is contended that in SLP(C) filed by the applicants this F court on 02.12.2012 stayed the recovery of transit fee. Applicants case is that despite the knowledge ofinterim 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.
4444. One Writ Petition (C)No.203 of 2009 (M/s. Pappu Coal G 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 of2007. H
630 SUPREME COURT REPORTS [2017] l l S.C.R.
A V. CIVIL APPEALS AGAINST THE JUDGMENT DATED 14.05.2007 Of THE MADHYA PRADESH HIGH COURT
4545. The State of Madhya Pradesh has filed appeals against a conunon judgment dated 14.05.2007 of the High Court of Madhya Pradesh. Civil Appeal arising out ofSLP(C)No.6956 of 2008 has been B filed against the conunon judgment rendered in six writ petitions which also included Writ Petition No.2309 of2002 (Northern Coalfields Limited vs. State of Madhva Pradesh and ors.
4646. The writ petitioners-Northern Coalfields Limited is engaged in -excavation and sale of coal. The State of M.P. framed M.P. Transit c (Forest Produce) Riules, 2000 for imposing transit fee. The writ petitioner pleaded in the wrlit 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 ofM.F. fixing fee of Rs. 7/-per metric tonne was challenged. D Following reliefs were sought in the writ petition: "i) Issue am appropriate writ/writs, order/orders, directionl4irections to quash the authorisation of imposing transit passes on movement of coal under .MP. Transit paS$ (Forest Rule) 2000 ANNEJ.'7JRE-PII. E ii) To quasi! the fixation of rates of fees for issuance of transit passes ANNEXURE-P/2. iii) To quash the demand for payment offees for transit of coal ANNEJ.'7JRE-P/3 F iv) To gra/lt such other appropriate relief as deemed and fit and proper in the facts and circumstances of the case. "
4747. More or less similar reliefs were claimed in the other writ petitions before th@ M.P. High Court. In some of the writ petitions prayer G was also made for issuing writ of mandamus declaring Section 2(4 )(b )(iv) and Section 41 oftille 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.
STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 631 CRUSHER [ASHOK BHUSHAN, J.]
4848. Counter-atlidavit 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 timber and other forest-produce.
4949. The High Court after hearing the parties and considering the submissions· by the impugned judgment quashed the notification dated 28.05.200 I by which fee ofRs.7/-was fixed. The High Court also directed refund of the amount in a phased manner within a period of five years. Aggrieved by the judgment dated 14.05.2001 the State of Madhya Pradesh has filed these appeals.
5050. We have heard learned counsel appearing for the States as well as learned counsel appearing for various writ petitioners. c
5151. 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 be~alf of the States have been referred to as on behalf of the ~talc, VI. Submissions with regard to tfig !udgment ofUttarakhand High D Court
5252. As noted above both the State of Uttarakhand and State of U.P. have challenged thcjudgment of Uttarakhand High Court. Shri Dinesh Dwivedi, learned senior counsel questioning the judgment dated 01.07.2004 ofUttarakhand High Court in M/s. Kmnaon Stone Crusher E vs. State ofUttarakhand, submits that boulders crushed into grits retain same characteristic that is forest produce. By obtaining grits, stone chips and dust no new material is obtained. Challenging the judgment of Uttarakhand High Court in M/s. Gupta Builders dated 26.06.2007, it is submitted that the mere fact that royalty has been paid by the writ petitioners in accordance with the Uttar Pradesh Minor 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 H.
632 SUPREME COURT REPORTS [2017] ll S.C.R.
A 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.
5353. Replying the above submission of State, learned counsel for writ petitioners $ubmits that main challenge in the writ petitions filed by petitioners was that no Transit Fee can be levied on finished products B from the stone c~usher. 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 byword 'when', which denotes c 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 furthertransit of such material being material not brought from forest shall not attract tax under Section 41 of Act, 1927.
5454. 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 Forest Produce. Act, I 927 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 ofTransit 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 ofTransit Fee at the time of second transit is irrational and unreasonable.
5555. Learned counsel forthe State ofU.P, challenging the judgment of High Court ofUttarakhand has also raised the similar submissions as has been raised by the learned counsel for the State of Uttarakhand. G VII. SUBMISSIONS RELATING TO JUDGMENTS OF THE ALLAHABAD HIGH COURT.
5656. Following are various submissions on behalf of several writ petitioners and their reply by State:- H
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 633 CRUSHER [ASHOK BHUSHAN. J.]
(i) (a) The products which are being transited by them or on their behalf arc not Forest Produce since they have undergone manufacturing process resulting into a new commodity. All the writ petitioners supported the judgment of Uttarakhand High Corn1dated01.07.2004 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 B & chips etc .. They submitted that in the stone crusher. factories, boulders and stones obtained from different mining lessees arc subjected to a process by which different items arc formed thereby losing their character ofForest Produce. Several other materials like lime stone, fly ash. clinker, calcium hydro-oxide and calcium oxide, cinder, gypsum are also obtained after undergoing a manufacturing process, which arc no longer a forest c produce. Another group of petitioners who deal with marble stone. stone slabs and tiles also raise similar submission that marble slabs arc finished goods which are different from Forest Produce and no Transit Fee can be demanded. (b)Another group of petitioners who deal with in veneer, plywood D ·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 non-lcviability of transit fee ·is claimed comprises of coal, bard coke, finished coal, coal briquettes, soft-coke. 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. E It is further submitted that in view of Mines and Minerals (Development -& Regulation) Act, .1957 (hereinafter referred to as 'MMDRAct, l 957) 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'). F (c) The above submissions of writ petitioners have been refuted by learned counsel appearing for State ofU.P. and State ofUttarakhand. 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 of product. Stone grits, sand grits G & chips obtained after crushing arc 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 ai1icles - the State has refuted the submission and it is submitted that all the articles H
634 SUPREME COURT REPORTS [2017] ll S.C.R.
A 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 for as. fly ash, clinker and synthetic gypsum arc concerned, the State does not claim them to be Forest Produce and no Transit Fee shall be charged on fly ash, clinker and synthetic gypsum. He, however, submitted that gypsum is a naturally mined Forest Produce and what is excluded is only synthetic gypsum. (f) For veneer and plywood, it is submitted that veneer is small pieces of timber which remains a Forest Produce and plywood is also a kind of timber which retains its natural character of Forest Produce. D With other articles, with regard to which, it is claimed that by manufacturing process and chemical treatment they arc 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 & .I 978 Rules is based on 1957 Act. It is submitted that 1957 Act is enacted by the Parliament in reference to Entry 54 of List l 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 to provisions of List I with respect of mines and minerals development under the control of the Union of India. lt 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
STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 635 CRUSHER [ASHOK BHUSHAN, J.)
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 trench upon occupied field. The provision of Forest Act, 1927 including Section 41 B and Transit Fee Rules, 1978 framed thereunder shall stand impliedly repealed after enactment of 1957 Act, especially after insertion of Section 4( IA) 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 repugnancybetween a parliamentary statute and a statute of State legislature arises when the two laws operate in the same field, c they collide with each other. It is submitted that subject matters of 1927 Act and 1957 Act arc 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 I 957 D Act deals with mines and minerals wealth. He further submits that I 957 Act does not impliedly overrule the 1927 Act, both the legislations being under different subjects. It is submitted that argument of implied repeal could have arisen only where there is no option. To take a view that 1957 Act shall impliedly overrule 1927 Act regarding transit of forest- produce, the control of the State w1der 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 arc different. Their powers arc different, officers arc different, consequences of breach are different and both provisions operate in different fields. It is thus submitted that the provisions of Indian Forest Act, l 927 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. G (iii) (a) It is submitted that Division Bench of the Allahabad High Court in K11111ar Stone Works and others by its judgment dated 27.04.2005 has mis-interpreted the words "brought from" as contained in Section 2(4)(h) of 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 H
636 SUPREME COURT REPORTS (2017] l l S.C.R.
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 thmgs mentioned in sub-clause (I) of sub-section (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 B produce to be forest to be brought from forest means it is stiu1ing 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 c 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 vide its order dated 04.03.2008 in Mis. Nagarj1111a Co11structio11 Ltd. has already expressed its disagreement with the Division Bench judgment in Kumar Stotte H1tJrks 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 sec/ion 2(4)(b) of the Indian Forest Act would cover such items mentioned in sub-clauses (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 !he Hon 'b/e Chief Justice for appropriate orders." (c) lt is submitted that the Division Bench ofAllahabad High Court while delivering the judgment dated l l. l l .201 l although noticed that the above questions have been referred to for consideration ofa larger Bench G did not await the judgment of larger Bench rather chose to follow the Division Bench judgment in K11111ar Stolle Worlcs. ( d) Learned counsel for the State has refuted the aforesaid submission. It is submitted that the Division Bench of the Allahabad High Court in Kumar Stone Works has correctly held that the term 'brought from a forest' must be read to mean 'brought through a forest'. H
STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 637 CRUSHER [ASHOK BHUSHAN, J.]
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