State of Uttarakhand & Ors. Vs. Kumaon Stone Crusher
[Civil Appeal No. 14874 of 2017 arising out of SLP (C) No.19445 of 2004]
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[C.A. No. 2047/2006]
ASHOK BHUSHAN, J.
Delay condoned.
Leave granted.
2. This batch of cases relates to levy of transit fee. Transit fee levied by three States, i.e., State of Uttar Pradesh, State of Uttarakhand and State of Madhya Pradesh is in question.
3. In exercise of power under Section 41 of Indian Forest Act , 1927 (hereinafter referred to as "1927 Act) rules have been framed by different States. State of U.P. has framed the Rules, namely, the Uttar Pradesh Transit of Timber & other Forest Produce Rules, 1978 (hereinafter 6 referred to as "1978 Rules"). After formation of the State of Uttarakhand in the year 2000, the above 1978 Rules were also extended by the State of Uttarakhand by 2001 Rules. State of Madhaya Pradesh has framed Rules, namely, the Madhya Pradesh Transit (Forest Produce) Rules, 2000(hereinafter referred to as "2000 Rules").
4. Several writ petitions were filed in the Allahabad High Court, Uttarakhand High Court and High Court of Madhya Pradesh challenging the levy of transit fee, validity of transit fee Rules and for other reliefs. The writ petitions filed by the writ petitioners were allowed by the Uttarakhand High Court whereas Allahabad High Court dismissed some writ petitions and allowed others. The Madhya Pradesh High Court has allowed the writ petitions by a common judgment dated 14.05.2007. The State of Uttarakhand and State of Uttar Pradesh has filed SLPs, in which leave has been granted, challenging the judgments of the High Courts in so far as writ petitions filed by the writ petitioners were allowed. The State of Madhya Pradesh has also filed appeals challenging the common judgment dated 14.05.2007. The writ petitioners 7 whose writ petitions were dismissed by the Allahabad High Court has also filed SLPs against the said judgment in which leave has been granted.
5. The entire bunch of cases before us can be described in four groups. First group consists of appeals filed by the State of U.P. as well as State of Uttarakhand challenging various judgments of Uttarakhand High Court by which writ petitions filed by the different writ petitioners for quashing the levy of transit fee were allowed. The second group of appeals consists of appeals filed by the State of U.P. challenging the judgment of Allahabad High Court dated 11.11.2011 and few other judgments by which writ petitions filed by the writ petitioners have been allowed.
Third group of appeals has been filed by the writ petitioners whose writ petitions filed before the High Court either have been dismissed or the reliefs claimed in their writ petitions have not been granted. The fourth group of appeals has been filed by the State of Madhya Pradesh against the judgment dated 14.05.2007 by which writ petitions filed by the writ petitioners in the Madhya Pradesh High Court have been allowed quashing the notification fixing the transit fee and directing for refund of the transit fee.
6. For comprehending the issues which have come for consideration in this batch of appeals, we shall first notice the facts in some of the writ petitions which have been decided by three High Courts, i.e., Uttarakhand, Allahabad and Madhya Pradesh.
7. The parties shall be hereinafter referred to as described in the writ petitions filed before the High Court.
FACTS
I. CIVIL APPEALS arising out of JUDGMENTS of UTTARAKHAND HIGH COURT.
8. There are nineteen appeals arising out of judgments rendered by Uttarakhand High Court. There are only three main judgments rendered by Division Bench of the High Court which have been followed in other cases. It is thus necessary to note the facts giving rise to above mentioned three judgments.
(1) Judgment dated 01.07.2004 in Writ Petition No. 1124 (MB) of 2001, M/s Kumaon Stone Crusher vs. State of U.P. & Ors. [Giving rise to Civil Appeal (arising out of SLP No. 19445 of 2004, State of Uttaranchal & Ors. vs. State of Kumaon Stone Crusher and Civil Appeal (arising out of SLP No. 26273 of 2004, the State of U. P. & Ors. vs. M/s. Kumaon Stone Crusher.]
9. M/s Kumaon Stone Crusher filed a writ petition praying for quashing the order dated 14.06.1999 issued by Conservator of Forest and order dated 01.06.1999 issued by Divisional Forest Officer directing for making recovery and levy of Transit Fee upon the finished item of stone i.e. stone grits, stone chips etc from the writ petitioner. Petitioners case was that its stone crusher which collects the boulders from the bank of Sharda River, which is a Forest Produce, Transit Fee is charged and paid. After taking the boulders to the crushing centre and involving manufacturing process, boulders are converted into the commercial commodity, namely, stone grits and chips. It is pleaded that after it becomes a commercial commodity, it ceases to be as Forest Produce and no Transit Fee can be charged and recovered thereafter.
10. The Division Bench vide its judgment dated 10 01.07.2004 allowed the writ petition and quashed the orders dated 14.03.1999 and 21.06.1999. Both State of Uttarakhand and State of U. P. aggrieved by aforesaid judgments have filed the above noted several appeals.
(2) JUDGMENT DATED 30.03.2005 IN WRIT PET. NO.310 of 2005, M/s. Kumaon Pea Gravel Aggregated Manufacturing Company vs. State of Uttarakhand and Ors. [Giving rise to Civil Appeal (arising out of SLP No. 23547 of 2005 and Civil Appeal (arising out of SLP No. 24106 of 2007)]
11. Writ Petitioners, proprietary firms were carrying on the business of manufacturing & sale of finished produce of washed and single pea gravel and bajri. The Writ Petitioner used to purchase river bed material from the lessee of query on payment of royalty and trade tax on which Transit Fee is charged from the State of Uttarakhand. But when the writ petitioners transport their finished products from their factory to customers, Transit Fee is charged by State of Uttarakhand and further, when it crosses the border of Uttarakhand and enter into the State of U.P., the Transit Pass issued by the State of Uttarakhand is to be surrendered and again Transit Passes are to be taken by making payment of the Transit Fee.
12. High Court allowed the writ petition vide its judgment dated 30.03.2005 holding that after river bed material is converted into the Washed & Single Pea Gravel and Bajri after involving manufacturing process, a new commercial commodity comes into existence and same ceases to be a Forest Produce. High Court allowed the writ petition holding that no Transit Fee can be realised. It was further observed that even if, same is treated as Forest Produce, Transit Fee can not be realised twice on the same material under 1978 Rules. Both State of U.P. and Uttarakhand had filed Civil Appeals against the aforesaid judgment.
(3) Judgment dated 26.06.2007 in Writ Petition No. 993 of 2004, M/s Gupta Builders vs. State of Uttaranchal & Ors.
13. The writ petitioner in the writ petition has prayed for issuing a writ of certiorari, quashing 1978 Rules as applicable in State of Uttaranchal (now Uttarakhand) 12 so far the 1978 Rules provides for Transit Pass and Transit Fee for boulders, sand and bajri, further not to enforce 1978 Rules as amended by the State of U.P. vide amendment Rules 2004.
14. Writ Petitioner, a Registered Partnership Firm was engaged in the business of purchase & sale of natural stones, boulders, sand & bajri and supplying the same to the various Government Departments including PWD. Writ Petitioner purchased boulders, sand, bajri from the Kol river bed from Uttaranchal Forest Development Corporation which is lessee. Writ Petitioner makes payment of royalty and other charges to the lessee. The Uttar Pradesh Minor Minerals (Concession) Rules, 1963 (hereinafter referred to as 'Rules, 1963') has been adopted by the State of Uttarakhand, as Uttaranchal Minor Minerals (Concession) Rules, 2001(hereinafter referred to as 'Rules, 2001'). Uttaranchal Forest Development Corporation issues Form MM11 to the writ petitioner.
15. Writ Petitioner pleaded that since royalty and other charges are being paid in accordance with the minor mineral rules framed under the Mines and Minerals (Development & Regulation) Act, 1957 (hereinafter referred to as 'MMDR Act, 1957'), no Transit Fee can be levied on the writ petitioner. The High Court allowed the writ petition holding that Transit Fee under Rules, 1978 can not be applicable on the transit of minor minerals. The levy of Transit Fee was held to be illegal.
16. Following the aforesaid judgment dated 26.06.2007 several other writ petitions were decided giving rise to different other Civil Appeals, which are Civil Appeal No.1010 of 2011, Civil Appeal(arising out of SLP No. 18094 of 2011) and Civil Appeal (arising out of SLP No. 26285 of 2011).
II. CIVIL APPEALS arising out of JUDGMENTS of ALLAHABAD HIGH COURT
17. A large number of Civil Appeals have been filed. Four Transfer Petitions and seven Contempt Petitions have also been filed. Civil appeals have been filed by the aggrieved parties against the various judgments of the Allahabad High Court. All the civil appeals filed by the writ petitioners as well as by the State of U.P. centre around leviability of transit fee on different forest produces as per 1978 Rules.
18. Apart from various other judgments against which appeals have been filed, two judgments delivered by two Division Benches need to be specially noted by which judgments bunch of writ petitions numbering more then 100 have been decided. We shall notice these two judgments first before referring to facts of other cases.
CIVIL APPEAL NOS.27392762 of 2008 (KUMAR STONE WORKS & Ors. VS. STATE of U.P. & ORS.) (arising out of judgment dated 27.04.2005 in Writ Petition No.975 of 2004, Kumar Stone Works & Others vs. State of U.P. & Ors.)
19. Several writ petitions were filed challenging the realisation of transit fee on transport of stone chips, stone grit, stone ballast, sand, morrum, coal, lime stone, dolomite etc. The writ petitioners have also challenged the validity of notification dated 14.06.2004 by which 1978 Rules were amended increasing the transit fee from Rs.5/to Rs.38/per tonne of lorry load of timber and other forest produce. By judgment dated 15 27.04.2005 bunch of writ petitions was decided consisting of petitions dealing with different materials. The High Court in its judgment has noticed details of few of the writ petitions facts of only leading petition which need to be briefly referred:
20. Writ Petition No.975 of 2004, which was stated to be leading writ petition: Petitioners have been granted mining lease by the District Magistrate, Sonebhadra, for excavation of boulders, rocks, sand and morrum in the District of Sonebhadra from the plots situated on the land owned by the State Government which do not come within any forest area. The petitioners' case was that they do not carry any mining operation in the forest area. After excavation they transport the goods from the site to the destination by truck. The petitioners convert the stone and boulder into Gitti. It was further pleaded that while transporting the goods, they do not pass through the forest area and they are not using any forest road for the purpose of transportation of their goods.
They pay royalty to the State Government under the provisions of the U.P. Minor Minerals (Concession) Rules, 1963. The State's case was that the petitioners are procuring the grit, boulder etc. from the land of village Billi Markundi notified under Section 4 of the Indian Forest Act, 1927. The petitioners are carrying out mining operations in the forest land. With regard to some of the petitioners it was alleged that they are carrying business in the area which had already been notified as forest area under Section 4 of 1927 Act. It was pleaded by the State that grit, boulder etc. are being procured and transported from the forest which are the forest produce. The Transit Rules, 1978 has already been upheld by this Court.
21. The Division Bench after hearing the parties dismissed all the writ petitions holding the liability of the petitioners to pay transit fee. The High Court held that validity of the Rules have already been upheld by this Court in State of U.P. vs. Sitapur Packing Wood Suppliers, 2002 (4) SCC 566. The Court upheld the 2004 Amendment. The High Court also held that the words 17 "brought from forest" as occurring in Section 2(4)(b) of the 1927 Act, necessarily implies that it passes through the forest. It also held forest must be understood according to its dictionary meaning. This description covers all statutory recognised forest, whether designated as reserve, protected or otherwise. The Court held that all goods are passing through forest, hence, petitioners cannot deny liability to pay transit fee. The increase of transit fee to Rs.38/can neither be said to be excessive or exorbitant or prohibitive.
22. The several civil appeals have been filed against the above judgment where the appellants reiterate their claim as they raised before the High Court. Civil Appeal arising out of SLP(C)No.1675 of 2012 State of U.P. & Ors. vs. M/s. Ajay Trading (Coal)Co. & Ors. (arising out of the judgment dated 11/21.11.2011) in Writ Petition No.963 of 2011 M/ s. Ajay Trading (Coal)Co. & Ors. vs. State U.P. & Ors.)
23. By judgment dated 11.11.2011, two batches of writ petitions were decided. First batch consisted of Writ (Tax) No.327 of 2008(NTPC Limited & another vs. State of U.P. and others) and other connected matters and second 18 batch consisted of Writ (Tax) No.963 of 2011 (M/s. Ajay Trading (Coal) Co. and others vs. State of U.P. & Ors.).
24. The first group of writ petitions of which Writ (Tax) No.327 of 2008 was treated as leading writ petition, was filed against the imposition of transit fee on the transportation of soil(mitti) and coal. NTPC Limited is a Government of India undertaking engaged in generation of electricity in its various units, one of them being Singrauli Super Thermal Power Station at Shakti Nagar, District Sonebhadra which is a Coal Based Thermal Power Station. For disposal of fly ash, soil is excavated from nonforest areas and it is transported by the route, which does not fall within the forest area. The Divisional Forest Officer has demanded transit fee on transportation of soil. By amendments the petitioners were also permitted to challenge Fourth and Fifth Amendment Rules, 1978.
25. The second group of writ petitions of which Writ (Tax) No.963 of 2011(M/s. Ajay Trading((Coal) Co. and others vs. State of U.P. & ors.) was treated as leading petition. That petitioners are incorporated as Public 19 Limited Co./Private Lt. Co./Proprietor Firm Manufacturers and Traders of goods made of forest produce, the miners, as transporters of forest produce who challenged the applicability of Indian Forest Act, 1927 on mines and minerals and other forest produce. The validity of Fourth and Fifth Amendment Rules by which transit fee was increased was also challenged. Both the above batch of writ petitions consisted of a large number of writ petitions dealing with various materials raising various facts and grounds, some common and some different.
26. The Division Bench by its judgment dated 11.11.2011 has set aside the Fourth and Fifth Amendment Rules increasing the transit fee. The Court recorded its conclusion in paragraph 187 of the judgment on various submissions raised by the learned counsel for the parties before it.
27. The claim of various writ petitioners that they are not liable to pay transit fee was, however, not accepted. Aggrieved against the judgment dated 11.11.2011 in so far as it struck down Fourth and Fifth Amendment Rules, the State of U.P. has come up in appeals whereas writ 20 petitioners who were denying the liability to pay transit fee have filed appeals against the judgment dated 11.11.2011 reiterating their claim that they are not liable to pay transit fee on various grounds as raised in their writ petitions. The claims in various writ petitions are different and also founded on different grounds. It is neither necessary nor desirable to notice the facts and claim in each case separately. The writ petitions which have been decided by both the judgments dated 27.04.2005 as well as 11.11.2011 consisted of different nature of writ petitions which can be broadly described in few groups. It shall suffice to notice facts and claims as raised in few cases of each group:
Group(A) This represents petitioners who have obtained mining leases under U.P. Minor Minerals (Concession) Rules, 1963 as well as leases of major minerals for mining of various minerals. Some of the mining lease holders are also transporting the minerals. There are other categories of petitioners who are only transporting the minerals by their factories. Stone crusher, dealers who are crushing the minerals and 21 transporting finished materials, all these petitioners denied their liability to pay transit fee. Petitioners claim that the stone ballasts and grit, boulders etc. are minerals which are covered under MMDR Act, 1957 and no transit fee can be charged under 1978 Rules. Some of the petitioners say that they are transporting the minerals through State and National Highways by paying toll tax. Petitioners further state that the transit fee is charged twice that is on raw material as well as on finished goods which is not permissible. Check posts have been put on State and National Highways which are illegal.
Group(B) Petitioners in this group deal with coal/ hard coke/coal briquettes /softcoke /cinder (rejected coke). Petitioners claim that coal is not forest produce and it is governed by various Parliamentary Acts which covers the field. Petitioners further pleaded that they are not mining coal from forest area rather they are purchasing from Coal India Ltd. after payment of necessary expenses. They are not using any forest land and rather are using State and National highways and PWD 22 roads. Some petitioners obtained coal from a company or dealer by paying necessary charges. The petitioner is using U.P. roads as a passage only and going out of State of U.P. that is to Delhi and Haryana. Some petitioners also rely on exemption notification dated 29.03.2010.
Group(C) This group consisted of limestone, calcium hydroxide, marble, calcium oxide, dolomite, pawdis, etc. Petitioners claim that the aforesaid items are not forest produce. They further pleaded that they are using State and National highways as well as PWD roads and not using any forest road. They further pleaded that twice transit fee is charged, firstly on raw material and secondly on the finished products by Fourth and Fifth Amendment.
Group(D) This group consists of petitioners who are dealers in plywood, imported timber/wood, bamboo, veneer, waste of plywoods, wood charcoal. Petitioners claim that they are not passing through forest area in U.P. They are not transporting any forest produce rather are transporting finished goods. Petitioners are purchasing timber which is coming out of the country.
Group(E) This group consists of petitioners dealing 23 in fly ash, clinkers and gypsum. Petitioners claim to obtain the aforesaid material by manufacturing process. Petitioners claim that the aforesaid articles are not forest produce since they undergo chemical process. 28. In so far as writ petition included in group 'A' is concerned, we have noticed above the facts of Writ Petition No.26273 of 2004, M/s. Kumaon Stone Crusher, decided on 01.07.2004. Group 'B' consisting of petitioners who are dealing in coal/hard coke/coal briquettes/soft coke/cinder(rejected coke), etc. C.A. No.2706 of 2008 (M/s. Krishna Kumar Jaiswal vs. State of U.P. & Ors., is one of such writ petitions which was dismissed by the High Court on 27.04.2005.
29. In group 'B' reference is made to Civil Appeals arising out of SLP(C)Nos.3490934916 of 2012 (M./s. Anand Coal Agency & Ors. etc.etc. vs. State of U.P. & Ors. etc.etc.). The writ petitionersappellants are involved in trading of coal. Petitioners get coal after the acceptance of their bid by the Coal India Limited for the coal field concern. The petitioners imports coal from the outside the State of U.P. by road and do not use forest 24 roads. The coal is transported only by National highways and PWD roads. It was stated that collection of transit fee on coal is illegal and without jurisdiction. Levy on schedule minerals is exclusively subject matter of MMDR Act.
30. Another case in this context is Civil Appeal arising out of SLP(C)No.981 of 2012 (Lanco Anpara Power Ltd. vs. State of U.P. & Ors.). The writ petitionerappellant is a Company carrying on the business in generation, distribution and sale of electricity in the State of U.P. Transit fee is charged on transportation of coal from the colliery to the thermal power unit of the petitioner at Anpara. The petitioner contends that condition precedent for applicability of transit fee with regard to forest produce as referred to in Section 2(4)(b)(iv) is that genesis of the produce in question must be traceable to forest. In the present, coal brought by the petitioner does not owe its genesis to a forest. The transit fee thus cannot be levied.
31. In group 'C', one of the cases is Civil Appeal arising out of SLP(C)No.36272 of 2011 (Agra Stone Traders 25 Association & Ors. vs. State of U.P. & Ors., the writ petitionersappellants are engaged in the business of purchasing and selling of marbles, marbles goods, marble chips, stone chips, stone powder, dolomite, limestone chips and pawdis from the State Rajasthan, Madhya Pradesh, Karnataka, Andhra Pradesh, Orissa, etc. from various wholesale shopkeepers, industries/factories situated in the above said States.
After purchasing the above said materials/finished goods the same are transported by them within the State of U.P. for sale to the consumers from the shops of the writ petitioners. The above materials are not directly transported from mines nor the same are in original form of mines and minerals. The petitioners have all necessary passes and invoices from different States. However, when petitioners' vehicles enter into the State of U.P. transit fee is being charged under 1978 Rules. The petitioners denied their liability to pay transit fee.
32. One of such cases is Civil Appeal No.1697 of 2012 (M/s. Aditya Birla Chemicals (India) Limited vs. State of U.P. & Ors.). The writ petitionerappellant is a public 26 limited company who is engaged in the business of manufacture of chemicals and uses calcium hydroxide and calcium oxide. The petitioner pleads that calcium hydroxide is manufactured by treating lime with water at a particular temperature and calcium oxide is made by thermal decomposition of materials such as limestone, that contain calcium carbonate in a lime kiln which is accomplished by heating the material to above 825 degree centigrade. These products were also purchased from registered traders/manufacturers of the State of Rajasthan after obtaining invoices and passes. On such transportation the State of U.P. is levying transit fee. The product manufactured and purchased by the petitioners is not forest produce and no transit fee can be levied.
33. In group 'D', one of the cases is Civil Appeal arising out of SLP (C) No.30185 of 2012 (Arvind Kumar Singh & Anr. vs. State of U.P. & Ors.), the writ petitionerappellant carries on the business of supplying bamboo, waste of plywood and small twigs/debarked jalawani lakdi of eucalyptus and poplar trees to paper manufacturing units. The paper manufacturing units, to 27 which the petitioner supplies are situate in the State of Haryana, Punjab, Uttar Pradesh and Madhya Pradesh. Waste of plywood is a waste product obtained from the plywood industries, which is processed to obtain chips. The purchases are not made by the petitioner inside any forest of Uttar Pradesh or any other State. The loaded trucks of the petitioner do not pass through any forest road. The waste of plywood and veneer is neither timber nor any kind of forest produce. They are products of human/mechanical effort and labour and a result of a manufacturing process. There is no liability to pay transit fee on the above items.
34. In group 'E', one of the cases is Civil Appeal arising out of SLP(C)No.5760 of 2012 (Ambuja Cements Limited vs. State of U.P. & Ors.). The writ petitionerappellant is an ISO Co. for manufacturing of cement. The fly ash (a by product of Thermal Power Plants, purchased by the petitioners); and gypsum (a raw material used in the manufacture of cement and purchased by the petitioner) and clinker is not a forest produce. Clinker/fly ash is an industrial produced and cannot fall 28 in the ambit of forest produce as defined under Section 2(4) of 1927 Act.
The manufacture of clinker comprises of two stages. In stage one raw material like lime stone, clay, bauxite, iron ore and sand are mixed in specific proportion and raw mix is obtained and in stage second the raw material is fed into kiln whereby at high temperature, chemical reaction occurs and the product obtained is 'alite' which is commercially sold as clinker. The petitioner though was not a party in the writ petition before the High Court but has filed the SLP with the permission of the Court granted on 10.02.2012.
III. TRANSFER PETITIONS
35. Transfer Petition No.18 of 2012 has been filed under Article 139A for transferring the Writ Petition No.40 of 2000 pending in the High Court of Judicature at Allahabad. The writ petitioner is engaged in business of manufacturing and dealing in aluminium and semis. Hindalco owns and operates the Aluminium plant at Renukoot and captive thermal power plant is at Renusagar. Hindalco uses both bauxite and coal in the production of aluminium.
36. In December, 1999, the State of U.P. demanded transit fee on transport of minerals (bauxite and coal). Aggrieved thereby Writ Petition(C) No 40 of 2000 was filed. An Interim order was passed on 18.01.2000 restraining forest department from charging transit fee. This interim order continued till 29.10.2013 when this court passed detailed interim order.
37. The petitioner's case is that in SLP (C) No.11367 of 2007, Kanhaiya Singh & Anr. Versus State of U.P., the same question is engaging attention of this Court, hence, the Writ Petition filed by the petitioner be transferred and heard along with the aforesaid Special Leave Petition.
38. Transfer Petition No.44 of 2012 has been filed to transfer Writ petition(tax) No.1629 of 2007 to hear it with SLP (C) No.11367 of 2007. The petitioner has set up coal based thermal power plant at Renusagar for captive generation of power which it supplies continuously to the aluminium manufacturing unit of the petitioner at Renukoot. In the process of generation of power the said thermal power plant produces the fly ash which needs to 30 be disposed of as per the directions of the Central Government. 39. The petitioner has entered into agreement with various cement manufacturers for lifting, disposal of fly ash. From November 2007, the forest department of the State started demanding transit fee from each Truck/Dumper. Even though the payment of any levy is the responsibility of contractors who are lifting the fly ash. The petitioner filed Writ Petition No.1629 of 2007 challenging the aforesaid demand of transit fee on fly ash in which the interim order was passed by the High Court on 29.11.2007. In the aforesaid background it was prayed that Writ Petition be transferred and heard along with SLP (C) No.11367 of 2007.
40. Transfer Petition No.76 of 2012 has been filed by Aditya Birla Chemicals (India) Ltd. for transfer of Writ Petition no.101 of 2008 pending in the Allahabad High Court. The Petitioner is engaged in the business of manufacturing and sale of chemicals, casting soda, bleaching powder, sodium chloride etc. at its factory situated at Renukoot, District Sonebhadra. For continuous 31 supply of power to the manufacturing unit petitioner has set up coal based thermal power plant at Renusagar.
Fly ash is generated from thermal power plant which needs to be disposed of. Petitioner made available the fly ash to seven cement industries free of cost. The petitioner maintained its own roads which is connecting National Highway No. 76E which goes one side to Madhya Pradesh and to Mirzapur on other side. From November 2007, forest department of U.P. Started demanded transit fee on supply of fly ash. After filing the Writ petition the various developments took place including decisions of bunch of writ petitions of 11.11.2011.
41. The petitioner case is that similar issues are pending in SLP (C) No.11367 of 2007 and Writ Petition be transferred and heard along with the aforesaid Special Leave Petition. This Court in all the above three Transfer Petitions, on 19.11.2012 passed an order to take up these matters along with the SLP (C) No.11367 of 2007.
IV. CONTEMPT PETITIONS
42. Contempt Petition No.251 of 2008 in I.A.No.7 of 2008 in Civil Appeal No.2797 of 2008, the members of applicants association are plying public transport truck carrying minor minerals like boulders, sand, stone, dust, etc. Trucks do not enter into any forest area or do not uses any forest road. In C.A.No.2797 of 2008 an interim order was passed by this court directing that there shall be stay of demand by way of transit fee in the meantime. Applicants case is that the applicant's association has also been impleaded in [C.A. No. 2797 of 2008. It is pleaded that despite the knowledge of interim order of this court the respondent at different check posts are demanding transit fee. Prayer has been made to issue Show Cause Notice and initiate contempt proceedings. No Notice has been issued in the contempt proceeding as yet.
43. Contempt Petition(C) No.199201 of 2014 in SLP (C) No.31530 of 2011 and other two Special Leave Petitions. Applicants are engaged in the business of transportation of sand, stones, polish stones, rough stones, crushed stones, stone grits, stone marbles etc. Applications claimed that whenever their vehicles entered in the State 33 of U.P., Transit fee is demanded. It is contended that in SLP (C) filed by the applicants this court on 02.12.2012 stayed the recovery of transit fee. Applicants case is that despite the knowledge of interim order dated 02.12.2012 the same is not being complied with, hence, the Contempt Petition has been filed. In Contempt application, no notice has been issued.
44. One Writ Petition (C)No.203 of 2009 (M/s. Pappu Coal Master & Ors. vs. State of U.P. & Anr.) has also been filed where petitioners have prayed that respondent may be restrained from charging any fee from petitioners under the 1978 Rules as amended by Amendment Rules dated 14.06.2004. This writ petition was directed to be listed along with SLP(C)No.11367 of 2007.
V. CIVIL APPEALS AGAINST THE JUDGMENT DATED 14.05.2007 of THE MADHYA PRADESH HIGH COURT
45. The State of Madhya Pradesh has filed appeals against a common judgment dated 14.05.2007 of the High Court of Madhya Pradesh. Civil Appeal arising out of SLP(C)No.6956 of 2008 has been filed against the common judgment rendered in six writ petitions which also 34 included Writ Petition No.2309 of 2002 (Northern Coalfields Limited vs. State of Madhya Pradesh and ors.
46. The writ petitionersNorthern Coalfields Limited is engaged in excavation and sale of coal. The State of M.P. framed M.P. Transit (Forest Produce) Rules, 2000 for imposing transit fee. The writ petitioner pleaded in the writ petition that the State of M.P. has no legislative competence for imposing any tax on coal. It was further pleaded that fee can be imposed only if there is any quid pro quo between the services rendered and fee charged. Notification dated 28.05.2001 issued by the State of M.P. fixing fee of Rs.7/per metric tonne was challenged. Following reliefs were sought in the writ petition:
"i) Issue on appropriate writ/writs, order/orders, direction/directions to quash the authorisation of imposing transit passes on movement of coal under M.P. Transit pass (Forest Rule) 2000 ANNEXUREP/ 1.
ii) To quash the fixation of rates of fees for issuance of transit passes ANNEXUREP/ 2.
iii) To quash the demand for payment of fees for transit of coal ANNEXUREP/ 3 iv) To grant such other appropriate 35 relief as deemed and fit and proper in the facts and circumstances of the case."
47. More or less similar reliefs were claimed in the other writ petitions before the M.P. High Court. In some of the writ petitions prayer was also made for issuing writ of mandamus declaring Section 2(4)(b)(iv) and Section 41 of the 1927 Act as unconstitutional and ultra vires to the extent it relates to minerals. Prayer was also made to declare M.P. Transit (Forest Produce) Rules, 2000 and notification dated 28.05.2001 as ultra vires to the power of the State under 1927 Act.
48. Counteraffidavit was filed by the State contending that as per Section 41 of 1927 Act, the State is conferred with a power to make rules to regulate the transit of all timer and other forest produce.
49. The High Court after hearing the parties and considering the submissions by the impugned judgment quashed the notification dated 28.05.2001 by which fee of Rs.7/was fixed. The High Court also directed refund of the amount in a phased manner with a period of five years. Aggrieved by the judgment dated 14.05.2001 the 36 State of Madhya Pradesh has filed these appeals.
50. We have heard learned counsel appearing for the States as well as learned counsel appearing for various writ petitioners.
51. While referring the respective submissions of the learned counsel, submissions on behalf of the writ petitioners have been referred to as submissions of writ petitioners and the submissions on behalf of the States have been referred to as on behalf of the State.
VI. SUBMISSIONS WITH REGARD TO THE JUDGMENT OF UTTARAKHAND HIGH COURT
52. As noted above both the State of Uttarakhand and State of U.P. have challenged the judgment of Uttarakhand High Court. Shri Dinesh Dwivedi, learned senior counsel questioning the judgment dated 01.07.2004 of Uttarakhand High Court in M/s. Kumaon Stone Crusher vs. State of Uttarakhand, submits that boulders crushed into grits retain same characteristic that is forest produce. By obtaining grits, stone chips and dust no new material is obtained. Challenging the judgment of Uttarakhand High Court in M/s. Gupta Builders dated 26.06.2007, it is submitted that the mere fact that royalty has been paid by the writ petitioners in accordance with the Uttar Pradesh Minor Minerals (Concession) Rules, 1963 as adopted in Uttarakhand by Uttarakhand Minor Minerals (Concession) Rules, 2001 shall have no effect on the entitlement of the State to levy transit fee.
The judgment of the High Court that no transit fee can be levied on the minerals is erroneous. It is further submitted that the High Court erred in adopting a very restrictive meaning of word 'forest' whereas the forest has to be understood in a wide sense. It is contended that Forest Act, 1927 and MMDR Act, 1957 operate in different fields. In so far as the case of the writ petitioners is that transit fee is being charged for second transit also. It is submitted that transit pass has its destination and after it reaches its destination, the pass comes to an end, the transit fee can be validly charged.
53. Replying the above submission of State, learned counsel for writ petitioners submits that main challenge in the writ petitions filed by petitioners was that no Transit Fee can be levied on finished products from the stone crusher. It is contended that river bed materials i.e. boulders and bajri by applying mechanical process are converted into small size stone grits, chips and dust which become a commercial commodity and ceases to be a Forest Produce therefore no Transit Fee can be charged. It is further contended that in Section 2(4)(b) of the 1927 Act the words 'found in' and 'brought from' are qualified by word 'when', which denotes the time factor. The word 'when' signifies that the item while leaving the forest is in continuous process of transit from the point where it is said to be found in. But once, the continuous transit of forest produce terminates at any point of place which is not a forest item included in Clause B(4) (2), shall cease to be a Forest Produce and further transit of such material being material not brought from forest shall not attract tax under Section 41 of Act, 1927.
54. The stone or sand which is in its primary or dominantly primary state is subjected to a manufacturing process for making it marketable product, which is not a 39 Forest Produce. Act, 1927 does not provide for any definition of term 'Manufacturing Process'. The term 'Manufacturing Process' is to be given a liberal interpretation. The process of stone crushing have to be held to be Manufacturing Process. It is further contended that levy of Transit Fee on Transit Pass does not have any relationship with the distance of the destination of the transit and the Transit Pass originally issued at the time of First Sale of transit required only on endorsement and the insistence of levy of Transit Fee at the time of second transit is irrational and unreasonable.
55. Learned counsel for the State of U.P, challenging the judgment of High Court of Uttarakhand has also raised the similar submissions as has been raised by the learned counsel for the State of Uttarakhand.
VII. SUBMISSIONS RELATING TO JUDGMENTS of THE ALLAHABAD HIGH COURT.
56. Following are various submissions on behalf of several writ petitioners and their reply by State:
(i)
(a)The products which are being transited by them 40 or on their behalf are not Forest Produce since they have undergone manufacturing process resulting into a new commodity. All the writ petitioners supported the judgment of Uttarakhand High Court dated 01.07.2004 in M/s Kumaon Stone Crusher wherein, the High Court has held that no levy of Transit Fee can be made on the finished items of stone i.e. stone grits, sand grits & chips etc. They submitted that in the stone crusher, factories, boulders and stones obtained from different mining lessees are subjected to a process by which different items are formed thereby losing their character of Forest Produce. Several other materials like lime stone, fly ash, clinker, calcium hydrooxide and calcium oxide, cinder, gypsum are also obtained after undergoing a manufacturing process, which are no longer a forest produce. Another group of petitioners who deal with marble stone, stone slabs and tiles also raise similar submission that marble slabs are finished goods which are different from Forest Produce and no Transit Fee can be demanded.
(b)Another group of petitioners who deal with in 41 veneer, plywood also claimed that after undergoing manufacturing process veneer and plywood are no longer a Forest Produce hence, no Transit Fee can be charged. Last category of articles for which nonleviability of transit fee is claimed comprises of coal, hard coke, finished coal, coal briquettes, softcoke. With regard to coal it is submitted that coal is not a Forest Produce at all, since it is obtained from collieries which are not in forest. It is further submitted that in view of Mines and Minerals (Development & Regulation) Act, 1957 (hereinafter referred to as 'MMDR Act, 1957) and Coal Bearing Areas (Acquisition & Development) Act, 1957, the regulation of coal is outside the Indian Forest Act, 1927 (hereinafter referred to as 'Act, 1927').
(c)The above submissions of writ petitioners have been refuted by learned counsel appearing for State of U.P. and State of Uttarakhand. It is submitted that stone boulders and stone ballasts after being subjected to crushing by which stone grits, sand grits & chips are obtained, does not in any manner change the nature 42 of product. Stone grits, sand grits & chips obtained after crushing are still a Forest Produce on which Transit Fee is charged. Accepting the aforesaid argument will lead to a situation where State shall lose its regulatory power on Forest Produce on mere facial change of the Forest Produce. With regard to other articles the State has refuted the submission and it is submitted that all the articles claimed by the writ petitioners are Forest Produce which are subject to Transit Fee.
(d)With regard to parliamentary enactments relating to coal as claimed by the writ petitioners, it is submitted that parliamentary enactments regarding coal are on different subjects and has no effect on the Act, 1927 and the rules framed therein.
(e)Learned Additional Advocate General of the State of U.P., during his submission has submitted that in so far as, fly ash, clinker and synthetic gypsum are concerned, the State does not claim them to be Forest Produce and no Transit Fee shall be charged on fly ash, clinker and synthetic gypsum. He, however, submitted 43 that gypsum is a naturally mined Forest Produce and what is excluded is only synthetic gypsum.
(f)For veneer and plywood, it is submitted that veneer is small pieces of timber which remains a Forest Produce and plywood is also a kind of timber which retains its natural character of Forest Produce. With other articles, with regard to which, it is claimed that by manufacturing process and chemical treatment they are transformed to new commercial commodity is refuted by counsel for the State.
(ii) (a)One of the the main planks of attack of learned counsel for the writ petitioners to the 1927 Act & 1978 Rules is based on 1957 Act. It is submitted that 1957 Act is enacted by the Parliament in reference to Entry 54 of List I of Seventh Schedule of the Constitution of India. It relates to regulation of mines and the development of minerals to the extent to which such regulation and development under the control of the Union is declared by the Parliament by law. The legislative competency of the State with regard to mines and minerals development is contained in Entry 23 of List II which Entry is subject 44 to provisions of List I with respect of mines and minerals development under the control of the Union of India.
It is submitted that in so far as transit fee on minerals is concerned, the entire field is covered by 1957 Act wherein there is a declaration by the Parliament that Union shall take under its control the regulation of mines and the development of minerals to the extent provided therein. The entire regulation of minerals including its transport being covered under 1957 Act, the State is denuded of any jurisdiction to legislate. It is further contended that 1957 Act is a special enactment which shall override the 1927 Act which is a general enactment. It is further contended that provisions of 1978 Rules and the provisions of Section 41 of Forest Act, due to the repugnancy to the provisions of 1957 Act shall stand overridden.
The transit and transportation of minerals is an integral part of regulation and development of minerals and the Parliament having unequivocally enacted the law it is to occupy the entire field regarding the transit and transportation of minerals and development of mines. No other law can 45 trench upon occupied field. The provision of Forest Act, 1927 including Section 41 and Transit Fee Rules, 1978 framed thereunder shall stand impliedly repealed after enactment of 1957 Act, especially after insertion of Section 4(1A) and Section 23C by Act 38 of 1999 with effect from 18.12.1999.
(b)Learned counsel for the State refuting the above submissions contends that repugnancy between a parliamentary statute and a statute of State legislature arises when the two laws operate in the same field, they collide with each other. It is submitted that subject matters of 1927 Act and 1957 Act are distinct and different. In 1927 Act provisions relating to transport of forest produce is only incidental and ancillary in nature. The object of two legislations is entirely different. Forest Act, 1927 comprehensively deals with forest and forest wealth whereas 1957 Act deals with mines and minerals wealth.
He further submits that 1957 Act does not impliedly overrule the 1927 Act, both the legislations being under different subjects. It is submitted that argument 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 forestproduce, the control of the State under Section 41 shall be lost and the very purpose and object of the Forest Act shall be defeated. An activity of mining held in a forest cannot be regulated and prevented by mining officers in the forest area, they cannot enter into forest area and exercise their powers.
The machinery for enforcement of forest laws and the mining laws are different. Their powers are different, officers are different, consequences of breach are different and both provisions operate in different fields. It is thus submitted that the provisions of Indian Forest Act, 1927 in so far as Section 41 of 1927 Act and 1978 Rules are concerned, shall not stand impliedly overruled by Parliamentary enactment of 1957 Act.
(iii)
(a)It is submitted that Division Bench of the Allahabad High Court in Kumar Stone Works and others by its judgment dated 27.04.2005 has misinterpreted the words "brought from" as contained in Section 2(4)(b) of 47 1927 Act. It is submitted that there is no issue with regard to the words "found in". The words "found in" clearly mean found in a forest. The word "when" signifies the physical presence of the item. The word 'when' also qualifies the words "brought from a forest". Thus when a forest produce is brought from a forest, the things mentioned in subclause (1) of subsection (4) of Sec