TMI Blog2002 (7) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... , for the respondents. Dushyant Dave, Senior Advocate [Sunil Dogra, Manu Nair (for Suresh A. Shroff Co.)], Ms. Pratibha M. Singh, Manik Dogra and Maninder Singh, Advocates, with him), for the appellants. -------------------------------------------------- The judgment of the Court was delivered by D.P. MOHAPATRA, J. -Leave is granted in all the special leave petitions. 2.. The controversy raised in these cases relates only to the legality and validity of the levy of additional toll tax under Notification No. S.R.O. 348 dated August 20, 1982 on dry fruits like almonds, walnuts and walnut kernels. In view of the common questions involved in the cases they were heard together with consent of learned counsel for the parties and they are being disposed of by this judgment. 3.. For the sake of convenience we will refer to relevant facts with reference to Writ Petition No. 660 of 1982 filed by M/s. Mehta Foods Pvt. Ltd. against the State of Jammu and Kashmir represented by the Chief Secretary and the Secretary in Ministry of Finance of the Government of Jammu and Kashmir which is the subject-matter of civil appeal arising out of SLP (C) No. 16852 of 1999. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terials are supplied to foreign markets. 5.. Setting out the details of the processes undertaken by it the petitioner stated that the walnuts and bitter apricots in shell were first graded by a grading machine with a view to ensure size segregation; after completing the process of grading, the dry fruits in shell were sorted out manually, this was done so that the split walnuts, damaged nut and spoiled nuts as also the oily nuts were separated. After completing the process of sorting, the walnuts were subjected to bleaching. They were treated with a chemical solution. This is meant to give them a luster and attractive appearance. It was the contention of the petitioner that it is this process of bleaching which completely transforms the original look of the nuts and renders the outer shell softer than the original one. After bleaching, the walnuts are put in another machine for drying. This is done with a view to attain retention of 3 per cent of moisture content. After drying, the nuts are sorted manually with a view to eliminate unwanted nuts. The walnuts are inspected again with a view to ensure quality control. 6.. As regards walnut kernels and bitter apricots the process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not covered by the term "manufacture". 8.. In support of their respective cases the parties raised various questions which were considered in detail by the High Court in the impugned judgment covering about 50 pages. The High Court has traced the development of the levy of tolls under the Levy of Tolls Act, 1995 (Samvat 1938 A.D.) (for short "the Act"). The High Court has taken note of section 3 of the Act in which it is, inter alia, provided that the Government may from time to time prescribe, annul or alter rates of tolls to be levied upon any road, ferry or bridge (in the State) and may place the collection of such tolls under such management as may appear to it proper, and all persons employed in the management and collection of such tolls shall be liable to the same responsibilities as would belong to them if employed in the collection of the (excise) revenue under the Jammu and Kashmir (Excise) Act, 1958. 9.. The arguments raised in support of the challenge against the levy of additional toll tax were summed up by the High Court as follows: "(i) that levy of tolls visualises an element of quid pro quo. This would involve examination of the distinction between tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goes into a consolidated fund, the nature of collection is altered; (ii) that in this case, what is being collected, is a tax and not a fee. This is being collected in the exercise of sovereign power vested in the State. This levy was being charged before the Constitution came into force; (iii) that even if the toll in question is treated as a fee, even then there has to be no corresponding rendering of service. This is because the toll in question is in the nature of toll traverse and not toll thorough. In the case of 'toll traverse', mere use of the soil is sufficient consideration for the levy of the toll; (iv) that the petitioners are using not only the national highways but they are using State highways also. Therefore, even if the concept of quid pro quo is made applicable, even then the petitioners cannot succeed. This is because as indicated above, in addition to the national highway, they are using State highway and also the roads which are not part of national highway; (v) that the vesting of national highway in the Central Government is only with a view to see that these are properly maintained. The ownership of soil remains with the State. On this reasoning als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given by the Full Bench in Writ Petition No. 660 of 1982 and other connected writ petitions enumerated in the title, these petitions are found to be without merit and are dismissed. The interim directions shall stand vacated automatically." 13.. Before considering the case on merits, the meaning of the expressions "toll", "toll thorough" and "toll traverse" may be noted: The expression "toll" normally means a definite payment exacted by the State or the local authority; but virtue of sovereignty or lordship, or in return for protection; more especially, for permission to pass somewhere, do some act, or perform some function. Another meaning attributed to the term is a charge for the landing or shipping goods at a port; a charge made for transport of goods, esp. by railway or canal. The expression "toll thorough" means where a town prescribes to have toll for every beast that goes through their town. The term "toll traverse" means where one claims to have an amount for every beast that is driven over his ground. (See The Shorter Oxford English Dictionary on Historical Principles, revised and edited by C.T. Onions, Third Edition, Volume II, page 2206). 14.. In Wharton's Law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty or a person duly authorised by the Government may collect for passage of carriages and vehicles over a road or bridge. This meaning is by no means exhaustive. Where provision for levy and collection of tolls is made under the legislative enactment or a subordinate legislation then the levy is to be governed strictly according to the provisions of the statute or rules or any other instruments, as the case may be. 19.. As noted earlier, in the writ petitions the petitioners questioned the validity of levy of additional toll tax by the State Government under the Notification S.R.O. No. 348 dated August 20, 1982. Relevant portion of the said notification is extracted hereunder: "In exercise of the powers conferred by sub-section (1) of section 3 of the Levy of Tolls Act Samvat 1995 (VIII of 1995) (1938 A.D.) and in supersession of Notification S.R.O. No. 341 dated August 19, 1982, the Government hereby direct that additional toll tax shall be levied at Re. 0.60 per kg. on dry fruit including almonds, walnuts and walnut kernels thereof exported out of State through Lakhanpur, Jammu Railway Station, Manwal and other toll posts as may be notified by the Government from time to ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme of the statute does not envisage levy of toll on goods or on any transaction of sale thereof. It is clearly a levy upon user of public roads and bridges in the State. The scheme fits in with the concept of tolls, be it toll traverse or toll thorough, to be levied in lieu of the advantage or privilege provided by the State Government for user of roads and bridges lying within the State. For the purpose of the levy the agency which was constructed the roads or bridges in question or the source of finance for implementation of the project are not relevant. On a prima facie reading of the Notification No. 348 in the context of the provision in section 3(1), it is manifest that the notification is not in conformity with the power vested in the State Government under the section. On a plain reading of the notification it is clear that the intention is to levy toll on dry fruits including almonds, walnuts and walnut kernels exported out of the State through certain exit points by road or railways. The power to impose such a levy does not flow from the power vested in section 3 of the Act in purported exercise of which the notification has been issued. 22.. A Constitution Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be construed strictly. If a person has not been brought within the ambit of the charging section by clear words, he cannot be taxed at all." 26.. Again in the case of Diwan Bros. v. Central Bank of India, Bombay (1976) 3 SCC 800, a three-Judge Bench of this Court, construing the principles of interpretation of fiscal statutes, quoted with approval the observations in A.V. Fernandez v. State of Kerala [1957] 8 STC 561 (SC). [1957] SCR 837, and in State of Maharashtra v. Mishri Lal Tarachand Lodha [1964] 5 SCR 230, in which it was observed: "The Act is a taxing statute and its provisions therefore have to be construed strictly, in favour of the subject-litigant." 27.. Following the ratio in the aforementioned decisions it was observed: "These observations manifestly show that the courts have to interpret the provisions of a fiscal statute strictly so as to give benefit of doubt to the litigant. The principles deducible from the decisions referred to above are well-established and admit of no doubt." 28.. From the discussions in the foregoing paragraphs, the position that emerges is that the Notification S.R.O. No. 348 in which the additional toll tax was levied was clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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