TMI Blog2013 (8) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... re included within meaning of words 'forest produce' – Held that:- Where a forest produce changes its essential character into a commercially new article - totally different from forest produce, having a distinct character - with aid of human skill it ceases to be forest produce – court did not persuaded to hold that Kattha and Cutch which come within ambit of expression Katechu that is covered within definition of forest produce as same has been decided in State of M.P. vs. S.P. Sales Agencies (2004 (3) TMI 713 - SUPREME COURT) Whether Kattha and Cutch – expression catechu comes within sweep of cutch and kattha and is included within meaning of word as forest produce - sponge iron made by manufacturing process from iron ore is not a forest produce - all minerals from mines and quarries are forest produce. Monopolized Transportation - State monopolized entire trade of tendu patta - collection, packing, storage and transportation of tendu leaves in State of U.P. is strictly regulated by statute and Rules - Rule 4 regulates entire transport of tendu leaves under prescribed forms – Held that:- trade and transportation of tendu leaves which is monopolised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orbitant increase of transit fees by 4th and 5th Amendment to Rules of 1978 - without rendering any services to facilitate trade - Rules have been framed by State Government under Indian Forest Act which is Central Act – it further restrict freedom of trade, commerce and intercourse - and is thus violative of Art.301 – not saved by Art.304 (b) - increase in transit fee thus cannot be treated to be reasonable restriction on freedom of trade, commerce and intercourse with or within State in public interest. Mohd. Yasin v. John Mohammad 1986 (3) SCC 20.( John Mohammad 1986 (3) SCC 20. 1986 (4) TMI 330 - SUPREME COURT). Principles of sustainable development - increase in transit fee on ad valorem basis on timber, coal and other minerals, necessary for raising infrastructure, generating power and manufacture of essential goods have a direct impact and impede development of State - No scientific study in this regard has been conducted by S/G - nor any reports placed before Court to justify increase of fees - taking into consideration right to development, which is a fundamental right of citizens of State under Art.21. (T.N. Godaverman's) Justifiability of increase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ors., (Writ (Tax) No.963 of 2011) of the second batch, the petitioners incorporated as public limited companies/private limited companies, registered partnership/proprietorship firms, manufacturers and traders of goods made out of forest produce, the miners and the transports of forest produce, have challenged the applicability of the Indian Forest Act, 1927, on mines and minerals including coal and other forest produce; as also the validity of the U.P. Transport of Timber and Other Forest Produce Rules, 1978 (in short the Rules of 1978) made under Section 41 (1) (c) of the Indian Forest Act, 1927; as amended by the 4th Amendment to the Rules in 1978 notified on 13.12.2010, increasing levy of transit fee from Rs.38 per metric tonne, to Rs.75; Rs.100 and Rs.200 per cubic meter of capacity per lorry load of different quality of timber and other forest produce; and the 5th Amendment to the Rules of 1978, notified on 4.6.2011 enhancing transit fee and changing the basis of levy from cubic feat to advalorum between 5% to 15%, on variety of forest produce including timber, firewood, and other forest produce coming from mines e.g., coal, limestone, sand, bajari and other minerals, as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se transit fees. The powers of the State Government, it was held, under Entry 17-A of List III of the Seventh Schedule of the Constitution of India, would include power to regulate transit of forest produce. The Supreme Court also upheld the findings of the High Court that the power to regulate the transit of timber under the Act and the Rules is not confined to the transit of timber of forest produce by the owner thereof; it would also extend to those traders, who arrange to transport it for any reason and will be included within the general power of control over transit under Section 41 (2) of the Act. 5. In Sitapur Packing Wood Suppliers (supra), the Supreme Court, following State of Tripura vs. Sudhir Ranjan Nath (1997) 3 SCC 665, in which the application fees for transit of timber was upheld, and the judgments in Corporation of Calcutta vs. Liberty Cinema AIR 1965 SC 1107; Secunderabad Hyderabad Hotel Onwers' Association vs. Hyderabad Municipal Corporation (1999) 2 SCC 274 and P. Kannadasan vs. State of T.N. (1996) 5 SCC 670, held that transit fee under Rule 5 is clearly regulatory and, thus it was not necessary for the State to establish quid pro quo. The Supreme Court held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals as the State Government after the impugned judgment of the High Court realizing its mistake amended the Rule so as to bring the provision of penalty in accord with the provisions of the Act. 11. For the aforesaid reasons, we allow these appeals and hold that the levy of the transit fee is valid and the judgment of the High Court is accordingly set aside. The parties are, however, left to bear their own costs." 6. In the year 2004 by Notification dated 14.6.2004 (after more than 25 years of the enforcement of the Rules of 1978), the transit fee was increased from Rs. 5/- to Rs. 38/-, per tonne of weight and came to be challenged again both on the ground of legislative competence of the State Government to make Rules to levy transit fee on stone chips, stone grit, stone balast, sand, morrum, coal, limestone, dolomite etc., and also on the ground that the mines and minerals are not 'forest produce' as defined under sub-section (4) of Section 2 of the Indian Forest Act, 1927 as these are not found in or brought from a forest. In Kumar Stone Works and others vs. State of UP and others 2005 (3) AWC 2177 this Court held that the phrase 'that is to say' occurring in clause (b) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and found that the word 'brought' is a verb and past tense and past participle of word 'bring'. The stone chip, stone gittis, stone ballast, sand, morrum, limestone, dolomite etc. included in clause (b) of sub section (4) of Section 2 of the Forest Act whether found in or brought from forest were held to be included in the definition of forest produce. 8. M/s Subhash Stone Works, Sonebhadra approached this Court in Writ Petition No. 24911 of 2004 for restraining the respondents from realising transit fees from lifting and transporting stone chips, stone grits and balast from the mine sites to different destination. The Division Bench dismissed the writ petition but left it open to the petitioners to move an application before the authority concerned to prove that the goods, which were being transported by the petitioners, did not pass through forest land to make it not liable for payment of transit fee in that regard. The representation was rejected in the light of the judgment in Kumar Stone Works (supra). A Division Bench of this Court, after noticing the judgments in M/s Yashwant Stone Works vs. State of UP and others AIR 1988 All. 121 (UP); Gandhi Smarak Nidhi Vyasthapak an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o location of those items having their origin in the forest and being still within the forest; (iii) even if an item was not originally forest produce such as mangoes, from a tree in a private land of a farmer merely because it is transported and during the course of such transportation it passes road or a highway through a forest, which will not become forest produce. The interpretation, which creates a fiction is to be adopted only when there are words, which compel such interpretation and (iv) the expression 'forest produce' occurs in various Sections of Indian Forest Act, 1927 such as Sections 3, 4, 5, 11, 12, 14, 15 and 26 of Chapter II, which relates to reserved forest; Sections 28 (2) of Chapter III, which relates to village forest, Section 29, 30, 32, 33 of Chapter IV, which relates to protected forest, Section 38 in Chapter-V, which relates to claimants forest, Section 39 in Chapter VI, which relates to duty and other Sections. In none of these provisions the expression has been used to cover a produce as forest produce only because it passes through a forest. In all the Sections the context indicates that the produce being referred to as forest produce is that which has i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sub-section (4) of section 2 of the said Act, excavated from non-forest land and moved thereby, from the operation of said rules. By order, (Chanchal Kumar Tewary) Principal Secretary" 14. The judgment in Kumar Stone Works (supra) is under challenge in Supreme Court. A Special Leave to Appeal, directed against a judgment of the High Court following the judgment in Kumar Stone Works, being SLP (C) 11261/2005 (M/s Tuganiya Gramodyog Vikas Sansthan and others vs. State of UP and others) in which by an order dated 7.4.2008 the Supreme Court has directed the status quo to be maintained as on that day is also pending. The Special Leave to Appeal (Civil)...../2005 (CC 8893/2005) M/s Bhagyashree Trading Company vs. State of UP and others, and many other petitions have been tagged with SLP (C) No. 11261/2005. 15. In Kanhaiya Singh and another vs. State of UP and others in Special Leave to Appeal (C) No. 11367 of 2007 from the judgment of the High Court dated 5.4.2007 in Writ Petition No.16408 of 2007, Hon'ble Supreme Court was pleased to pass an order on 23.7.2008:- "ORDER I.A. Nos. 2 3 of 2008 in SLP (C) No.11367 of 2007 and I.A. No. 4/2008 in C.A. No. 279/2008 Having h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No. 312/XIV-2-2011-343 (L)-2001 dated June 04, 2011 the U.P. Transit of Timber and Other Forest Produce (Fifth Amendment) Rules, 2011, (in short the 5th Amendment) were notified providing for transit fee at advalorem basis per truck load on different rates between 5% to 15%, and including in the notification for the first time the forest produce coming from mines i.e. coal, lime, stone, sand, Bajri and other minerals. The notifications dated 13.10.2010 and 4.6.2011 challenged in these writ petitions, in tabular form, as they were published, which also gives comparison of the change brought about from the 4th Amendment to the 5th Amendment, is quoted as follows:- "Uttar Pradesh Shasan Van Anubhag-2 In pursuance of provisions of clause (3) of Article 348 of the Constitution, the Governor is pleased to order the publication of the following English translation of notification no.312/XIV-2-2011-343(L)/2001, dated June 04, 2011: Notification No.312/XIV-2-2011-343 (L)/2001 Lucknow, Dated June 04, 2011 In exercise of the powers under sections 41, 42, 51 and 76 of the Indian Forest Act, 1927 (Act no.16 of 1927), read with section 21 of the General Clauses Act, 1897 (Act n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isham, Sandal Wood and Red Sanders or other forest produce except as mentioned in (i) (c). (c) per lorry load of other forest produce coming from mines, e.g., coal, lime, stone, sand, Bajari and other minerals. Advalorem at the rate of 15% or minimum Rs.750/. Advalorem at the rate of 15% or minimum Rs.750/. (ii) (a) per cart load of timber other than of Khair, Sal and Sagaum (Teak), Shisham, Sandal Wood and Red Sanders. (b) per cart load of timber other than of Khair, Sal and Sagaun (Teak), Shisham, Sandal Wood and Red Sanders or other forest produce. Rs.100.00 per cubic Meter of capacity Rs.40.00 per cubic Meter capacity Rs.40.00 per cubic Meter capacity (ii) (a) per cart load of timber of Khair, Sal and Sagaun (Teak), Shisham, Sandal Wood and Red Sanders. (b) per cart load of timber other than of Khair, Sal and Sagaun (Teak), Shisham, Sandal Wood and Red Sanders or other forest produce except as mentioned in (ii) (c). (c) per lorry load of other forest produce coming from mines, e.g., coal, lime, stone, sand, Bajari and other minerals. Advalorem at the rate of 5% or minimum Rs.400/. Advalorem at the rate of 5% or minimum Rs.200/Advalorem at the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the premises of SSTPC. After levelling these areas with ash (pond ash), the said area is covered and compacted by soil. The third method of disposal of ash is making it available to various parties engaged in the manufacture of cement. The disposal of the ash in the ash dyke method remains the primary and most effective method of disposal of ash. 21. In NTPC Ltd another vs. State of UP others the petitioner no.1 has awarded contracts to M/s Rungta Projects Limited (petitioner no.2) on 6.6.2007 for the raising of the bunds of the Ash Dyke Location-II situated in southern parts of village Marrak and Jogichaura, Tehsil Duddhi, District Sonebhadra in five areas of about 500 acres. The soil is excavated from the Rihand reservoir from those acres of land at 880 feet level falling in the Village Kohroul for which no objection certificate has been issued by the Executive Engineer, Rihand Dam and the mining permit has been given by the District Mining Officer, Sonebhadra. The Divisional Forest Officer, Renukoot Forest Division has given no objection certificate on 8.1.2008 for excavation of soil. The mining permits have been issued. The soil is excavated from non-forest areas and is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that in the garb of levying transit fees for regulation of forest produce the State in fact is imposing levy on scheduled mineral, which is exclusively subject matter of MMDR Act. It is a colourable exercise of powers. He submits that Entry 54 of List-I of the Seventh Schedule read with Section 2 of the MMDR Act, the Union legislature alone has jurisdiction to regulate matters with regard to mines and minerals. The power to regulate miner minerals has been conceded to the State Government only to the extent contemplated under Section 15 of the MMDR Act. The State legislature is denuded of the power to regulate or in any manner deal with the minerals so as to exceed the field of regulation covered exclusively and subscribe by Section 15 of the MMDR Act. He has relied upon Government of West Bengal and another vs. Kesoram Industries Limited and another, JT 2004 (1) SC 375 (para 148), in which, while considering the power of the State to levy tax or fee on minerals in view of provision of Entry 54 of List-I of the Seventh Schedule, it was held that a tax or fee levied by State with the object of augmenting its finances and in reasonable limits does not ipso facto trench upon regulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of the Mines and Minerals (Development and Regulation) Act, 1957 (1957 Act) Act as amended up to date and the Rules made there-under establish that the field inasmuch as it relates to regulation and development of mines and minerals is ''fully occupied' by later Parliamentary legislation namely 1957 Act and the Indian Forest Act, 1927 (1927 Act) can not operate in the so occupied field of regulation and development of mines and minerals. This is further supported by various legislations relating to coal and coal mining. Reliance has been placed on Indu Bhushan Bose Vs. Rama S. Devi, AIR 1970 SC 228; Quarry Owners Association Vs. State of Bihar, (2000) 8 SCC 655; State of Tamil Nadu Vs. M/s Hind Stone, AIR 1981 SC 711; State of West Bengal Vs. Kesoram Industries, (2004) 10 SCC 201 and State of Orissa Vs. M.A. Tulloch, AIR 1964 SC 1284. 2. Under Section 23-C of 1957 Act, the State of Uttar Pradesh has itself framed comprehensive Rules titled "U.P. Minerals (Prevention of Illegal Mining, Transportation and Storage) Rules, 2002" whereunder the dispatches of minerals and ores are mandatorily to be accompanied by transit passes issued under the said Rules and strictly in accorda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Impugned levy is a colorable exercise of power. The State cannot do indirectly what it is prohibited to do directly. 8. The impugned Rules and Notification dated 4.6.2011 are in contravention of Article 301 of the Constitution of India as it impedes the free flow of minerals. 9. Presidential assent has admittedly not been obtained for framing the Rules purportedly under Section 41 of 1927 Act and issuance of the impugned Notification. Therefore, the Rules are hit by the provisions of Articles 304 of the Constitution of India and are invalid on this ground alone. 10. The impugned 5th Amendment is violative of Article 14 of the Constitution as the same suffer from uncanalised and arbitrary power on the various authorities for taking different prices of coal for the purpose of collecting/ realizing transit fee and the fee is exorbitant, excessive and extortionary particularly keeping in view the nature of the levy being regulatory only for issuing transit passes. Reliance has been placed on Calcutta Municipal Corporation Vs. Shrey Mercantile (P) Ltd., (2005) 4 SCC 245; Vam Organic Chemicals Ltd. Anr. Vs. State of U.P. Ors., (1997) 2 SCC 715; and A.P. Paper Mills Ltd. Vs. Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes of Orissa, Bihar, Chhatisgarh, Madhya Pradesh, U.P. and A.P. have been referred by a three Judge Bench of the Supreme Court in Civil Appeal No.4056-4064 of 1999 formulating 11 questions, based on the law laid down by 5 judges' Constitution Bench in Keso Ram Industries Ltd. (Supra), which has interpreted earlier decision of the Constitution Bench of 7 Hon'ble Judges in Indian Cement's case (1990) 1 SCC 12, the High Court should wait until the verdict is given on the issues by the Supreme Court. 28. Shri S.P. Gupta, Senior Advocate assisted by Shri Aloke Kumar appearing in Writ Petition No. 963 of 2011 (Ajai Trading (Coal) Company vs. State of UP and others), challenging the 5th Amendment, submits that the coal has been included specifically for the first time in the Notification dated 4.6.2011. The levy of transit fee payable under the 4th Amendment at the rate of Rs. 5936/- per Truck has been arbitrarily and exorbitantly increased by the 5th Amendment to Rs. 60, 000/- per Truck. Shri Gupta submits that by 42nd Amendment, to the Constitution w.e.f. 03.1.1977 Entry-23 in List-II was deleted with a corresponding Entry 17-A 'Forests', was inserted in List-III. The State Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehind the levy of a tax is the principle of ability or capacity. In the case of a tax, there is no identification of a specific benefit and even if such identification is there, it is not capable of direct measurement. In the case of a tax, a particular advantage, if it exists at all, is incidental to the States' action. It is assessed on certain elements of business, such as, manufacture, purchase, sale, consumption, use, capital etc. but its payment is not a condition precedent. It is not a term or condition of a licence. A fee is generally a term of a licence. A tax is a payment where the special benefit, if any, is converted into common burden. 43. On the other hand, a fee is based on the "principle of equivalence". This principle is the converse of the "principle of ability" to pay. In the case of a fee or compensatory tax, the "principle of equivalence" applies. The basis of a fee or a compensatory tax is the same. The main basis of a fee or a compensatory tax is the quantifiable and measurable benefit. In the case of a tax, even if there is any benefit, the same is incidental to the government action and even if such benefit results from the government action, the same is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity/services. Every benefit is measured in terms of cost which has to be reimbursed by compensatory tax or in the form of compensatory tax. In other words, compensatory tax is a recompense/reimbursement. 46. In the context of Article 301, therefore, compensatory tax is a compulsory contribution levied broadly in proportion to the special benefits derived to defray the costs of regulation or to meet the outlay incurred for some special advantage to trade, commerce and intercourse. It may incidentally bring in net-revenue to the government but that circumstance is not an essential ingredient of compensatory tax. 47. Since compensatory tax is a judicially evolved concept, understanding of the concept, as discussed above, indicates its parameters. 48. To sum up, the basis of every levy is the controlling factor. In the case of "a tax", the levy is a part of common burden based on the principle of ability or capacity to pay. In the case of "a fee", the basis is the special benefit to the payer (individual as such) based on the principle of equivalence. When the tax is imposed as a part of regulation or as a part of regulatory measure, its basis shifts from the concept of "burden" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est produce, since the petitioners are bringing coal from Rajasthan, the transit fee is by way of unreasonable restriction on the import of coal and is consequently violative of Article 301 of Constitution. He submits that even assuming that the transit fee is regulatory fee, it has to be commensurate with the expenditure incurred by the State for the purposes of regulation and not for any other purpose. The Forest Department does not incur any expenditure on the movement of coal. 35. Shri Bharat Ji Agarwal has relied upon State of UP v. Vam Organics (2004) 1 SCC 225, in which the levy was struck down on the ground that the State has not given the details of the actual expenditure on regulating industrial alcohol for the purposes that it may not be renatured for the purpose of consumption as potable alcohol. Shri Bharat Ji Agarwal has also relied upon the judgments in Indian Glycols vs. State of UP 2004 UPTC 474, Ram Surat Tiwari vs. State of UP 1991 ALJ 644, Synthetics and Chemicals Ltd vs. State of UP AIR 1990 SC 1927, Indian Mica and Micanite Industries Ltd v. State of Bihar, AIR 1971 SC 1182, in submitting that the burden of proof that the services are being rendered by the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t produce, which only naturally occurs or which is either found in or brought from a forest. The coal and lime stone are not forest produce as they are neither found in or brought from any forest. The increase of transit fee from Rs. 5.00 per tonne of capacity of lorry in the year 1978 to Rs. 38.00 and thereafter on cubic fit basis and finally by the 5the Amendment to the Rules by notification dated 4.6.2011 advalorem has increased the cost of raw material by 15%. He submits that the judgment in Kumar Stone Works (supra), in which it was held without any positive material brought on record that the coal is being transported within the State of UP passes through the forest in Sonebhadra, is subject matter of Special Leave to Appeal (C) No. 11261 of 2005 (converted into Civil Appeal No. 2797 of 2008) filed by Star Paper Mill (the petitioner). The Supreme Court has by an interim order dated 7.4.2008 directed status quo as on that day to be maintained. Shri Rahul Agarwal submits that where the movement of raw material does not originate in any forest or any place which is in the forest or its movement is minimal in any forest area in which practically no forest road is used, the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber produced outside the country and for protection of environment internationally, the Rules of 1978 will not stand the test of the extra territorial operation of the laws. He relies upon a constitution bench decision in GVK Industries Ltd another vs. Income Tax Officer others (2011) 4 SCC 36 in which the Supreme Court laid down the principles of extra territorial operation of laws under Article 245 of the Constitution of India. 42. Shri Navin Sinha, Senior Advocate, assisted by Shri Vipin Sinha appears for the petitioners in Writ Petition Nos. 941, 942 and 943 of 2011 filed by the Indian Wood Product Co. Ltd. engaged in the business of manufacture and sale of Katechu and Kutch from Khairwood extract, Gambiar and Cashew Husk. All the three writ petitions were filed on 11.7.2011. In Writ Petition No. 941 of 2011 the reliefs have been sought against the Conservator of Forest, Bareilly and the Divisional Forest Officer, Bareilly; in Writ Petition No. 942 of 2011 the reliefs have been sought against the Divisional Forest Officer, Mughalsarai Range, Varanasi and in Writ Petition No. 943 of 2011 the reliefs have been sought against the Conservator of Forest, Agra, Meerut, Kanpur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. That Kattha is produced after processing Khair wood which takes a period of about 40-45 days. Firstly upper layer of the Khair wood is removed at the Kattha producing factories. Then inner hard wood is cut into small chips and boiled in water along with Gambier Cashew husk. Thus another liquor is prepared which is made thick by evaporation process. It is put into aluminum containers which are put into chillers. By this process thick liquor is formed into crystals and this crystalized and freezed liquor is sacked. Thereafter the substance so recovered is mashed to make it uniform and given shape of about 1.5 millimeter thick plates. These plates are pressed by Hydraulic press to remove further water contents. Thereafter these plates are cut into 2" 2" cakes. These cakes are dried in dehumidified for about 15 days. Again these cakes are put in room through which normal air is passed for about 5 days. 12. That the mill Kattha so obtained by the above process is eatable and marketable item and not a forest produce within the meaning of Section 2 (4) of the Indian Forest Act. Thus for its transit no pass is required. The petitioners sells its mills Kattha to whole salers and ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sub-section (4) of Section 2 of the Indian Forest Act, 1927 and further such processed form of forest produce cannot be subjected to transit rule under Section 41 of the Act. Shri Sinha submits that in terms of the notification issued on 20.10.2010 (4th Amendment) the transit fee payable by the petitioner was @ Rs. 200/- per cubic meter replacing the transit fee payable earlier @ Rs. 38/- per tonne capacity. The 5th Amendment has enhanced the transit fee at advalorem basis and consequently increased the liability in case of while sandal wood oil by 100 times. In para-21 of the writ petition it is stated that the consequent impact of the enhancement is that in ordinary course, a truck load of white sandal wood oil may be carrying about 0.320 cubic meter of the value in the realm of Rs. 91, 44, 800/- on which under the 4th Amendment the liability would be about Rs. 128/- per cubic meter. Now on advelorum basis at 5% of the value, the transit fee would amount to approximate Rs. 45, 000/- on the same quantity. In one of the Invoice No. 002, Book No. 01 despatching Sandal Wood Oil Rectified (High Santanol) dated 7.4.2011 by Ultra Aromatics, Plot No. 237, Village Budhpur, Delhi valued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... true sense of term. In such cases, although the principles of quid pro quo with arithmetical exactitude are not necessary to be established, broad co-relationship between the amount charged and the service rendered is required to be maintained. Where the State wants to regulate any trade or business by means of license and to charge licence fee in connection therewith; but in such cases principles of quid pro quo do not apply as by regulating the trade or business the State Government is not rendering any service but enforcing the regulation by placing restriction on their rights to trade or business for the good of the society. By exercising the control on the activities of the licensees, the State makes the activities subject to reasonable restrictions, which is not a service rendered to them. By granting a licence the State does not confer any privilege or benefit on any one and that it does is to regulate a trade, business or profession in public interest. After citing Indian Mica and Nicanite Industries Ltd v. State of Bihar, AIR 1971 SC 1182 and Corporation of Calcutta v. Liberty Cinema AIR 1965 SC 1107 this Court held: when the State makes the law for regulation of any trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of, Shri Navin Sinha has relied upon judgment in Suresh Lohiya v. State of Maharashtra and another (1996) 10 SCC 397. In this case the Supreme Court held that bamboo mats are commercially different than bamboo which is a forest produce. In common parlance this is a distinct product and same cannot be included within the expression 'forest produce' as defined in Section 2 (4) of the Act despite it being inclusive in nature. The reasoning given by the Supreme Court in paras 6 and 7 is quoted as below:- "6. We have given our considered thought to the rival contentions. It appears to us that the High Court erred in taking the abovesaid view by referring to the definition of 'timber' inasmuch as we agree with Shri Bhatia that the second part of the definition does not take within its fold fashioned bamboo as that part is relatable to wood, and not tree. We have said so because the definition of tree includes even canes, and a cane cannot be taken as a wood, even if a tree could be. But then, the High Court has also referred to sub-clause (i) (supra) which speaks of produce of tree as well. As to this, submission of the appellant's counsel has been that when sub-clause (i) is read as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t cannot be subjected to levy of transit fee. There are no notifications regarding the areas declaring them to be forest from which the Coal is brought. The passing of the Coal from any of the area namely the Sonebhadra forest area is not sufficient for imposition of the transit fee. 51. Shri Manish Goyal has relied upon judgment in State of Mysore v. H. Sanjeeviah AIR 1967 SC 1189, where the night rule under the Mysore Forest Act (Act No. 11 of 1900) regulating transit of timber, firewood, charcoal and bamboos held to be violative by the Mysore High Court was upheld by the Supreme Court on the ground that the power, which the State Government may exercise under the proviso to Rule 2 to regulate the transport of forest produce including the power to prohibit or restrict transport. The power to restrict movement of forest produce between sunset and sunrise was found to be prohibitory and restrictive of the right to transport forest produce. Relying upon Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan (supra) it was held that the restrictions obstruct the freedom, where regulations promote it. Police regulations, though they may superficially appear to restrict the free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies as petitioners are dealing in transport of Clinker and Flyash; in Writ Petition Nos. 89 of 2010 and 886 of 2011 the petitioners are dealing in transport of Calcium Hydroxide, Calcium Oxide, Quick Lime and Hydrated Lime; in Writ Petition Nos. 395 of 2009, 503 of 2011 and 529 of 2011 the petitioners are dealing in transport of Hard Coke; in Writ Petition Nos. 528 of 2011 and 698 of 2011 the petitioners are dealing in transport of Coal Hard Coke; in Writ Petition No. 1398 of 2010 the petitioner-company is dealing in transport of Coal, Gypsum, Minerals etc; in Writ Petition Nos. 1127 of 2009, 1579 of 2010, 476 of 2010 and 284 of 2010 the petitioners are dealing in transport of Iron-ore; in Writ Petition No. 495 of 2010 the petitioners are dealing in transport of Iron-ore and Coal; in Writ Petition No. 779 of 2010 the petitioners are dealing in transport of Marble Stone; in Writ Petition No. 1628 of 2010 the petitioners are dealing in transport of Quartz, Bauxite, Feldspar etc.; in Writ Petition No. 276 of 2010 the petitioners are dealing in transport of rejected Coke Ash Burn Coke; in Writ Petition No. 55 of 2009 the petitioner is dealing in transport of Soil (Mitti); in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemicals for which they need Calcium Hydroxide, Calcium Oxide, Quick Lime and Hydrated Lime. Most of these is purchased from traders/manufacturers situated in Jodhpur in the State of Rajasthan and are transported after paying royalty. 56. Shri Aloke Kumar submits that the commodities transported by the petitioners are not found in the forests in the State of UP. They are not forest produce as they are not found in or brought from and transported through the forest areas in the State of UP. He has relied upon Suresh Lohiya vs. State of Maharashtra (1996) 10 SCC 397 in which a commercially new and distinct article such as bamboo mat was not held to be forest produce. 57. Shri Aloke Kumar submits that the Flyash is given free of cost by NTPC to the Cement Industry as industrial waste. It has no commercial value and is not a forest produce. 58. It is submitted by Shri Aloke Kumar, that Hard Coke is manufactured out of crust coal heated in chambers. After the impunities are removed and the oxygen is released, the residue is subjected to sprinkling by water in a controlled manner producing Hard Coke. He submits that Hard Coke, rejected Coke, Ash Burn Coke are industrial waste, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fee has been levied to protect environment, does not justify the advalorem imposition, of fees. He submits that the environmental concerns of the State Government are not based on any scientific analysis of empirical data. The decision taken to increase transit fee is not informed by the reasoning as there is no scientific data collected to analyse it. Shri Tarun Agrawal submits that the principles of sustainable development, and inter-generational equity cannot justify the increase of transit fee. The increase of transit fee on advalorem basis will not result in optimum use of consequential sustainable development. The increase in transit fees cannot minimise the use of forest produce. Its optimization may help in sustaining a balance. The increase is thus wholly unreasonable with no object to achieve to justify it. 63. Shri Siddhartha Srivastava, appearing in Writ Petition Nos. 714 of 2011 and 1087 of 2011 filed by the petitioners dealing in transport of Marble, Kota Stone, Granite from Rajasthan, submits that Section 41 (2) (c) does not provide for levy of transit fee on forest produce. He submits that there is no legislation for imposing transit fee. The word 'fees' under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions are engaged in transporting tendu leaves under the U.P. Tendu Patta (Vyapar Viniyaman) Adhiniyam, 1972 (in short the Tendu Patta Adhiniyam of 1972). The U.P. Tendu Patta (Vyapar Viniyaman) Niyamawali, 1972 provides for the rules to carry out the purpose of the Act. 67. Shri V.K. Singh submits that the State legislature has passed the Tendu Patta Adhiniyam, 1972, as an independent, complete and Special Act to provide in the interest of public for creation of the State monopoly of purchase and distribution of tendu leaves. The inclusion of 'forest' in Entry-17A in List-III entitles the State Government to enact laws for regulating activities connected with forest. 68. Shri V.K. Singh submits that the tendu leaves are grown in a special area in Uttar Pradesh bordering Madhya Pradesh, Chhatisgarh, and Bihar. Tendu shrubs are naturally grown, and are of the average height of 3 ft. In the third week of May and first week of June for a period of 20 days only, the tendu leaves grown in these shrubs, used for manufacture of 'biri', are traditionally collected by the tribals of the area. In order to protect the tribals from exploitation and to take over the entire purchase and dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tendu leaves. The price is fixed under Section 7 by the State Government and Section 8 provides that the State Government shall purchase all tendu leaves offered for sale. Each grower is registered under Section 9. The disposal of tendu leaves is provided in Section 10. The Tendu Patta Niyamawali of 1972 provides under Rule 4 the transport permit and permit for sale and purchase of tendu leaves. Rule 4 (1) is quoted as below:- "4. Transport permit and permit for sale and purchase of tendu leaves- (1) Transport permit shall be of the following six types and shall be issued by officers and/or person mentioned against each of them: Type of transport permit Authority to issue permit (i) For transport from collection depot to storage godown: (a) Main permit, form T.P.I (Main) Divisional Forest Officer or an officer authorised by him in writing (b) Subsidiary permit Form T.P.I (Subsidiary) up to the extent of quantity mentioned in the main Divisional Forest Officer or any Officer and/or person authorised by the Divisional Forest Officer in writing (ii) For Transport from one Storage g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lude tendu leave as provision of transit of tendu leaves has been made by a complete Act and the Rules. The realisation of the transit fee under the Rules of 1978 is also barred under the principles of doctrine of occupied field. 70. It is further submitted by Shri V.K. Singh that since 1980 the U.P. Forest Corporation has complete monopoly on the trade of tendu leaves. The tendu leaves are collected in the gaddies (bundles) on the phar. The price is fixed by the Committee appointed by the State Government under the Tendu Patta Adhiniyam. The leaves are then dried for a few days under the sun light. One standard bag contains 1000 gaddies (bundles) of 50 leaves each. They are thereafter stitched and transported to godowns, from where they are taken out for commercial sale. The entire movement of tendu leaves is covered by the transit passes under Rule 4 namely T.P.-1 to T.P.-6. A tax under Section 5 (3) is paid on transport of tendu leaves. The entire trade operates under strict control of the State Government and thus no object is sought to be achieved in obtaining transit pass under the Rules of 1978 which virtually amounts to duplication of passes for payment of transit fee ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s well as receipt of Rs. 2850/- issued for transit pass under the Transit Rules of 1978, for same tendu leaves. 75. Shri Rajeev Misra appearing for the traders in Writ Petition No. 933 of 2011 submits that the U.P. Tobacco Products Pvt. Ltd.-the petitioners are engaged in the manufacture and sale of country made charrot commonly called as 'Biris'. He relies upon averments made in paragraphs-32 33 of the writ petition in which the petitioner has stated that the transit fee initially @ Rs. 5/- per tonne in 1978 was increased to Rs. 38/- per tonne of forest produce in 2004. By 4th Amendment notified on 20.10.2010 the rates have been increased from Rs. 38/- per tonne to Rs. 75/- per cubic meter of capacity of the lorry. By the 5th Amendment the transit fee has been prescribed at the advalorem rate of 5% or minimum of Rs. 750/- per lorry load. By this amendment one truck of tendu leaves with capacity of 10 tonnes will attract transit fee to the tune of Rs. 30,000/- as the current value of 1 kg of tendu leave is about Rs. 60/-, and 10 tonnes will mean 10,000 kg. The increase is highly excessive and does not serve any object. It will seriously affect the trade, providing employment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " at serial No. 4 which asks the person applying under Rule 4 (1) (b) (i) for the detail of the land has to be read with Rule 1 (2), which says that the extent of the Act is for whole of State of Uttar Pradesh. Thus, the land has to be situated in the State of Uttar Pradesh only." 78. Shri Udit Chandra submits that after the application under Schedule "B" by any person to which a booklet is issued to him under Rule 6 (2), a transit pass is to be issued in duplicate and triplicate to any other person/third party who approaches him for transit of such forest produce under Rule 6 (4). When any other person/third person reaches to Depot/Chowki as established under Rule 15 he has to pay the transit fee prescribed under Rule 5 only on those transit passes which have been issued by the person under Rule 6 (4). On payment of such fee a receipt is issued as prescribed under Schedule 'C' and therefore, the transit fee which is to be paid or in other words Rule 5 will only apply in those cases in which the transit is made on the transit pass issued under Rule 6 (4) and not in any other cases. The express mention of one thing implies the exclusion of the other. Once Rule 5 contemplates the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners in Writ Petition Nos. 1104 of 2010; 1624 of 2010; 1625 of 2010; 1626 of 2010 and 1103 of 2011, submits that during the pendency of the writ petitions by notification dated 29.3.2010 certain forest produce such as peat, surface soil, rock and minerals (including limestone, laterite, mineral oils and all products of mines or quarries) mentioned in Section 2 (4) clause-b (iv) of the Indian Forest Act, excavated from non-forest land and moved thereby, have been exempted from operation of the Rules. He submits that the word 'quarry' has not been included in the 5th Amendment, 2011, which is specifically mentioned in Section 2 (4) Clause-b (iv) of the Forest Act, 1927, as forest produce of mines or quarries. The 'mines' and 'quarry', have different meaning. In Webster's new world dictionary of American language by David B. Gural Nik (Editor-in-Chief) at page 904 and 1162, these words are defined as follows:- "Quarry: A place where building stone, marble or slate is excavated as by cutting or blasting -Vt. - ried, ry.ing 1. to excavate from a quarry 2. to make a quarry in (land). Mine:- 1. a) a large excavation made in the earth, from which to extract mettalic ores, coal, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided to change the transit fee. (a) At the time of consideration, the following facts were brought to the notice of the Government: a) Forest produce such as timber is being transported in stacks measured in cubic meter (cu.m). Hence, a practical approach in realizing transit fee would be cu.m instead of weight. b) On the price of timber between 2005-06 and 2006-07, the royalty rate was increased on an average by 30% and between 2006-07 to 2007-08 it increased by about 11%. c) Categories of forest produce: it is universally that timber of higher grade like teak fetch higher market price and profit. It is being generally used by affluent sections of the society with higher paying capacity. Hence, the agency involved in transportation should pay more as a transit fee in comparison to timber of low grade. It was, therefore, based on empirical data. In the light of the above, categories were formed as below: i) Valuable timber: Khair, Sal and Sagaun (Teak), Shisham, Sandal wood and Red Sanders. ii) Less valuable timber: other than Khair, Sal and Sagaun (Teak), Shisham, Sandal wood and Red Sanders." 84. It is then stated in paragraphs 10, 11 and 12 as follows:- "10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be grown also but high value forest produce such as coal, marble etc. are non-renewable resources which are to be used very cautiously and conservatively so that they remain available for posterity. The coal also generates pollution and release carbon dioxide (a global warming gas) wherever used. Hence, the forest produce which are precious and essential for survival for mankind, should be charged at higher rates to discourage the wanton and indiscriminate use of precious resources. It is a well settled principle that natural resources which are non-renewable and which cause pollution should be sparingly used and discouraged by imposition of higher transit fees. One of the most significant challenges in addressing climate change and global warming is reducing greenhouse gas emissions resulting from the use of coal. Coal is inherently higher polluting and more carbon intensive than other energy alternatives. Climate change and global warming if it is permitted to happen by carbon dioxide emissions will impose a heavy burden on future generations in all states, and in all countries. The Kyoto Protocol is an amendment to the United Nations Framework Convention on Climate Change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1972, is now referable to Entry 17A and 47 of List-III of Seventh Schedule of the Constitution. The U.P. Minor Mineral (Concessions) Rules, 1963 provide that any mineral can be transported in U.P on form MM-11 as provides that if the mineral is forest produce as defined under Section 2 (4) (b) of the Indian Forest Act, 1927, the transit fee is leviable irrespective of the fact, whether the same is being transported on Form MM-11. The minor mineral/major mineral (product of mines or quarries) is a forest produce. The words 'brought from' used in definition under Section 2 (4) (b) also connotes the meaning if transported through forest would amount to a forest produce as held in Kumar Stone's case. The word 'forest' has not been defined in Forest Act. The Supreme Court, in T.N. Godavarman Thirumulpad's case, has given an expansive meaning to the word 'forest'. 87. It is further stated in the counter affidavit, that scope and jurisdiction of MMRD Act 1957, and Indian Forest Act, 1927 is entirely different. Both the Acts have no relation with each other nor their provisions overlap in any way upon the other. The MMRD Act provides for regulation of mines and minerals, grant of mini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Duddhi. The State of U.P. has also filed index of documents annexing therewith the notifications declaring establishment of Kaimur Wild Life Santuary dated 10.8.1982, in Forest Range Halia (15992.8 hects.); Forest Range Ghorawal (area 19375.2 hects.); Gurma (14705 hects.) total area 5 sq. kms. bounded by the rivers and hills, given in the notification under Section 18 of the Wild Life (Protection) Act, 1972; a coloured map of Wild Life Sanctuary and map of the Kaimur Black Buck Sanctuary as document Nos.2 and 3. The Divisional Forest Officer, Kaimur Wild Life Division, Mirzapur has submitted a report that Kaimur Wild Life Sanctuary was declared vide notification dated 10th August, 1982 including Varanasi-Shakti Nagar; the Obra Forest Range and Markundi Forest Range included in Kaimur Wild Life Sanctuary. The current Obra Forest Range including Markundi Forest Division was notified in 1970. The working scheme of Obra Forest Division of the year 1980-81 to 1989-90 (Survey of India) indicate Markundi Forest Division; the Kaimur Wild Life Sanctuary includes Varanasi Shakti Nagar Road Km.73 to 76.2 (3.2 kms.) through the Markundi Forest Division of the Kaimur Wild Life Sanctuary. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like areas in reference to the orders passed by Hon'ble Supreme Court on 07.12.2007. Enclosure-As above. Sincerely yours -sd/- (B.K. Patnaik) Principal Chief Conservator of Forests, Uttar Pradesh, Lucknow" The First Supplementary Counter Affidavit and the Documents filed by the State of U.P.: 90. In the first supplementary counter affidavit of Shri Anwar Ahmad, Forest Range Officer, Renukoot, Forest Division, Renukoot, Distt. Sonbhadra in Writ Petition No.963 of 2011 (M/s Ajay Trading (Coal) Col. Ors. Vs. State of U.P. Ors.), it is stated that the Rules of 1978 have been framed under Sections 41, 42, 51 and 76 of the Indian Forest Act and in supersession of Government Notification dated September 30th, 1915, and all other orders and notifications on the subject to regulate the transit of timber and other forest produce. The prefatory note to the Rules of 1978 reads as follows:- "In exercise of the power under Section 41, 42, 51 and 76 of the Indian Forest Act (Act No.16 of 1927), and in suppression of Government Notification No.672/XIV-42, dated September 30, 1915, and all other orders and notification on the subject, the Governor is pleased to make the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so filed a short counter affidavit of Shri S.P. Singh, Forest Range Officer, Anpara, Renukoot Forest Division, Sonebhadra in NTPC Limited and others (Writ Petition No. 327 (Tax) of 2008) and a counter affidavit of Shri Anwar Ahmad, Forest Range Officer, Renukoot Forest Division, Renukoot, District Sonebhadra in M/s Ajay Trading (Coal) Co. and others vs. State of UP and others (Writ Petition No. 963 (Tax) of 2011). 94. In the short counter affidavit, it is stated by the State Government that plot nos. 71, 72, 73, 74, 75, 262/1 and 262/2 measuring area 6 acres in village Kohraul, Duddhi, Sonebhadra on which mining permit has been granted by the District Magistrate, Sonebhadra on 01.2.2008 for a period of three months, is not a forest land, but the road, from which the petitioner is transporting the ordinary earth to his dykes lagoon, is a National Highway No. 76-E, Varanasi-Shaktinagar marg, which falls on forest land. The Ministry of Environment and Forest, Government of India issued a letter on 28.6.1990 for transfer of the forest land on which the National Highway was constructed by PWD on certain terms and conditions. The first condition of this letter is that the legal status ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o environmental deterioration taking place on a large scale in the country raising widespread concerns, the Forest Conservation Act, 1980 restricted de-reservation of forest or use of forest land for non-forest purpose by any State Government or other authority except with the prior approval of the Central Government. 97. Shri Ravi Kant submits that in Ambica Quarry Works Vs. State of Gujarat, (1987) 1 SCC 213 it was observed that deforestation causes ecological imbalances as a result thereof have become social menace and thus the Forest Conservation Act, 1980 was brought into force as supplement to the Forest Act, 1927. In T.N. Godavarman Thirumal Pad Vs. Union of India, (1997) 2 SCC 267, the Supreme Court held that the word 'forest' must be understood according to its dictionary meaning. The description covers all statutorily recognised forests whether designated as reserved, protected or otherwise for the purposes of Section 2 (1) of the Forest Conservation Act, 1980. The Rules of 1978 were made in exercise of powers under Section 41, 42, 51 and 76 of the Indian Forest Act to regulate the transit of timber and other forest produce. The object of the Rules of 1978 for taking ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy mandates the States to protect and improve the environment and to safeguard the forest and wild life of the country. Art.51 (g) impose fundamental duties on every citizen of India to protect and improve the natural environment including forests, lakes, rivers and wild life and to save living creatures. The needs of time require a holistic view to be taken. The Court must take into account the definition of forest provided by the Supreme Court in T.N. Godaverman's case. The definition is not restricted to the kinds of forest such as reserve forest, village forest, protected forest etc. In any case he submits that both sides of railway tracks and roads in the State of U.P. have been included as protected forests by notifications issued under Section 80A of the Act. 101. Shri Ravi Kant submits that the Court has to give a very expansive meaning to the forest produce. The intention of the law maker has to be found by giving the purposive meaning to the words 'forest produce'. The legal process theory invites a dynamic statutory interpretation to the laws enacted in public welfare. The meaning of the words keep changing from time to time. The environmental concerns shown by the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that it would have extra territorial operation. He relies upon TISCO Vs. State of Bihar, AIR 1958 SC 452 and submits that where there is some nexus, the law would be valid. The transit fee is being charged on the cases, which are in the State of U.P. The physical presence of the goods in the State of U.P. on their movement, would not invalidate the law on the ground that the journey of the goods starts from outside the country or from any other State. All these goods are destined to be brought into and used in the State of U.P. 103. Replying to the arguments that the increase of regulatory fees on advalorem basis, has virtually become a compensatory tax, in as much as the quid pro quo is lacking, Shri Ravi Kant submits that the difference between tax and fee is waning. It is not necessary to render service to specify individual group or association. The services rendered to the society is sufficient. The co-relation between fee and service has to be broad and not exact. It is not necessary that the amount collected may be deposited in a separate account. It could like tax be brought into consolidated fund of the State. The expenditure incurred has also to be seen. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 51, 76, 77, and 78. 106. The Indian Forest Act, 1927 does not define 'forest' or 'forest land'. The lack of definition has wide implications. In T.N. Godavarman Thirumulpad vs. Union of India and others (1997) 11 SCC 605 the Supreme Court in its order dated 12.12.1996 stated: "The word 'forest' must be understood according to its dictionary meaning. This description covers all statutory recognized forest, whether designated as reserve, protected or otherwise for the purpose of Section 2 (1) of the Forest Conservation Act. The term 'forest land' occurring in Section 2 will not include forest as understood in the dictionary sense but also any area recorded as forest in the Government records irrespective of its ownership." 107. The dictionary meaning of forest suggests that forest is a large tract covered with trees and undergrowth, sometimes mixed with pasture (Oxford Dictionary, 7th Edition). The forest is also defined as 'a tract of land covered with trees and one usually of considerable extent' (Black's Law Dictionary). With these definitions it can be clearly said that the forests as defined by the Supreme Court are those which include all statutorily recognised forests, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orest Conservation Act, 1980 namely that the forest includes only reserved forest, protected forest and village forest, is no longer valid. The forest within the meaning of the Indian Forest Act, 1927, and Forest Conservation Act, 1980 is not limited to these categories. In order to conserve forest, keeping in view the ecological and sociological concerns, even those eco-system, which do not have growth of trees can be treated as forests. The forest like areas have been included within the concept of forest, to include eco-systems including wet lands, marshes, rocky lands, crop lands, grazing lands, or even deserts for maintaining ecological balance. In Ambica Quarries Works (supra) the Supreme Court held that the Forest Conservation Act, 1980 was in recognition of the awareness that the ecological imbalances as a result of deforestation have become social menaces and that further deforestation and ecological imbalance should be prevented. THE 'FOREST PRODUCE' 110. The 'Forest produce', is defined under Section 2 (4) of the Indian Forest Act, 1927. It is an inclusive definition and is thus not confined only to the forest produce, which is to be read and found in the definition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inition of forest-produce makes it clear that it takes within its fold all that is produced by nature but does not include man-made products such as toplas, palas, supdas, etc., made from bamboo chips. True it is that if bamboo as a whole is forest-produce, every part thereof including chips would fall within that definition but once the chips cease to be a 'produce' of nature and get merged into a 'product' brought about by human labour and if the product so made is commercially new and distinct, known to the business community as a totally different commodity having a distinct character, such an article or product ceases to be a forest-produce, i.e., furniture made from timber or paper produced from bamboo-pulp. Therefore, bamboo being a tree would certainly fall within Clause (b) of the definition of 'forest-produce', but toplas, supdas and palas made out of bamboo chips would not fall within the definition of forest-produce." 113. In Suresh Lohiya v. State of Maharashtra (1996) 10 SCC 397 the Supreme Court relied upon the test that where an article or thing which is totally different from forest produce having a distinct character, known to the business community as totally d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is not a forest produce (1991 (1) ALT 383); and the dung droppings from cattle grazing area is not a forest produce (AIR 1987 MP 163(DB))' 116. Since the definition of forest produce is inclusive and not an exhaustive. Only those articles, which are defined in category (a), whether found in, or brought from a forest or not, and in category (b) when found in or brought from a forest, are included within the definition of the words 'forest produce'. Where a forest produce defined in Section 2 (4) (a) and (b), is changed into commercially new article, which is totally different from forest produce having a distinct character, known to the business community, with the aid of human skill, it ceases to be forest produce. The interpretation clause under Section 2 of the Indian Forest Act, 1927 also defines 'timber' and 'tree' in sub-section (6) and (7). The timber includes in sub-section (6) trees when they have fallen or have been felled, and all wood whether cut up or fashioned or hollowed out for any purpose or not; and the word 'tree' under sub-section (7) includes palms, bamboos, skumps, brush-wood and canes. The timber is included under sub-section (4) (a) whereas tree is includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ethane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6). Pursuant to the protocol, signatories to Annex I (industrialized countries) commit to either reducing greenhouse gas emissions, or else to participate in emissions credits trading if they maintain or increase emissions. The UNFCCC was reconfirmed as the "appropriate forum for negotiating future action on climate change" in the Gleneagles Plan of Action, which followed the July 2005 G8 conference. Industrialized countries as a whole are required to reduce certain types of greenhouse emissions by 5.2 percent for the 2008 to 2012 commitment period whereas non-industrialized countries are not legally bound to any reductions. This division between industrialized and non-industrialized countries was made as it was felt that as non-industrialized countries generally produce lower levels of emissions than industrialized countries they should not be bound to the same reductions. Pursuant to the Kyoto Protocol each country has its own target levels, based on a percentage of base year emissions, resulting in some countries not having to reduce levels at all, while others ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ins credits whereas the host country loses credits. JI and CDM were developed in order to make it simpler for developed countries to meet their emission reduction goals and to encourage investment in emissions reduction CDM projects tend to be large-scale hydroelectric, gas capture and fuel switch projects, whereas JI projects are more often than not more diverse in type, with a slight preference for energy efficiency projects.43 International Emissions Trading ("IET") allows developed countries to buy or sell portions of their emissions commitments amongst themselves. The Kyoto Protocol was opened for signature on 16 March 1998 following ratification by consensus by the Conference of the Parties (COP3) in Kyoto, Japan in December 1997. Due to a provision in the agreement providing that the Kyoto Protocol shall become legally binding only upon the ratification of at least 55 countries composing at least 55 percent of the world's emissions addressed by the Protocol as of the year 1990, the Kyoto Protocol did not come into effect until 16 February 2004, following Russia's 18 November 2004 ratification. As of August 2005, 153 countries have ratified the Kyoto Protocol. Israel was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exploitation of natural resources and nature protection, industrial development and quality of air and water, use and development of land and conservation of their green cover, energy consumption and the risks of climate change etc. The concept of sustainable development emerged as the result of environmental churning by the world community of unthoughtful human activity callous to the environmental considerations. It seemed that the international economic community had a phobia that economic considerations shall always succumb to the environmental considerations, if the concept is enforced.. But the subsequent developments in the evolution of the environmental law prove that the phobia was unfounded. The Rio Declaration is of key importance in international law relating to the environment and other international instruments having environmental implications. The Rio Declaration is impartial, providing against the misuse of environmentalism in respect of trade. Principle 12 accords the concern of free trade advocates, that environmental restrictions should not constitute disguised or arbitrary interference with the free trade. Similarly, in its chapter 2, Agenda 21 calls for a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is withdrawn. This declaration has been made under Section 2 of the MMRD Act). 120. In Quarry Owners' Association vs. State of Bihar AIR 2000 SC 2870 it was held that the word 'regulation' may have different meaning in different context, but considering the economic and social activities including development and excavation of mines ecological and environmental factors, the fixation of the rates of royalties would also be included within its meaning. In State of West Bengal vs. Keso Ram Industries Ltd (supra) it was held that Section 2 of the MMRD Act, contain an indication that inspite of an inbuilt inclination on the parts of the courts to be liberal in assigning a wide meaning to the scope of the said provisions, the boundaries of limitation are there and the expanse of these provisions cannot be stretched as to strike at the State legislations which are adequately accommodated within the field of an Entry in List II. 121. The power of regulation and control is separate and distinct from the power of taxation for the purposes of legislation. The heads of taxation are clearly enumerated in Entries 82 to 92-C in List-I and Entries 45 to 63 in List-II. The Concurrent List d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mineral Area Development Authority etc. vs. M/s Steel Authority of India and others, Civil Appeal No. 4056/4064 of 1999, on March 30, 2011, by three Hon'ble Judges of Supreme Court framing eleven questions, questioning the correctness of State of West Bengal vs. Kesoram Industries Ltd to a larger bench of nine Judges, the Court may defer the hearing and await the decision of the Supreme Court in the reference. 125. In our opinion the answer to be given by a larger bench of Supreme Court on the eleven questions framed in Mineral Area Development Authority etc. vs. M/s Steel Authority of India, will not in any way affect the decision of this case. The Supreme Court has essentially referred the question as to whether the royalty determined under Section 9/15 (3) of the MMRD Act, 1957 is in the nature of tax and whether the State legislature while levying a tax on land under Entry 49 in List II of the 7th Schedule adopt a measure of tax based on the value of the produce of land. In such case, would the constitutional position be any different in so far as the tax on land is imposed on mining land on account of Entry 50 in List II and its inter-relation with Entry 54 List I. The Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his power given by the Central Act is vested in the State Government, and that the State Government has also the power under Rule 41 (2) (c) to provide for the issue, production and return of such passes and for the payment of fees thereof, the rules for regulating transit of all timber and other forest produce by passes and imposition of fees by the State Government cannot be held to be ultra vires of the Indian Forest Act, 1927, or beyond the powers of the State Government under Entry 17-A of List III of Constitution of India. The Rules as held by the Supreme Court in Sitapur Packing Wood Suppliers (supra), do not suffer from any constitutional infirmity. EXTRA-TERRITORIAL OPERATION OF LAWS 129. Part XI of the Constitution of India in Chapter-1-Legislative Relations, provides for distribution of legislative powers. Art.245 provides for the extent of laws made by Parliament and by legislatures of States subject to the provisions of the Constitution. The Parliament makes laws for the whole or any part of the territory of India, and the legislature of a State may make laws for the whole or any part of State. Clause 2 of Art.245 provides that no law made by Parliament shall be de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their sale and delivery in other States. In the interests of consumers and keeping in view the object of the legislation, the weights should be verified and stamped at the very inception at the place, where they are manufactured. The provisions of the State Legislature in verifying and stamping the weights cannot, therefore, be said to be beyond its territorial legislative competence. 131. In GVK Industries Limited Anr. Vs. Income Tax Officer Anr., (2011) 4 SCC 36 the Supreme Court was not directly concerned with the issue, however, at the instance of the Attorney General, it considered the question to re-examine the rigidity of the view expressed in Electronics Corporation of India Ltd. Vs. CIT (CIL), 1989 Supp (2) SCC 642, in which it was held that the Parliament's power to legislate, incorporate only competence to enact laws with respect to aspects or causes, that occur, arise or exist, or may be expected to do so, solely within India. The Supreme Court considering the arguments of the Attorney General that the Parliament has inherent power to legislate for any territory including territories beyond India and that no Court in India may question or invalidate such laws on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Constitution." 132. The Supreme Court also held that Parliament does not have power to legislate for any territory other than territory of India or part of it and such laws would be ultra vires. It follows, therefore, that the Parliament is empowered to make laws with respect to aspects or cause that occur, arise or exist or may be expected to do so within the territory of India and also with respect to extra-territorial expects or cause that have an impact on or nexus with India. 133. The Rules of 1978 made by the State Legislature in exercise of powers under Section 47 (1) (c) of the Forest Act, 1927, with the object of preventing deforestation, over exploitation of the natural wealth for maintaining ecological balance, address environmental concerns, which have direct impact, on the lives of the people including people living in India, has an impact or nexus with India. The operations of the Rules of 1978, therefore, on the forest product including timber, mines and minerals, even if they are brought from or excavated from outside State of UP. or even outside territories of India, for obtaining passes or payment of transit fees within the State of U.P. cannot be invalid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of U.P, in the State of U.P. or moving from within the State of U.P. to outside the State of U.P. may impede freedom and movement and be violative of Art.301 of the Constitution of India, only if it is established by the petitioner that the levy of transit fee is regulatory measure, which promotes facilities with or without compensation. If the imposition of transit fee on every movement of forest produce is found to be a compensatory tax, which is not for use for trading facilities and is confiscatory in nature, it is liable to be declared as unreasonable restriction upon freedom of trade and intercourse guaranteed by Art.301. 137. In Jindal stainless Ltd. (2) Anr. Vs. State of Haryana Ors., (2006) 7 SCC 241 the Supreme Court held that taxing laws are not excluded from the operation of Art.301, which means that the tax laws can and do amount to restrictions on freedom guaranteed under Part XIII of the Constitution. In Atiabari Tea Company (Supra) the Supreme Court propounded the doctrine of direct and immediate effect. In Automobile Transport (Supra) an exception was judicially crafted and the concept of compensatory tax was propounded. The tax which otherwise interfere w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... national agreements and as signatory to Kyoto Protocol, it is necessary to regulate the movement of forest produce. It is stated that in order to protect the illegal felling of trees, deforestation, illegal mining and poaching, it is obligatory for the State to regulate the movement of forest produce and that the restrictions of taking out of passes and payment of transit fee is reasonable and is in public interest. The transit fee, therefore, does not violate Art.301 of the Constitution. 141. As discussed above, we find justification in the stand taken by the State Government that the requirement of taking out the passes, and the transit fee, held to be regulatory in Sitapur Packing Wood Suppliers and others (Supra), when it was imposed at the rate of Rs.5 per tonne and thereafter amended in the year 2004 at Rs.38 per tonne, was reasonable, and was in realm of regulation. It was, as held by Supreme Court, not necessary for the regulation of transit, to justify the fees on quid pro quo. The increase of the transit fees by the 4th Amendment on cubic feet basis and thereafter by impugned 5th Amendment on ad valorem basis on movement of forest produce on the ground that the value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the imposition of transit fee having assumed the nature of compensatory tax, in the absence of any material placed by the State Government to use the collections for facilitating the trade, the levy cannot be sustained both on the grounds of its imposition under the Rule making power, as well as its conversion on account of its advalorem nature into compensatory tax and thus violative of the Article 301 of the Constitution of India. FEE OR TAX 145. The power to levy a tax is not identical with that of the power to levy a fee. Tax, in our constitutional scheme is distributed between the Union and the State legislatures by various Entries in List I and II. The residuary power to levy a tax belongs to Entry 97 of List I to the Parliament. The power to levy fee is given at the end of each of the three Lists. The legislature has power to levy a tax which is co-extensive with the power to legislate with respect to substantive matters. Either of the legislature may while making a law within its competence levy a fee. 146. A tax is an imposition made for public purpose by way of common burden, for common benefit without reference to any services rendered by the State or any specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , excessive or lacking in 'quid pro quo', they can file a representation to Government, which should consider the same and in appropriate cases give hearing before taking any decision regarding modification or cancellation. The Court can direct the Government in public interest to consider the representation. 152. The absence of uniformity in its incidence; the compulsion in the collection; some of the contributories not obtaining to same degree of service as others may; the State may as a whole ultimately and indirectly benefited out of the imposition; absence of a provision for the constitution of a separate fund and the benefit, to be derived is not simultaneous, but is deferred; or the fee is reserved for future services, will not invalidate the fees vide Krishi Upaj Mandi Samiti vs. Orient Paper Industries Limited (1995) 1 SCC 655. 153. On the above principles of law, on the validity of levy of fee laid down by Supreme Court, we find that the distinction between a tax and a fee primarily lies in the fact that a tax is levied as a part of the common burden based on the principle of capacity and ability to pay and may be progressive, the fee is a payment of a special benef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence between the compensatory tax and fees. While a challenge to the law being violative of Article 301 of Constitution of India, it was held that a tax may be progressive or proportional to income, property, expenditure or any other test of ability or capacity; compensatory taxes like fees, always have to be proportional to benefits and not progressive. These compensatory taxes like betterment charges, fees, regulatory charges or by way of recompense/reimbursement of the cost or expenses incurred or incurable for providing services/facilities are based on the principle of equivalence, unlike taxes whose basis is the concept of "burden" based on the principle of ability to pay. The main basis of a fee or a compensatory tax is the quantifiable and measurable benefit. Under the principle of equivalence, as applicable to a fee or compensatory tax, there is an indication of a quantifiable data, namely, a benefit, which is measurable. 156. The Supreme Court held that the basis of every levy is the controlling factor. In the case of "a tax", the levy is a part of common burden based on the principle of ability or capacity to pay. In the case of "a fee", the basis is the special benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se areas, which are forest like areas, are included within the meaning of word 'forest'. In T.N. Godavarman Thirumulkpad vs. Union of India (supra) the Supreme Court has given a very wide meaning of the word 'forest'. The word 'forest' must be understood according to its dictionary meaning, and this description covers all statutory recognised forest whether designated as reserved, protected or otherwise for the purpose of Section 2 (1) of the Forest Conservation Act, 1980. The term 'forest land' occurring in Section 2, includes forest as understood in the dictionary sense, but also any area recorded as forest in the Government records irrespective of its ownership. It also includes the land covered by forest like areas. 159. The State Government has placed on record the notifications, declaring both the sides of the road in almost all the major districts of the State of UP, qua the 55 classes of trees in such notified areas as protected forests. The entire land, in Kaimur Wild Life Sanctuary, Forest Range Halia, Forest Range Ghorawal, Gurma bounded by the rivers and hills notified under the notification under Section 18 of the Wild Life (Protection) Act, 1972, the Kaimur Black Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncept to protect environment. The argument, that the entire coal mined from the coal bearing areas, which are not notified as forest, is also not sustainable. With the new meaning and understanding of the word 'forest' and 'forest land', the argument, that the mines and mineral including coal, which is not excavated from the forest land, and moved thereby will not be included within the definition of forest produce to attract the Rules of 1978, is liable to be rejected. 162. The coal mines of the National Coalfields Limited (NCL) are situated both in the State of U.P. and M.P. The State Government has produced orders issued by the Government of UP granting lease of various land to NCL in Duddhi, Chunar and Kharia Coal Projects in District Mirzapur, and the letter of the State Government dated 18.10.2010, issued by the Divisional Forest Officer, Renukoot Forest in respect of areas of land in Jhigurdih-Gorvi extension on lease to NCL with the condition that even after the constructions, the land will continue to be protected/reserved forest and lease will not change its current legal character. These leases given by the State Government on forest land clearly demonstrate that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferent, the repugnancy does not arise. The law in this regard has been clarified by the Supreme Court in Deep Chand vs. State of UP AIR 1959 SC 648; Barai T. v. Henry An Hone AIR 1983 SC 150; Hoechst Pharmaceuticals Ltd. v. State of Bihar AIR 1983 SC 1019, and Sita Ram Brothers v. State of Rajasthan 1995 1 SCC 257 (para-4). 164. As held by the Supreme Court, repeatedly when an argument of repugnancy is raised under Article 254, every effort should be made to reconcile the two enactments and to construe them so as to avoid their being repugnant to each other and care should be taken to see whether the two really operate in different fields without encroachment. The Supreme Court has clarified in State of Rajasthan vs. Vatan Medical General Store (2001) 4 SCC 642 relying on State of AP v. McDowell Co. (1996) 3 SCC 709 that the doctrine of covered/occupied field can be applied only to the Entries of List III and further that there can be no question of repugnancy unless the two Acts are wholly incompatible with each other or the two standing together would lead to absurd result. It was held in Krishi Utpadan Mandi Samiti vs. Pilibhit Pantnagar Beej Ltd (2004) 1 SCC 391 that ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar Stone Works (supra). We thus observe that the answer to the questions referred in M/s Nagarjuna Construction Ltd (supra) will guide the interpretation of the words 'brought from' used in Section (2) (4) (b) of the Indian Forest Act. 168. We have considered the reasoning given and M/s Gupta Builders vs. State of Uttrakhand decided by the Uttrakhand High Court on 26.6.2007, that the term 'forest' used in the Forest Act, 1927 is limited to the forests, which are intended to be controlled and regulated under the Act of 1927 and until there is a declaration of land as a forest of specified category of minerals, which are products of mines and quarries cannot be presumed as forest produce. On the discussion of the meaning of the words 'forest', 'forest land' and 'forest produce' given by us in this judgment, we find it difficult to agree with such limited meaning given to these words and with respect to the Uttrakhand High Courts, we are unable to subscribe the same view. 169. The word 'forest produce' came up for consideration in Suresh Lohiya v. State of Maharashtra anr (1996) 10 SCC 397 and State of M.P. vs. S.P. Sales Agencies and others (2004) 4 SCC 448. In our opinion th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell tendu leaves to any person other than the State Government or an officer of the State Government authorised by it in that behalf or an agent in respect of the unit in which the leaves have grown; Sub-section (1) (b) provides that no person other than such Government officer or agent shall purchase tendu leaves from any person other than such Government, officer or agent, or collect tendu leaves grown on any land of which he is not owner or tenure-holder. Sub section (1) (c) provides that no person other than such Government, officer or agent shall transport tendu leaves except in the following cases, namely:- (i) where he being a grower of tendu leaves transports chem from any place within the unit wherein such leaves have grown to any other place in that unit; or (ii) where he transports them on behalf of such Government, officer or agent; or (iii) where he purchases the leaves from such Government, officer or agent either for the manufacture of bidis within Uttar Pradesh or for sale of the leaves outside Uttar Pradesh. Sub-section (2) of Section 5 provides for permission to sell and transport within the State of UP or to take such leaves outside the State of UP. Sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u leave is permitted except under transport permits issued under Rule 4. There is no object of requiring the Government, officers or agents appointed by the State Government to obtain transit passes and to pay transit fee under the Rules of 1978 is to regulate the transit of forest produce for the purposes of checking deforestation and poaching. As it is stated in the counter affidavit, the requirement of obtaining passes and payment of transit fee under the Rules of 1978 is by way of duplication, for achieving the same purpose. In Belsund Sugar Co. Ltd. vs. State of Bihar and others (1999) 9 SCC 620 it was held that where the entire trade of sugarcane was regulated, there was no object to be achieved by invoking the provisions of the Bihar Agricultural Produce Markets Act, 1960 on sugarcane and molasses. In paragraph-104 of this judgment it was held that where sale and purchase of sugarcane and mollases was regulated by the detailed statutory scheme of control of sale and purchase the general provisions of the Market Act, therefore, will give way to the special provisions. The State Government was fully conscious of this legal position, in providing in the note at the bottom of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orem at the rate of 15% or minimum of Rs. 750/- per lorry load of other forest produce coming from mines, i.e. coal, lime, stone, sand, bajari and other minerals. This increased fee has changed the character of the transit fees from regulatory fee to compensatory tax. We find substance in the argument raised by all the counsels relying upon Jindal Stainless Limited and anr. vs. State of Haryana and others (supra) that the fee is generally a term of a licence based on the principle of equivalence, which is converse of the principle of ability to pay. A fee has to be broadly proportional and not progressive. In the principle of equivalence, which is the foundation of a compensatory tax as well as a fee, the value of the quantifiable benefit is represented by the costs incurred in procuring the facility/service, which costs in turn become the basis of re-measurement/recompense for the provider of the service/facility. 178. In State of UP and others vs. Sitapur Packing Wood Suppliers (supra) it was held by the Supreme Court that the transit fee under the Rules of 1978 is regulatory in nature, and that the question of quid pro quo is necessary when a fee is compensatory. For every fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion as a charge for mutation. The Supreme Court held that a charge or fee if levied for the purpose of raising revenue under the taxing power is a tax. The imposition of fees for primary purpose of regulation and control may be classified as fees as it is in exercise of police power but if the revenue is the primary purpose and regulation is merely incidental thus the imposition is a tax. 181. In the present case the respondents have given in para-16 of the counter affidavit of Shri Anwar Ahmad, Forest Range Officer, Renukoot, District Sonebhadra, the details of the collections of transit fee in the years 2004-05, 2009-10, 2010-11 and 2011-12 upto July 2011. The 4th Amendment and the 5th Amendment to the Rules of 1978, came into force by notifications dated 20.10.2010 and 4.6.2011 respectively. The imposition on cubic meter basis and thereafter advalorem basis was stayed by the Supreme Court and this Court, and thus the collections upto July, 2011, were limited to 3848.33 lacs. On advalorem basis, on the cost of forest produce, between 5% to 15%, including coal imported in the State and transported in millions of tonnes, will increase the collections by not less than ten times. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 183. We further find that though a reference is made in the counter affidavit to the Kyoto Protocol, and sustainable development and that the State Government has obligations to the general public to protect the environment, nothing has been brought on record to demonstrate the obligations of the Government of U.P., and the role assigned to it, by the Ministry of Environment and Forest in the matter of observations, precautions and the steps to be taken for protecting the environment by reducing carbon emissions. No relevant date has been placed before us to demonstrate the purpose and the object sought to be achieved and the manner in which the increase of transit fee on advalorum basis will check the environmental degradation. 184. Coal is an important raw material for generation of electricity and manufacture of materials used in infrastructure for development of the State. The Union Government through its agencies including Coal India Limited is keeping strict control over the exploitation of coal bearing areas, and a constant vigil on the over exploitation of non-renewal sources of energy for maintaining inter-generational equity. If the State Government has been assigned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... USIONS 187. Our conclusions, on the questions raised before us are as follows:- (i) The words 'forest' and 'forest land' are not defined in the Indian Forest Act, 1927 and the Forest Conservation Act, 1980. These words must be understood according to its dictionary meaning. The description will cover all statutory recognised forest whether notified as reserved, protected or village forest or not, for the purposes of Section 2 (1) of the Forest Conservation Act. The principles and criteria of defining forest has to be based on sound ecological and scientific basis. The 'forest land' would also include the forest like areas, whether notified or not, for which the Government has taken decision in Government Order dated 20.12.2007 quoted in paragraph 89 of the judgment. (ii) The definition of 'forest produce' is inclusive and not exhaustive. Only those articles and goods, which are defined in Section 2 (4), (a) (b) of the Indian Forest Act, 1927 are included within the meaning of the words 'forest produce'. Where a forest produce so defined, changes its essential character either by processing or by manufacturing process into a commercially new article, which is totally differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 978, are not violative of Art.245 (2) of the Constitution of India, even if they have extra-territorial operations. The Rules of 1978 have been made by the State Government under the Act of Parliament and have close nexus with the residents of the State of U.P. as citizens of India for protection of environment from deforestation, poaching, maintaining ecological balance and to restrict over-exploitation of mineral resources of the State. (vi) The imposition of transit fee under Rule 5 of the Rules of 1978 is transitory and regulatory in nature. The transit fee is payable on movement of the forest produce within the State of U.P., with the object of protecting environment from deforestation and overexploitation of natural resources including mines and minerals when found in or brought from forest and which not only include notified, protected reserved and village forest but also the forest lands, and forest like areas, whether notified by the State Government or not. (vii) The levy of transit fee at the rate of Rs.38 per metric tonne per truck, etc. by notification dated 14.6.2004, was declared to be valid in Kumar Stones Works' case (Supra). The levy on such rates is subject t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad valorem basis purportedly to collect the transit fee to meet expenses for enforcement of regulation of movement by issuing transit passes, has not considered and kept in mind the principles of sustainable development, while raising environmental concern. The increase in the transit fee on advelorum basis on timber, coal and other minerals, necessary for raising infrastructure, generating power and manufacture of essential goods will have a direct impact and will impede the development of the State. No scientific study in this regard has been conducted by the State Government, nor any reports placed before the Court to justify the increase of fees, taking into consideration the right to development, which is a fundamental right of the citizens of the State under Art.21 of the Constitution of India. (xii) The State Government has failed to justify the increase of transit fees on advelorum basis by linking it only with the increased cost of enforcement for collections. The collections will be far and above the cost of enforcement, raising revenue for the State. The imposition will increase the cost of generation of power, and the manufacture of essential goods necessary for creat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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