TMI Blog2017 (9) TMI 1901X X X X Extracts X X X X X X X X Extracts X X X X ..... Division Bench of the High Court has allowed the Writ Petition by quashing the Notification dated 28.05.2001. The High Court held that the Notification dated 28.05.2001 is contrary to the provisions of Section 41 of the Act, 1927 and the notification transgresses Rule 5 of Rules, 2000 because Rule 5 provides that State Government or an authorised officer by it, from time to time, shall fix the rate of the fee for issue of Transit Pass. The fee is to be issued for issue of Transit Pass and Transit Pass by no stretch of imagination can have any nexus with unit of minerals. Thus in fact, it is a fee pertaining to the minerals and not a fee issued on Transit Pass. Whether the view of the High Court, holding that State could not have asked for payment of fee on Forest Produce on the basis of quantity/volume of the Forest Produce is correct ? We revert back to provision of Section 41 of the Act, 1927. Section 41 empowers the State to make Rules to regulate the transit of Forest Produce. The Rules thus can very well regulate the transit of the Forest Produce. Sub-Section 2 of Section 41 provides that in particular and without prejudice to the generality of the foregoing provision such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017 (Arising out of SLP (C) No. 1675/2012) , C.A. No. 14922/2017 (Arising out of SLP (C) No. 8713/2008) , C.A. No. 14924/2017 (Arising out of SLP (C) No. 10601/2008) , C.A. No. 14923/2017 (Arising out of SLP (C) No. 9523/2008) , C.A. No. 14920/2017 (Arising out of SLP (C) No. 6959/2008) , C.A. No. 14921/2017 (Arising out of SLP (C) No. 6958/2008) , C.A. No. 14452/2017 (Arising out of SLP (C) No. 950/2012) , C.A. No. 14453/2017 (Arising out of SLP (C) No. 1031/2012) , C.A. No. 14464/2017 (Arising out of SLP (C) No. 948/2012) , C.A. No. 14465/2017 (Arising out of SLP (C) No. 1169/2012) , C.A. No. 14468/2017 (Arising out of SLP (C) No. 1197/2012) , C.A. Nos. 14469-14476/2017 (Arising out of SLP (C) Nos. 2213-2220/2012) , T.P. (C) No. 76/2012, T.P. (C) No. 77/2012) , C.A. No. 14485/2017 (Arising out of SLP (C) No. 1697/2012) , C.A. No. 14486/2017 (Arising out of SLP (C) No. 2082/2012) , C.A. No. 14492/2017 (Arising out of SLP (C) No. 2236/2012) , C.A. No. 14493/2017 (Arising out of SLP (C) No. 2081/2012) , C.A. No. 14495/2017 (Arising out of SLP (C) No. 2399/2012) , C.A. Nos. 14497-14509/2017 (Arising out of SLP (C) Nos. 3152-3164/2012) , C.A. Nos. 14510-14523/2017 (Arising out of SLP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 87/2017 (Arising out of SLP (C) No. 6937/2012) , C.A. No. 13788/2017 (Arising out of SLP (C) No. 5558/2012) , C.A. Nos. 13792-13813/2017 (Arising out of SLP (C) Nos. 12967-12988/2012) , C.A. Nos. 13816-13828/2017 (Arising out of SLP (C) Nos. 12989-13001/2012) , C.A. No. 13829/2017 (Arising out of SLP (C) No. 7199/2012) , C.A. No. 13830/2017 (Arising out of SLP (C) No. 7702/2012) , C.A. Nos. 13745-13759/2017 (Arising out of SLP (C) Nos. 16846-16860/2013) , C.A. No. 13935/2017 (Arising out of SLP (C) No. 8775/2012) , C.A. No. 13936/2017 (Arising out of SLP (C) No. 10499/2012) , C.A. Nos. 13537-13541/2017 (Arising out of SLP (C) Nos. 16299-16303/2013) , C.A. No. 13937/2017 (Arising out of SLP (C) No. 7491/2012) , C.A. Nos. 14076-14078/2017 (Arising out of SLP (C) Nos. 8465-8467/2012, Conmt. Pet. (C) Nos. 199-201/2014 in SLP (C) Nos. 31530-31532/2011) , C.A. Nos. 13760-13770/2017 (Arising out of SLP (C) Nos. 2776-2786/2014) , C.A. Nos. 14080-14100/2017 (Arising out of SLP (C) Nos. 15501-15521/2012) , C.A. Nos. 14101-14117/2017 (Arising out of SLP (C) Nos. 15611-15627/2012) , C.A. Nos. 14118-14132/2017 (Arising out of SLP (C) Nos. 15430-15444/2012) , C.A. Nos. 14134-14145/2017 (Arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. Nos. 14368-14374/2017 (Arising out of SLP (C) Nos. 15604-15610/2012) , C.A. No. 14376/2017 (Arising out of SLP (C) No. 15445/2012) , C.A. No. 14378/2017 (Arising out of SLP (C) No. 16973/2012) , C.A. No. 14381/2017 (Arising out of SLP (C) No. 16972/2012) , C.A. Nos. 14382-14392/2017 (Arising out of SLP (C) Nos. 17016-17026) , C.A. Nos. 14393-14404/2017 (Arising out of SLP (C) Nos. 17004-17015/2012) , C.A. No. 2821/2008) , C.A. Nos. 14406-14407/2017 (Arising out of SLP (C) Nos. 15545-15546/2012) , C.A. No. 14292/2017 (Arising out of SLP (C) No. 15896/2010) , C.A. No. 13558/2017 (Arising out of SLP (C) No. 18661/2013) , C.A. Nos. 14409-14410/2017 (Arising out of SLP (C) Nos. 16987-16988/2012) , C.A. Nos. 14414-14423/2017 (Arising out of SLP (C) Nos. 16975-16984/2012) , C.A. Nos. 14426-14444/2017 (Arising out of SLP (C) Nos. 16951-16969/2012, SLP (C) No. 13656/2012 (XI) ) , C.A. No. 14447/2017 (Arising out of SLP (C) No. 13640/2012) , C.A. Nos. 14449-14451/2017 (Arising out of SLP (C) Nos. 34773-34775/2012) , C.A. No. 13574/2017 (Arising out of SLP (C) No. 18665/2013) , C.A. Nos. 14454-14463/2017 (Arising out of SLP (C) Nos. 23589-23598/2012) , C.A. Nos. 14466-14467/2017 (Arising o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f SLP (C) No. 18843/2009) , C.A. No. 13118/2017 (Arising out of SLP (C) No. 26273/2004) , C.A. No. 13121/2017 (Arising out of SLP (C) No. 24889/2004) , C.A. No. 13938/2017 (Arising out of SLP (C) No. 27324/2012) , C.A. No. 2819/2008) , C.A. No. 14265/2017 (Arising out of SLP (C) No. 22635/2008) , C.A. Nos. 13939-14074/2017 (Arising out of SLP (C) Nos. 30398-30533/2012) , C.A. No. 14267/2017 (Arising out of SLP (C) No. 21844/2008) , C.A. No. 14269/2017 (Arising out of SLP (C) No. 24768/2008) , C.A. No. 14079/2017 (Arising out of SLP (C) No. 27326/2012) , C.A. No. 14133/2017 (Arising out of SLP (C) No. 17217/2009) , C.A. No. 1007/2011 (X) ) , C.A. Nos. 14478-14484/2017 (Arising out of SLP (C) Nos. 33163-33169/2012) , C.A. No. 1008/2011 (X) ) , C.A. No. 13130/2017 (Arising out of SLP (C) No. 2294/2008) , C.A. Nos. 14487-14491/2017 (Arising out of SLP (C) Nos. 33170-33174/2012) , C.A. No. 14280/2017 (Arising out of SLP (C) No. 29725/2009) , Conmt. Pet. (C) Nos. 585-587/2016 in SLP (C) Nos. 31530-31532/2011) , C.A. No. 14494/2017 (Arising out of SLP (C) No. 30535/2012) , C.A. No. 14293/2017 (Arising out of SLP (C) No. 27511/2011) , C.A. No. 14308/2017 (Arising out of SLP (C) No. 27487/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (C) No. 1198/2012) , C.A. No. 14405/2017 (Arising out of SLP (C) No. 1074/2012) , T.P. (C) No. 44/2012) , C.A. No. 14408/2017 (Arising out of SLP (C) No. 652/2012) , C.A. No. 14411/2017 (Arising out of SLP (C) No. 738/2012) , C.A. Nos. 14412-14413/2017 (Arising out of SLP (C) Nos. 146-147/2012) , C.A. Nos. 14424-14425/2017 (Arising out of SLP (C) Nos. 877-878/2012) , C.A. No. 14445/2017 (Arising out of SLP (C) No. 981/2012) , C.A. Nos. 13399-13404/2017 (Arising out of SLP (C) Nos. 8204-8209/2013) , C.A. No. 13104/2017 (Arising out of SLP (C) No. 3457/2016) and C.A. No. 2047/2006 A.K. Sikri and Ashok Bhushan, JJ. For Appearing Parties: Neeraj Kishan Kaul, Sr. Adv., M.R. Shamshad, Mishra Saurabh, Pankaj Bhatia, Kailash Chand, Syed Shahid Hussain Rizvi, Advs. for AP J Chambers, Sharmila Upadhyay, Abhishek Chaudhary, E.C. Agrawala, Piyush Sharma, Pawanshree Agrawal, Pawan Kumar, R.N. Pareek, Rachana Srivastava, Monika, Sukrit R. Kapoor, Nitya Madhusoodhanan, Arun Kumar Sinha, Mukti Chowdhary, Manish Kumar Saran, Aniruddha P. Mayee, Samir Ali Khan, K.V. Sreekumar, Shamik Shirishbhai Sanjanwala, Sunil Kaundal, Abhijit Sengupta, Arvind Kumar, E.R. Sumathy, Garvesh Kabra, K.V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has framed Rules, namely, the Madhya Pradesh Transit (Forest Produce) Rules, 2000 (hereinafter referred to as 2000 Rules ) . 4. Several writ petitions were filed in the Allahabad High Court, Uttarakhand High Court and High Court of Madhya Pradesh challenging the levy of transit fee, validity of transit fee Rules and for other reliefs. The writ petitions filed by the writ Petitioners were allowed by the Uttarakhand High Court whereas Allahabad High Court dismissed some writ petitions and allowed others. The Madhya Pradesh High Court has allowed the writ petitions by a common judgment dated 14.05.2007. The State of Uttarakhand and State of Uttar Pradesh has filed SLPs, in which leave has been granted, challenging the judgments of the High Courts in so far as writ petitions filed by the writ Petitioners were allowed. The State of Madhya Pradesh has also filed appeals challenging the common judgment dated 14.05.2007. The writ Petitioners whose writ petitions were dismissed by the Allahabad High Court has also filed SLPs against the said judgment in which leave has been granted. 5. The entire bunch of cases before us can be described in four groups. First group consists of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of stone i.e. stone grits, stone chips etc from the writ Petitioner. Petitioners case was that its stone crusher which collects the boulders from the bank of Sharda River, which is a Forest Produce, Transit Fee is charged and paid. After taking the boulders to the crushing centre and involving manufacturing process, boulders are converted into the commercial commodity, namely, stone grits and chips. It is pleaded that after it becomes a commercial commodity, it ceases to be as Forest Produce and no Transit Fee can be charged and recovered thereafter. 10. The Division Bench vide its judgment dated 01.07.2004 allowed the writ petition and quashed the orders dated 14.03.1999 and 21.06.1999. Both State of Uttarakhand and State of U.P. aggrieved by aforesaid judgments have filed the above noted several appeals. (2) JUDGMENT DATED 30.03.2005 IN WRIT PET. No. 310 OF 2005, M/s. Kumaon Pea Gravel Aggregated Manufacturing Co. v. State of Uttarakhand and Ors. [Giving rise to Civil Appeal (arising out of SLP No. 23547 of 2005 and Civil Appeal (arising out of SLP No. 24106 of 2007) ] 11. Writ Petitioners, proprietary firms were carrying on the business of manufacturing sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;Rules, 2001') . Uttaranchal Forest Development Corporation issues Form MM-11 to the writ Petitioner. 15. Writ Petitioner pleaded that since royalty and other charges are being paid in accordance with the minor mineral Rules framed under the Mines and Minerals (Development Regulation) Act, 1957 (hereinafter referred to as 'MMDR Act, 1957') , no Transit Fee can be levied on the writ Petitioner. The High Court allowed the writ petition holding that Transit Fee under Rules, 1978 cannot be applicable on the transit of minor minerals. The levy of Transit Fee was held to be illegal. 16. Following the aforesaid judgment dated 26.06.2007 several other writ petitions were decided giving rise to different other Civil Appeals, which are Civil Appeal No. 1010 of 2011, Civil Appeal (arising out of SLP No. 18094 of 2011) and Civil Appeal (arising out of SLP No. 26285 of 2011). II. CIVIL APPEALS ARISING OUT OF JUDGMENTS OF ALLAHABAD HIGH COURT 17. A large number of Civil Appeals have been filed. Four Transfer Petitions and seven Contempt Petitions have also been filed. Civil appeals have been filed by the aggrieved parties against the various judgments of the Allahab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the grit, boulder etc. from the land of village Billi Markundi notified Under Section 4 of the Indian Forest Act, 1927. The Petitioners are carrying out mining operations in the forest land. With regard to some of the Petitioners it was alleged that they are carrying business in the area which had already been notified as forest area Under Section 4 of 1927 Act. It was pleaded by the State that grit, boulder etc. are being procured and transported from the forest which are the forest produce. The Transit Rules, 1978 has already been upheld by this Court. 21. The Division Bench after hearing the parties dismissed all the writ petitions holding the liability of the Petitioners to pay transit fee. The High Court held that validity of the Rules have already been upheld by this Court in State of U.P. v. Sitapur Packing Wood Suppliers, 2002 (4) SCC 566. The Court upheld the 2004 Amendment. The High Court also held that the words brought from forest as occurring in Section 2 (4) (b) of the 1927 Act, necessarily implies that it passes through the forest. It also held forest must be understood according to its dictionary meaning. This description covers all statutory recognised fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also challenged. Both the above batch of writ petitions consisted of a large number of writ petitions dealing with various materials raising various facts and grounds, some common and some different. 26. The Division Bench by its judgment dated 11.11.2011 has set aside the Fourth and Fifth Amendment Rules increasing the transit fee. The Court recorded its conclusion in paragraph 187 of the judgment on various submissions raised by the learned Counsel for the parties before it. 27. The claim of various writ Petitioners that they are not liable to pay transit fee was, however, not accepted. Aggrieved against the judgment dated 11.11.2011 in so far as it struck down Fourth and Fifth Amendment Rules, the State of U.P. has come up in appeals whereas writ Petitioners who were denying the liability to pay transit fee have filed appeals against the judgment dated 11.11.2011 reiterating their claim that they are not liable to pay transit fee on various grounds as raised in their writ petitions. The claims in various writ petitions are different and also founded on different grounds. It is neither necessary nor desirable to notice the facts and claim in each case separately. The wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... twice transit fee is charged, firstly on raw material and secondly on the finished products by Fourth and Fifth Amendment. Group (D) This group consists of Petitioners who are dealers in plywood, imported timber/wood, bamboo, veneer, waste of plywoods, wood charcoal. Petitioners claim that they are not passing through forest area in U.P. They are not transporting any forest produce rather are transporting finished goods. Petitioners are purchasing timber which is coming into the country. Group (E) This group consists of Petitioners dealing in fly ash, clinkers and gypsum. Petitioners claim to obtain the aforesaid material by manufacturing process. Petitioners claim that the aforesaid articles are not forest produce since they undergo chemical process. 28. In so far as writ petition included in group 'A' is concerned, we have noticed above the facts of Writ Petition No. 26273 of 2004, M/s. Kumaon Stone Crusher, decided on 01.07.2004. Group 'B' consisting of Petitioners who are dealing in coal/hard coke/coal briquettes/soft coke/cinder (rejected coke) , etc. C.A. No. 2706 of 2008 (M/s. Krishna Kumar Jaiswal v. State of U.P. and Ors., is one of such writ peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices from different States. However, when Petitioners' vehicles enter into the State of U.P. transit fee is being charged under 1978 Rules. The Petitioners denied their liability to pay transit fee. 32. One of such cases is Civil Appeal No. 1697 of 2012 (M/s. Aditya Birla Chemicals (India) Limited v. State of U.P. and Ors.) . The writ Petitioner-Appellant is a public limited company who is engaged in the business of manufacture of chemicals and uses calcium hydroxide and calcium oxide. The Petitioner pleads that calcium hydroxide is manufactured by treating lime with water at a particular temperature and calcium oxide is made by thermal decomposition of materials such as limestone, that contain calcium carbonate in a lime kiln which is accomplished by heating the material to above 825 degree centigrade. These products were also purchased from registered traders/manufacturers of the State of Rajasthan after obtaining invoices and passes. On such transportation the State of U.P. is levying transit fee. The product manufactured and purchased by the Petitioners is not forest produce and no transit fee can be levied. 33. In group 'D', one of the cases is Civil Appeal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aluminium plant at Renukoot and captive thermal power plant is at Renusagar. Hindalco uses both bauxite and coal in the production of aluminium. 36. In December, 1999, the State of U.P. demanded transit fee on transport of minerals (bauxite and coal) . Aggrieved thereby Writ Petition (C) No. 40 of 2000 was filed. An Interim order was passed on 18.01.2000 restraining forest department from charging transit fee. This interim order continued till 29.10.2013 when this Court passed detailed interim order. 37. The Petitioner's case is that in SLP (C) No. 11367 of 2007, Kanhaiya Singh and Anr. v. State of U.P., the same question is engaging attention of this Court, hence, the Writ Petition filed by the Petitioner be transferred and heard along with the aforesaid Special Leave Petition. 38. Transfer Petition No. 44 of 2012 has been filed to transfer Writ petition (tax) No. 1629 of 2007 to hear it with SLP (C) No. 11367 of 2007. The Petitioner has set up coal based thermal power plant at Renusagar for captive generation of power which it supplies continuously to the aluminium manufacturing unit of the Petitioner at Renukoot. In the process of generation of power the said therm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y forest area nor use any forest road. In C.A. No. 2797 of 2008 an interim order was passed by this Court directing that there shall be stay of demand by way of transit fee in the meantime. Applicants case is that the applicant's association has also been impleaded in C.A. No. 2797 of 2008. It is pleaded that despite the knowledge of interim order of this Court the Respondent at different check posts are demanding transit fee. Prayer has been made to issue Show Cause Notice and initiate contempt proceedings. No Notice has been issued in the contempt proceeding as yet. 43. Contempt Petition (C) No. 199-201 of 2014 in SLP (C) No. 31530 of 2011 and other two Special Leave Petitions. Applicants are engaged in the business of transportation of sand, stones, polish stones, rough stones, crushed stones, stone grits, stone marbles etc. Applications claimed that whenever their vehicles entered in the State of U.P., Transit fee is demanded. It is contended that in SLP (C) filed by the applicants this Court on 02.12.2012 stayed the recovery of transit fee. Applicants case is that despite the knowledge of interim order dated 02.12.2012 the same is not being complied with, hence, the Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declare M.P. Transit (Forest Produce) Rules, 2000 and notification dated 28.05.2001 as ultra vires to the power of the State under 1927 Act. 48. Counter-affidavit was filed by the State contending that as per Section 41 of 1927 Act, the State is conferred with a power to make Rules to regulate the transit of all timber and other forest-produce. 49. The High Court after hearing the parties and considering the submissions by the impugned judgment quashed the notification dated 28.05.2001 by which fee of ₹ 7/- was fixed. The High Court also directed refund of the amount in a phased manner within a period of five years. Aggrieved by the judgment dated 14.05.2001 the State of Madhya Pradesh has filed these appeals. 50. We have heard learned Counsel appearing for the States as well as learned Counsel appearing for various writ Petitioners. 51. While referring the respective submissions of the learned Counsel, submissions on behalf of the writ Petitioners have been referred to as submissions of writ Petitioners and the submissions on behalf of the States have been referred to as on behalf of the State. VI. Submissions with regard to the judgment of Uttarakhand High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at any point of place which is not a forest item included in Clause B (4) (2) , shall cease to be a Forest Produce and further transit of such material being material not brought from forest shall not attract tax Under Section 41 of Act, 1927. 54. The stone or sand which is in its primary or dominantly primary state is subjected to a manufacturing process for making it marketable product, which is not a Forest Produce. Act, 1927 does not provide for any definition of term 'Manufacturing Process'. The term 'Manufacturing Process' is to be given a liberal interpretation. The process of stone crushing have to be held to be Manufacturing Process. It is further contended that levy of Transit Fee on Transit Pass does not have any relationship with the distance of the destination of the transit and the Transit Pass originally issued at the time of First Sale of transit required only on endorsement and the insistence of levy of Transit Fee at the time of second transit is irrational and unreasonable. 55. Learned Counsel for the State of U.P, challenging the judgment of High Court of Uttarakhand has also raised the similar submissions as has been raised by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d grits chips are obtained, does not in any manner change the nature of product. Stone grits, sand grits chips obtained after crushing are still a Forest Produce on which Transit Fee is charged. Accepting the aforesaid argument will lead to a situation where State shall lose its regulatory power on Forest Produce on mere facial change of the Forest Produce. With regard to other articles the State has refuted the submission and it is submitted that all the articles claimed by the writ Petitioners are Forest Produce which are subject to Transit Fee. (d) With regard to parliamentary enactments relating to coal as claimed by the writ Petitioners, it is submitted that parliamentary enactments regarding coal are on different subjects and has no effect on the Act, 1927 and the Rules framed therein. (e) Learned Additional Advocate General of the State of U.P., during his submission has submitted that in so far as, fly ash, clinker and synthetic gypsum are concerned, the State does not claim them to be Forest Produce and no Transit Fee shall be charged on fly ash, clinker and synthetic gypsum. He, however, submitted that gypsum is a naturally mined Forest Produce and what is exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtion of Section 4 (1A) and Section 23C by Act 38 of 1999 with effect from 18.12.1999. (b) Learned Counsel for the State refuting the above submissions contends that repugnancy between a parliamentary statute and a statute of State legislature arises when the two laws operate in the same field, they collide with each other. It is submitted that subject matters of 1927 Act and 1957 Act are distinct and different. In 1927 Act provisions relating to transport of forest produce is only incidental and ancillary in nature. The object of two legislations is entirely different. Forest Act, 1927 comprehensively deals with forest and forest wealth whereas 1957 Act deals with mines and minerals wealth. He further submits that 1957 Act does not impliedly overrule the 1927 Act, both the legislations being under different subjects. It is submitted that argument of implied repeal could have arisen only where there is no option. To take a view that 1957 Act shall impliedly overrule 1927 Act regarding transit of forest-produce, the control of the State Under Section 41 shall be lost and the very purpose and object of the Forest Act shall be defeated. An activity of mining held in a forest cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsported through a forest? (ii) Whether the interpretation of the words 'brought from' given by Division Bench in Kumar Stones Case (Supra) is correct? Let the papers be placed before the Hon'ble Chief Justice for appropriate orders. (c) It is submitted that the Division Bench of Allahabad High Court while delivering the judgment dated 11.11.2011 although noticed that the above questions have been referred to for consideration of a larger Bench did not await the judgment of larger Bench rather chose to follow the Division Bench judgment in Kumar Stone Works. (d) Learned Counsel for the State has refuted the aforesaid submission. It is submitted that the Division Bench of the Allahabad High Court in Kumar Stone Works has correctly held that the term 'brought from a forest' must be read to mean 'brought through a forest'. It is submitted that any other interpretation would render the term to be in conflict with the term 'found in a forest'. It is submitted that the High Court has referred to various dictionary meanings of word 'brought' and after relying on said definition the Division Bench held that the words 'brought from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h have been declared as protected forests. Hence, forest produces transiting from the above roads are liable to pay transit fee. In support of his submission he refers to notification dated 10.02.1960 issued under proviso to Sub-section (3) of Section 29 as well as Section 80A of 1927 Act. (vi) (a) One of the submissions raised by learned Counsel for the Petitioner is that Rule 3 read with Schedule A of 1978 Rules is totally independent of Rule 5 and same has no correlation with each other. Rule 3 and Schedule A nowhere contemplates or has a column prescribing charging of a fee. It is submitted that transit fee is chargeable on transit pass issued under Rule 4 (b) which is required to be checked under Rule 6 (4) only. Referring to Rule 5, it is submitted that Rule 5 contemplates charging a fee in those cases in which transit is done on the transit pass issued under Rule 4 (1) (b) and checked under Rule 6 (4) . (b) It is submitted that fee cannot be charged in any other case. The above submissions have been refuted on behalf of the State. It is contended that on all transit pass issued under the Rule 1978 transit fee is required to be paid. (vii) The Petitioners further sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h has been overruled by 9-Judges Constitution Bench in Jindal Stainless Ltd. and Anr. v. State of Haryana and Ors., 2016 (1) Scale 1, the very basis of the judgment of the High Court is knocked out. The State being entitled to levy transit fee it can change the basis of levy of transit fee. That option on the basis of advalorem is also permissible both for fee and tax and no exception can be taken to the Fifth Amendment on the ground that the Fifth Amendment adopts advalorem basis for fixing the fee. The increase in transit fee by Fourth and Fifth Amendments cannot be held to be arbitrary or excessively disproportionate. The finding of the High Court that the State had not provided any data to justify the increase in transit fee is incorrect since the State had in fact by a table which itself has been noted in paragraph 85 of the judgment has mentioned the income and expenditure related to transit fee, a perusal of which could indicate that the expenditure of State Government was much more than collection of transit fee even after Fifth Amendment. The value of timber and other forest-produce has increased manifold. The increase in levy of transit fee had become necessary to meet th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riatim. IX. Whether by Manufacturing process/chemical Treatment as claimed by the writ Petitioners, the forest produce looses its character of forest produce. 61. We first take the case of stone boulders which are crushed into stone grits, stone chips and stone dust etc. Stone boulders are obtained from riverbed, stone rocks stone mines. After crushing of the stone boulders, stone grits, stone chips and stone dust are obtained which does not transform into any new commodity, except that the stone in smaller pieces and shapes are obtained. The Allahabad High Court, in its judgment in Kumar Stone Works (Supra) decided on 27.04.2005 has given a detailed reasoning for not accepting stone grits, stone chips and stone dust as a new commodity. It held that the character of Forest Produce is not lost by such crushing of the stone. High Court of Uttarakhand has taken a contrary view in its judgment dated 01.07.2004 in Kumaon Stone Crusher (Supra) , as noted above. 62. Learned Counsel for the writ Petitioners have relied on few judgments of this Court which need to be noticed. Reliance is placed on Two Judge Bench in Suresh Lohiya v. State of Maharashtra and Anr. (1996) 10 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature with which we are concerned in the present case. Where the dealer had brought into existence new commercial goods by consuming the boulders to bring out small pieces of stone, it was held that such activity attracted purchase tax. In the present case, however, stone, as such, and gitti and articles of stones are all of similar nature though by size they may be different. Even if gitti, kankar, stone ballast, etc. may all be looked upon as separate in commercial character from stone boulders offered for sale in the market, yet it cannot be presumed that Entry 40 of the notification is intended to describe the same as not stone at all. In fact the term stone is wide enough to include the various forms such as gitti, kankar, stone ballast. In that view of the matter, we think that the view taken by the majority of the Tribunal and affirmed by the High Court stands to reason. We are, therefore, not inclined to interfere with the same. 65. The above judgment held that the nature and character of the stone remains the same, even after, crushing the boulders into small stones, dust etc. Reliance by the writ Petitioner is also placed on judgment in (2003) 3 SCC 122, Tej Bahadu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sandalwood as contemplated Under Section 2 (o) of the Act. In the absence of any specific Rules or provisions in the Act to this effect, we are unable to agree with this argument. We are of the opinion that once sandalwood is subjected to a certain process from which a sandalwood product is lawfully obtained, then such product ceases to be sandalwood as understood in Section 2 (o) of the Act. 66. The above case also does not lend any support to the case of writ Petitioners. In the above case, Appellant had obtained permission of the competent authority for converting the sandalwood into various types of handles hence, the transportation was not found violative of rules. 67. In this context, it is necessary to refer to a Three Judge Bench judgment of this Court in Karnataka Forest Development Corporation Ltd. v. Cantreads Private Limited and Ors. (1994) 4 SCC 455. This Court had occasion to consider Karnataka Forest Act, 1963. Caoutchouc or latex covers natural covering sheets of various grades or not, was the question under consideration. After noticing the various dictionary meanings of caoutchouc, it was held that since processing does not result in bringing out a new comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture or production Under Section 80-IA of the Income Tax Act. 71. In the above view, this Court held that Assessee was entitled for the benefit of Section 80-IA of the Income Tax Act, 1961. The above case was directly concerned as to what was the 'manufacture or production', which was defined in the Act itself and the marble slabs or tiles were held to be covered by 'manufacture or production'. The case was on its own facts and the Court was not concerned, as to whether, the marble blocks after it became marble slabs or tiles loses its nature or character of Forest Produce. The said judgment does not help in the present case. 72. This Court in Akbar Badrudin Giwani v. Collector of Customs, Bombay, (1990) 2 SCC 203, again reiterated that the general principle of interpretation of tariff entries according to any tax statutes of a commercial nomenclature can be departed from where the application of commercial meaning or trade nomenclature runs counter to the statutory context. In the present case statutory context of Forest Produce as defined in Act, 1927 has to be taken in its botanical and scientific sense. 73. We thus conclude that the Transit Fee on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a sedimentary rock. Dolomite is formed by the post depositional alteration of lime mud and limestone by magnesium-rich ground water. Dolomite and limestone are very similar stones and are forest produce. 80. Coming to fly ash, clinker and gypsum, learned Additional Advocate General has submitted before us that the State has accepted that fly ash, clinker an synthetic gypsum are not forest produce. Thus, fly ash, clinker and synthetic gypsum are not forest produce. Gypsum is naturally found and obtained in the natural form, hence it is a forest produce. Veneer and waste plywood 81. The veneer is nothing but thin sheets of wood which are cut from existing logs planks, which is then again glued upon planks of wood. The essential nature of the product of veneer is merely sliced/cut up wood. Hence, it continues to be a forest produce. 82. The waste plywood that is remains of plywood and veneer are nothing but cut-up logs. The process of manufacturing involves placing logs and wood into a specialized machine, which cuts out thin sheets of wood from the log. That when the logs reaches a certain diameter of thickness, the same can no longer be suitable for extraction by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 87. The Constitution Bench judgment of this Court in Hingir-Rampur Coal Co., Ltd. and Ors. v. The State of Orissa and Ors. AIR 1961 SC 459, needs to be noted. The State of Orissa has enacted Orissa Mining Areas Development Fund Act, 1952 by which levy and demand was raised. The Appellant challenged the enactment on the ground that legislation covers the same field which was occupied by 1957 Act referable to Entry 54 of List I. Considering the submission of the Appellant, the Constitution Bench stated following: 23...... If Parliament by its law has declared that Regulation and development of mines should in public interest be under the control of the Union, to the extent of such declaration the jurisdiction of the State Legislature is excluded. In other words, if a Central Act has been passed which contains a declaration by Parliament as required by Entry 54, and if the said declaration covers the field occupied by the impugned Act the impugned Act would be ultra vires, not because of any repugnance between the two statutes but because the State Legislature had no jurisdiction to pass the law. The limitation imposed by the latter part of Entry 23 is a limitation on the legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, is not attracted in the facts of the present case. The present is not a case where the legislation, 1927 Act and Rules 1978 are referable to Entry 23 of List II. The present is a case where we are concerned with a pre-constitutional legislation which is 1927 Act which has been continued as per Article 372 of the Constitution. Article 372 Sub-clause (1) is as follows: 372. Continuance in force of existing laws and their adaptation.- (1) Notwithstanding the repeal by this Constitution of the enactments referred to in Article 395 but subject to the other provisions of this Constitution, all the laws in force in the territory of India immediately before the commencement of this Constitution shall continue in force therein until altered or repealed or amended by a competent legislature or other competent authority. 93. The law which has been continued in force by virtue of Article 372 is to continue until altered or repealed or amended by a competent legislature. Several pre-constitutional laws which have been continued Under Article 372 came before this Court for consideration wherein Article 254 was also considered. 94. A Constitution Bench of this Court in B.V. Patank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into force and, by Article 395, repealed the Government of India Act, 1935, the Punjab Courts Act was continued being a law in force in the territory of India immediately before the commencement of the Constitution of India by virtue of Article 372 (1) of the Constitution of India. This being the case, Article 254 of the Constitution of India would have no application to such a law for the simple reason that it is not a law made by the Legislature of a State but is an existing law continued by virtue of Article 372 of the Constitution of India. If at all, it is Article 372 (1) alone that would apply to such law which is to continue in force until altered or repealed or amended by a competent legislature or other competent authority. We have already found that since Section 97 (1) of the Code of Civil Procedure (CPC) (Amendment) Act, 1976 has no application to Section 41 of the Punjab Courts Act, it would necessarily continue as a law in force. Shri Viswanathan's reliance upon this authority, therefore, does not lead his argument any further. 96. Thus, to find out as to whether the 1927 Act and Rules, 1978 framed thereunder survive even after enforcement of 1957 Act, we have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against implied repeal of other laws is further strengthened on the principle expressio unius est exclusio alterius. Further, the presumption will be comparatively strong in case of virtually contemporaneous Acts. The continuance of existing legislation, in the absence of an express provision of repeal, being presumed, the burden to show that there has been a repeal by implication lies on the party asserting the same. The presumption is, however, rebutted and a repeal is inferred by necessary implication when the provisions of the later Act are so inconsistent with or repugnant to the provisions of the earlier Act 'that the two cannot stand together'. But, if the two may be read together and some application may be made of the words in the earlier Act, a repeal will not be inferred... 100. This Court in Municipal Council, Palai through the Commissioner of Municipal Council, Palai v. T.J. Joseph in AIR 1963 SC 1561, has elaborated the concept of implied repeal in following words: 9. It is undoubtedly true that the legislature can exercise the power of repeal by implication. But it is an equally well-settled principle of law that there is a presumption against an implie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the entire subject matter of the old; otherwise there is no indication of the intent of the legislature to abrogate the old law. Consequently, the later enactment will be construed as a continuation of the old one. The third question to be considered is whether the new statute purports to replace the old one in its entirety or only partially. Where replacement of an earlier statute is partial, a question like the one which the court did not choose to answer in the Commissioners of Sewers case would arise for decision. 10. It must be remembered that at the basis of the doctrine of implied repeal is the presumption that the legislature which must be deemed to know the existing law did not intend to create any confusion in the law by retaining conflicting provisions on the statute book and, therefore, when the court applies this doctrine it does no more than give effect to the intention of the legislature ascertained by it in the usual way i.e. by examining the scope and the object of the two enactments, the earlier and the later. 101. The question of repeal by implication arises when two statutes become inconsistent to the extent that competence of one is not possible w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject. 104. A repeal may be brought about by subsequent legislation without any reference to the legislation intended to be repealed, since, it matters little as to whether repeal is done expressly or inferentially. As noted above, 1957 Act was enacted in reference to Entry 54 of List I to provide for the Regulation of mines and the development of minerals whereas the subject of the legislation under the 1927 Act was the forest, transit of forest-produce and the duty leviable on timber and other forest-produce. 105. It is sine qua non that both the sets of laws must deal with the same subject matter . In the instant case, under the Forest Act transit of forest-produce itself is subject of primary legislation as can be seen from the preamble and the provisions to Section 41 42 of the Act. In contrast, the 1957 Act in view of Section 2 thereof, gives control of the Regulation of Mines and Development of Minerals to the Union. The detailed provisions as primary legislation, deal with Regulation of mines and development of minerals (Section 4 to 17 and Section 18) . For the purposes of Regulation of Mines and Development of Minerals, it is provided that no mining operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vironment and to safeguard the forests and and wild life of the country. 113. Article 51A of the Constitution lays down as one of the fundamental duties that every citizen to protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compassion for living creatures. 114. As per the National Forest Policy, 1988 issued by the Ministry of Environment Forests, one of the basic objectives if the State is to 'encourage efficient utilization of forest produce and maximizing substitution of wood' and states that the principal aim of Forest Policy must be to ensure environmental stability and maintenance of ecological balance including atmospheric equilibrium, which are vital for sustenance of all life forms, human, animal and plant. The derivation of direct economic benefit must be subordinated to this principal aim. 115. The subjects of 1927 Act and 1957 Act are thus distinct and separate. The 1957 Act was on development and Regulation of mines and minerals. Mines and minerals are also found in forests. The definition of forest-produce as contained in Section 2 Sub-section (4) of the Act includes peat, surface oil, rock and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alid notwithstanding any incidental trenching upon matters beyond its competence i.e. on a matter included in the list belonging to the other legislature. To say differently, incidental encroachment is not altogether forbidden. 118. In A.S. Krishna and Ors. v. State of Madras AIR 1957 SC 297 this Court laid down following in paragraph 12: 12. This point arose directly for decision before the Privy Council in Prafulla Kumar Mukherjee v. The Bank of Commerce, Ltd. [1946 74 I.A. 23 There, the question was whether the Bengal Money-Lenders Act, 1940, which limited the amount recoverable by a money-lender for principal and interest on his loans, was valid in so far as it related to promissory notes. Money-lending is within the exclusive competence of the Provincial Legislature under Item 27 of List II, but promissory note is a topic reserved for the center, vide List I, Item 28. It was held by the Privy Council that the pith and substance of the impugned legislation begin money-lending, it was valid notwithstanding that it incidentally encroached on a field of legislation reserve for the center under Enter 28. After quoting its approval the observations of Sir Maurice Gwyer C.J. in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be invalid, merely because it incidentally encroaches on matters assigned to another legislature. When a law is impugned as being ultra vires of the legislative competence, what is required to be ascertained is the true character of the legislation. If on such an examination it is found that the legislation is in substance one on a matter assigned to the legislature then it must be held to be valid in its entirety even though it might incidentally trench on matters which are beyond its competence. In order to examine the true character of the enactment, the entire Act, its object, scope and effect, is required to be gone into. The question of invasion into the territory of another legislation is to be determined not by degree but by substance. The doctrine of pith and substance has to be applied not only in cases of conflict between the powers of two legislatures but in any case where the question arises whether a legislation is covered by particular legislative power in exercise of which it is purported to be made. 120. Thus, even it is assumed that, in working of two legislations which pertain to different subject matters, there is an incidental encroachment in respect of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h word is used. Acme Life Ins. CO. v. White, Tex. Civ. App. 99 SW 2d 1059, 1060. Words from and to , used in contract, may be given meaning to which reason and sense entitles them, under circumstances of case. Woodruff v. Adams, 134 Cal App. 490, 25 P, 2d 529. 124. The word 'from' is used to denote a point of time, a place or a period. Both the words 'found in or brought from' have been used before word 'forest'. Both the words that is 'found in' and 'brought from', has clear nexus with forest. The true meaning of the words 'brought from' has to be appreciated when read in the context of word 'found in'. The word 'brought from' is an expression which conveys the idea of the items having their origin in the forests and they have been taken out from the forest. The word 'from' refers to the place from which the goods have been moved out that is from the place of their original location. The forest is birth place, the origin of the items mentioned in Sub-clauses (1) to (iv) of sub-clause (b) of Section 2 (4) . The 'found in' means that the item which has origin from the forest, is found in the forest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough it. It is, however, contended that if an Article so brought from outside the forest is 'found' i.e., discovered by somebody within a forest, it would come within the definition. We find it difficult to accept this argument which places extreme strain both on the language and upon logic. The expression at the commencement of Clause (b) of Section 2 (4) should be compared with the expression at the commencement of Clause (a) of Section 2 (4) . The articles listed under Clause (a) become forest-produce by virtue of their own nature, whether they are found in a forest or not, or brought from a forest or not. On the other hand, the articles listed under Clause (b) become forest-produce, not by virtue of their nature alone, but by virtue of the fact that they are found in or brought from a forest. The term 'found in' a forest does not necessarily, in our opinion, require an actual discovery of those items by a living person before those items can become forest-produce. In our opinion, the term 'found in' actually refers to things growing in a forest like timber trees, fuel trees, fruits, flowers etc. or mineral deposits or stones existing in the forest. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing is stated: 4....The word forest must be understood according to its dictionary meaning. This description covers all statutorily recognised forests, whether designated as reserved, protected or otherwise for the purpose of Section 2 (i) of the Forest Conservation Act. The term forest land , occurring in Section 2, will not only include forest as understood in the dictionary sense, but also any area recorded as forest in the Government record irrespective of the ownership. This is how it has to be understood for the purpose of Section 2 of the Act. The provisions enacted in the Forest Conservation Act, 1980 for the conservation of forests and the matters connected therewith must apply clearly to all forests so understood irrespective of the ownership or classification thereof... 131. Thus, forest shall include all statutorily recognised forests, whether designated as reserve, protected or otherwise. The term forest land , occurring in Section 2, will not only include forest as understood in the dictionary sense, but also any area recorded as forest in the Government records irrespective of the ownership. The restrictive meaning of forest as given by the Uttarakhan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Advocate General is notification dated 10.02.1960. It is useful to extract the contents of the said notification: February 10, 1960 No. 1115/XIV-331-50,-Whereas the Governor Uttar Pradesh, is of the opinion that the making of enquiry and record contemplated Under Sub-section (3) of Section 29 of the Indian Forest Act 1927 (Act No. XVI of 027) , will occupy such length of time as in the meantime to endanger the rights of the State Government, now therefore, in exercise of the powers conferred by the proviso to the aforesaid Sub-section and by the Sub-section (1) of the said section, read with Section 80A of the aforesaid Act, the Governor of Uttar Pradesh is pleased to declare that pending such enquiry and record the provisions of Chapter IV of the said Act to be applicable to the lands specified in the Schedule here to: A) Schedule 135. A perusal of the Schedule indicates that in 48 Districts as they existed in 1960, different roads have been declared to be protected forests from mileage to mileage. A perusal of the Schedule which is part of notification issued by the State of U.P. indicates that in the various roads mentioned in the Schedule National h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity. Section 80A is included in Chapter XIII which is a miscellaneous Chapter. Section 80A empowers the State to declare any land on the banks of canals or the sides of roads as protected forest on which any other provisions of the Act can be applied. Notification dated 10.02.1960 declared that provisions of Chapter IV of the Act shall be applied. Thus land mentioned in the Schedule is declared as protected forest. 139. Section 80A delineates the legislative scheme of declaring protected forests on banks of canals or the sides of roads. The State while issuing notification Under Section 80A can only effectuate, the object and purpose of Section 80A as enacted by the State legislature. 140. The notification dated 10.02.1960 has to be read in the light of the substantive provisions contained Under Section 80A. When Section 80A empowers the State to declare any land on the banks of canals or the sides of roads as protected forests State can do only which is permitted by the State and no more. Section 80A read with notification dated 10.02.1960 shall only mean that both the sides of the roads which have been mentioned in the Schedule are now declared protected forests. The purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vator of Forest or the Divisional Forest Officer; (b) For forest produce owned by any person, such person or his agent if so authorized in writing by the Divisional Forest Officer- (i) Provided that any person who desires to obtain a transit pass or authorization to issue passes under Clause (b) of Sub-rule (1) above shall apply in the form in Schedule 'B' and the Divisional Forest Officer may, before issuing the transit pass or authorization to issue such passes, conduct such inquiry and call for such information as considered necessary; (ii) Such authorization shall specify the period during which it shall remain in force, and shall also specify the route to be adopted and check Chawki or depot through which to produce must pass; and (iii) Any authorization may at any time be changed (on request or otherwise) or cancelled by the Division Forest Officer or Conservation of Forests. 142. Now we come to Rule (5) which provides for fees payable for different passes. Rule 5 along with its Marginal note (as originally framed) is as follows: Fees Payable for different classes of passes 5. At the check Chawki or depot established under Rule 15 and specified un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where forest produce is to be produced for examination. The Marginal Note of Rule 5 also clarifies the intent of the Rule. The Marginal note reads as Fees payable for different classes of passes. Thus Marginal Note clarifies that transit fee is payable at all kinds of passes and submission is incorrect that leviability of fee is only on one category of passes as referred to in Rule 4 (1) (b) . Marginal note has been held to be an internal aid to statutory interpretation of a statute. Justice G.P. Singh in Principles of Statutory interpretation 14th Edition regarding marginal note states as follows: ...Marginal notes appended to Articles of the Constitution have been held to constitute part of the Constitution as passed by the Constituent Assembly and therefore they have been made use of in construing the Articles, e.g. Article 286, as furnishing 'prima facie', 'some clue as to the meaning and purpose of the Article'. A note appended to a statutory provision or subordinate legislation is merely explanatory in nature and does not dilute the rigour of the main provision. Notes under the Rules cannot control the Rules but they can provide an aid for interpretat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions of learned Counsel of the Petitioner that transit fee is payable only with regard to passes issued under Rule 4 (1) (b) which are required to be checked under Rule 6 (4) , cannot be accepted. Pay ability of transit fee is attached with transit pass issued under form A except in cases where no transit pass is required for the removal of forest produce as enumerated in proviso to Rule 3. We thus do not accept the interpretation of Rule 3, 4, 5 6 as contended by learned Counsel for the Petitioner in respect of pay ability of transit fee on transit passes issued under 1978 Rules. XVI. Non-issuance of Section 20 Notification after Section 4 Notification of 1927 Act 149. At this juncture, it is also necessary to notice one submission raised by the learned Counsel for the Petitioners. It is contended that the State of Uttar Pradesh although issued notification Under Section 4 of 1927 Act proposing to constitute a land as forest but no final notification having been issued Under Section 20 of 1927 Act the land covered by a notification issued Under Section 4 cannot be regarded as forest so as to levy transit fee on the forest produce transiting through that area. With re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cases. 153. The writ Petitioners have contended that in view of striking down Fourth and Fifth Amendment Rules to 1978 Rules, the Third Amendment dated 09.09.2004 could not have been resorted to for realising the transit fee at the rate of ₹ 38/-. The Petitioners relying on judgments of Firm A.T.B. Mehtab Majid and Co. v. State of Madras and Anr. AIR 1963 SC 928; B.N. Tiwari v. Union of India AIR 1965 SC 1430 and State of U.P. and Ors. v. Hirendera Pal Singh, 2011 (5) SCC 305, have submitted that the earlier Rule does not revive even when substituted Rule is struck down by the Court. Shri D.K. Singh, learned Additional Advocate General has refuted the submission and placed reliance on judgment of this Court in Supreme Court Advocate-on-record Association v. Union of India, 2016 (5) SCC 1. This Court in the interim order dated 29.10.2013 has expressly directed that the State shall be free to recover transit fee for forest produce removed from within the State of U.P. at the rate stipulated in the Third amendment to the Rules mentioned in the earlier part of this order. Further, after noticing the striking down of Fourth and Fifth Amendment Rules by the High Court, thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the question as to whether by striking down Fourth and Fifth Amendment Rules, Third Amendment Rule does not revive need not be gone into in the present case. In view of the order of the Division Bench of the High Court dated 11.11.2011, the State was fully competent to recover the transit fee as per Third Amendment Rule, which direction of the High Court we duly affirm. XVII. VALIDITY OF FOURTH AND FIFTH AMENDMENT RULES 156. We now proceed to consider the respective contentions of the parties on the Fourth and Fifth Amendment Rules. Before we proceed to consider the rival contentions, it is necessary to have broad over-view of the concept of fee and tax. Further, the nature of regulatory fee and its essential characteristic also needs to be looked into. 157. The locus classicus on the concept of fee and tax is the judgment of this Court in The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt AIR 1954 SC 282, B.K. Mukherjea, J. speaking for 7-Judge Bench has elaborately defined the tax and fee in paragraphs 43 and 44 which are quoted below: 43. A neat definition of what tax means has been given by Latham C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or privilege. Fees confer a special capacity, although the special advantage, as for example in the case of registration fees for documents or marriage licences, is secondary to the primary motive of Regulation in the public interest (Vide Findlay Shirras on Science of Public Finance Vol. I, p. 202.) . Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives. As Seligman says, it is the special benefit accruing to the individual which is the reason for payment in the case of fees; in the case of a tax, the particular advantage if it exists at all is an incidental result of State action (Vide Seligman's Essays on Taxation, p. 408.). 46. If, as we hold, a fee is regarded as a sort of return or consideration for services rendered, it is absolutely necessary that the levy of fees should, on the face of the legislative provision, be co-related to the expenses incurred by Government in rendering the services. As indicated in Article 110 of the Constitution, ordinarily there are two classes of cases where Government imposes 'fees' upon persons. In the first class of cases, Government simply grants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o meet expenditure necessary or expedient for providing amenities like communication, water supply and electricity for the better development of the mining area and to meet the welfare of the labour employed and other persons residing or working in the area of the mines. Here again there is no element of control but the services resulted in real benefit specially accruing to the persons on whom the levy was imposed. These decisions of this Court clearly establish that in order to make a levy a fee for services rendered the levy must confer special benefit on the persons on whom it is imposed. No case has been brought to our notice in which it has been held that a mere control exercised on the activities of the persons on whom the levy is imposed so as to make these activities more onerous, is service rendered to them making the levy a fee. 160. The nature of transit fee came for consideration before this Court in State of Tripura and Ors. v. Sudhir Ranjan Nath, 1997 (3) SCC 665. The Tripura Transit Rules levy the transit fee. The High Court has declared Rule 3 which provided for charging of transit fee as unconstitutional. In appeal against the said judgment, referring to the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy of transit fee was invalidated. In absence of quid pro quo, the High Court did not strike down the Rules and observe that it is open to the State Government to levy transit fee by rendering service as quid pro quo. Rules 3 and 5 of 1978 Rules as well as provisions of Section 41 of Forest Act, 1927 were considered by this Court. This Court relying on the judgments of this Court in State of Tripura v. Sudhir Ranjan Nath, Corporation of Calcutta v. Liberty Cinema and Secunderabad Hyderabad Hotel Owners' Assn. v. Hyderabad Municipal Corporation held transit fee under Rule 5 as clearly regulatory and it was held that it was not necessary for the State to establish quid pro quo. Following was held in paragraphs 8, 9 and 10: 8. The distinction between tax and fee is well settled and need not be restated herein. It is clear from the afore-noticed provisions of the Act and the Rules that the transitory fee is regulatory in nature. The question of quid pro quo is necessary when a fee is compensatory. It is well established that for every fee quid pro quo is not necessary. The transit fee being regulatory, it is not necessary to establish the factum of rendering of service. Thus, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41 of the Forest Act, 1927 empowered the State to make Rules to regulate transit of forest produce. The State of Uttar Pradesh by Uttar Pradesh Act 23 of 1965 with effect from 23.11.1965 after Sub-section (2) of Section 41 inserted Sub-sections (2A) and (2B) . Sub-section (2A) is as follows: (2A) The State Government may by notification in the Gazette delegate, either unconditionally or subject to such conditions as may be specified in the notification, to any Forest-officer, not below the rank of Conservator, the power to prescribe fees under Clause (c) of Sub-section (2). 166. The State of U.P. in exercise of power Under Section 41 framed Rules, namely, the Uttar Pradesh Transit of Timber and other Forest Produce Rules, 1978. Rule 3 provided for Regulation of transit of forest-produce by means of passes which is to the following effect: 3. Regulation of transit of forest produce by means of passes. - No forest produce shall be moved into, or from, or within, the State of Uttar Pradesh except as hereinafter provided, without a transit pass in the form in Schedule A to these Rules, from an officer of the Forest Department or a person duly authorised by or under these Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pacity is shown. Now, comes to Fourth Amendment Rules, 2010 dated 20.10.2010, the fee which was ₹ 38/- for per tonne per lorry load of timber or other forest produce was increased as ₹ 200/- per cubic meter of capacity other than of Khair, Sal and Sagaun (Teak) , Shisham, Sandal Wood and Red Sanders. Then comes to Fifth Amendment Rules, 2011 dated 04.06.2011. Rule 5 was amended where the basis of levy of fee was changed into advalorem at the rate of 5% or minimum ₹ 2,000/- for per lorry load of timber or other than of Khair, Sal and Sagaun (Teak) , Shisham, Sandal Wood and Red Sanders. Relevant extract of Rule 5 as amended by Fifth Amendment is as follows: 169. Before we proceed further with the discussion it is necessary to note the actual impact on Transit Fee of Fourth and Fifth Amendment Rules. We have already noted that initially when Transit Fee Rules were framed in 1978, Transit Fee on per lorry load of timber was ₹ 5 per tonne of capacity. By 3rd amendment with effect from 14.06.2004 ₹ 5/- was increased as ₹ 38 per tonne of capacity. By 4th amendment rules, the Transit Fee was increased as ₹ 200/- per cubic meter with regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any quid pro quo? (b) Whether the State has satisfactorily justified the increase in Transit Fee by 4th 5th amendment by producing relevant material? (c) Whether by adoption of ad-valorem basis by 5th amendment Rules the Transit Fee no longer remains a fee and has changed into character of a tax? 175. We have already noticed the pronouncement of this Court that for regulatory fee, State is not to prove any quid pro quo. Regulatory Fee can be charged, even if, no services are rendered by the State in lieu of fee realised. This Court in few more cases had occasion to advert to the aforesaid issue which need to be noted. In The State of Maharashtra and Ors. v. Salvation Army, Western India Territory, (1975) 1 SCC 509, this Court had occasion to consider the provisions of Bombay Public Trust Act, 1950 wherein, two per cent contribution was required to be paid to Public Trust Administration Fund. This Court noticed the essential elements to characterise the payment as a fee. In para 14 following was stated: 14...Thus, two elements are essential in order that a payment may be regarded as a fee. In the first place, it must be levied in consideration of certain services whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcessive. In any case, the Appellant has not challenged the amount of the levy as unreasonable and expropriatory or excessive... 178. Thus the issue (a) as noted above, has to be answered holding that although, the State is not required to prove any quid pro quo for levy or increase in fee but a broad correlation has to be established between expenses incurred for Regulation of Transit and the fee realised. 179. The issue (b) that whether State has satisfactorily justified the increase in Transit Fee by Fourth and Fifth Amendment Rules by producing any material has to be answered on the basis of material which has been produced by the State before the High Court and has been adverted to before us by learned senior Counsel Shri Ravindra Srivastava. The submission of learned Counsel for the State is that the High Court has not adverted to the relevant material produced by the State which was filed before the Court by means of a counter affidavit. The above submission is not correct since in para 85 of the judgment, the High Court has noticed the figures which were placed by the State in its affidavit regarding amount of collection of Transit Fee and the expenses incurred by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has increased about three times i.e. from ₹ 11213.93 lakh in year 2004-05 to 32205.16 lakh in year 2010-11. The license fee/renewal of saw mills and veneer/plywood are thus regulatory in nature and the same has been enhanced with a view to balance and meet the enhanced expenditure being incurred on enforcement/Regulation of the Forest Department.. 182. From the above it is clear that the submission of learned Counsel for writ Petitioners is correct that the expenditure which is claimed by the State as noticed in paragraph 85 of the impugned judgment of the High Court is the expenditure not confined to Regulation of transit but other expenditures of the forest department as well. Thus, the correlation sought to be established by the State on account of transit fee raised and those expenditures as claimed is unfounded and has rightly not been accepted by the High Court. 183. The High Court after considering the stand of the State has held the following in paragraphs 141 and 142: 141....The increase of the transit fees by the 4th Amendment on cubic feet basis and thereafter by impugned 5th Amendment on ad valorem basis on movement of forest produce on the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t produce, with no benefit or service directly or indirectly to facilitate the trade or transit of forest produce. There is no averment, nor it is argued by learned Counsel appearing for the State that any facility or services are to be provided or are contemplated for the trade. 185. The High Court thus held, after considering the material brought by the State for increase in transit fee, that increase in transit fee was excessive and the character of the fee has changed from simple regulatory fee to a fee which is for raising revenue. 186. The High Court in para 181 has returned the finding that The revenue to be generated by the transit fee, would thus be at least 10 times more than the cost in collection of fees. 187. A three-judges Bench in Calcutta Municipal Corporation and Ors. v. Shrey Mercantile (P) Ltd. and Ors. 2005 (4) SCC 245 had considered provisions of Calcutta Municipal Corporation (Taxation) Regulations, 1989 whether levy was made on advalorem basis. The Court examined the issue as to whether such levy is a fee or a tax . The Court held the levy in the nature of tax and also held it arbitrary and discriminatory, violative of Article 14. The following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the quantum of levy indicates that it is a tax and not a fee. The analysis of the various provisions of the Act and the impugned Regulations shows that the impugned levy is in exercise of power of taxation under the said Act to augment the revenues primarily and not as a part of regulatory measure. 189. Shri Ravindra Srivastava, learned senior Counsel, appearing for the State has submitted that no exception can be taken to the adoption of advalorem basis for imposition of transit fee by means of Fifth Amendment Rules. He submits that when a State is competent to levy fee, what shall be the yardstick of such levy depends on facts of each case and the State can find its own basis for determining the extent of fee. He has relied on three-Judges Bench judgment in P.M. Ashwathanarayana Sefty and Ors. v. State of Karnataka and Ors. 1989 Supp. (1) SCC 696. He submits that this Court in the above case was considering the levy of Court fee under Karnataka Court Fee Valuation Act, 1958. The Court fee was leviable on advalorem basis and the Court proceeded to examine the issue as to whether Court fee can be levied on advalorem basis. This Court in the above case has also held that a fee ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings. The Court held the aforesaid imposition as arbitrary and upheld the judgment striking down the above provision. Paragraph 90 to 93 of the judgment are relevant and are extracted below: 90. In the appeal of the State of Maharashtra arising out of the Bombay Court Fees Act, 1959, the High Court has struck down the impugned provisions on the ground that the levy of court fee on proceedings for grant of probate and letters of administration ad valorem without the upper limit prescribed for all other litigants--the court fee in the present case amounts to ₹ 6,14,814 --is discriminatory. The High Court has also held that, there is no intelligible or rational differentia between the two classes of litigation and that having regard to the fact that what is recovered is a fee, the purported classification has no rational nexus to the object. The argument was noticed by the learned Single Judge thus: Petitioners next contend that the impugned Clause discriminates as between different types of suitors and that there is no justification for this discrimination. Plaintiffs who go to civil courts claiming decrees are not required to pay court fees in excess of ₹ 15,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciple for levy of transit fee was not appropriate and such levy changed the character of fee into a tax which has rightly been so held by the High Court. We are, thus, of the view that the High Court has given cogent and valid reason for striking down the Fourth and Fifth Amendment Rules which decision was rendered by the High Court after elaborate and proper consideration of material brought before the Court after analysing the purpose and object of the imposition of transit fee. We, thus, affirm the judgment of the High Court striking down Fourth and Fifth Amendment Rules. Transfer Petitions 193. This Court vide its order dated 19.11.2012 had already directed the transfer petitions to be heard along with SLP (C) No. 11367 of 2007. The Transfer Petitions, thus, deserve to be decided in terms of the Civil Appeal arising out of SLP (C) No. 11367 of 2007. Contempt Petitions 194. The seven Contempt Petitions have been filed in which notices have not yet been issued. All the Civil Appeals being decided by this order, the contempt petitions deserve to be dismissed. XVIII. Interim orders passed against the judgment of the Allahabad High Court 195. In this batch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of such forest produce at the rate stipulated in the fourth amendment to aforesaid Rule 5. (4) Any such recovery shall remain subject to the ultimate outcome of present petitions pending in this Court. (5) In the event of writ Petitioners/private parties succeeding in their cases, the amount deposited/recovered 27 from them shall be refunded to them with interest @ 9% per annum from the date of deposit till actual refund. (6) The State shall maintain accurate amount of recovery made and the nature/quantity of the produce removed by the private party is concerned. (7) These modified directions shall come into effect on and from 1st May 2016. (8) This modification shall not apply to exempted goods or industrial by-products like Klinker fly ash. 197. This Court directed that State shall be free to recover transit fee within the State of U.P. at the rate stipulated in the Fifth Amendment to Rule 5. 198. The Court also held that such recovery shall remain subject to the ultimate outcome of present cases pending in this Court. With further condition that in the event of writ Petitioners/private parties succeeding in their cases, the amount deposited/recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 'Regulations, 1996') , which specifically provides for issue of transit pass and charging of fee covers the field and State Government cannot frame any Rule of the present nature effecting the transportation of mineral. Rule 5 of Rules, 2000 as well as Notification dated 28.05.2001 are contrary to Section 41 of Act, 1927. The Act, 1927 being a pre-constitutional statute enacted by the dominion legislature and Act, 1957 being a parliamentary enactment will have overriding effect over the provisions of the earlier statute. The State Government has put the fee on Transit Pass qua tonnage which makes it colourable piece of exercise of power. 202. The State contested the Writ Petition by filing counter-affidavit and contended that the Act, 1927 has been designed to protect and increase the forest wealth and Notification dated 28.05.2001 has been issued in exercise of power under Rule 5 of Rules, 2000, which were framed Under Section 41 of the Act, 1927. The Regulatory Fee is not charged on extraction of mineral and there is no encroachment on the provisions of Act, 1957. The Regulatory Fee is charged only on the transportation of minerals. The method chosen by State Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the Respondent-Petitioners has not filed any Special Leave Petition challenging the judgment of the High Court dated 14.05.2009, they are entitled to urge the grounds which were pressed before the High Court in support of the Writ Petition. 207. It is submitted that Petitioner does not mine coal but buys it from Northern Coal Fields Ltd. or from other coal fields. Petitioner also reimburses the royalty etc on the coal purchased from different coal fields as per the provisions of Act, 1957. The impugned demand is illegal and without jurisdiction as the field is fully occupied by Rules made thereunder. The Transit Fee of ₹ 7 per tonne fixed by Notification dated 28.05.2001 is Transit Fee on minerals which is illegal and without jurisdiction. 208. We have considered the submissions raised by learned Counsel for the parties and perused the record. Before we proceed to consider the submission, it is necessary to notice the finding given by the Division Bench of the High Court in the impugned judgment on various contentions raised before it. The Division Bench of the High Court considered the submission of learned Counsel for the writ Petitioners that Act, 1957 occupies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er including Section 4 (1A) and Section 23C of Act, 1957 have already been considered by us, while considering the submission raised with regard to Civil Appeals arising from the judgment of the Allahabad High Court. The above submission having already noted and considered, it needs no repetition here. Hence, submission raised by learned Counsel for the writ Petitioners on the basis of Act, 1957 is thus rejected. 211. Now, we come to the reason on the basis of which Division Bench of the High Court has allowed the Writ Petition by quashing the Notification dated 28.05.2001. The High Court held that the Notification dated 28.05.2001 is contrary to the provisions of Section 41 of the Act, 1927 and the notification transgresses Rule 5 of Rules, 2000 because Rule 5 provides that State Government or an authorised officer by it, from time to time, shall fix the rate of the fee for issue of Transit Pass. The fee is to be issued for issue of Transit Pass and Transit Pass by no stretch of imagination can have any nexus with unit of minerals. Thus in fact, it is a fee pertaining to the minerals and not a fee issued on Transit Pass. In para 74 of the judgment, following has been held by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the High Court, holding that State could not have asked for payment of fee on Forest Produce on the basis of quantity/volume of the Forest Produce is correct ? We revert back to provision of Section 41 of the Act, 1927. Section 41 empowers the State to make Rules to regulate the transit of Forest Produce. The Rules thus can very well regulate the transit of the Forest Produce. Sub-Section 2 of Section 41 provides that in particular and without prejudice to the generality of the foregoing provision such Rules may,.... (c) provide for the issue, production and return of such passes and for the payment of fees therefore. Thus, power given to State is to regulate the transit of all timber and other Forest Produce and the Rules may provide for issue of passes and for the payment of fees, therefore, fee for issue of the passes has correlation with the Forest Produce which is clear from the scheme of Rules, 2000. According to Rule 3 no Forest Produce shall move into or outside or within the State of Madhya Pradesh except in the manner as provided without a Transit Pass in Form A, B and C. The Forms of Transit Pass are part of the rules. For example, for ready reference, we extrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Other Forest Produce Rules, 1978, provided for payment of transit fee on the forest produce calculated on the rates as mentioned therein. High Court had upheld the competence of the State in providing fee as set out in Rule 5 which was noticed by this Court in paragraph 7 of the judgment, which is to the following effect: 7. Having found that the constitutional competence in providing fee as set out in Rule 5 is not lacking, the High Court accepted the challenge to the validity of levy on the ground that the fee is not supported by the principle of quid pro quo. It held that no service is provided in lieu of the fee to any person much less to the person from whom the transit fee is charged. In the view of the High Court, reasonable relationship between the levy of the fee and the services rendered had not been established. 217. High Court although upheld the competence of the State to provide fee but held that fee is not supported by principles of quid pro quo. On that ground transit fee was held to be invalid. The view of the High Court was reversed and this Court held that charging of transit fee was valid. Following was held in paragraph 10 and 11: 10. The transit fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... result into a new commodity different from forest produce. The crushed materials continue to be stone and retain their nature of forest produce. (b) Coal with its various varieties, limestone, hydrated lime, quick limestone, slake lime, veneer and plywood waste are all forest produce. (c) Marble blocks, marble slabs, marble chips are all forest produce. (d) Flay ash, clinker, synthetic gypsum are not forest produce. Gypsum, however, is a forest produce. II. The Indian Forest Act, 1927 and the Rules framed Under Section 41 are neither overridden nor impliedly repealed, altered or amended by Mines and Minerals (Development and Regulation) Act, 1957 and the Rules framed thereunder. Both the above legislations operate in different spheres and fields. III. The words brought from as occurring in Section 2 (4) (b) of 1927 Act means brought from forest from where forest produce has originated. The words 'brought from forest' cannot be read as brought through forest . We, however, clarify that for an item to be treated as forest produce, its origin may be in any forest within the State of U.P. or in a forest outside the State of U.P. IV. The forest has to be un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the State of U.P. against the judgment dated 11.11.2011 and subsequent judgments following judgment dated 11.11.2011 are dismissed. (3) The Civil Appeals filed by the writ Petitioners against the judgment of the Allahabad High Court dated 27.04.2005 and the subsequent judgments following the judgment dated 27.04.2005 as well as the Civil Appeals filed by the writ Petitioners against the judgment dated 11.11.2011 and other subsequent judgments following the judgment dated 11.11.2011 are disposed of in terms of our conclusion as recorded in paragraph 221 (I to VIII) . (4) The transfer petitions are disposed of in terms of our conclusion as recorded in paragraph 221 (I to VIII) and Writ Petition (C) No. 203 of 2009 (M/s. Pappu Coal Master and Ors. v. State of U.P. and Anr.) is also disposed of in terms of our conclusion as recorded in paragraph 221 (I to VIII) . (5) The writ Petitioners from whom the transit fee was realised with effect from 01.05.2016 in accordance with the Fifth Amendment to 1978 Rules shall be entitled to claim for refund along with interest @ 9% which shall be considered by the State or any officer authorised by the State. The claim of refund sha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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