TMI Blog2024 (1) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitution - whether the Goa Cess Act levys an unconstitutional fee or a tax? - whether the State stand denuded of its power to levy cess under the said Act on the ground that levy stands subsumed by the GST Act? HELD THAT:- The title of the Goa Cess Act namely Goa Rural Improvement and Welfare Cess Act, 2000 as also the preamble of the Act would indicate that the object of the Act is to provide additional resources for improvement of infrastructure and health with a view to promote the welfare of people residing in the rural areas affected by the use of plastics, dumping of garbage and spillage of materials. It provides that the legislature thought it expedient to provide additional resources for improvement of infrastructure and health with a view to promote the welfare of people residing in the rural areas affected by the use of plastics, dumping of garbage and spillage of material. The legislative competence to enact the Goa Cess Act has been upheld by a Division Bench of this Court in the case Sociedade De Fomento Industrial Pvt.Ltd., Goa [ 2018 (9) TMI 2141 - BOMBAY HIGH COURT] . The Division Bench has held that the Goa Cess Act is relatable to Entries 6, 13, 23 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the levy, benefits the petitioner as well, and there existed a co-relationship. It was thus observed that the Goa Cess Act and the Rules, whether it imposes a tax or fee, could not be said to be unconstitutional. Thus, there is no substance in the contention of the petitioner that the Goa Cess Act levies a tax and not a fee. Whether Goa Cess Act is violative of Articles 301, 303 and 304 of the Constitution? - HELD THAT:- By now it is well settled that clauses (a) and (b) of Article 304 are required to be read disjunctively. Clause (a) of Article 304 provides for imposition of any tax on goods imported from other States or Union territories to which similar goods manufactured or produced in that State are subject with an intention as not to discriminate between goods so imported and goods so manufactured or produced. Thus, per se clause (a) of Article 304 is not attracted in the facts of the present case inasmuch as the Cess being levied by Goa Cess Act cannot be strictu sensu categorized as a tax on goods which are sought to be imported - The petitioners are merely concerned in regard to the iron ore/ores or coal. It is thus seen that what is sought to be included in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of rates is a matter of expertise which would depend on several factors to be considered. It would completely lie within the powers of the rule making authority to fix the rates. Except for a bald case of breach of Article 14, no material is placed on record to contend that the rates so arrived at and fixed by the State of Goa as issued by different notifications need interference. Challenge on the ground of GST Laws - HELD THAT:- The object of GST laws is totally distinct from the object and purpose of the Goa Cess Act. Even the expert body namely the GST council has refrained from subsuming and thereby recommending the repeal of the Goa Cess Act in view of the incorporation of the GST laws. It would not be out of place to mention that Entry 52 of List II which dealt with taxes on entry of goods into local area for consumption use or sale therein and Entry 55 of List II inter alia in regard to taxes on advertisement, have been repealed, that too without any corresponding amendment in Entry 66 of List II. It is therefore, an unwarranted exercise on the part of the petitioners in making an attempt to attack the validity of the Goa Cess Act on the incorporation of the GST la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitions, by the petitioners, who are inter-alia engaged in transportation of iron and coal into the State of Goa from the other States. (B) Challenge 2. The challenge of the petitioners is primarily mounted on the following counts : (i) that the Goa Cess Act imposes an unconstitutional cess; (ii) The levy as imposed is violative of Articles 301, 303, and 304 of the Constitution of India; (iii) the implementation of the Goa Cess Act violates the petitioner s rights under Article 14 of the Constitution of India, since the levy is on two classes of items, the Goan ore on which royalty is paid and the non-Goan ore on which royalty is not paid; and lastly (iv) that there is no power/competence to sustain the levy of cess since the State stands denuded of its power, under the Goa Cess Act, as such levy stands subsumed by the Goa Goods and Services Tax Act and the Central Goods and Service Tax Act 2017, (for short GST Act ). 3. At the outset, it is required to be noted that a batch of petitions in the case of Sociedade De Fomento Industrial Pvt. Ltd., Goa Vs. State of Goa AIR Online2018 Bom 1112 (of which the present proceedings were also a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For convenience the facts as pleaded in the lead writ petition can be noted hereunder: The petitioner company is stated to be engaged in the business of mining iron ore, extraction, processing, transportation, and export of iron ore from the State of Goa. It also carries on mining activity in the State of Karnataka and Orissa. It is contended that the mineral ore as also coal brought by the petitioner from the State of Karnataka, is required to be transported through the State of Goa, since Goa has a major port namely the Mormugao Port, from where the mineral ore is exported. That ore is imported by the petitioner which is also required for the petitioner s activities in Goa. It is the petitioner s case that the cess under the Goa Cess Act is levied both on the mineral ore as also on coal, which is being transported by the petitioner through the State of Goa. 7. The petitioner further contends that the petitioner is the grantee or concessionaire or holder in respect of leases of iron ore mines, in the State of Goa and Karnataka. It inter alia transports iron ore from its mines and/or purchased by the petitioner, from other sources, in the State of Karnataka, into the State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns issued thereunder and/or forebear the Respondent from enforcing the same; (B1) That this Hon ble Court be pleased to issue a Writ of Certiorari or Writ in the nature of Certiorari or any other appropriate Writ, order or direction calling for the records from the Respondents and upon examining the legality, propriety and reasonability thereof be pleased to quash and set aside the Corrigendum issued vide Notification dated 08/10/2010. (C) In the alternative and without prejudice to Prayer Clauses (A) and (B) above, this Hon'ble Court be pleased to declare that the Notification dated 13/05/2008 is arbitrary, illegal, unconstitutional and therefore null and void. (D) That this Hon'ble Court be pleased to issue a Writ of Mandamus or Writ in the nature of Mandamus or any other appropriate Writ, Order or Direction commanding the Respondents, their servants and agents to refund to the Petitioners, a sum of Rs. 1,74,68,240/- (Rupees One crore seventy four lakhs sixty eight thousand two hundred and forty only) collected from it by way of cess on iron ore between the period April 2008 to March 2009, and any other further sums that may be paid by the Petitioner No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is contended that there is neither violation of Article 301 of the Constitution nor there is an infringement of Article 14 or any other constitutional provision. In justifying the legislation it is contended that mining is one of the major industries in the State of Goa. Different ores like manganese and iron ore, which are extracted in Goa are exported by using facilities at the Mormugao Port. In addition to the ores extracted from Goa, the ores from various other places outside Goa, are also exported from the Mormugao port. Such ore is brought into Goa either by road transportation or by railway wagons. It is contended that in the case of railway transportation, the ore is brought at Sanvordem Railway Station and unloaded at the said station, from where the ore is taken by trucks to the Mormugao Port, for onward transportation by the sea route. 13. It is contended that the State charges royalties on the ore which is extracted in Goa. It is stated that at the relevant time almost 19 million tones of iron and manganese ore was mined in Goa. The royalty on such mining is fixed by the Central Government. It is contended that large quantities of ore is brought into the State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into force by a notification dated 23 January 2006, with effect from 1 February 2006. 15. The reply affidavit referring to the provisions of Section 3 of the Goa Cess Act, contends that it provides that there shall be levied and collected from the owner, a cess on all carrier transporting material. It is stated that carrier has been defined under Section 2(a) to mean any mode or conveyance or facility by which material is transported from one place to another, by a mechanical device. It is contended that cess is levied not on the mineral or the ore as contended by the petitioner, it is levied on the carrier, which transports the material. Also referring to Section 4 of the impugned Act, it is stated that under the said provision, the amounts received by way of cess, reduced by the cost of collection, after due appropriation as may made by the State Legislature by law, is to be utilized by the Government to make various expenditures as provided for under Section 4, which is to meet the expenditures incurred in connection with the measures which are necessary or expedient to promote the welfare of the people residing in the rural areas affected by the movement of carriers tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the carrier alone. The measure of liability is defined in terms of weight of the items/materials as listed in the schedule to the Goa Cess Act. It is contended that, there is thus a clear relationship between the levy of cess on the materials and the criteria for determining the measure of liability. It is contended that the statutory provision for measuring the liability on account of the levy throws sufficient light on the general character of the levy. 17. The reply affidavit further contends that the regulatory measures or measures imposing the levy do not come within the purview of restriction contemplated by Article 301 and such measures need not comply with the requirement of proviso to Article 304(b) of the Constitution. It is stated that there is no restriction on the freedom of trade and commerce, on the contrary, instead of hindering the trade, the same would be facilitated by making provisions for roads, maintaining roads in good state of repairs and in providing better infrastructure. It is, therefore, contended that the provisions of the Goa Cess Act, imposing a cess on carrier transporting the material into/within the State, which is in the nature of a regulato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to apply the doctrine of pith and substance to determine whether the impugned law relates to the particular subject mentioned in List II. It is contended that in substance the Goa Cess Act falls within the State List. There is no encroachment on the Union List in the present case. This affidavit also places on record the data/figures in relation to the expenditure incurred for the various infrastructural facilities provided by the State Government in order to meet the objects of the impugned Act in the rural areas as generated from the Goa Rural Improvement and Welfare Cess and deposited in the Consolidated Fund of the Goa Government. Additional Affidavit I 19. There is an additional affidavit dated 29 March 2016 filed on behalf of the State by Mr. Sunil Masurkar, Director of Transport, Government of Goa, which is similar on the contentions as urged in the earlier affidavit dated 12 February 2016 filed on behalf of the State. Additional Affidavit II 20. There is a further additional affidavit dated 20 April 2016 filed on behalf of the State by Mr. Sunil Masurkar, Director of Transport, Government of Goa, to place on record a notification dated 6 April 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties which are as under: (E) Submissions on behalf of the Petitioners 23. Mr. Dhond, learned Senior Counsel appearing for the petitioners in Writ Petition No. 244 of 2009 and Mr. Nadkarni and Mr. Sawant, learned Counsel appearing for the petitioners in Writ Petition No. 474 of 2012 have made the following submissions. 24. It is urged on behalf of the petitioners that the Cess as levied by the Goa Cess Act, is unconstitutional on the following counts: I. At the outset, it is submitted that the decision of the Division Bench in the case Sociedade De Fomento Industrial Pvt.Ltd., Goa (supra) does not foreclose the petitioners challenge on the grounds as urged as such grounds are expressly kept open by the Division Bench. II. (i) The cess as assailed is a tax on the consignment of goods, in the course of inter-State trade and commerce. It is submitted that neither the State List (List II) nor the Concurrent List (List III) in the Seventh Schedule of the Constitution authorizes levy of such tax. (ii) It is submitted that Entry 42 in List I providing for inter-State trade and commerce and Entry 92-B in List I providing for taxes on the consignment of goods, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tsoever between the petitioners or the others like the petitioners and the services allegedly rendered from the impugned cess. In supporting such contention, reliance is placed on the decision in Hingir-Rampur Coal Co. Ltd. Vs. State of Orissa AIR 1961 SC 459, Corporation of Calcutta Vs. Liberty Cinema AIR 1965 SC 1107 and State of West Bengal vs. Kesoram Industries Ltd. Ors. (2004)10 SCC 201. (iii) At least three Constitution Benches of the Supreme Court in Hingir- Rampur Coal Co. Ltd. Vs. State of Orissa (supra), Corporation of Calcutta Vs. Liberty Cinema (supra) and State of West Bengal vs. Kesoram Industries Ltd. Ors.(supra), have set down these essential characteristics of a fee which are firstly, there must be an element of quid pro quo between the person who pays it and the public authority that imposes it. In supporting this submission, reliance is placed on the decision in Hingir-Rampur Coal Co. Ltd. v. State of Orissa (supra); further, referring to the decision of the Supreme Court in Corporation of Calcutta Vs. Liberty Cinema (supra), such quid pro quo must involve the conferment of some benefit (whether primary or secondary) on the persons on whom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r-State trade or commerce, for which the State has no legislative competence to impose it. V. Discriminatory On the ground that the impugned cess is discriminatory, the submissions are to the effect that both, as originally enacted and as on date, the impugned Act discriminates between persons who transport the ore which is locally mined, that is where mining-lease royalty is paid to the Government of Goa and those who mine it outside Goa, but transport it into the State of Goa, wherein such royalty is not paid to the Government of Goa. It is submitted that the case of the State that in this there is no discrimination, is misconceived. It is submitted that such distinction makes no difference for the reason that royalty is levied on all minerals wherever mined, by virtue of the MMDR Act. The ores are transported into the State of Goa in the course of inter-state commerce is not royalty-free . In the petitioner s case royalty is paid on the ore in the State in which it is mined namely in Karnataka. As for the 10% of sales proceeds of ore, payable into the Goa Iron Ore Permanent Fund as charged as per the decision in Goa Foundation v. Union of India Ors. (2014) 6 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner has also contended that Article 246A(2), Article 269 and Article 286 as amended by the Constitution (101st Amendment) Act operate proprio vigore and hence, would not depend on any recommendation by the GST Council. It is also the case of the petitioners that the State s case that the subsuming is restricted to Entries 66 read with Entries 52, 54, 55 and 62 of List II of the Seventh Schedule is affected by the Constitution(101st Amendment) Act, would not assist the State Government. It is submitted that in any case as held by the Supreme Court in Union of India v. Mohit Minerals (P) Ltd., the recommendations of the GST Council are not binding and that the GST regime has subsumed all the indirect taxes. On the above submissions, the writ petitions ought to be allowed. (F) Submissions on behalf of the Respondents 25. Mr. Apte, learned Senior Counsel alongwith Mr. N. Vaze, Ms. S. Linhares appearing for the respondent -State have made the following submissions : (I) Once Constitutionality of a statute is upheld, its challenge on additional grounds is not permissible: a) It is submitted that one batch of Petitions was disposed of by the judgment an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the challenge to the constitutional validity on basis of additional grounds is required to be dismissed. (II) It is submitted that the Goa Cess Act is a fee and therefore cannot be challenged for violation of Part XIII of the Constitution. The reasons being:- a) this Court in Fomento s case has relied upon the ratio of the decision of the Supreme Court in the case State of West Bengal vs Kesoram Industries reported in (2004) 10 SCC 201, by rendering a specific finding that the Goa Cess Act and Rules thereunder can also be justified, as a fee and is relatable to Entry 66 of List II of Schedule VII to the Constitution of India. It is submitted that such finding is specifically found in paragraph 52 read with paragraph 37 of the judgment in Fomento s case in which in paragraphs 140 to 146 the decision of the Supreme Court in Kesoram Industries (supra) were considered by this Court. b) It is submitted that fee is referable to Entry 66 of List -II of schedule VII of the Constitution of India. It is now well settled that the test of quid-pro-quo is now not applicable rigorously to Fee . Broad co-relationship is sufficient for holding a Fee to be constitutionally v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criminatory. The grievance is about exercise of power by the executive in fixing the rates in the Schedule is stated to be arbitrary. Such a ground has not been raised in this Petition at all and therefore the Petition must fail. c) The Goa Cess Act confers powers on the executive to fix rates in the Schedule. This is a piece of delegated legislation. Different rates prescribed with respect to carrier, transportation of ore from outside the State is based on reasonable classification , which is clear from the following: i) In case of iron ore, a reasonable classification is made on basis of ore mined within the State in respect of which the State of Goa receives royalty and on the other hand the ore mined outside Goa no royalty is received by the State. ii) It is submitted that in the matter of Goa Foundation vs Union of India reported in (2014) 6 SCC 590 , the Supreme Court directed the Goa Iron Ore Permanent Fund to be created in which 10% of the sale proceeds of the iron ore excavated in the State of Goa and sold by the lessees is required to be contributed to the said Fund. The State of Goa has presented a comprehensive scheme before the Supreme Court for utili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion of the Goa Cess Act being violative of Article 304 (a) does not arise. j) It is submitted that the Goa Cess Act is not in relation to supply. The word supply was considered by the House of Lords in the matter of Regina vs Maginnis, reported in (1987) 2 WLR 765 wherein it is held the word supply in its ordinary natural meaning conveys the idea of furnishing or providing to another something which is wanted or required in order to meet the wants or requirements of that other. It connotes more than the mere transfer of physical control of some chattel or object from one person to another. No one would ordinarily say that to hand over something to a mere custodier was to supply him with it. The additional concept is that to enable the recipient to apply the thing handed over to purposes for which he desires or has duty to apply it . In the present case, the Petitioner is bringing its own ore from Karnataka where it is subjected to royalty into the State of Goa for its own consumption. This can by no stretch of imagination be construed as a supply under part XIII of the Constitution of India. k) Moreover, the Goa Cess Act is for the purpose of providing additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct does not levy tax on goods and services and it is not referable to relevant entries. In fact, deletion of some of the entries supports the case of the Respondent in as much as it gives indication in regard to coverage of taxes by GST regime. ii) The Constitution (101st Amendment) Act, 2016, more particularly Section 17 thereof provides for deletion of entries 84, 92 and 92 C of List-Union List and omission of Entry 52 and 55 and substitution of Entry 54 and 62 of the List II -State List. iii) Perusal of the omitted entries prior to substitution in the List-II (State List) reflects that the said entries pertain to supply, sale, manufacturing, entertainment and luxury tax. Thus essentially it can be seen that any tax which would fall under the omitted entries 52 and 55 or entries 54 and 62 of List -II prior to substitution, would be subsumed by the GST. iv) It is submitted that the judgment in Fomento s case in paragraph 37 records that the State has relied upon Entry 6, 13 , 23, 50, 56 and 66 of List II. This Court further considered the entire Act in paragraphs 41, 42, 43, 44, 55, 56, 57 and 58 and 1 thereafter has rendered a finding in paragraph 52 to state that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le considering legislative competence of the state. It is specifically so in case of taxing statutes. The State has produced data regarding user of additional resources, and this has been noted in paragraph 56 in Fomento s judgment (supra). (b) The Goa Cess Act is not on occupied field of MMDR Act 1957. MMDR Act is not a complete code and occupies a limited field pertinent to development and regulation of mining and the Goa Cess Act does not in any manner overlap the said field. Perusal of the preamble of the Goa Cess Act supports this contention. (c) Levy of Goa Cess is on certain items mentioned in Schedule I of the Goa Cess Act pertaining to carrier transporting material. (d) The judgment of the Supreme Court in Jindal Stainless Ltd. Anr. Vs. State of Haryana ors. (2017) 12 SCC 1 is essentially with respect to entry tax in relation to Article 301 to 304 of the Constitution of India. The Goa Cess Act is a fee and not a tax, much less an entry tax. The decision in Jindal Steels (supra) upholds the power to tax, but says it should not be discriminatory. As stated above, the Goa Cess Act, the Rules thereunder, the Schedule or the Rates in any case are not discrimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is arbitrary or unreasonable. The Supreme Court observed that some or other constitutional infirmity needs to be found, before invalidating an Act, and that an enactment cannot be struck down on the ground that Court thinks it unjustified. It was held that the Parliament and the Legislatures, composed as they are of the representatives of the people, are supposed to know and be aware of the needs of the people and what is good and bad for them. The Court cannot sit in judgment over their wisdom. An enactment cannot be struck down by applying the principles proportionality when its applicability even in administrative law sphere is not fully and finally settled. The Court observed that it is one thing to say that a restriction imposed upon a fundamental right can be struck down if it is disproportionate, excessive or unreasonable and quite another thing to say that the Court can strike down enactment, if it thinks it to be unreasonable, unnecessary or unwarranted. These principles have been reiterated by the Supreme Court in Goa Glass Fibre Ltd. Vs. State of Goa and another (2010) 6 SCC 499. 27. The question which arises for consideration is as to whether the Goa Cess Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the region directly affected-by mining activity. It was, therefore, proposed to introduce such Bill for the levy of cess on the carriers which transport certain items like coal, coke, sand, murrum, debris, garbage, mineral water bottles using plastic packaging, iron ore, manganese ore, etc. The statement of object and reasons reads thus: Statement of Objects and Reasons The cess on transhipment of mineral ore from one mode of surface transport to another at the rate of Rs. 21/- per tonne of ore transported within the State and Rs. 5/- per tonne of ore (including coal) brought into the State for the purpose of shipping has been proposed in the Budget Speech for the year 2000-2001, relating to Goa Fund. The proceeds are proposed to be put in the Green Goa Fund and utilized for the purpose of improvement of water supply and roads,-as well as, afforestation and control of dust pollution in the region directly affected-by mining activity. It is, therefore, proposed to introduce the present Bill for the levy of cess on the carriers which transport certain items like coal, coke, sand, murrum, debris, garbage, mineral water bottles using plastic packaging, iron ore, ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;Application of proceeds of cess.- An amount equivalent to the proceeds of cess levied under this Act, reduced by the cost of collection as determined by the Government in the prescribed manner, together with any income from investment of the said amount and any other moneys received by the Government for the purposes of this Act shall, after due appropriation made by the State Legislature by law, be utilized by the Government to meet the expenditure incurred in connection with measures which, in the opinion of the Government, are necessary or expedient to promote the welfare of the people residing in the rural areas affected by the movement of carriers transporting material on public roads or dumping of garbage or use of plastics and in particular:- (a) to defray the cost of measures taken for the benefit of the villagers affected by the transportation of material on public roads, as well as, dumping of garbage, material and plastics; (b) for improvement of public health, the prevention of disease and the provision for improvement of medical facilities; (c) for provision and improvement of water supply; (d) for improvement of public roads and the erection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Material Rate 1 Iron ore where royalty is paid to Government Rs.2/- per metric ton 2 Manganese ore where royalty is paid to Government Rs. 2/- per metric ton 3 Bauxite ore where royalty is paid to Government Rs. 2/- per metric to 4 Iron ore where royalty is not paid to Government Rs. 5/- per metric ton 5 Manganese ore where royalty is not paid to Government Rs. 5/- per metric ton 6 Bauxite ore where royalty is not paid to Government Rs. 5/- per metric ton 7 Coal Rs. 5/- per metric ton 8 Coke Rs. 5/- per metric ton 9 Sand Rs. 2/- per cubic meter 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cess levied under this Act, reduced by the cost of collection as determined by the Government in the prescribed manner together with any income from investment of the said amount and any other moneys received by the Government for the purposes of this Act shall, after due appropriation made by the State Legislature by law, be utilized by the Government to meet the expenditure incurred in connection with measures which, in the opinion of the Government, are necessary or expedient to promote the welfare of the people residing in the rural areas affected by the movement of carriers transporting material on public roads or dumping of garbage or use of plastics and in particular: (a) to defray the cost of measures taken for the benefit of the villagers affected by the transportation of material on public roads, as well as, dumping of garbage, material and plastics; (b) for improvement of public health, the prevention of disease and the provision for improvement of medical facilities; (c) for provision and improvement of water supply; (d) for improvement of public roads and the erection of tree barriers for arresting the dust levels; (e) to meet the allowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amely:- 1 Iron ore, where royalty is paid to the Government Rs. 20/- per metric ton 2 Manganese ore, where royalty is paid to the Government Rs. 20/- per metric ton 3 Bauxite ore, where royalty is paid to the Rs. 20/- per metric ton Government 4 Iron ore, where royalty is not paid to the Government Rs. 50/- per metric ton 5 Manganese ore, where royalty is not paid to the Government Rs. 50/- per metric ton 6 Bauxite ore, where royalty is not paid to the Government Rs. 50/- per metric ton 7 Coal Rs. 50/- per metric ton 8 Coke Rs. 50/- per metric ton 9 a) Sand, where royalty is paid to the Government Rs. 2/- per cubic metre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tary (Transport). Panaji, 6th April, 2016. 37. Before we discuss the issues as raised by the parties, we may observe that the legislative competence to enact the Goa Cess Act has been upheld by a Division Bench of this Court in the case Sociedade De Fomento Industrial Pvt.Ltd., Goa (supra). The Division Bench has held that the Goa Cess Act is relatable to Entries 6, 13, 23 and 66 of List II (State List) under the Seventh Schedule to the Constitution, and its validity is not impaired or affected by Entries 52 and 54 of List I. It is also held that it does not in any manner breach the mandate of the Central Act namely Mines and Minerals (Development and Regulation) Act,1957 read with Act 65 of 1951 and Act 53 of 1948 respectively. The Division Bench held that considering the substance and object of the Goa Cess Act and the Rules framed thereunder vis a vis MMDR Act and the Rules framed thereunder, there was no irrevocable conflict between the concerned Union Legislation and the State Legislation. It was observed that the Goa Cess Act and Rules thereunder are targeted for augmentation of revenue to provide infrastructures in the State without impinging on the mineral regulation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught to be realised, had undergone a sea change. The Court observed that in regard to the concept of fee, it is no longer regarded necessary that some specific service must be rendered to the particular individual or individuals from whom the fee is realized, and what has to be seen is whether there is a broad and general co-relationship between the totality of the fee on the one hand and the totality of the expenses of the services on the other. It was observed that a broad co-relationship between the two is sufficient to sustain the levy. The relevant observations of the Supreme Court in this regard are required to be noted which read thus: 15. It is well settled that the basic difference between a tax and a fee is that a tax is a compulsory exaction of money by the State or a public authority for public purposes, and is not a payment for some specific services rendered. On the other hand, a fee is generally defined to be a charge for a special service rendered by some governmental agency. In other words there has to be quid pro quo in a fee vide Kewal Krishan Puri v. State of Punjab, AIR (1980) SC 1008. 16. The earlier view of the Supreme Court was that to sustain th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat is necessary is that there should be a reasonable relationship between the levy of fee and the services rendered and it is not necessary to establish that those who pay the fee must receive direct or special benefit or advantage of the services rendered for which the fee was being paid. It was held that if one who is liable to pay, receives general benefit from the authority levying the fee, the element of service required for collecting the fee is satisfied. 23. In State of West Bengal v. Kesoram Industries Ltd. and Ors., [2004] 10 SCC 201 a Constitution Bench of the Supreme Court (vide para 140) observed: The imposition of cess envisaged through the SADA Act and the Rules was a step towards developing the special area. It is a matter of common knowledge, and does not need any evidence to demonstrate, that mining activity carried on the land within the special area involves extraction, removal, loading-unloading and transportation of the minerals accompanied by its natural consequences entailed on the environment and the infrastructure such as roads, water and power supply etc. within the special area. The impugned cess can, therefore, be justified as a fee fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to a decision of this Court in Vijayalashmi Rice Mill and Ors. v. Commercial Tax Officers, Palakol and Ors.. In this case, their Lordships considered the distinction between fee, cesses and taxes. Their Lordships held that ordinarily a tax generates general revenue not for any service rendered. However, the nomenclature is not important. Sometimes a 'tax' may be in reality a fee, depending upon its nature. It was observed that the earlier concept of fee has undergone a sea change and rendering of some specific service to a particular payer of fee is no longer considered necessary to sustain the levy of fee provided there is a broad and general correlationship between the totality of the fee imposed and the totality of the expenses on the service rendered. This discussion makes it clear that the distinction between a tax and a fee remains, even though the concept of a fee has undergone a sea change. (emphasis supplied) 41. In Consumer Online Foundation Ors. Vs. Union of India Ors. (2011) 5 SCC 360 the Supreme Court was considering the decision of the Delhi High Court upholding levy of development fees on the embarking passengers, by the lessees of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge. The Division Bench thus observed that the State does not have to show with a mathematical exactitude, that the fee charged corresponds to the service provided, but some link is required to be established between the fees collected and the benefit conferred. It was observed that it was good enough to establish that a link exists but it need not be direct. Considering the material on record, it was observed that sufficient evidence was placed on record of spending the money, both on road infrastructure and welfare activities. It was observed that it could not be said that the petitioners do not benefit at all from the services rendered and that there is not even a remote connection. It was held that the Goa Cess Act and the Rules are a device for the State to augment its resources and the services rendered by the collection of the levy, benefits the petitioner as well, and there existed a co-relationship. It was thus observed that the Goa Cess Act and the Rules, whether it imposes a tax or fee, could not be said to be unconstitutional. The Division Bench referring to the decision in Kesoram (supra) it was observed that it was immaterial that the nature of the impost is fee or ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices rendered is not a condition precedent, nor it is confined to the contributors alone. A broad co-relationship is all that is necessary. It is also not necessary that services nor the incidence of the fee has to be uniform. The element of quid pro quo is not always possible, nor necessary, to be established by direct evidence. Thus, the traditional view of strict quid pro quo has undergone a substantial change. The State does not have to show with a mathematical exactitude that the fee charged corresponds to the service provided, but some link is required to be established between the fees collected and the benefit conferred. It is good enough to establish that a link exists but it need not be direct. 58. Sufficient evidence placed on record of spending the money, both on road infrastructure and welfare activities. It cannot be said that the Petitioners do not benefit at all from the services rendered and that there is not even a remote connection. The Goa Cess Act and the Rules are a device for the State to augment its resources. The services rendered by the collection of the levy benefits the Petitioner as well, and there exists a co-relationship. Therefore, the Goa C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is required to be held as unconstitutional under the provisions of Article 301 of the Constitution. 46. As the challenge raised by the petitioner to the levy under the Goa Cess Act is premised on the provisions of Article 301, 302, 303 and 304 of the Constitution, the said provisions are required to be noted, which read thus:- Article 301 Freedom of trade, commerce and intercourse. Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free. Freedom of trade, commerce and intercourse. Article 302. Power of Parliament to impose restrictions on trade, commerce and intercourse.: Parliament may by law impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest. Power of Parliament to impose restrictions on trade, commerce and intercourse. Article 303 Restrictions on the legislative powers of the Union and of the States with regard to trade and commerce. (1) Notwithstanding anything in article 302, neither Parliament nor the Legislature of a State shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trade and commerce in any of the Lists in the Seventh Schedule. However, the exception as made by sub-clause (2) of Article 303 is to the effect that the provision recognizes the power of the Parliament to make any law giving, or authorising the giving of, any preference or making, or authorising the making of, any discrimination if it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India. Article 304 when it provides for restrictions on trade, commerce, and intercourse is again an exception to Article 301, or Article 303 which recognizes the powers with the legislature of a State to make law so as to impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so however as, not to discriminate between goods so imported and goods so manufactured or produced; and further to impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest. However, for introducing such Bill, previous sanction of the President would be necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held by the Supreme Court in the case of State of West Bengal vs. Kesoram (supra). 50. The question, however, is whether the Goa Cess Act would violate Article 301 of the Constitution. For Article 301 to be attracted, the primary consideration would be whether the Goa Cess Act imposes restriction on trade, commerce and intercourse amongst the States within the meaning of Article 304(a) of the Constitution. Article 304(a) begins with the non-obstante clause when it provides Notwithstanding anything in Article 301 or Article 303, so as recognized that the Legislature of a State may by law a) impose on goods imported from other States or Union territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; b) so as to impose such reasonable restriction on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest. 51. By now it is well settled that clauses (a) and (b) of Article 304 are required to be read disjunctively. Clause (a) of Article 304 provides for imposition of any tax on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terials as listed under the schedule to the Act, the spillage of which is a potential threat to the health and welfare of the people and a cause of serious concern to the environment necessitating its preservation. 52. Now we may test whether in reality any restriction is brought about in the rights of the petitioners on freedom of trade, commerce and intercourse. The case of the petitioners is that they are transporting the ores from Karnataka either for further transportation through the Mormugao Port in the State of Goa to other places and/or for the purpose of use in its own units situated in Goa. The carrier of such ore entering Goa is what would be subject to a levy of cess under the Goa Cess Act. The case of the petitioners is that such material ores which are being brought in from other States are subjected to levy of cess, whereas such cess is not levied on the ore which is mined in Goa and for which royalty and other charges are paid. On such reason, the petitioners contend that there is a restriction imposed on the petitioners by levy of cess under the Goa Cess Act and which would be violative of Article 301. 53. We are afraid to accept such contention for more tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discriminating between the goods imported and goods so manufactured or produced in Goa as discussed hereinabove. It also does not impose any restriction whatsoever on the freedom of trade, commerce or intercourse with or within the State falling under the meaning of Clause (b) of Article 304. A reference to the position in law would aid the discussion. 54. In State of West Bengal vs. Kesoram Industries Ltd. (supra), a Constitution Bench of the Supreme Court in considering the levy of cess as imposed by the State of West Bengal inter alia on the coal bearing land which was struck down by the High Court as unconstitutional for want of legislative competence observed that there was nothing wrong in the state legislation levying cess by way of tax so as to generate its funds. It was observed that although it was termed as, a 'cess on mineral right', the impact thereof fell on the land delivering minerals. It was observed that the levy of cess also fell within the scope of Entry 49 of List II apart from clearly falling under Entry 5 of List II and Entry 50 of State List II. It was observed that the levy of cess on mineral rights does not contravene any of the limitations impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 55. We may also observe that the contentions of the petitioners in assailing the Goa Cess Act on the ground that it violates Article 301 even otherwise are also not well-founded for the reason that the freedom as enshrined under Article 301 would not mean that the State is denuded of its power to levy a fee or a tax within the source of its legislative power as conferred under List II and List III of the Constitution. Merely because a cess is levied, it cannot be said that ipso facto a restriction on freedom of trade is sought to be imposed. The endeavour of the Court would be to consider Article 301 in the context of Article 304, namely, as to whether any discrimination is brought about and secondly, whether any reasonable restriction on freedom of trade, commerce and intercourse is being foisted by the legislation. Thus, when neither a discrimination is brought about by imposing such levy or in other words, such levy which is non- discriminatory in nature and/or also when there is no restriction much less any reasonable restriction, is imposed/brought about on freedom of trade or commerce, there is no question of an argument of such levy being violative of Article 301 being attra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng its legislative power under Schedule VII List II Entry 52 to the Constitution in enacting laws that provided for a levy of tax on the entry of goods into local areas comprising the States . The Constitutional validity of such levies was questioned before different High Courts by assesses / dealers aggrieved by the same, inter alia on the ground that the same were violative of the constitutionally recognized right to free trade commerce and intercourse guaranteed under Article 301 of the Constitution of India. The levies were also assailed on the ground that the same were discriminatory and, therefore, violative of Article 304(a) of the Constitution of India. Absence of Presidential sanction in terms of Article 304(b) of the Constitution of India was also set-up as a ground of challenge to the levies imposed by the respective State legislatures. A Division Bench of the Punjab and Haryana High Court had dismissed a writ petition which assailed the constitutional validity of the Haryana Local Development Act, 2000, relying upon the decisions of the Supreme Court in Atiabari Tea Co. Ltd. v. State of Assam Ors. AIR 1961 SC 232; Automobile Transport (Rajasthan) Ltd. etc. v. State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treating taxes as a restriction per se, specifically recognizes the State legislature s power to impose the same on goods imported from other States or Union Territories. The observations of the Supreme Court in the majority judgment, relevant in the context in hand can be noted hereunder: 67. Three distinct aspects touching the question need be noticed straightaway: 67.1. The first and the foremost of these aspects is that the concept of compensatory taxes is not recognised by the Constitution. A tax is a compulsory exaction of money for general public good and is defined as under by Thomas M. Cooley in his book The Law of Taxation at p. 61 (Clark A. Nichols ed., 4th Edn. 1924) as: Taxes are the enforced proportional contributions from persons and property, levied by the State by virtue of its sovereignty for the support of Government and for all public needs. This definition of taxes, often referred to as Cooley's definition , has been quoted and endorsed, or approved, expressly or otherwise, by many different courts. While this definition of taxes characterises them as contributions , other definitions refer to them as imposts , duty or impost , charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, AIR 1954 SC 282 : 1954 SCR 1005], Jagannath Ramanuj Das v. State of Orissa [Jagannath Ramanuj Das v. State of Orissa, AIR 1954 SC 400], Hingir-Rampur Coal Co. Ltd. v. State of Orissa [Hingir-Rampur Coal Co. Ltd. v. State of Orissa, AIR 1961 SC 459], Corpn. of Calcutta v. Liberty Cinema [Corpn. of Calcutta v. Liberty Cinema, AIR 1965 SC 1107], Kewal Krishan Puri v. State of Punjab [Kewal Krishan Puri v. State of Punjab, (1980) 1 SCC 416], Krishi Upaj Mandi Samiti v. Orient Paper and Industries Ltd. [Krishi Upaj Mandi Samiti v. Orient Paper and Industries Ltd., (1995) 1 SCC 655], State of Gujarat v. Akhil Gujarat Pravasi V.S. Mahamandal [State of Gujarat v. Akhil Gujarat Pravasi V.S. Mahamandal, (2004) 5 SCC 155] and State of W.B. v. Kesoram Industries Ltd. [State of W.B. v. Kesoram Industries Ltd., (2004) 10 SCC 201 : AIR 2005 SC 1646] ) 67.3. Thirdly, and lastly, the concept of compensatory taxes being outside Part XIII, is difficult to apply in actual practice. Experience in the present batch of cases has amply demonstrated that difficulty. Most of the legislations enacted by the States in these cases have described the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 76.6. Such power to levy taxes is however subject to the condition that similar goods manufactured or produced in the State levying the tax are also subjected to tax and that there is no discrimination on that account between goods so imported and goods so manufactured or produced. 76.7. The limitation on the power to levy taxes is entirely covered by clause (a) of Article 304 which exhausts the universe insofar as the State Legislature's power to levy of taxes is concerned. 76.8. Resultantly, a discriminatory tax on the import of goods from other States alone will work as an impediment on free trade, commerce and intercourse within the meaning of Article 301. 76.9. Reasonable restrictions in public interest referred to in clause (b) of Article 304 do not comprehend levy of taxes as a restriction especially when taxes are presumed to be both reasonable and in public interest. (emphasis supplied) 61. Answering question No. 1 (as framed in paragraph 11.1) the majority judgment observed thus: 127. In the light of what we have said above, we answer Question (i) in the negative and declare that a non-discriminatory tax does not per se constitute a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 and 16, it may well be that the statute will, without more, incur condemnation as violating a specific constitutional prohibition unless it is saved by one or other of the provisos to those articles. But the position under Article 14 is different. Equal protection claims under that article are examined with the presumption that the State action is reasonable and justified. This presumption of constitutionality stems from the wide power of classification which the legislature must, of necessity, possess in making laws operating differently as regards different groups of persons in order to give effect to its policies. 135. Fazl Ali, J. in his concurring judgment explained the concept in the following words : ( Kathi Raning case [Kathi Raning Rawat v. State of Saurashtra, (1952) 1 SCC 215 : AIR 1952 SC 123 : 1952 Cri LJ 805] , AIR p. 127, para 19) 19. I think that a distinction should be drawn between discrimination without reason and discrimination with reason . The whole doctrine of classification is based on this distinction and on the well-known fact that the circumstances which govern one set of persons or objects may not necessarily be the same as those govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respective territories by granting incentives and exemptions necessary for such growth and development. The argument that power to grant exemption cannot be used by the State even in cases where such exemptions are manifestly intended to promote industrial growth or promoting industrial activity has not appealed to us. The power to grant exemption is a part of the sovereign power to levy taxes which cannot be taken away from the States that are otherwise competent to impose taxes and duties. The conceptual foundation on which such exemptions and incentives have been held permissible and upheld by this Court in Video case [Video Electronics (P) Ltd. v. State of Punjab, (1990) 3 SCC 87 : 1990 SCC (Tax) 327] is, in our opinion, juristically sound and legally unexceptionable. Video Electronics [Video Electronics (P) Ltd. v. State of Punjab, (1990) 3 SCC 87 : 1990 SCC (Tax) 327], therefore, correctly states the legal position as regards the approach to be adopted by the courts while examining the validity of levies. So long as the differentiation made by the States is not intended to create an unfavourable bias and so long as the differentiation is intended to benefit a distinct cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecisions of this Court in Atiabari [Atiabari Tea Co. Ltd. v. State of Assam, AIR 1961 SC 232 : (1961) 1 SCR 809], Automobile Transport [Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan, AIR 1962 SC 1406 : (1963) 1 SCR 491] and Jindal [Jindal Stainless Ltd. (2) v. State of Haryana, (2006) 7 SCC 241] cases and all other judgments that follow these pronouncements are to the extent of such reliance overruled. 1159.7. A tax on entry of goods into a local area for use, sale or consumption therein is permissible although similar goods are not produced within the taxing State. 1159.8. Article 304(a) frowns upon discrimination (of a hostile nature in the protectionist sense) and not on mere differentiation. Therefore, incentives, set-offs, etc. granted to a specified class of dealers for a limited period of time in a non-hostile fashion with a view to developing economically backward areas would not violate Article 304(a). The question whether the levies in the present case indeed satisfy this test is left to be determined by the regular Benches hearing the matters. 1160. States are well within their right to design their fiscal legislations to ensure that the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des or skins purchase in the raw condition in the State. It was contended that such discriminatory taxation was said to be offend the provisions of Article 304(a) of the Constitution. It was in such context, the Supreme Court considered the provisions of Article 301 of the Constitution and as construed in the case of Atiabari Tea Co. Ltd. Vs. State of Assam (supra) and in Automobile Transport (Rajasthan) Ltd. VS. State of Rajasthan (supra) (overruled in the decision in Jindal (Supra)). The Supreme Court held that the contention that Article 304(a) would be attracted only when the impost was at the holder that is when the goods enter the State on cross the border of the State, is not a sound proposition as Article 304 (a) allowed the Legislature of a State to impose taxes on goods imported from other States and does not support the contention that the imposition must be at the point of entry only. We are at a loss to understand as to how such decision can support the case of the petitioners, as certainly any principle which would be applicable in the context of the Sales Tax Act, may not be relevant in the present context, where the question is imposition of cess on carriers tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law. In any event the decision in H. Anraj (supra) was overruled by the Supreme Court in Sunrise Associates vs. Govt. of NCT of Delhi Ors. (2006)5 SCC 603 holding that H. Anraj incorrectly held that sale of a lottery ticket involved a sale of goods. In such decision, it was held that there was no sale of goods within the meaning of Sales Tax Acts of the different States but at the highest a transfer of an actionable claim. The decision to the extent that it held otherwise was accordingly overruled though prospectively with effect from the date of the said judgment. 69. Similarly the decision in Goodyear India Ltd. v. State of Haryana (supra) as relied on behalf of the petitioners, is also not applicable in the facts of the present case. It was a case in regard to imposition of purchase tax under Section 9(1)(b) of Haryana General Sales Tax Act, 1973, at the point of despatches of the goods made by the petitioner therein of the goods to the depots outside the State. It is seen that such decision has also been overruled. 70. On behalf of the petitioners, reliance is also placed on the decision in Gujarat Ambuja Cements Ltd. Anr. Vs. Union of India Anr. (2005) 4 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... containers projected by Shri S. T. Desai, counsel for the assessee appellant but, on further reflection, we veered round to the view presented by Shri Sanghi, for the state, that after all law is not always logic and taxation considerations may stem from administrative experience and other factors of life and not artistic visualisation or neat logic and so the literal, through pedestrian, interpretation must prevail. 72. In our opinion, these farsighted observations of Justice Krishna Iyer are aptly applicable in considering the legislation in hand. We discuss the reasons for the same. There cannot be two opinions that the transportation of materials of the nature which are provided for in Schedule I of the Goa Cess Act and that too within a small State like Goa, which has a meager land mass would certainly bring about situations of serious issues of public health, for the reason that it is undisputedly that not only normal transportation but such heavy transportation of materials in trucks/heavy vehicles are bound to cause large scale pollution and damage to the environment. There also cannot be two opinions that pollution caused by such transportation would be of varied n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss discriminates between the ore which is locally mined, wherein mining-lease royalty is paid to the Government of Goa and the ore which is mined outside Goa and transport the ore into the State of Goa, in respect of which royalty is not paid to the Government of Goa. The petitioners have also contended that there is no distinction between such ores for the reason that royalty is levied on all minerals, wherever they are mined. Hence, the ores being transported into the State of Goa in the course of inter-state commerce is not royalty-free , as the royalty on ore in the petitioner s case is paid in the State of Karnataka. Also 10% of sales proceeds of ore payable into the Goa Iron Ore Permanent Fund as per the decision of Supreme Court in Goa Foundation v. Union of India Ors. (supra) cannot justify the discriminatory impugned Cess, as the ore in Karnataka is also subjected to such charge as per the decision of Supreme Court in Samaj Parivartan Samudaya vs. State of Karnataka (supra). 76. We are also not inclined to accept the petitioners contention that the Goa Cess Act brings about any discrimination and is violative of Article 14 of the Constitution. We do not find tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not vulnerable on the ground of discrimination merely because it taxes or exempts from tax some incomes or objects and not others. 78. It is well settled that Article 14 does not forbid reasonable classification of persons, objects and transactions by the legislature for the purpose of attaining specific ends. Such principle was reaffirmed by the Supreme Court in R.K. Garg And Ors. vs Union Of India (UOI) And Ors. (1981) 4 SCC 675 when the Supreme Court in the context of a decision of the Supreme Court in Re: Special Courts Bill observed thus: 6. That takes us to the principal question arising in the writ petitions namely, whether the provisions of the Act are violative of Article 14 of the Constitution. The true scope and ambit of Article 14 has been the subject matter of discussion in numerous decisions of this Court and the propositions applicable to cases arising under that Article have been repeated so many times during the last thirty years that they now sound platitudinous. The latest and most complete exposition of the propositions relating to the applicability of Article 14 as emerging from the avalanche of cases which have flooded this Court since the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the legislature. The question to which we must therefore address ourselves is whether the classification made by the Act in the present case satisfies the aforesaid test or it is arbitrary and irrational and hence violative of the equal protection clause in Article 14. 7. Now while considering the constitutional validity of a statute said to be violative of Article 14, it is necessary to bear in mind certain well established principles which have been evolved by the courts as rules of guidance in discharge of its constitutional function of judicial review. The first rule is that there is always a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. This rule is based on the assumption, judicially recognised and accepted, that the legislature understands and correctly appreciates the needs of its own people, its laws are directed to problems made manifest by experience and its discrimination are based on adequate grounds. The presumption of constitutionality is indeed so strong that in order to sustain it, the court may take into considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid. The courts cannot, as pointed out by the United States Supreme Court in Secretary of Agriculture v. Central Roig Refining Company be converted into tribunals for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The Court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act being violative of Article 14 of the Constitution on the ground that there is no intelligible differentia distincting coal and coke used by industries in the State and outside the State, which we have extensively discussed hereinabove. 81. Insofar as Mr. Nadkarni s reliance on the decision of the Supreme Court in the case of State of Uttar Pradesh Ors. vs. Jaiprakash Associates Ltd. along with companion appeals (2014) 4 SCC 720, in our opinion, this decision would also not assist the petitioners. In such decision, the Court considering whether grant of rebate of tax by the State Government by issuing a notification in exercise of its powers under section 5 of the Uttar Pradesh Trade Tax Act. 1948 discriminates between the goods imported from neighbouring States and goods manufactured and produced in the State of Uttar Pradesh and it is in such context, whether the provisions would contravene the Constitutional provisions of Articles 301 and 304(a) of the Constitution of India. We may observe that the context in which the Supreme Court considered the issues as raised under Articles 301 and 304(a) of the Constitution of India is certainly not an issue as would be applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les of equality as enshrined under Article 14 of the Constitution in the State of Goa, exercising powers under Section 3 of the Goa Cess Act in prescribing the rate of cess to be levied of different categories of materials. It is well settled that fixation of rates of cess is within the domain of the rule making power of the authority and unless there is some strong material, that the rates as fixed are unconscionable and/or are patently arbitrary, it would not be appropriate for the Court to question the wisdom of the Government in fixing of the rates. Even otherwise fixing of rates is a matter of expertise which would depend on several factors to be considered. It would completely lie within the powers of the rule making authority to fix the rates. Except for a bald case of breach of Article 14, no material is placed on record to contend that the rates so arrived at and fixed by the State of Goa as issued by different notifications need interference. We, therefore, cannot accept the petitioner s case relying on the decision of UOI vs. N.S. Rathnam and Sons (supra). (IV) Challenge on the ground of GST Laws 83. The contention as urged on behalf of the petitioners that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Council as conferred by Article 279A of the Constitution, in as much as, in the absence of the GST Council refraining from taking a decision to subsume the Goa Cess Act in the GST laws, it would not be correct for the petitioners to assert that the Goa Cess Act would fall within the ambit of the GST laws. Thus, such contention of the petitioners in reading transportation of iron ore in the context of Goa Cess Act, to be a supply/service under the GST Act is totally fallacious. The object of GST laws is totally distinct from the object and purpose of the Goa Cess Act. Even the expert body namely the GST council has refrained from subsuming and thereby recommending the repeal of the Goa Cess Act in view of the incorporation of the GST laws. It would not be out of place to mention that Entry 52 of List II which dealt with taxes on entry of goods into local area for consumption use or sale therein and Entry 55 of List II inter alia in regard to taxes on advertisement, have been repealed, that too without any corresponding amendment in Entry 66 of List II. It is therefore, an unwarranted exercise on the part of the petitioners in making an attempt to attack the validity of the Goa Cess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, the relevant in the present context are noted hereunder: . c) The Municipal Corporations shall ensure that the metal sheets around construction sites are erected of sufficient height to ensure that dust from the construction sites shall not be spread over. d) To separate the dust generated on construction sites, the Municipal Corporations shall ensure that regular and continuous water sprinkling is done by the project proponents/construction agencies. f) It shall be ensured by all concerned that no construction debris is carried or transported to or out of the construction site. It shall also be ensured that all construction material being taken to the construction site including the ready-mix concrete is transported to the construction site in fully covered trucks or mixer plants. g) On the next date, if the air quality does not substantially improve, the Court may pass an order banning transportation of the construction material in and out of the construction sites. h) We also direct that the Authorities shall ensure that no burning of any waste, including solid waste is permitted in open areas, specially at the dumping sites where the municip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertainly part of the business of the Petitioners, it is not in dispute that such transportation is causing environmental issues affecting the health of the citizens by such pollution, then certainly the State was not powerless under the federal structure of the Constitution and the legislative powers as it would wield to enact the legislation of the nature as impugned before us. 92. It also cannot be expected that a small State like Goa is Constitutionally prevented from augmenting revenue for the purpose of improvement of infrastructure and health with a view to promote welfare of the people and more particularly belonging to the rural areas, who become victims of such commercial activities. The polluter pays is the principle which is well recognised. The present Act therefore precisely deals with the societal needs of having an effective infrastructure, which would not only be in the interest of the commercial activities as undertaken by the Petitioners, but also in regard to the health and welfare of the people of Goa residing in rural areas. One can imagine a situation of the persons residing in rural areas in the absence of such transportation activities and whether such pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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