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2003 DIGILAW 411 (JK)

Walia Construction Co. v. State Of J. &K.

2003-12-24

Y.P.NARGOTRA

body2003
With the consent of learned counsel for the parties the petition has been admitted to hearing and taken up for final disposal. 2. The controversy involved in this case pertains to levy of toll tax upon the goods and exemption thereon. The petitioner-firm deals in running the Hot Mix plant and also takes contracts for road construction and improvement thereof. The petitioner tendered and has been awarded the contract for resurfacing by providing and laying 4 cm thick dense bituminous concrete renewal coat on pathankot-Jammu road (National Highway 1A) in reaches K.M 33 to 38,50 and 40 to 51.50 during the year 2003-2004. The estimated cost of the contract awarded to the petitioner is at Rs.154110991/-. The case of the petitioner is that he tendered the contract at 6.23% below the estimated cost of the work because of the fact that there was an exemption issued u/s 5 of Levy of Tolls Act, 1995 vide SRO 132 of 1988. However when his vehicles started carrying concrete premix imported by the contractors engaged by the Central Public Works Department at Damtal to the site of work, after crossing Lakhanpur, the respondents insisted for payment of additional and special toll. The petitioner denies his liability thereto and hence he has filed the present writ petition and this way the question arising for consideration is as to whether the goods i.e. concrete premix carried in the vehicles of the petitioner is liable to pay toll tax. 3. The respondents were put on notice. Their stand is that the petitioner is liable to pay toll in view of the provisions contained in SRO 225/2003, which SRO has not been challenged by the petitioner. It has been pleaded by the respondents that as per the proviso contained in SRO 225/03 issued after the amendments of sec.3 of Levy of Toll Act, 1995 the petitioner is liable to pay tax on the goods as well as the vehicles. 4. I have heard the learned counsel for the parties. Levy of Tolls is governed by the Act known as "Levy of Tolls Act 1995" (hereinafter referred to as the Act), which was enacted top consolidate in one Act the provisions for levy of tolls upon public roads and bridges in the Jammu & Kashmir State. Section 3 of the Act is reproduced as under:- "3. Levy of Tolls is governed by the Act known as "Levy of Tolls Act 1995" (hereinafter referred to as the Act), which was enacted top consolidate in one Act the provisions for levy of tolls upon public roads and bridges in the Jammu & Kashmir State. Section 3 of the Act is reproduced as under:- "3. Rate of toll to be levied -- (1) The Government may from time to time prescribe, annual or alter rates of tolls to be levied upon any road ferry or bridge in the State and may plaid the collection of such tolls under such management as may appear to it, and all persons employed in the management and collection of such tolls shall be liable to the same responsibilities as would belong to them if employed in such collection of the excise revenue under Jammu and Kashmir Excise Act 1958. (2) The rates prescribed to be levied at the commencement of this Act shall be the rates mentioned in the first schedule hereto annexed,. The rates shall continue to be levied till they are annulled or altered in accordance with the provisions of this section. (3) The power to annul or alter the rates vested in the Government under the foregoing provisions of this section may be exercised from time to time after publication in the Government Gazette. The amendment and alteration shall have the same force and effect as if they had been contained in the first schedule. (4) The persons under whose management the tolls are levied at the commencement of this Act shall levy the tolls prescribed and shall be held to have been appointed for collection of tolls under the provisions of this Act, (5) The Government may, from time to time, notify the commodities in respect of which tolls may be levied on ad-valorem basis, subject to a maximum of 15% of the value of purchase." Section 5 of the Act deals with exemptions from levy of tolls prescribed u/s 3. It reads as under:- "5.Exemption from tolls-The Government may from time to time define and grant exemptions from payment of tolls levied under this Act." 5. The schedule attached with the Act prescribes different amounts of tolls with regard to different kind of modes of transportation. It reads as under:- "5.Exemption from tolls-The Government may from time to time define and grant exemptions from payment of tolls levied under this Act." 5. The schedule attached with the Act prescribes different amounts of tolls with regard to different kind of modes of transportation. Upto 1966 it appears that toll was being levied on vehicles and other modes of transportation but the goods carried through these modes were not being taxed. Then SRO 379 dated 14.9.1967 was issued whereby additional toll was ordered to be levied on the vehicles carrying fruit produce in the State @ 2 per 37 KGs. After issuance of SRO 379 the Government started collecting toll on the goods by issuance of different SROs and notifications. On 20.8.1982 vide SRO 348 the Government of J&K levied additional toll on dry fruits like almond, walnuts and walnut kernel which was being carried through vehicles. The validity of the said SRO came to be considered by the Full Bench of this Court. The petitioner in a writ petition questioned the validity of levy of additional toll tax on dry fruits to be exported out of the State through the barriers located at Lakhanpur, Jammu Railway Station, Manwal and other toll posts. The Full Bench of this Court held the levy of additional toll tax valid and the case was sent back to the Division Bench for disposal. The Division Bench took note of the decision of the Full Bench and accordingly dismissed the writ petitions. The petitioners in that case went in SLP before the Supreme Court and their lordships of the Supreme court examined the validity of the said SRO vide their judgment given in the case titled Hansraj and Sons v. State of J&K, AIR 2002 SC 2692. Their lordships interpreted the expression `toll as follows:- "The expression `toll normally means a definite payment exacted by the State or the local authority, by virtue of sovereignty or lordship, or in return for protection; more especially, for permission to pass somewhere, do some act, or perform some function. Another meaning attributed to the term is a charge for the landing or shipping goods at a port; a charge made for transport of goods esp. by railway or canal. The expression `toll thorough means where a town prescribes to have toll for every beast that goes through their town. Another meaning attributed to the term is a charge for the landing or shipping goods at a port; a charge made for transport of goods esp. by railway or canal. The expression `toll thorough means where a town prescribes to have toll for every beast that goes through their town. The term `toll traverse means where one claims to have an amount for every beast that is driven over his ground.(See The shorter Oxford English Dictionary on Historical Principles revised and edited by C.T. Oninos. Third Edition Volume II page 2206)," Their lordships further observed:- " It is clear from the above that though tolls are of different types and may be levied in different situations, it ordinarily means the amount which the Government or a local authority or a person duly authorized by the government may collect for passage of carries and vehicles over a road or bridge,. This meaning is by no means exhaustive. Where provision for levy and collection of tolls is made under the legislative enactment or a subordinate legislation then the levy is to be governed strictly according to the provisions of the statute or rules or any other instrument, as the case may be." Their lordships while referring to the Act in question further observed as under:- "21. In the schedule to the Act are enumerated vehicles of different types and the rates at which the toll is to be charged in respect of the same. The schedule bears the heading "Through Traffic up and down crossing the Domell Toll Stations per trip each way". From the contents of the schedule it is clear that the statute contemplates levy of toll for crossing upon different roads and bridges in the State and the State is vested with the power to prescribe by notification the toll rate of the levy and manner of collection of the same. The scheme of the statute does not envisage levy of toll on goods or on any transaction of sale thereof. It is clearly a levy upon user of public roads and bridges in the State. The scheme fits in with the concept of tolls, be it toll traverse or toll thorough, to be levied in lieu of the advantage or privilege provided by the State Government for user of roads and bridges lying within the State. It is clearly a levy upon user of public roads and bridges in the State. The scheme fits in with the concept of tolls, be it toll traverse or toll thorough, to be levied in lieu of the advantage or privilege provided by the State Government for user of roads and bridges lying within the State. For the purpose of the levy the agency which has constructed the roads or bridges in question or the source of finance for implementation of the project are not relevant. On a prima facie reading of the provision in section 3(1) it is manifest that the notification is not in conformity with the power vested in the State Government under the section. On a plain reading of the notification it is clear that the intention is to levy toll on dry fruits including almonds, walnuts and walnut kernels exported out of the State through certain exit points by road or railways. The power to impose such a levy does not flow from the power vested in section 3 of the Act in purported exercise of which the notification has been issued." "It is made clear that this judgment will have only prospective operation and any amount collected as tax/additional toll tax under the impugned notification need not be refunded." 6. By the above quoted judgment of the Supreme court law was settled that under the Act of 1995 additional toll tax could not be levied by the State on the goods being carried in the vehicles or other modes of transport. Confronted with this situation the State legislature carried out an amendment in the Act called "Levy of Tolls Amendment Act 2002" which came into force on 17th July 2002 (the date on which the Supreme court passed the above said judgment in Hansrajs case supra). In the preamble of the Act for the words "Jammu and Kashmir State" the words "the state in respect of men, animals, vehicles, machinery, commodities and goods in any form whatsoever" were substituted. Likewise in sub-sec(1) of sec.3 for the words "in the state" the words "in the state in respect of men, animals, vehicles, machinery, commodities and goods in any form whatsoever" came to be substituted. This Amendment Act in fact replaces the Levy of Tolls Ordinance 2002 and sec.4 of the Amendment Act reads as follows:- "4. Likewise in sub-sec(1) of sec.3 for the words "in the state" the words "in the state in respect of men, animals, vehicles, machinery, commodities and goods in any form whatsoever" came to be substituted. This Amendment Act in fact replaces the Levy of Tolls Ordinance 2002 and sec.4 of the Amendment Act reads as follows:- "4. Repeal and saving -- (1) The Levy of Tolls (Amendment) Ordinance,2002 (Ordinance No.II of 2002) is hereby repealed. (2) -- Notwithstanding such repeal, anything done, any action taken, any order or notification issued, under any of the provisions of law repealed under sub-section(1) shall be deemed to have been done, taken or issued under the corresponding provisions of this Act as if such provisions of this Act were in force on the day such thing was done, action was taken or notification was issued." 7. Thus by amendment of the Preamble and sec.3 (1) of the Act a power to charge toll tax on the goods and commodities etc. stands conferred on the State and after the said amendment the Government issued SRO 2256/03 in exercise of powers conferred by sub-sec.(1) and sec.5 of sec(3) of the Act and directed thereby that the basic and additional toll for heavy and light vehicles, goods carriers and goods respectively shall be levied at the Toll stations and at the rates as specified in annexure A, B & C annexed to the notification. The goods to be carried by the petitioner are covered by annexure `C to the notification and provide for charging of toll tax @ Rs. 40/- per quintal. The petitioner has not challenged the legality or validity of SRO 225. His case is that under SRO 132 issued by the Government on 8.4.1988, had exempted the concrete premix imported by the contractors engaged by C.P.W.D. Lakhanpur for carrying out improvement of the national highway from payment of toll tax. 40/- per quintal. The petitioner has not challenged the legality or validity of SRO 225. His case is that under SRO 132 issued by the Government on 8.4.1988, had exempted the concrete premix imported by the contractors engaged by C.P.W.D. Lakhanpur for carrying out improvement of the national highway from payment of toll tax. Learned counsel for the petitioner on the basis of SRO 132 argued that presuming that the State government had the power to impose tax upon the goods in the year 1988, even then according to him under SRO 132 imposition of tax upon concrete pre mix stood exempted and this exemption granted by the State Government continued to be in force as it has not been revoked by any notification or order of the Government and, therefore, the goods carried by the petitioners cannot be taxed u/s 3(1) of the Act. 8. On the other hand the contention of learned Advocate General is that firstly the exemption granted under SRO 132 was granted when the State in fact did not possess power to impose tax on the goods, as has been held by the Supreme Court in Hansrajs case(supra) and, therefore, once there was no power to impose tax there could not be any question of exemption on imposition of tax. So, according to him, SRO 132 is of no consequence to the case of the petitioner. Secondly he has argued that under SRO only the vehicles carrying concrete premix were exempted from payment of additional and special toll leviable under the said Act,. Therefore, if at all the petitioner is entitled to exemption he is entitled exemption only on the vehicles and not on the goods exported in them. He has argued that after the amendment of the Act State Government has power to impose tax on the goods as swell as on the vehicles and in exercise of that power the State has issued SRO 225 of 2003 under which the goods carried in the vehicles of the petitioners are liable to be taxed and, therefore, the petitioner has no case. SRO 132 relied upon by the petitioner reads as under:- "SRO 132 -- In exercise of the powers conferred by section 5 of the Levy of Tolls Act, Samvat 1995 (VIII of 1995) the Government hereby exempt the vehicles carrying the concrete premix imported by the contractors engaged by the Central Public Works Department Madhopur for carrying improvement of National Highway IA Pathankot-Jammu road (from Madhopur to Vijaypur and Samba) from payment of additional toll and special toll leviable under the said Act. Provided that every such vehicle shall obtain a certificate from the Executive Engineer, Central Public Works Department, Madhopur to the effect that the vehicle is carrying concrete premix required for the improvement of National Highway No.IA viz. Pathankot-Jammu road from Madhopur to Vijaypur and Samba. This notification shall be deemed to have come into force with effect from 1.2.1988." 9. From the bare reading of this SRO it transpires that the Government has granted exemption not only to the vehicles carrying concrete premix imported by the contractors engaged by the C.P.W.D. for carrying improvement of National Highway No.IA viz. Pathankot-Jammu road (Madhopur,Vijaypur and Samba) but have also exempted the concrete premix imported by the said contractors from payment of additional toll or special toll leviable under the said Act. Had the intention of the Government been to exempt only the vehicles, the Government would not have used the expression "additional toll and special toll" in the SRO. From SRO 225 also it is evident that the expression "additional toll " refers to the goods and not to the vehicles. Nor such expression "additional or special toll" find any mention in section 3. By the use of the expression "additional toll and special toll" in SRO 132 it is manifest that the Government intended to exempt concrete premix being imported into the State for effecting repairs and improvement to the national highway. 10. Be it so, the fact remains that in view of the judgment rendered in Hansrajs case the State Government had no power to charge toll tax on the goods when SRO 132 was issued. If the State Government had no power to charge toll tax on the goods being imported in the State in the year 1988 and still if the tax was being charged, it was without any authority of law. If the State Government had no power to charge toll tax on the goods being imported in the State in the year 1988 and still if the tax was being charged, it was without any authority of law. Therefore, there would be no question of granting exemption from charging of the tax on goods u/s 5 of the Act. The exemption if any granted was without any competence. 11. Be that as it may, after coming into operation the Amendment Act of 2002 on 17.7.2002 the State Government stands vested with the power to impose tax on goods. After 17.7.2002 admittedly no exemption has been granted on the concrete premix to be imported by the contractors from out side the State. The contention of learned counsel for the petitioner is that exemption granted u/s 5 by SRO 132 be held to be still in force in view of the provisions contained in Levy of Toll (Validation) Act 2000. Sec.2 of the Act reads as under:- "2. Validation of certain orders, proceedings and acts-(1) Notwithstanding anything contained in any law or judgment, decree or order of any court, additional toll levied and/or collected at the rate of Rs.0.60 per Kg. On dry fruits including almonds, walnut and kernels thereof exported out of the State through Lakhanpur, Jammu Railway station Manwal and any other toll post from the date of issuance of notification SRO 359 of 1998 dated 31.12.1998 till 05.10.2000 by any authority in the State under the Levy of Tolls Act, Samvat 1995 shall be deemed to be and always to have been validly levied. (2) For purposes of Levy of Tolls Act, Samvat 1995 and any other law for the time being in force, all orders made, proceedings taken and acts done during the validation period by any authority shall be as good and valid as if such authority was authorized under the provisions of the said Act and the rules made there under." 12. Learned counsel for the petitioner has argued that in view of the provisions contained in sub-sec.(2), SRO 132 of 1988 shall stand validated and continue to be in force. I cannot agree with the submission made. Learned counsel for the petitioner has argued that in view of the provisions contained in sub-sec.(2), SRO 132 of 1988 shall stand validated and continue to be in force. I cannot agree with the submission made. From the bare reading of section 2, Levy of Toll (Validation) Act 2000 it is ex-facie clear that by this Act, the acts done and notifications issued or orders made under the Act, after issuance of Notification SRO 359 of 1988 dated 31.12.1988 till 5.10.2000 have only been validated and not the acts done or the orders passed before 31.12.1988. SRO 132 was issued when the Government possessed no power to levy tax on goods and, therefore, validly no exemption from charging tax could be granted and even if it was granted it has lived its life after the amendment of Sec.3 by the Amendment Act of 2002 and issuance of SRO 225 of 2003. 13. Therefore I hold that the concrete premix which is imported from out side the State is liable to toll tax under SRO 225 of 2003. There is no merit in the writ petition of the petitioner, which is accordingly dismissed.