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2008 DIGILAW 823 (ALL)

Sri Sai Stone Crusher, Bijnore v. State of U. P.

2008-04-11

SUDHIR AGARWAL, SUSHIL HARKAULI

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JUDGMENT :- The petitioners having registered stone crushers situated at various places in District Bijnore have approached this Court under Article 226 of the Constitution of India challenging the collection and demand of transit fee on stone grit/ chips transported by the petitioners from their stone crushers to other places in the State of U.P. 2. The case set out by the petitioners in brief is that they purchase stones, boulders and rocks from Uttarakhand Forest Development Corporation and pay transit fee to the forest authorities of Forest Department of Uttarakhand in the said State. However, when they transport and bring in aforesaid items to their stone crushers situated in District Bijnor, on the entry in the State of U.P. the forest department of U.P. also charges transit fee on the said items under the provisions of U.P. Transit of Timber and other Forest Produce Rules, 1978 (hereinafter referred to as "1978 Rules"). The aforesaid items, namely, stones, boulders and rocks etc. are taken to the petitioners crushing units situated in Najibabad, in District Bijnor whereat after crushing of the said items, the petitioners get grit and chips of different sizes, namely, stone dust, 6 mm grit, 10 mm grit, 20 mm grit, 40 mm grit and 65 mm grit etc., which are residuary items resulting from process of crushing of the said stones, boulders and rocks. The aforesaid crushed items when transported from petitioners stone crushers to other places, the officials of Forest Department of the State of U.P. again require the petitioners to pay transit fee under 1978 Rules on the ground that being forest produce, petitioners are liable to pay transit fee on the said items again. It is this levy which is under challenge in this writ petition. 3. Sri V.K. Singh learned Senior Advocate assisted by Sri S. Shekhar vehemently argued that after crushing stones, boulder and rocks etc. the ultimate products resulted from crushing are not of different nature and the nature of the primary item remains the same. It is only reduction of size which is commonly known as grit. In the crushing process stone dust is also produced which is a residuary item. the ultimate products resulted from crushing are not of different nature and the nature of the primary item remains the same. It is only reduction of size which is commonly known as grit. In the crushing process stone dust is also produced which is a residuary item. He, therefore, submits that since there is no change in the nature of the product, therefore, it cannot be said that a new item has been produced by the petitioners after undergoing the process of crushing of stones, boulders, rocks etc. and, therefore, transit fee having paid once cannot be charged again on the said items while transported in the State of U.P. Alternatively, he contended that if it is a new produce different than boulders, rocks etc. and is not something found in the forest, then it ceases to be a forest produce and then also no transit fee on the said items in the State of U.P. is chargeable under 1978 Rules. Thirdly, though meekingly he contended that Forest Act is a Central Act having been enacted by the Parliament and, therefore, on forest produce found in one State, if a person has already paid transit fee in that State, he is not liable to pay transit fee in other States, even for once and, therefore, in the present case, in the State of U.P. , levy of transit fee on transportation of boulders, rocks, stones etc. when it is brought in the State of U.P. from Uttarakhand after payment of transit fee in that State is wholly illegal and without jurisdiction since the petitioners have already paid transit fee to the Forest Authorities in Uttarakhand. 4. The respondents have filed counter affidavit. The stand taken by the respondents is that under 1978 Rules, transit fee is payable as and when a person is required to obtain transit pass under Rule-3 thereof. Since, in every transit pass, the quantity, destination, period of transportation is mentioned, therefore, as and when there is any change of destination or period of transportation etc., another pass would be required to be obtained by the person concerned and for that purpose, he has to pay transit fee again. Since, in every transit pass, the quantity, destination, period of transportation is mentioned, therefore, as and when there is any change of destination or period of transportation etc., another pass would be required to be obtained by the person concerned and for that purpose, he has to pay transit fee again. It is the case of the respondents that one transit pass is issued for transportation of forest produce from the area mentioned therein and once it stands exhausted, thereafter, for further transportation, the incumbent would have to obtain fresh pass for which he would have to pay transit fee again. Reliance is placed on the judgment of this Court in Ashok Kumar Jaiswal v. Conservator of Forests, Writ petition No. 24893 of 1996 decided on 5.11.1996, it is said that levy and demand by the respondents is absolutely correct and in accordance with law. 5. We have heard learned counsel for the parties and perused the record. 6. The first question, which has to be answered by this Court is as to what is the meaning of the words "forest produce" and whether the stones, boulders and rocks, after crushing and conversion thereof in the grits and chips of different smaller sizes, is there any change in the produce itself or it remains the same. 7. The term "forest produce" has been defined in Section 2(4) of the Indian Forest Act, 1927 (hereinafter referred to as the "Act") and reads as under : "2. Interpretation clause. - .................... (4) "forest-produce" includes - (a) the following whether found in, or brought from, a forest or not, that is to say, - timber, charcoal, caoutchouc, catechu, wood-oil, resin, natural varnish, bark, lac, mahua flowers, mahua seeds, kuth and myrabolams, and (b) the following when found in, or brought from, a forest, that is to say, - (i) trees and leaves, flowers and fruits, and all other parts or produce, not hereinbefore mentioned, of trees, (ii) plants not being trees (including grass, creepers, reeds and moss), and all parts of produce of such plants, (iii) wild animals and skins, horns, bones, silk cocoons, honey, and wax, and all other parts of produce of animals, and (iv) peat, surface soil, rock, and minerals (including limestone, laterite, mineral oils and all products of mines or quarries)" 8. It is not disputed by the learned counsel for the parties that stones, boulders and rocks, transported by the petitioners to their crushing units constitute forest Produce as defined under Section 2(4) (b)(iv) of the Act. After the said produce is brought in the crushing units of the petitioners, they crush the same to reduce size thereof and produce grits and chips of much smaller sizes, namely, 6 mm, 10 mm, 20 mm etc. The basic nature of the forest produce remain the same. In fact, in the counter affidavit, the respondents have admitted the position that even after crushing of the stones, it remains of similar nature though of different size and, therefore, the nature of forest produce would not change. In paras-4 and 5 of the counter affidavit, this has been admitted and in support thereof, reliance has been placed by the respondents on the Apex Courts decision in Commissioner of Sales Tax, U.P. v. Lal Kunwa Stone Crusher (P.) Ltd. 2000 (3) SCC 525 : (2000 All LJ 868), State of Maharashtra v. Mahalaxmi Stones 2003 (1) SCC 70 : (2002 AIR SCW 4902) and Division Bench judgment of this Court in Kumar Stone Works and others v. State of U.P. and others 2005 (3) AWC 2177 . This position not being disputed by the petitioners, in view of the admission by the respondents as also the law laid down by the Apex Court and a Division Bench Judgment of this Court in Kumar Stone Works (supra), we are also of the view that even after crushing of the stones, boulders and rocks, and reducing size thereof in producing grits and chips, the nature of the forest produce does not go under any change and it remains the same. Thus, it can be said to be the same forest produce as transported by the petitioners to their crushing units though of different size. 9. Now, we come to the next question as to whether the demand of transit fee for transportation of forest produce from crushing units to other places in the State of U.P., though once transit fee has already been paid by the petitioners for transporting the said forest produce to their crushing units is justified and permissible under 1978 Rules. 10. It would be appropriate at this stage to reproduce Rules-3, 4, 5, 7 and 8 of 1978 Rules. "3. 10. It would be appropriate at this stage to reproduce Rules-3, 4, 5, 7 and 8 of 1978 Rules. "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 rules to issue such pass or otherwise than in accordance with the conditions of such pass or by any route or to any destination other than the route or destination specified in such pass : Provided that no transit pass shall be required for the removal - (a) of any forest produce which is being removed for bona fide consumption by any person in exercise of a privilege granted in this behalf by the State Government or of a right recognised under this Act, within the limits of a village in which it is produced; (b) of forest produce by contractors agency from the forests managed by the Forest Department, in which case the movement shall be regulated by the relevant conditions of sale and terms of the corresponding agreement deed executed by the buyer; (c) of such forest produce as may be exempted by the State Government from the operation of these rules by notification in the official Gazette. 4. Officers and persons to issue passes. 4. Officers and persons to issue passes. - (1) The following officers and persons shall have power to issue passes under these rules - (a) for forest produce belonging to Government or not owned by any other person, the Conservator of Forest, the Divisional Forest Officer, the Sub-Divisional Forest Officer or any other officer authorised in this behalf in writing by the Conservator of Forest or the Divisional Forest Officer; (b) for forest produce owned by any other person within a periphery of 80 kilometres of any reserved forest in respect of the species of trees exempted, from time to time, by Government under Section 21 of the Uttar Pradesh Production of Trees in Rural and Hill Areas Act, 1976 (U.P.) Act No. 454 of 1976 and for other species of trees owned by any person anywhere in Uttar Pradesh, such person or his agent if so authorised in writing by the Divisional Forest Officer : (i) Provided that any person who desires to obtain a transit pass or authorisation 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 authorisation to issue such passes, conduct such inquiry and call for such information as considered necessary; (ii) such transit pass or authorisation 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 or forest nursery through which the produce must pass and shall be issued after taking prescribed transit fees; and (iii) any transit pass or authorisation may at any time be modified (on request or otherwise) or cancelled by the Divisional Forest Officer or Conservator of Forests. (c) (i) For forest produce owned by any other person outside the periphery of 80 kilometres of a reserved forest in respect of the species of tree exempted, from time to time by Government under Section 21 of the Uttar Pradesh Protection of Trees in Rural and Hill Areas Act, 1976 (U.P. Act No. 45 of 1976) such person or his agent if so authorised by an order in writing by the Divisional Forest Officer or the Block Development Officer having jurisdiction over the area after verifying that the trees are of the exempted species : Provided that any person who desires to obtain a transit pass or authorisation to issue passes under Clause (c) of sub-rule (1) above, shall furnish to the Divisional Forest Officer or the Block Development Officer concerned an affidavit giving the following particulars - (a) the quantity of such forest produce; (b) the name and the address of the owner; (c) the holding with the Khasara/ Khatauni numbers from which the produce has been obtained and that the holding is located outside the periphery of 1 kilometre of a reserved forest; (d) the number and the species of trees; and (e) the place to which the procure is to be taken, (i) The transit pass or authorisation shall be issued by the Range Officer/Deputy Range Officer on the basis of the order of the Divisional Forest Officer/Block Development Officer after taking prescribed transit fees : (ii) Such transit pass or authorisation 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 or forest nursery through which the produce must pass. (2) The Officer competent to pass order for the issue of a transit pass or authorisation may refuse to pass such order for reasons to be recorded in writing. (3) Appeal against the order passed by the Block Development Officer shall lie to the Conservator of Forests and in case of orders passed by any other officer to the next higher authority (Conservator of Forest in case the order has been passed by the Divisional Forest Officer, and Additional Chief Conservator of Forests in case the order has been passed by the Conservator of Forest) and its decision shall be final. 5. Fees payable for different classes of passes. 5. Fees payable for different classes of passes. - At the Check Chawki or depot established under Rule 15 and specified under proviso (ii) to Clause (b), of sub-rule (1) of Rule 4, the forest-produce along with the two copies of pass (duplicate and triplicate) shall be produced for examination under sub-rule (4) of Rule 6 and for payment of transit fee on the forest-produce calculated at the following rates, corresponding receipt shall be granted in the form given in Schedule C - (i) per lorry load of timber or other forest produce Rs. 5.00 per Ton of capacity. (ii) per cart load of timber or other forest produce Rs. 2.50 (iii) per camel load of timber or other forest produce Rs. 1.25 (iv) per pony load of timber of other forest produce Rs. 0.50 (v) per head load or timber or other forest produce" Rs. 0.25 "7. Separate passes for each load. - No transit pass shall ordinarily cover more than one load, whether such load be carried by a person, an animal or in a vehicle. But the Divisional Forest Officer may, whenever he deems fit order that one pass may cover any number of headloads or animal loads not exceeding 50 any number of cart loads not exceeding 10, for journeys not exceeding 25 Kilometres from and to the same places and undertaken at one and the same time. 8. Passes not be tampered with. - No alteration shall be made in anything printed or written on any transit pass, except in the matter of route and period and this may only be done by a Forest Officer not below the rank of a Forester for sufficient reasons to be mentioned in the pass." 11. Schedule-A of 1978 Rules shows the format in which transit pass is issued and is reproduced as under : "SCHEDULE A FORM [SEE RULE 3] Counterfoil Book No. Transit Pass Counterfoil Page No. 1 2 3 1. Locality of origin : (a) Name and situation of forest. (b) Name of forest owner. 2. Name and address of owner of forest produce. 3. Description of produce and quantity. 4. Property mark, etc. 5. Name of village, town to which the produce is to be transported. 6. Route by which produce is to be transported 7. Depot/depots at which forest produce will be produced for check. 8. Date of expiry of pass. 9. 2. Name and address of owner of forest produce. 3. Description of produce and quantity. 4. Property mark, etc. 5. Name of village, town to which the produce is to be transported. 6. Route by which produce is to be transported 7. Depot/depots at which forest produce will be produced for check. 8. Date of expiry of pass. 9. Any other particulars. 10. Signature, seal of issuing officer and date. 11. Signature of checking officer." 12. From a bare reading of 1978 Rules and in particular those quoted above, it does appear that when someone requires to transport a forest produce, he shall apply for a transit pass in the format prescribed in Schedule-A. Thereafter the pass shall be issued by competent authority of the Forest Department or a person authorized under 1978 Rules. Besides other, the transit pass contains the details of the place to which forest produce is to be transported as well as the route by which it is to be transported. It also contains the date of expiry of pass and the depot at which forest produce will be produced for check. Therefore, as soon as the forest produce reaches its destination as per the details given in the format, i.e, transit pass, it shall exhaust and cannot be utilized again for transportation of even the same forest produce to another place, i.e., to a place different than what was mentioned in the transit pass. 13. From a plain reading of the Rules, the respondents are to be justified in demanding transit fee from the petitioners for transportation of the forest produce from their crushing units to any other place even though they have already paid transit fee for transporting thereto at their crushing unit. But that would not rest the matter. The reason being is that transit fee under 1978 Rules is neither a tax on the sale of forest produce nor is a fiscal statute imposing liability on each and every transaction of forest produce. It is regulatory in nature. It has been imposed only to ascertain that forest produce may not be unauthorizedly removed from the forest area so as not to cause indiscreet deforestation, mining etc. in the forest area notified under the Act. The objective is for maintaining ecological balance, and to prevent excessive and unauthorized mining, deforestation of forest produce from the forest area. It has been imposed only to ascertain that forest produce may not be unauthorizedly removed from the forest area so as not to cause indiscreet deforestation, mining etc. in the forest area notified under the Act. The objective is for maintaining ecological balance, and to prevent excessive and unauthorized mining, deforestation of forest produce from the forest area. While upholding validity of 1978 Rules, the Apex Court in State of U.P. and others v. M/s. Sitapur Packing Wood Suppliers etc. JT 2002 (4) SC 341 : ( AIR 2003 SC 2165 ), held transit fee under 1978 Rules as regulatory. It placed reliance on its earlier decision in State of Tripura and others v. Sudhir Ranjan Nath JT 1997 (2) SC 530 : ( AIR 1997 SC 1168 ). 14. We have to consider and construe the levy of transit fee in the light of the aforesaid nature. The charging provision of transit fee is Rule-5 which shows that it shall be paid at the Check, Chowki or Depot established under Rule-15 and specified under proviso (ii) to Rule-4 (1)(b). Thus, when a pass is issued, at the Check-Post or Chowki which shall come to be crossed, the transit fee shall be paid by the person concerned as is evident from the above. Application of Rules 3, 4 and 5 in this manner leads to a situation that after having issued the transit pass for one route, it would stand exhausted and for the same forest produce, again transit fee shall be payable for another route. It means that for the transportation of same commodity, every time one would be required to pay transit fee on mere change of route, or date or period though once it has already paid. It would make it in the nature of tax on the event of transportation depending on route etc. though the commodity or forest produce remains the same for which the transit fee has already been paid in the State of U.P. This may result in discriminatory treatment in various cases. It would make it in the nature of tax on the event of transportation depending on route etc. though the commodity or forest produce remains the same for which the transit fee has already been paid in the State of U.P. This may result in discriminatory treatment in various cases. Viz., if a person purchases stones or boulders from Haridwar and enters the State of U.P., he applies for transit pass for carrying forest produce upto the far east area of the State, namely, Gorakhpur, he would be entitled to pay one transit fee though in the midst, it may be possible that he may get the forest produce, namely, stones, boulders and rocks etc. crushed in a crushing unit and get the size reduced in the manner he required. Another person, who has also to transport the same forest produce from Haridwar to Gorakhpur, if opt to transport the same commodity at two stages and brings it from Haridwar to Nazibabad in District Bijnor which is a bordering area near State of Uttaranchal, he would pay the same amount of transit fee as was paid by other person, who directly sought to transport the same from Haridwar to Gorakhpur, but as per the case of the respondents, the transit pass of later person would stand exhausted as soon as he transports the goods upto Nazibabad District Bijnor and, thereafter, from Nazibabad District Bijnor to Gorakhpur, if he intends to seek fresh issuance of pass, he would have to pay transit fee again though the destination and route travelled by the forest produce would be the same as that of the earlier person, who opted transit pass for Haridwar to Gorakhpur. This, in our view, cannot be the intention of 1978 Rules inasmuch as transit fee on forest produce, which is regulatory in nature, is not a kind of tax on the transaction depending mere on the route, time, period etc. In our view, instead of having a fresh transit pass, by taking recourse of Rule-8 of 1978 Rules, the competent authority may allow change in the route and period provided in the transit pass. Since the commodity or forest produce remain the same, the route and period can be changed under Rule-8 of 1978 Rules. In our view, instead of having a fresh transit pass, by taking recourse of Rule-8 of 1978 Rules, the competent authority may allow change in the route and period provided in the transit pass. Since the commodity or forest produce remain the same, the route and period can be changed under Rule-8 of 1978 Rules. Therefore, in respect to the same forest produce, in respect to which, transit fee has already been paid in the State of U.P., there would not be any requirement to pay transit fee again but it would be open to the person concerned to seek change in the transit pass from the competent authority with respect to route and period as provided under Rule-8 and, can transport the same without paying transit fee again on the same forest produce. Repeated and frequent transit fee under 1978 Rules would result an make it in the nature of tax on transaction or sale or transfer etc. and would change the very nature of transit fee. Neither in the case of Kumar Stone Works (supra) nor in Ashok Kumar Jaiswal (supra), this Court had any occasion to consider as to whether a transit fee would be payable again on the forest produce whereupon transit fee once has already been paid under 1978 Rules for mere transportation thereof from one destination to another, which is different than that is mentioned in the transit pass whereupon transit fee was paid. Therefore, none of the aforesaid judgments would help the respondents in any manner. 15. In view of the above, the writ petition is allowed. The demand of transit fee again on the forest produce on which transit fee was already paid by the petitioners is hereby quashed. However, it is made clear that transportation of the aforesaid forest produce would be permissible only if the petitioners apply for change of route and period as permitted under Rule-8 of 1978 Rules whereupon without asking for payment of any transit fee again, the competent authority would consider to allow transportation of the said forest produce through the changed route and period if the transit fee, on the same forest produce, has already been paid once by the petitioners in the State of U.P. 16. There shall be no order as to costs. Petition allowed.