JUDGMENT (Per : MR.JUSTICE D.H.WAGHELA) 1. By consent and at the request of learned counsel on both sides, both the petitions are admitted and heard for final disposal. Proposed amendments of the petitions as per the draft amendment are allowed. In SCA No.6204 of 2010, the petitioner has been awarded contract for one year to extract, collect, gather and remove ordinary sand from the river Tapi from certain area at village Amboli, taluka Kamrej, Surat. The petitioner was the highest bidder at Rs.3,03,00,000/-against the upset price fixed at Rs.25,20,000/-. After the agreement dated 11.01.2010 between the petitioner and the Government of Gujarat, he commenced excavation of sand, a part of which was subjected to further processing by addition of fly-ash and the other part was sold as sand out of State. In SCA No.7321 of 2010, ten petitioners are in the business of processing ordinary river sand after buying it from lease holders. They process the sand by way of washing, cleaning and mixing fly-ash to convert it into IS-Zone-2-Sand and sell such sand in 50 kg. bags under a brand name. They are supplying such sand to builders of the State of Maharashtra and are stated to be paying VAT as well as CST, having also necessary registration therefor. As Against the contention of the petitioner that after processing, mixing with fly-ash and packing, the sand became a sand product, it is averred by the Under Secretary, Industries and Mines Department of the State Government, that addition of any inert material does not change the characteristics or the nature of the sand and the spectrography analysis and chemical analysis of the product clearly suggested that the petitioner's product was nothing but black coloured sand. 1.1 Initially, both the petitions were directed against Resolution No. GMR-102010-1-S-CHH dated 04.05.2010 whereby all lease holders, stockists, traders and exporters were prohibited from exporting ordinary sand excavated from the State either to other States or other countries, by transporting such sand outside the State or the country. 1.1 Initially, both the petitions were directed against Resolution No. GMR-102010-1-S-CHH dated 04.05.2010 whereby all lease holders, stockists, traders and exporters were prohibited from exporting ordinary sand excavated from the State either to other States or other countries, by transporting such sand outside the State or the country. During pendency of the first petition, Industries and Mines Department of the Government of Gujarat has, in purported exercise of powers under section 15 read with section 23-C of the Mines and Minerals (Development and Regulation) Act, 1957 (“the Act for short), issued notification dated 11.06.2010 to further amend the Gujarat Minor Mineral Rules, 1966 by making the Gujarat Minor Mineral (Amendment) Rules, 2010, so as to insert, with immediate effect, Rule 44-BB, which reads as under: Rule 44 BB - No movement of sand shall be allowed beyond the border of the State. In case any vehicle is found transporting sand to the neighbouring State, even with authorized royalty pass or delivery challan, it shall be treated as violation of the Act and the Rules made thereunder and the penal provisions as specified therein shall be applicable.” By way of new Rules made in exercise of the powers conferred by section 15 of the Act, the Government of Gujarat has enacted and notified on 26.08.2010 the Gujarat Minor Mineral Concession Rules, 2010 so as to repeal the Gujarat Minor Mineral Rules, 1966 and, inter alia, provide for in Rule 71 as under: “Rule 71 .Prohibition to transport sand beyond border- No movement of sand shall be allowed beyond the border of the State. In case any vehicle is found transporting sand to the neighbouring State even with authorized royalty pass or delivery challan, it shall be treated as violation of the Act and the rules made thereunder and the penal provisions, except compounding, as specified therein shall be applicable.” The aforesaid notification dated 04.05.2010, Rule 44-BB newly inserted in the Gujarat Minor Mineral Rules, 1966 and the aforesaid new Rule 71, the challenge to which was added by amendments which are allowed, are under challenge in both the petitions. 2. 2. The factual background for issuing the impugned resolution and amending the rules to prevent movement of sand outside the State is that, a Study Group was constituted by the Indian Bureau of Mines, under the auspices of the Central Government in their Ministry of Mines, to analyze the issue of export of sand in view of its environmental aspect. It was, inter alia, recorded in the Minutes dated 22.7.2009 and 15.9.2009 of the Study Group that different types of sands are being exported to other countries by mines owners, dealers or exporters. As per section 15 of the Act, river sand being minor mineral, its regulation falls under the purview of respective State Governments who enact their own minor mineral conservation rules to regulate the minor mineral activity in respective States. Some States have made specific provisions imposing ban on transportation of sand through inter-State borders to protect depleting ground water and to cater the local requirements. Over-exploitation and export of river sand may lead to environment degradation and imbalance in the eco-system, and hence export of river sand was required to be banned in the larger interest of the nation. The Study Group recorded their conclusions as under: “CONCLUSIONS: Based on the discussions, the following emerged: (1) As a matter of policy, the export of sand and soil may be discouraged as it adds to the depletion of water level and environmental damage. (2) However, in case of exports under compulsion of bilateral trade, the source of material, agreement with the exporter and lease holder and quarry lease permit from the respective State Government and analysis of the material must be checked in before granting the export licence. (3) Most of the States have insufficient resources of sand and soil to meet the growing demand of construction activities and in the State of Andhra Pradesh, Tamil Nadu and Kerala, there is a ban on inter-State movement of sand and soil. (4) Large scale exploitation of river sand is leading to environmental imbalance and depletion of ground water in the surrounding areas. (4) Large scale exploitation of river sand is leading to environmental imbalance and depletion of ground water in the surrounding areas. (5) As most of the sand and soil are exported from the coastal areas of Andhra Pradesh, Tamil Nadu, Orissa and Kerala and there are certain vested interests involved in the trade and export of sand material without the valid permission of the respective State Government, it may be possible that the sand and soil being exported may be mixed with beach sand material which may contain heavy minerals including radio active minerals. (6) There is not much difference between river sand and beach sand in the physical appearance, but the beach sand minerals are quite important for their industrial applications. (7) There is no mechanism to analyze the true contents of sand material being exported from the ports. The State or the Central Authorities are not carrying out any analysis of the sand material being exported. (8) Some of the NGOs have also voiced against over-exploitation and export of sand and soil". 3. Learned senior advocates Mr.N.D.Nanavati and Mr.Mihir Joshi have assailed the impugned rules on several counts and summary of their contentions is submitted in writing. Since the challenge is mounted by the petitioners against the impugned resolution and the rules banning movement of sand outside the State on the basis of Articles 19(1)(g) and 301 to 304 of the Constitution and legislative competence of the State Government in that regard is questioned, it would be appropriate to set out the relevant constitutional and statutory provisions, as under: "CONSTITUTION OF INDIA: PART XIII A.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. A.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 A.303. A.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 A.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 shall have power to make any law giving, or authorising the giving of, any preference to one State over another, or making, or authorising the making of, any discrimination betweenone State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule. (2) Nothing in clause (1) shall prevent Parliament from making any law giving, or authorising the giving of, any preference or making, or authorising the making of, any discrimination if it is declared by such law that 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 A.304 Restrictions on trade, commerce and intercourse among States.- Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law- (a) 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 (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interests: Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President. SEVENTH SCHEDULE List I-Union List Entry 42. Inter-State trade and commerce. Entry 54. Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest. List II-State List Entry 23. Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union. ..... List II-State List Entry 23. Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union. ..... ..... ..... 'MINES AND MINERALS (DEVELOPMENT AND REGULATION) ACT,1957: An Act to provide for the regulation of mines and the development of minerals under the control of the Union. S.2 Declaration as to expediency of Union control- It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided. S.3 Definitions - In this Act unless the context otherwise requires,- (a) "minerals" includes all minerals except mineral oils ; (e) "minor minerals" means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes and any other mineral which the Central Government may by notification in the Official Gazette declare to be a minor mineral; GENERAL RESTRICTIONS ON UNDERTAKING PROSPECTING AND MINING OPERATIONS S.4. Prospecting or mining operations to be under licence or lease: (1) No person shall undertake any reconnaissance, prospecting or mining operations in any area, except under and in accordance with the terms and conditions of reconnaissance permit or of a prospecting licence or, as the case may be, a mining lease, granted under this Act and the rules made thereunder: Provided that ..... Provided further that ..... Provided also that ..... (1A) No person shall transport or store or cause to be transported any mineral otherwise than in accordance with the provisions of this Act and the rules made thereunder. (2) ..... (3) ..... S.13. Power of Central Government to make rules in respect of minerals- (1) The Central Government may, by notification in the Official Gazette, make rules for regulating the grant of reconnaissance permits, prospecting licences and mining leases in respect of minerals and for purposes connected therewith. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters namely:-........ (a) to (f) ..... (g) the terms on which, and the conditions subject to which, any other reconnaissance permit, prospecting licence or mining lease may be granted or renewed; (h) to (qq) ..... (r) any other matter which is to be, or may be, prescribed under this Act. S.15. (a) to (f) ..... (g) the terms on which, and the conditions subject to which, any other reconnaissance permit, prospecting licence or mining lease may be granted or renewed; (h) to (qq) ..... (r) any other matter which is to be, or may be, prescribed under this Act. S.15. Power of State Governments to make rules in respect of minor minerals- (1) The State Government may by notification in the Official Gazette make rules for regulating the grant of quarry leases mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith. (1A) In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely- (a) to (c) ..... (d) the terms on which, and the conditions subject to which and the authority by which quarry leases, mining leases or other mineral concessions may be granted or renewed; (e) to (n) ..... (o) any other matter which is to be, or may be prescribed. (2) ..... (3) ..... DEVELOPMENT OF MINERALS S.18 Mineral Development - (1) It shall be the duty of the Central Government to take all such steps as may be necessary for the conservation and development of minerals in India and for that purpose the Central Government may by notification in the Official Gazette make such rules as it thinks fit. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters namely- (a) ..... (b) the regulation of the excavation or collection of minerals from any mine; (c) ..... (d) ..... (e) ..... (f) the regulation of the arrangements for the storage of minerals and the stocks thereof that may be kept by any person; (3) All rules made under this section shall be binding on the Government. S.19 Prospecting licences and mining leases to be void if in contravention of Act Any reconnaissance permit, prospecting licence or mining lease granted, renewed or acquired in contravention of the provisions of this Act or any rules or orders made thereunder shall be void and of no effect. Explanation:- ..... ...... S.19 Prospecting licences and mining leases to be void if in contravention of Act Any reconnaissance permit, prospecting licence or mining lease granted, renewed or acquired in contravention of the provisions of this Act or any rules or orders made thereunder shall be void and of no effect. Explanation:- ..... ...... S.21 Penalties (1) Whoever contravenes the provisions of sub-section (1) or sub-section (1A) of section 4 shall be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twenty-five thousand rupees, or with both. (2) & (3) ........ (4) Whenever any person raises, transports or causes to be raised or transported, without any lawful authority, any mineral from any land, and, for that purpose, uses any tool, equipment, vehicle or any other thing, such mineral, tool, equipment, vehicle or any other thing shall be liable to be seized by an officer or authority specially empowered in this behalf. (4A) Any mineral, tool, equipment, vehicle or any other thing seized under sub-section (4), shall be liable to be confiscated by an order of the court competent to take cognizance of the offence under sub-section (1) and shall be disposed of in accordance with the directions of such court. S.23-A Compounding of offences (1) Any offence punishable under this Act or any rule made thereunder may, either before or after the institution of the prosecution, be compounded by the person authorised under section 22 to make a complaint to the court with respect to that offence, on payment to that person, for credit to the Government, of such sum as that person may specify: Provided that ........ (2) ...... S.23-C Power of State Government to make rules for preventing illegal mining, transportation and storage of minerals: (1) The State Government may, by notification in the Official Gazette, make rules for preventing illegal mining, transportation and storage of minerals and for the purposes connected therewith. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:- (a) ...... (b) ...... (c) regulation of mineral being transported from the area granted under a prospecting licence or a mining lease or a quarrying licence or a permit, in whatever name the permission to excavate minerals, has been given; (d) ..... (e) ..... (f) ..... (b) ...... (c) regulation of mineral being transported from the area granted under a prospecting licence or a mining lease or a quarrying licence or a permit, in whatever name the permission to excavate minerals, has been given; (d) ..... (e) ..... (f) ..... (g) any other matter which is required to be, or may be, prescribed for the purpose of prevention of illegal mining, transportation and storage of minerals. (3) Notwithstanding anything contained in section 30, the Central Government shall have no power to revise any order passed by a State Government or any of its authorised officers or any authority under the rules made under subsections (1) and (2). S.28 Rules and notifications to be laid before Parliament and certain rules to be approved by Parliament. (1) ..... (2) ..... (3) Every rule and every notification made by the State Government under this Act shall be laid, as soon as may be after it is made, before each House of the State Legislature where it consists of two Houses, or where such Legislature consists one House, before that House." ..... ..... ..... 3.1 Out of the above provisions of the Act, section 4 (1A) and section 23-C are inserted by the Amendment Act 38 of 1999 with effect from 18.12.1999; and the Statement of Objects and Reasons of the Amendment Act, inter alia, states as under: "STATEMENT OF OBJECTS AND REASONS The Mines and Minerals (Regulation and Development) Act, 1957 provides for the regular and development of minerals other than petroleum and natural gas. Consequent upon the decisions taken in the Conference of the State Ministers/Secretaries of Mines and Geology held in December, 1996, a Committee under the Chairmanship of the then Secretary, Ministry of Mines was constituted in February, 1997 to, inter alia, make recommendations regarding delegation of powers to the State Governments relating to grant and renewal of prospecting licences and mining leases and other related approvals and to suggest measures to reduce delay in this regard, review of the existing laws and procedures governing the regulation and development of minerals to make them more compatible with the changed policies and measures for prevention of illegal mining. The Committee in its report made wide-ranging recommendations in the area of delegation of powers to the state Governments, procedural simplifications, etc. The Committee in its report made wide-ranging recommendations in the area of delegation of powers to the state Governments, procedural simplifications, etc. which will go a long way to mitigate the problems faced by the States and the prospective investors while, at the same time, keeping the interests of the mining industry in particular and the national interest, in general, intact. After careful consideration of the recommendations of the Committee, the Government has decided to amend the Mines and Minerals (Regulation and Development) Act, 1947. 2. Some of the more important amendments to be made are as follows: (i) ..... (ii) ..... (iii) A new provision is proposed to be inserted in the Act prohibiting transportation or storage or anything causing transportation or storage of any mineral except under the due provisions of the Act, with a view to preventing illegal mining. Further, the Act is proposed to be amended to cover the breach of the provisions of the proposed new provision of the Act to be punishable. It is also proposed to insert a new provision to provide for anything seized under the Act as liable for confiscation under court orders. A new section is proposed to be inserted to empower the State Governments to make rules for preventing illegal mining, transportation and storage of minerals and for purposes connected therewith.' (underlines added) It may be noted here that the State Government has made Gujarat Minor Mineral Rules, 1966 and Gujarat Mineral (Prevention of Illegal Mining, Transportation and Storage) Rules, 2005 before the impugned Gujarat Minor Mineral (Amendment) Rules, 2010, inserting Rule 44-BB in the Gujarat Minor Mineral Rules, 1966. Now the Gujarat Minor Mineral Concession Rules, 2010 has replaced the Gujarat Minor Mineral Rules, 1966. 3.2 The relevant rules of the Gujarat Mineral (Prevention of Illegal Mining, Transportation and Storage) Rules, 2005 read as under: "R.3 Restriction on possession, storage etc. Now the Gujarat Minor Mineral Concession Rules, 2010 has replaced the Gujarat Minor Mineral Rules, 1966. 3.2 The relevant rules of the Gujarat Mineral (Prevention of Illegal Mining, Transportation and Storage) Rules, 2005 read as under: "R.3 Restriction on possession, storage etc. of minerals- No person shall, (i) win, possess, store, sell, trade, mine, remove in or otherwise deal with any mineral except in accordance with the provisions of the Act; (ii) win, possess, transport, store, sell, trade, mine or remove any mineral from any place except in accordance with the terms and conditions of a registration granted by the authorised officer; (iii) transport or carry or cause to transport or carry any mineral by any means from the place of raising to another place without being in possession of a valid transit pass/ delivery challan issued by the authorised officer. R.6 Transport of Mineral: (i) For transportation of any mineral, the lease holder shall make an application in Form-A to the authorised officer for issuing of transit passes prescribed by the Commissioner of Geology and Mining, Provided that for the transportation of any mineral from any place, the registered stockist shall make an application with legal source of mineral procured, in Form-B to the authorised officer for issuing of delivery challan; (ii) All despatches of minerals by a carrier shall be accompanied with a challan or transport pass in duplicate in Form-B. The person in charge of the carrier shall produce the challan or transport pass at the check post, en route or on demand by any authorised officer. Provided that in the case of transport of mineral by holder of prospecting licence or transport of mineral purchased by auction, in addition to transit pass, a special permit by the authorised officer or authorised auctioneer, as the case may be, shall suffice. (iii) ..... (iv) ..... (v) A challan or transit pass issued by the authorised officer shall be duly certified by him for inter-State transport. 4. The ratio of relevant judgments and the important observations made therein, as discussed at the bar, may be extracted as under: (a) In State of Tamil Nadu v. M/s.Sanjeetha Trading Co. [ (1993) 1 SCC 236 ], the Apex Court observed, in the context of complete prohibition on the transport and movement of timber from any place within the State of Tamil Nadu to any place outside the State, as under: "8. [ (1993) 1 SCC 236 ], the Apex Court observed, in the context of complete prohibition on the transport and movement of timber from any place within the State of Tamil Nadu to any place outside the State, as under: "8. The question is whether this infringes in any manner Article 301 of the Constitution which ensures that trade, commerce and intercourse throughout the territory of India shall be free. The framers of the Constitution thought such intercourse necessary, so that there should be an economic unity of India and there should not be regional or territorial barriers. At the same time, being conscious of the fact that such freedom of trade, commerce and intercourse throughout the territory of India may require to be curbed or curtailed under certain situations taking into consideration the public interest, liberty was given to the Parliament as well as to the Legislatures of the States under Arts. 302, 303 and 304 of the Constitution to impose reasonable restrictions on such freedom of trade and commerce or intercourse between one State and another, by following the procedures prescribed in the aforesaid Articles. "18. The matter may be different where total prohibition has been imposed on the movement of goods or articles from one State to another which have not been declared to be essential commodities or articles. In those cases the State, which has imposed such ban, has to satisfy the Court that in spite of total prohibition it amounts only to regulation of the trade in such articles or that even if it was a restriction it was reasonable within the meaning of Art. 304(b) of the Constitution and has been imposed by law as required by Art. 304(b). Sometimes it is being said that many artificial barriers on movement of produce of a particular State are being contemplated or imposed only on the consideration of "My-State-My-people". This will only amount to the protection of regional interests for political end and not of public interest. This was not conceived by Chapter XIII of the Constitution. In Charles H. Baldwin v. G.A.F. Seelig, Inc.,[ (1934) 294 US 51]1, while dealing with the commerce clause in the American Constitution, Cardozo, J. observed :- "This part of the Constitution was framed under the dominion of a political philosophy less parochial in range. This was not conceived by Chapter XIII of the Constitution. In Charles H. Baldwin v. G.A.F. Seelig, Inc.,[ (1934) 294 US 51]1, while dealing with the commerce clause in the American Constitution, Cardozo, J. observed :- "This part of the Constitution was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the peoples of the several States must sink or swim together and that in the long run prosperity and salvation are in union and not division." (b) In State of Tamil Nadu v. M.P.P.Kavery Chetty [ (1995) 2 SCC 402 ], in the context of challenge to the amendment of Tamil Nadu Minor Mineral Concession Rules, the Apex Court observed: "19. The High Court quashed Rules 8D and 19B principally on the ground that S. 15 of the said Act gave no power to the State Government to frame rules to regulate internal or foreign trade in granite after it had been quarried. Section 15 also did not empower the State Government to frame rules to enable a State Government company or corporation to fix a minimum price for granite. "23. It is difficult to see how granite resources can be protected by controlling the sale of granite after its excavation and fixing the minimum price thereof. "24. There is no power conferred upon the State Government under the said Act to exercise control over minor minerals after they have been excavated. The power of the State Government, as the subordinate rule making authority, is restricted in the manner set out in S. 15. The power to control the sale and the sale price of a minor mineral is not covered by the terms of clause (o) of sub-sec. (1A) of S. 15. This clause can relate only to the regulation of the grant of quarry and mining leases and other mineral concessions and it does not confer the power to regulate the sale of already mined minerals. "25. In our view, therefore, the High Court was clearly right in striking down Rules 8D and 19B as being beyond the purview of the rule making power of the State Government. These Rules having been struck down, the High Court was also right in striking down Government Order No. 214 to the extent that it prescribed these Rules and Government Order No. 216 made in pursuance of these Rules. These Rules having been struck down, the High Court was also right in striking down Government Order No. 214 to the extent that it prescribed these Rules and Government Order No. 216 made in pursuance of these Rules. (c) In State of Bihar and others, v. Harihar Prasad Debuka [ AIR 1989 SC 1119 ], it is observed: "18. Coming to the impugned Notification and the two adopted Forms, namely, Forms XXVIII A and XXVIII B we find that there is no imposition of any tax by them. It is, therefore, pertinent to ask what this measure actually does. Does it directly and immediately restrain inter-State trade, commerce and intercourse? Does it place the intra-State carrier in a superior or advantageous position to that occupied by inter-State carrier? Does it restrict inter-State trade, commerce and intercourse? What are the direct and indirect effects of this measure and whether it amounts to a prohibition or a mere regulation? If it is a mere regulation then only the motive, purpose or policy of the State Government would be relevant. However, if it amounts to a prohibition that would not be relevant. If it has any effect on inter-State trade, we have to ascertain the essence or incidence thereof. (d) In Jindal Stainless Ltd. v. State of Haryana [ (2006) 7 SCC 241 ], Constitution Bench of the Supreme Court, in the context of challenge to a compensatory tax on inter-State sales, observed: "SCOPE OF ARTICLES 301, 302 AND 304 : "32. Article 301 states that subject to the other provisions of Part-XIII, trade, commerce and intercourse throughout India shall be free. It is not freedom from all laws but freedom from such laws which restrict or affect activities of trade and commerce amongst the States. Although Article 301 is positively worded, in effect, it is negative as freedom correspondingly creates general limitation on all legislative power to ensure that trade, commerce and intercourse throughout India shall be free. Article 301, therefore, refers to freedom from laws which go beyond regulations which burdens, restricts or prevents the trade movement between States and also within the State. Since "freedom" correspondingly imposes "limitation", we have the doctrine of "direct and immediate effect" of the operation of the impugned law on the freedom of trade and commerce in Article 301 as enunciated in Atiabari Tea Co.[ AIR 1961 SC 232 , AIR 1962 SC 1406 ]. Since "freedom" correspondingly imposes "limitation", we have the doctrine of "direct and immediate effect" of the operation of the impugned law on the freedom of trade and commerce in Article 301 as enunciated in Atiabari Tea Co.[ AIR 1961 SC 232 , AIR 1962 SC 1406 ]. 33. Article 301 is, therefore, not only an authorization to enact laws for the protection and encouragement of trade and commerce amongst the States but by its own force creates an area of trade free from interference by the State and, therefore, Article 301 per se constitutes limitation on the power of the State. Article 301 is, however, subject to the other provisions of Articles 302, 303 and 304. It states that subject to other provisions of Part-XIII, trade, commerce and intercourse throughout India shall be free. 34. ..... ..... 35. Broadly, the above analysis of the scheme of Articles 301 to 304 shows that Article 304 relates to the State Legislature while Article 302relates to the Parliament in the matter of lifting of limitation, which, as stated above, flows from the freedom of trade and commerce guaranteed under Article 301. Article 304 also confers upon the State Legislature power to lift the limitations imposed on it by Article301 and Clause (1) of Article 303. This aspect is important because the doctrine of "direct and immediate effect" which is mentioned in Atiabari Tea Co. emerges from the concept of "limitation" embodied in Article 301. It is this doctrine of direct and immediate effect which constitutes the basis of the working test propounded vide para 19 in Automobile Transport. Therefore, whenever the law is impugned as violative of Article 301, the Courts will have to examine the effect of the operation of the impugned law on the inter-State and the intra-State movement of goods, which movement constitutes an integral part of trade. 48. When any legislation, whether it would be a taxation law or a non-taxation law, is challenged before the court as violating Article 301, the first question to be asked is : what is the scope of the operation of the law? Whether it has chosen an activity like movement of trade, commerce and intercourse throughout India, as the criterion of its operation? If yes, the next question is: what is the effect of operation of the law on the freedom guaranteed under Article 301? Whether it has chosen an activity like movement of trade, commerce and intercourse throughout India, as the criterion of its operation? If yes, the next question is: what is the effect of operation of the law on the freedom guaranteed under Article 301? If the effect is to facilitate free flow of trade and commerce then it is regulation and if it is to impede or burden the activity, then the law is a restraint. After finding the law to be a restraint/restriction one has to see whether the impugned law is enacted by the Parliament or the State Legislature. Clause (b) of Article 304 confers a power upon the State Legislature similar to that conferred upon Parliament by Article 302 subject to the following differences : (a) ..... (b) ..... (c) ..... 53. We reiterate that the doctrine of "direct and immediate effect" of the impugned law on trade and commerce under Article 301 as propounded in Atiabari Tea Co. Ltd. v. State of Assam ( AIR 1961 SC 232 ) and the working test enunciated in Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan ( AIR 1962 SC 1406 ) for deciding whether a tax is compensatory or not vide para 19 of the report (AIR), will continue to apply and the test of "some connection" indicated in para 8 of the judgment in Bhagatram Rajeevkumar v. Commissioner of Sales Tax, M.P. (1995 Supp. (1) SCC 673) and followed in the case of State of Bihar v. Bihar Chamber of Commerce [ (1996) 9 SCC 136 ], is, in our opinion, not good law. Accordingly, the constitutional validity of various local enactments which are the subject matters of pending appeals, special leave petitions and writ petitions will now be listed for being disposed of in the light of this judgment. (underlines added) (e) In K.T.Varghese v. State of Kerala [ (2008) 3 SCC 735 ], the Apex Court, following M.P.P.Kavery Chetty (supra), struck down the conditions restricting sale of minerals only within the State of Kerala and that too for domestic and agricultural purpose. (f) In State of Tripura v. Sudhir Ranjan Nath [ AIR 1997 SC 1168 ], the Apex Court observed: 17. Objection is next taken to sub-rule (8). (f) In State of Tripura v. Sudhir Ranjan Nath [ AIR 1997 SC 1168 ], the Apex Court observed: 17. Objection is next taken to sub-rule (8). It is submitted that the power to regulate conferred upon the State Government by Section 41 does not take in the power to prohibit whereas sub-rule (8) empowers the State Government to prohibit the export of timber and firewood if such a course is necessary to cater to the needs of the local people or for meeting the requirements of the people of the State. This in turn raises the question, what is the meaning and ambit of the expression "regulate" in Section 41(1) of the Act? Section 41 (1) empowers the State Government "to regulate the transit of all timber and other forest-produce". The expression is not defined either in the Act or in the Rules made by the State of Tripura. We must, therefore, go by its normal meaning having regard to the context in which and the purpose to achieve which, the expression is used. As held by this Court in Jiyajee Cotton Mills Ltd. v. Madhya Pradesh Electricity Board, 1989 Suppl (2) SCC 52 : ( AIR 1989 SC 788 ), the expression "regulate" has different shades of meaning and must take its colour from the context in which it is used having regard to the purpose and object of the relevant provisions, and as has been repeatedly observed, the Court while interpreting the expression must necessarily keep in view the object to be achieved and the mischief sought to be remedied" [at page 79] (of SCC) : (at p. 807 of AIR). Having regard to the context and other relevant circumstances, it has been held in some cases that the expression "regulation" does not include "prohibition" whereas in certain other contexts, it has been understood as taking within its fold "prohibition" as well. It has been held in K. Ramanathan v. State of Tamil Nadu, (1985) 2 SCC 116 : ( AIR 1985 SC 660 , Paras 18 and 19) that : ..... ..... ..... 18. To the same effect is the decision of this Court in State of Tamil Nadu v. M/s. Hind Stone (1981) 2 SCC 205 : ( AIR 1981 SC 711 ). ..... ..... 18. To the same effect is the decision of this Court in State of Tamil Nadu v. M/s. Hind Stone (1981) 2 SCC 205 : ( AIR 1981 SC 711 ). Dealing with the contention that Section 15 of the Mines and Minerals [Regulation and Development] Act, 1957 authorises the making of rules regulating the grant of mining leases and that the power does not take in power to prohibit the grant of leases, this Court held (at p. 719 of AIR) : "We do not think that 'regulation' has that rigidity of meaning as never to take in 'prohibition'. Much depends on the context in which the expression is used in the statute and the object sought to be achieved by the contemplated regulation. It was observed by Mathew, J. in G. K. Krishna v. State of Tamil Nadu (1975) 1 SCC 375 : ( AIR 1975 SC 583 ). The word 'regulation' has no fixed connotation. Its meaning differs according to the nature of the thing to which it is applied'. In modern statutes concerned as they are with economic and social activities, 'regulation' must, of necessity, receive so wide an interpretation that in certain situations, it must exclude competition to the public sector from the private sector. More so in a welfare State. It was pointed out by the Privy Council in Commonwealth of Australia v. Bank of New South Wales [1950 AC 235 : (1949) 2 All ER 755 (PC)] and we agree with what was stated therein -that the problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved, not so much legal as political, social or economic consideration and that it could not be laid down that in no circumstances could the exclusion of competition so as to create a monopoly, either in a State or Commonwealth agency, be justified. Each case, it was said, must be judged on its own facts and in its own setting of time and circumstances and it might be that in regard to some economic activities and at some stage of social development, prohibition with a view to State monopoly was the only practical and reasonable manner of regulation. Each case, it was said, must be judged on its own facts and in its own setting of time and circumstances and it might be that in regard to some economic activities and at some stage of social development, prohibition with a view to State monopoly was the only practical and reasonable manner of regulation. The statute with which we are concerned the Mines and Minerals [Regulation and Development] Act, is aimed, as we have already said more than once, at the conservation and the prudent and discriminating exploitation of minerals. Surely, in the case of a scarce mineral, to permit exploitation by the State or its agency and to prohibit exploitation by private agencies is the most effective method of conservation and prudent exploitation. If you want to conserve for the future, you must prohibit in the present. We have no doubt that the prohibiting of leases in certain cases is part of the regulation contemplated by Section 15 of the Act. " 19. ..... 21. We shall now consider the attack based upon Article 301. In our opinion the reasons for which Rule 3 has been held to be in contravention of Article 301 of the Constitution are unsustainable in law. The impugned Rule 3 is made by the State as the delegate of the Parliament to carry out the purposes of the Act. It is not a law made by the Legislature of the State of Tripura nor is it a rule made by the Government of Tripura in its capacity as the Government of Tripura. This is the basic distinction between the present case and decision in H. Sanjeeviah ( AIR 1967 SC 1189 ), where the enactment concerned was a law made by the State Legislature and had, therefore, to comply with clause (b) of Article 304. We have also pointed out hereinabove that the Indian Forest Act is a post-constitutional Parliamentary enactment insofar as Tripura is concerned for the reason that it has been extended to Tripura [which was then a Union Territory] by the Union Territories (Laws) Act. 1950. Sections 41 and 76 are, therefore, laws within the meaning of Article 302 of the Constitution which empowers the Parliament to impose such restrictions on the freedom of trade, commerce and intercourse between one State and another or within any part of the territory of India, as may be required in the public interest. 1950. Sections 41 and 76 are, therefore, laws within the meaning of Article 302 of the Constitution which empowers the Parliament to impose such restrictions on the freedom of trade, commerce and intercourse between one State and another or within any part of the territory of India, as may be required in the public interest. If Sections 41 and 76 are saved by Article 302, any rule made to carry out the purposes of the said provisions or to elucidate the meaning and purport of the said provisions must equally be protected by Article 302, as held by this Court in M/s. Krishan Lal Praveen Kumar v. State of Rajasthan (1981) 4 SCC 550 : ( AIR 1982 SC 29 ). 22. It is relevant to notice that Article 302 uses the expression "restrictions". In other words, it empowers the Parliament to impose such restrictions on the freedom of trade, commerce and intercourse between one State or another or within any part of the territory of India, as may be required in the public interest. Though the expression "restrictions" in this article is not qualified by the word "reasonable", we shall proceed on the assumption, for the purposes of this case, that such restrictions ought to be reasonable. Even so, it would be evident that the provision in Article 302 has a close parallel with clauses (2) to (6) of Article 19. Under clauses (2) to (6) of Article 19, it has been held by this Court that the power to impose reasonable restrictions takes in the power to prohibit also in appropriate situations [see Narendra Kumar v. Union of India, (1960) 2 SCR 375 ] : ( AIR 1960 SC 430 ). It may also be mentioned that the prime example of the exercise of power under Article 302 is the Essential Commodities Act, 1955, which not only empowers the making of the rules for the purpose of regulating the production, supply and distribution of essential commodities but also for prohibiting the production, supply and distribution of essential commodities and trade and commerce therein. For the above reasons, we are of the opinion that Rule 3 of the Tripura Transit Rules cannot be said to be violative of Article 301 nor is it required to comply with the requirement of the proviso to clause (b) of Article 304 of the Constitution. For the above reasons, we are of the opinion that Rule 3 of the Tripura Transit Rules cannot be said to be violative of Article 301 nor is it required to comply with the requirement of the proviso to clause (b) of Article 304 of the Constitution. (g) The Andhra Pradesh High Court has in C.Narayana Reddy v. Commissioner of Panchayat Raj and Rural Employment A.P., [AIR 2004 Andhra Pradesh 234], in the context of similar challenge, adopted the view as under: 17. .....Rule 9-W of the Rules, the validity of which is under challenge in these two writ petitions runs as under: 'No movement of sand shall be allowed across the border to the neighbouring State.' 18. It is also relevant to note that the same restriction has been incorporated as Condition No.8(III) in the lease agreement executed in favour of the petitioners, which expressly prohibits movement of sand to the neighbouring State. 22. In the light of the ratio laid down in the above decisions, it is clear that once the minor mineral is excavated and the required royalty and seignorage fee is paid, it becomes the property of the lessee. Under the Rules framed by the State Government under Section 15 of the Act, no restrictions could be imposed by the State Government on such minor mineral, after it has been excavated. 28. Section 23-C of the Act does authorise the State Government to make rules not only for the purpose of preventing illegal mining but also for transportation and storage of minor minerals, which power would imply that even after the minor mineral has been mined, the power is conferred on the State Government to frame Rules for such mined minor mineral as regards its storage and/or its transportation and also to frame rules to see that no illegal mining activity is carried on. Sub-clauses (1) to (g) to Clause (2) of Section 23-C are illustrative of the matters, which are covered under the rule making power. Subsection (2) says that in particular and without prejudice to the generality of the powers conferred under Section 23-C, rules may provide for all or any of the said matters. Sub-clause (c) itself say that regulations can be framed of mineral being transported from the area granted under the licence or a mining lease. Rules can be framed on any of the matters including transportation of the excavated mineral. Sub-clause (c) itself say that regulations can be framed of mineral being transported from the area granted under the licence or a mining lease. Rules can be framed on any of the matters including transportation of the excavated mineral. Section 23-C is the source of power under which Rule 9-W can be said to have been framed by the State Government. We have to keep in mind that the Parliament passed the Amendment Act, 1999 (Act No.38 of 1999) thereby inserting section 23-C in the Principal Act after the decision of the Supreme Court in Kavery Chetty's case, AIR 1995 SC 858 (supra). By the said provision, power was specifically conferred on the State Government to make rules for preventing illegal mining, transportation and storage of minerals. The State Government has framed the Rules thereafter. Thus, there is ample power with the State Government to frame Rules regarding transportation of the excavated minor mineral, which would include restriction on the transport of the said minor mineral beyond the limits of the State borders. In this view of the matter, the challenge to Rule 9-W is without any substance. (h) In M/s.Novel Granites Ltd. v. Government Andhra Pradesh [AIR 2009 Andhra Pradesh 107], the Andhra Pradesh High Court observed: 49. The contention of the learned Special Government Pleader that the purpose of including the processed mineral within the definition of rule 2 (h) was to prevent illegal exploitation of mineral, is without any merit. The object of delegating rule making power under Section 23-C being confined to arrest of illicit mining, transport and storage, there is no necessity to stretch the regulatory arm beyond these stages and interfere with processing and manufacturing activities. In fact, to prevent illegal mining, there is no need to make rules covering such activities, because no lessee can operate quarry and extract mineral clandestinely, without the knowledge of the departmental officials. Similarly, the mineral extracted cannot be transported and stored without the lessee or the purchaser obtaining necessary permits. If there is effective check and control at these three stages, there is no necessity whatsoever for the State Government or its officers to exercise control over the processed or finished product to find out whether royalty and dead rent were paid in respect of the mineral before it is processed. If there is effective check and control at these three stages, there is no necessity whatsoever for the State Government or its officers to exercise control over the processed or finished product to find out whether royalty and dead rent were paid in respect of the mineral before it is processed. In Tej Bahadur Dube (supra), the Supreme Court rejected a similar contention and set aside the conviction of the persons, who transported the sandalwood pieces without a transit permit. (i) In an unreported judgment in D.Sivakumar and A.Chandrasekaran v. Government of Tamil Nadu and others in W.P.Nos.23317 and 24211 of 2008, Division Bench of Madras High Court dealt with vires of a similar rule, being Rule 38-B of the Tamil Nadu Minor Minerals Concession Rules, 1959, which read as follows: 38-B Transport of sand outside the State not to be made: No transport of sand covered under Rule 38-A of these rules shall be made across the border of other States. The High Court held: ..... ..... 4. ......Based upon the recommendation of the High Level Committee, the Government of Tamil Nadu introduced Rule 38-A of the Tamil Nadu Minor Minerals Concession Rules, 1959 by way of G.O.Ms.No.95, Industries Department, dated 01.10.2003. The objective of the said Government order was to eliminate indiscriminate and unscientific sand quarrying and also to prevent further damage as noted by the High Level Committee. Accordingly, in the said rule the right to exploit sand in the State of Tamil Nadu became vested with the Government through the Public Works Department. ..... ..... 18. Impact of Rule 38-A: Rule 38-A of the Tamil Nadu Minor Minerals Concession Rules, 1959 was introduced based upon the recommendations of the Expert Committee and also in pursuant to the orders passed by the Hon'ble High Court. The said rule has been introduced with a view to regulate and control indiscriminate, over exploitation and illicit sand mining. As stated earlier, both the Division Bench of the Hon'ble High Court as well as the Hon'ble Supreme Court have upheld the validity of the rule 38-A. We are of the opinion that rule 38-B is nothing but a natural sequence to rule 38-A. The object and purpose of rule 38-B is similar to that of rule 38-A. Therefore, rule 38-B will have to be read in the context of Rule 38-A which is upheld by the Hon'ble Supreme Court of India. 19. It is a matter of fact that there is a huge demand for sand due tothe spurt in developmental activities. It is also a matter of fact that in some of the neighbouring States, there is a total ban of sand quarrying in the rivers. As held already, the rivers are natural resources of the nation as well as the entire world and they cannot be allowed to be damaged in a particular State as against the other States. Rivers and other water resources are dwindling coupled with the increase in demand for water due to ever growing population. It is to be noted that even in the counter affidavit it has been stated by the respondents that the dealers and businessmen are trying to make huge profits by selling not only the sand from the Government but also indulging in indiscriminate quarrying and transporting the same in the guise of a valid permit. Hence, we are of the opinion that taking into consideration of the overall public interest, the impugned Rule will have to be sustained. (j) In State of Bombay v. R.M.D.Chamarbaugwala [ AIR 1957 SC 699 ], it was observed by the Constitution Bench: 44. ......The purpose of the Act is not to restrict anything which brings the transactions under the description of trade, commerce or intercourse. In other words, the Act is in pith and substance an act with respect to betting and gambling. To control and restrict betting and gambling is not to interfere with trade, commerce or intercourse as such but to keep the flow of trade, commerce and intercourse free and unpolluted and to save it from anti-social activities. (k) In India Cement Ltd. v. State of Tamil Nadu [(1990) 1 SCC 112], it was observed: 17. In re: C.P. and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938; 1939 FCR p. 18 : (AIR 1939 FC 1), Chief Justice Gwyer of the Federal Court of India relied on the observations of Lord Wright in James v. Commonwealth of Australia (1936) AC 578 and observed that a Constitution must not be construed in any narrow or pedantic sense, and that construction most beneficial to the widest possible amplitude of its powers must be adopted. The learned Chief Justice emphasised that a broad and liberal spirit should inspire those whose duty it is to interpret the Constitution, but they are not free to stretch or pervert the language of the enactment in the interest of any legal or constitutional theory, or even for the purposes of supplying omissions or correcting supposed errors. A Federal Court will not strengthen, but only derogate from, its position, if it seeks to do anything but declare the law; but it may rightly reflect that a Constitution of a country is a living and organic thing, which of all instruments has the greatest claim to be construed Ut res magis valeat quam pereat, 'It is better that it should live than that it should perish'. 18. ........ The entries in the three lists of the Seventh Schedule to the Constitution are legislative heads or fields of legislation. These demarcate the area over which appropriate legislature can operate. It is well settled that widest amplitude should be given to the language of these entries, but some of these entries in different lists or in the same list may overlap and sometimes may also appear to be in direct conflict with each other. Then, it is the duty of the court to find out its true intent and purpose and to examine a particular legislation in its pith and substance to determine whether it fits in one or the other of the lists. ....... (l) In Union of India v. Shah Goverdhan L Kabra Teachers College [ (2002) 8 SCC 228 ], the Apex Court held: 7. It is further a well-settled principle that entries in the different lists should be read together without giving a narrow meaning to any of them. Power of the Parliament as well as the State legislature are expressed in precise and definite terms. While an entry is to be given its widest meaning but it cannot be so interpreted as to override another entry or make another entry meaningless and in case of an apparent conflict between different entries, it is the duty of the Court to reconcile them. When it appears to the Court that there is apparent overlapping between the two entries the doctrine of "pith and substance" has to be applied to find out the true nature of a legislation and the entry within which it would fall. When it appears to the Court that there is apparent overlapping between the two entries the doctrine of "pith and substance" has to be applied to find out the true nature of a legislation and the entry within which it would fall. In case of conflict between entries in List I and List II, the same has to be decided by application of the principle of "pith and substance". The doctrine of "pith and substance" means that if an enactment substantially falls within the powers expressly conferred by the Constitution upon the legislature which enacted it, it cannot be held to be invalid, merely because it incidentally encroaches on matters assigned to another legislature. When a law is impugned as being ultra-vires of the legislative competence, what is required to be ascertained is the true character of the legislation. If on such an examination it is found that the legislation is in substance one on a matter assigned to the legislature then it must be held to be valid in its entirety even though it might incidentally trench on matters which are beyond its competence. In order to examine the true character of the enactment, the entire Act, its object and scope and effect, is required to be gone into. The question of invasion into the territory of another legislation is to be determined not by degree but by substance. The doctrine of "pith and substance" has to be applied not only in case of conflict between the powers of two legislatures but inany case where the question arises whether a legislation is covered by particular legislative power in exercise of which it is purported to be made. (m) Recently in State of Maharashtra v. Bharat Shantilal Shah [ (2008) 13 SCC 5 ], it is reiterated that one of the proven methods of examining the legislative competence of an enactment is by the application of doctrine of pith and substance. This doctrine is applied when the legislative competence of the legislature with regard to a particular enactment is challenged with reference to the entries in various lists. If there is a challenge to the legislative competence, the courts will try to ascertain the pith and substance of such enactment on a scrutiny of the Act in a question. This doctrine is applied when the legislative competence of the legislature with regard to a particular enactment is challenged with reference to the entries in various lists. If there is a challenge to the legislative competence, the courts will try to ascertain the pith and substance of such enactment on a scrutiny of the Act in a question. In this process, it is necessary for the courts to go into and examine the true character of the enactment, its object, its scope and effect to find out whether the enactment in question is genuinely referable to the field of legislation allotted to the respective legislature under the constitutional scheme. It is further observed that where a challenge is made to the constitutional validity of a particular State Act with reference to a subject mentioned in any entry in List I, the court has to look to the substance of the State Act and on such analysis and examination, if it is found that in pith and substance, it falls under an entry in the State List but there is only an incidental encroachment on topics in the Union List, the State Act would not become invalid merely because there is incidental encroachment on any of the topics in the Union List. (n) Constitution Bench of the Apex Court in Amar Chandra Chakraborty v. Collector of Excise, Govt. of Tripura, Agartala [ AIR 1972 SC 1863 ] observed: 9. ........The ejusdem generis rule strives to reconcile the incompatibility between specific and general words. This doctrine applies when (i) the statute contains an enumeration of specific words; (ii) the subjects of the enumeration constitute a class or category, (iii) that class or category is not exhausted by the enumeration; (iv) the general term follows the enumeration and (v) there is no indication of a different legislative intent. (o) In Siddeshwari Cotton Mills (P) Ltd., M/s. v. Union of India [(1989) 2 SCC 458], the Apex Court observed: 12. The expression "ejusdem generic" -'of the same kind or nature' signifies a principle of construction whereby words in a statute which are otherwise wide but are associated in the text with more limited words are, by implication, given a restricted operation and are limited to matters of the same class or genus as preceding them. The expression "ejusdem generic" -'of the same kind or nature' signifies a principle of construction whereby words in a statute which are otherwise wide but are associated in the text with more limited words are, by implication, given a restricted operation and are limited to matters of the same class or genus as preceding them. If a list or string or family of genus-describing terms are followed by wider or residuary or sweeping - up words, then the verbal context and the linguistic implications of the preceding words limit the scope of such words. 18. In U. P. S. E. Board v. Hari Shanker, AIR 1979 SC 65 , it was observed : "..........The true scope of the rule of "ejusdem generis" is that words of a general nature following specific and particular words should be construed as limited to things which are of the same nature as those specified. But the rule is one which has to be "applied with caution and not pushed too far"....." (p) In State of Kerala v. Unni [ (2007) 2 SCC 365 ], the Supreme Court observed: 33. In Kerala Samsthana Chethu Thozhilali Union v. State of Kerala and Others [ (2006) 4 SCC 327 ], this Court while interpreting the provisions of the same Act, opined : "28. The Rules in terms of sub-section (1) of Section 29 of the Act, thus, could be framed only for the purpose of carrying out the provisions of the Act. Both the power to frame rules and the power to impose terms and conditions are, therefore, subject to the provisions of the Act. They must conform to the legislative policy. They must not be contrary to the other provisions of the Act. They must not be framed in contravention of the constitutional or statutory scheme." 36. When a statute provides for a condition which is impossible to be performed, unreasonableness of a statute shall be presumed. It would be for the State in such a situation to justify the reasonableness thereof. 5. In order to examine the pith and substance of the Act and its scheme, an overview of the relevant provisions thereof will be apposite. The Act provides for development and regulation of mines and minerals under the control of the Union, in the public interest. Minerals include 'minor minerals'. 5. In order to examine the pith and substance of the Act and its scheme, an overview of the relevant provisions thereof will be apposite. The Act provides for development and regulation of mines and minerals under the control of the Union, in the public interest. Minerals include 'minor minerals'. Total prohibition of transport or storage of any mineral, otherwise than in accordance with the provisions of the Act and the rules made thereunder, is provided in section 4 (1-A). However, powers to make rules are delegated to the Central Government under section 13 and to the State Governments under sections 15 and 23-C. Since sections 5 to 13 do not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals, the powers of the Central Government to make rules are, to that extent, circumscribed by section 14, as far as minor minerals are concerned. Thus, the State Governments are conferred exclusive powers to make rules in respect of minor minerals for regulating the grant of quarry leases, mining leases or other mineral concessions and for the purposes connected therewith. However, section 23-C confers powers upon a State Government to make rules in respect of all minerals, including those under the control of the union, for preventing illegal mining, transportation and storage of minerals and for the purposes connected therewith. By virtue of section 17-A, provisions are made for reserving certain areas for the purposes of conservation, by the Central Government in consultation with the State Government, or by the State Government with the approval of the Central Government. The provisions of section 18 cast a duty upon the Central Government to take all necessary steps for conservation and systematic development of minerals in India and for the protection of environment and empower it to make such rules as it thinks fit. Such rules may provide, inter alia, for regulation of excavation or collection of minerals from any mine and for the regulation of the arrangements for storage of minerals and stocks thereof that may be kept by any person. What clearly emerges from the analysis of the scheme of the Act is that there is limited delegation of legislative powers to the State Government and the delegation of authority is for specific purposes and not couched in general terms. 6. What clearly emerges from the analysis of the scheme of the Act is that there is limited delegation of legislative powers to the State Government and the delegation of authority is for specific purposes and not couched in general terms. 6. The whole Act having been apparently enacted by the Parliament with declaration in section 2 in terms of Entry No.54 in List-I (Union List) of the Seventh Schedule of the Constitution; and having regard to its content and object, the Act, in pith and substance, operates in the area of regulation of mines and mineral development, and such regulation and development under the control of the Union is declared by the Parliament by law to be expedient in the public interest. The Act by no stretch could be said to be in respect of inter-State trade and commerce under the separate category specified by Entry No.42 of the Seventh Schedule. Therefore, it is difficult to assume that the Parliament, while enacting the Act or delegating the legislative power to the State Government, envisaged or contemplated making of some legal provisions in the Act in respect of inter-State trade or commerce. Thus, any rule made under the Act by the State Government, when challenged, has to be tested on the anvil of the terms of delegation and the scope and scheme of the Act ; inasmuch as the delegated authority cannot legally be stretched to sneak into an area reserved for the Parliament under the Union List under Article 246 of the Constitution. 7. Reading the provisions of sections 15 and 23-C in light of the above discussion, it would clearly appear that the power of the State Government to make rules is restricted to: (i) making rules for grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for the purposes connected therewith; and (ii) making rules for preventing illegal mining, transportation and storage of minerals and for the purposes connected therewith. Prima facie, the delegation of powers to the State Government does not include or envisage restriction on inter-State trade, commerce and intercourse, which, as a general rule, shall be free, according to Article 301. 8. Prima facie, the delegation of powers to the State Government does not include or envisage restriction on inter-State trade, commerce and intercourse, which, as a general rule, shall be free, according to Article 301. 8. In the facts of the present cases, the State Government appears to have framed the Gujarat Minor Mineral Rules, 1966 in exercise of the power under section 15 of the Act and the Gujarat Minerals (Prevention of Illegal Mining, Transportation and Storage) Rules, 2005 in exercise of the power conferred by section 23-C of the Act. Later on, amendment, by way of the Gujarat Minor Mineral (Amendment) Rules, 2010, is made to insert Rule 44-BB; and even the new Gujarat Minor Mineral Concession Rules, 2010, again in exercise of the power conferred by section 15 of the Act, have been notified, repealing the Gujarat Minor Mineral Rules, 1966 and introducing Rule 71 therein. The original Rule 44-BB and new Rule 71 of the Concession Rules, 2010 are couched in the same terms, except that in the reincarnation of the restriction in Rule 71, penal provisions for movement of sand beyond the border of the State are made applicable, without the facility of compounding. Thus, the State Government has sought to completely prohibit inter-State trade in respect of ordinary sand by making it a criminal offence and sought to justify the provision on the grounds of conservation, local requirements, environmental degradation and the policy of the State Government. And the legislative authority to make such provision in the rules is expressly derived from section 15 of the Act, although it was argued in defence of the impugned rule that the legislative competence can as well be legally traced to the delegation of powers under section 23-C of the Act. 9. As seen earlier, by virtue of section 18 of the Act, the duty of conservation and systematic development of minerals in India and protection of environment by preventing or controlling any pollution caused by prospecting or mining is cast upon the Central Government; and the Central Government is empowered to make rules for such purposes, including for the purpose of regulation of excavation or collection of minerals from any mine and regulation of arrangements for storage of minerals. Therefore, the powers delegated to the State Government by section 15 or section 23-C cannot be so read as to allow the State Government to make rules in respect of which the Central Government has the exclusive power to make rules under section 18 of the Act; nor can the areas of concern enumerated in section 18 be the justification for the State to usurp the powers of the Central Government by making rules under the broad head of "regulating the grant of quarry leases, mining leases or other mineral concessions" or "for preventing illegal mining, transportation and storage of minerals". Apart from that, the provisions of section 23-C are not delegating the legislative authority only in respect of minor minerals, but it authorises the State Government to make rules for preventing illegal mining, transportation and storage of all minerals to which the Act applies. Therefore, it is inconceivable that the State Government can assume the power to make rules for any purpose other than prevention of illegal mining, transportation and storage of minerals and for the purposes connected therewith. The conclusions of the Study Group, mentioned in paragraph 2 hereinabove, were directed against export of sand outside India and did not approve or recommend prohibition of inter-State trade or movement of sand. Apparently, the legal or constitutional aspect of trade in sand was not the subject-matter of study by the Study Group. 10. Learned Advocate General, appearing for the respondents, urged that the power to make rules for regulating the grant of leases or other concessions included the power to restrict the movement and the specific power to make rules for preventing illegal mining, transportation and storage, specifically authorises the State Governments to regulate transportation and storage of all minerals. He submitted that the two words, viz. "transportation" and "storage" indicated two different and distinct subjects for making rules and the delegated legislation need not be restricted to only making rules for preventing illegal transportation or illegal storage. That argument was buttressed by the fact that by the amendment of 1999, the Act was simultaneously amended to insert provisions of section 4 (1-A) so as to regulate transport or storage of minerals, independently and without reference to the activity of illegal mining. That argument was buttressed by the fact that by the amendment of 1999, the Act was simultaneously amended to insert provisions of section 4 (1-A) so as to regulate transport or storage of minerals, independently and without reference to the activity of illegal mining. Although phrases and sentences in a statute are interpreted according to the grammatical meaning, relative and qualifying words, phrases and clauses are applied to the antecedent immediately preceding, such interpretation is subordinate to the context in which the provision is made. Referring to the judgments of the Apex Court in State of Tripura v. Sudhir Ranjan Nath (supra) and India Cement Ltd. v. State of Tamil Nadu (supra), it was submitted that regulation, in a given case and context, may include complete prohibition; and following the reasoning adopted by Division Benches of Andhra Pradesh High Court and Tamil Nadu High Court, similar rule prohibiting movement of sand is required to be upheld. It was further submitted that there was no conflict between the powers of two legislatures and the impugned rule ought to be upheld even if it incidentally trenches upon a subject-matter of another entry in the Union List. He relied upon judgment of the Apex Court in Union of India v. Shah Goverdhan L.Kabra Teachers College (supra) and State of Maharashtra v. Bharat Shantilal Shah (supra). 11. Considering the above arguments, it would appear that the Apex Court has , directly dealing with the very issue in State of Tamil Nadu v. M.P.P.Kavery Chetty (supra), held that there is no power conferred upon the State Government under the Act to exercise control over minor minerals after they have been excavated. Section 15 of the Act could relate only to the regulation of grant of quarry and mining leases and other mineral concessions; and it did not confer power to regulate sale of already mined minerals. Those observations having been made by a larger bench of the Apex Court, after full reference to the earlier decision in State of Tamil Nadu v. Hind Stone and others [ (1981) 2 SCC 205 ], the later view of the larger bench has to prevail and any reference to a different view in Hind Stone (supra) can only be academic. It could, however, be argued that after the decision in M.P.P.Kavery Chetty (supra) in the year 1995 and possibly due to it, the Act was amended in 1999 to confer additional powers upon the State Governments by way of section 23-C with the backing of section 4 (1-A). Therefore, it is conceivable that rules may be made to prevent transportation and storage of minerals by regulating or restricting such transport or storage, irrespective of the legality of mining or excavation of minerals being stored or transported; and, such regulation or prevention could be aimed at preventing illegal mining or violation of conditions of mining leases or mineral concessions. But such rules have to be confined to sub-serving the purposes connected with the grant of quarry and mining leases or mineral concessions, or prevention of illegal mining, transportation and storage. Since all the powers of the State Government are derived from the Central Act, the pith and substance and subject-matter of which is not inter-State trade and commerce, the subordinate legislation cannot be stretched to legislate or encroach upon the area reserved for the Parliament under a different entry in the Union List, particularly in the face of Article 301 of the Constitution. 12. Hon'ble Justice C.K.Thakkar, in Chapters IV and V of his Lectures on Administrative Law (Third Edition), has culled out pertinent propositions, some of which may be extracted as under: The Constitution confers a power and imposes a duty on the legislature to make laws and the said function cannot be delegated by the legislature to the executive or even to another legislature. It can neither create a parallel legislature nor destroy its legislative power. The legislative policy may be reflected in as few or in as many words as the legislature thinks fit. It may be express or implied. It may be gathered from the history, preamble, title, scheme, statement of objects and reasons, etc. Delegated legislation must be consistent with the parent Act and cannot travel beyond the legislative policy and standard laid down by the legislature. The validity of the delegated legislation can be challenged on the ground that it is ultra vires the parent Act or enabling statute or any general law. It is an accepted principle that delegated authority must be exercised strictly within the authority of law. Delegated legislation can be held valid only if it conforms exactly to the power granted. The validity of the delegated legislation can be challenged on the ground that it is ultra vires the parent Act or enabling statute or any general law. It is an accepted principle that delegated authority must be exercised strictly within the authority of law. Delegated legislation can be held valid only if it conforms exactly to the power granted. Whether a particular piece of delegated legislation is in excess of the power of subordinate legislation conferred on the delegate has to be determined with reference to the specific provisions contained in the relevant statute conferring the power to make the rule, regulation, etc. and also the object and purpose of the Act as can be gathered from various provisions of the enactment. Even though a parent Act might not be unconstitutional, an order made thereunder (delegated legislation) can still be unconstitutional and can be challenged as violative of the provisions of the Constitution. Every order made under a statutory provision must not only be within the authority conferred by the statutory provision, but must also stand the test of constitutionality. Parliament cannot be presumed to have intended to confer power on any authority to act in contravention of constitutional provisions. It is a basic constitutional assumption underlying every statutory grant of power that the authority on which the power is conferred should act constitutionally and not in violation of the Constitution. 13. Freedom of trade protected by the Constitution came under serious consideration of the Apex Court in Atiabari Tea Co. Ltd. v. State of Assam [ AIR 1961 SC 232 ]. The majority view in that Constitution bench judgment was that in dealing with constitutional questions, courts should be slow to embark upon an unnecessarily wide or general enquiry and should confine their decision as far as may be reasonably practicable within the narrow limits of the controversy arising between the parties in the particular case. The majority view in that Constitution bench judgment was that in dealing with constitutional questions, courts should be slow to embark upon an unnecessarily wide or general enquiry and should confine their decision as far as may be reasonably practicable within the narrow limits of the controversy arising between the parties in the particular case. Their Lordships held that the provision contained in Article 301 guaranteeing the freedom of trade, commerce and intercourse is not a declaration of a mere platitude, or the expression of a pious hope of a declaratory character; it is not also a mere statement of a directive principle of State policy; it embodies and enshrines a principle of paramount importance that the economic unity of the country will provide the main sustaining force for the stability and progress of the political and cultural unity of the country. On a careful examination of the relevant provisions of Part XIII as a whole as well as the principle of economic unity which it is intended to safeguard by making the said provisions, the conclusion is inevitable that the content of freedom provided for by Article 301 was larger than the freedom contemplated by section 297 of the Government of India Act of 1935 and whatever else it may or may not include, it includes movement of trade which is of the very essence of all trade and is its integral part. If the transport or the movement of goods is taxed solely on the basis that the goods are thus carried or transported, that directly affects the freedom of trade as contemplated by Article 301. When Article 301 provides that trade shall be free throughout the country of India, primarily it is the movement part of the trade that it has in mind and the movement or transport part of trade must be free, subject, of course, to the limits and exceptions provided by the other Articles of Part XIII. In determining the limits of the width and amplitude of the freedom guaranteed by Article 301, a rational and workable test to apply would be: Does the impugned restriction operate directly or immediately on trade or its movement? Justice Gajendragadkar went on to observe: 34. In determining the limits of the width and amplitude of the freedom guaranteed by Article 301, a rational and workable test to apply would be: Does the impugned restriction operate directly or immediately on trade or its movement? Justice Gajendragadkar went on to observe: 34. In drafting the relevant Articles of Part XIII the makers of the Constitution were fully conscious that economic unity was absolutely essential for the stability and progress of the federal polity which had been adopted by the Constitution for the governance of the country. Political freedom which had been won, and political unity which had been accomplished by the Constitution, had to be sustained and strengthened by the bond of economic unity. It was realised that in course of time different political parties believing in different economic theories or ideologies may come in power in the several constituent units of the Union and that may conceivably give rise to local and regional pulls and pressures in economic matters. Local or regional fears or apprehensions raised by local or regional problems may persuade the State Legislatures to adopt remedial measures intended solely for the protection of regional interests without due regard to their effect on the economy of the nation as a whole. The object of Part XIII was to avoid such a possibility. Free movement and exchange of goods throughout the territory of India is essential for the economy of the nation and for sustaining and improving living standards of the country In view of the above observations and the note of caution sounded therein against straying into any other laws where the validity would have been similarly challenged, the examination is confined herein to the provisions of the relevant Act and the rules. The provisions of other Acts, such as the Forest Act or the Essential Commodities Act, being dissimilar, the precedents thereon are not required to be discussed or applied, except where broad and relevant principles are laid down. It may also be noted here that, initially, the impugned resolution and the rules were assailed on the ground of violation of Article 304 of the Constitution, but such arguments were given up after the respondent taking a stand that the parent Act was covered by Article 302 and the impugned rules were made pursuant to the powers conferred by that Act. 14. 14. As seen earlier, the provisions of section 4 (1-A) and section 23-C were simultaneously added by the amendment of 1999, with the objective of prohibiting transportation or storage of any mineral, except in accordance with the provisions of the Act and the Rules made in that behalf, with a view to preventing illegal mining. Prohibition or restriction of inter-State trade of any mineral was neither intended nor provided or envisaged either expressly or by necessary implication. On the other hand, delegation of powers to make rules either in section 15 or in section 23-C of the Act is not couched in general terms as in section 18. Section 18 exclusively empowers the Central Government to make such rules as it thinks fit for the purpose of conservation and development of minerals in the whole country. Apart from delegation of such powers couched in wider terms, the Central Government is specifically authorized to make rules for regulation of excavation or collection of minerals from any mine as well as for storage of minerals. As against that, the State Government is empowered to make rules, in respect of all minerals, for regulation of minerals being transported from the area granted under a prospecting licence or a mining lease or a quarry licence or a permit. The context and the composite scheme of the Act contained in the provisions of sections 4(1-A), 15, 18, 21 and 23-C clearly indicate that the delegation of power to regulate or make rules for transportation or storage of minerals, including minor minerals, does not empower and cannot be stretched to empower the State Government to make rules directly prohibiting movement of minerals so as to impinge upon the freedom guaranteed by Article 301 of the Constitution. In fact, the State Government has admittedly made the Gujarat Mineral (Prevention of Illegal Mining, Transportation and Storage) Rules, 2005 in exercise of the powers conferred by section 23C of the Act for regulating transport, possession and storage of minerals in the State; and those rules are not under challenge. Although it is not significant, in light of the view being taken herein about validity of the impugned rules, it needs to be noted that the part of new Rule 71 taking away the facility of compounding is apparently repugnant to section 23A of the Act. Although it is not significant, in light of the view being taken herein about validity of the impugned rules, it needs to be noted that the part of new Rule 71 taking away the facility of compounding is apparently repugnant to section 23A of the Act. And, if validity of the impugned rules cannot be upheld, the impugned resolution cannot stand without the support of any legal, executive or legislative authority. 15. In view of the express provisions of the Act, as analysed and adumbrated hereinabove, and in view of the salutary edicts contained in the Constitution Bench judgment of the Apex Court in Atiabari Tea Co. Ltd. (supra), it is difficult to subscribe to the views adopted by the Division Benches of the Andhra Pradesh High Court in C.Narayana Reddy (supra) and the Madras High Court in D.Sivakumar (supra) in respect of the same issue under the same Act and the same minor mineral. Therefore, respectfully disagreeing with the views adopted by the Andhra Pradesh and the Madras High Courts, it is held that the impugned resolution as well as Rule 44-BB of the Gujarat Minor Mineral Rules, 1966 and Rule 71 of the Gujarat Minor Mineral Concession Rules, 2010 are illegal and ultra vires the Mines and Mineral (Development and Regulation) Act, 1957 as also inconsistent with the relevant provisions of the Constitution. Therefore, the impugned resolution dated 04.05.2010, Rule 44-BB of the Gujarat Minor Mineral Rules, 1966 and Rule 71 of the Gujarat Minor Mineral Concession Rules, 2010 are held and declared to be null and void and Rule in each of the petitions is made absolute accordingly with no order as to costs. (D.H.Waghela,J.) (Smt.Abhilasha Kumari,J.) Upon pronouncement of this judgment today, learned Advocate General prayed for suspending operation of this judgment and order for a period of four weeks for approaching the higher forum, if the respondents were so advised. The request was objected on behalf of the petitioners on the ground that the rules which are held to be null and void cannot be allowed to operate and the petitioners were suffering losses due to operation of the rule. In the facts and circumstances and considering the importance of the issues involved, operation of this judgment and order is stayed till 12th November, 2010.