Research › Search › Judgment

Allahabad High Court · body

2018 DIGILAW 2284 (ALL)

HINDALCO INDUSTRIES LIMITED v. STATE OF U. P.

2018-11-02

PANKAJ MITHAL, SIDDHARTHA VERMA

body2018
JUDGMENT By the Court.—These two writ petitions relate to charging of transit fee on the transportation of Coal from the Northern Coal Fields Limited (in short NCL) Singarauli, M.P., to the factories of the petitioner and to its thermal power station situate in Renukut, District Sonebhadra in U.P. 2. The petitioner is a Public Limited company with its registered head office at Mumbai. It is engaged in manufacturing Aluminum and has factories/plants at Renukut, District-Sonebhadra in U.P., and at Mahan in district Singarauli, M.P. It also has a captive Thermal Power Plant at Renusagar in District Sonbhadra, U.P. for supply of uninterrupted and continuous power supply to its factories/plants. 3. The petitioner uses coal as a fuel for the generation of power. The coal is purchased by it through e-auction from the coal mines of the NCL at Beena and Krishnashila. The coal so purchased by the petitioner is transported to its factories either through Railways or through Aeril Rope-Way and Belt Pipe Conveyor System (in short ARW and BPC). The transportation of coal is not by road either through Truck, Lorry, Cart, Animal or Human Head. 4. In exercise of powers under Section 41,42,51 and 76 of the Indian forest Act the State of U.P., has framed a set of Rules known as U.P. Transit of Timber and other Forest Produce Rules, 1978 which have been amended from time to time. These Rules inter alia provide for regulation of transit of forest produce and for this purpose provides for issuance of passes and for levy of transit fee at the rate notified from time to time. 5. The petitioner has filed this petition for a direction upon the respondents not to charge, collect and recover any transit fee from the petitioner on the transportation of coal purchased by it through e-auction from the collieries of Beena and Krishnashila to its factories/plants by adopting the mode of AWR/BPC system or Railway. 6. Sri V.K. Upadhya, Senior counsel assisted by Sri Ritvik Upadhya learned counsel for the petitioner has argued that under the aforesaid Rules it is only the forest department that is entitle to collect the transit fee on the transit of forest produce. There is no provision for charging transit fee on the transportation of forest produce by any other mode except road. There is no provision for charging transit fee on the transportation of forest produce by any other mode except road. Therefore, the action of the NCL in realizing the transit fee from the petitioner on the transport of coal through Railway or through AWR and BPC system is wholly illegal and without jurisdiction. 7. Sri Avinash Tripathi, learned Standing counsel as well as Sri S.D. Dube learned counsel for the NCL in response to the above submissions advanced on behalf of the petitioner had argued that coal is a forest product and therefore its transportation is liable to payment of transit fee in accordance with the Rules. The transit of coal through Railway rakes would amount to transportation through Lorry and chargeable to transit fee under the Rules. The coal purchased by auction purchaser is loaded into wagons at the Railway siding and the individual wagons are weighed in motion on weigh bridge. 8. The conditions of the e-auction provides that all statutory levies and charges applicable at the time of delivery of coal shall be payable by successful purchasers and the dispute arising out of such e-auction or in relation thereto are to be dealt with exclusively in accordance with the provisions of Arbitration and Conciliation Act, 1996. The NCL has full authority to charge and realize the statutory dues such as transit fee. The forest department vide its various notices had demanded transit fee even on coal transported by Rail mode. Therefore, there is no illegality in realising the transit fee from the petitioner and that the NCL is authorized to realize it. 9. In the wake of the respective submissions of the parties as aforesaid, two broad legal issues as under springs up for consideration of the Court : (I) Whether the Rules provide for charging transit fee on the transportation of forest produce/coal through Railways or through AWR and BPC system; and (II) Whether NCL has any authority to collect transit fee in the absence of any specific authorization to do so from the department of forest. 10. The aforesaid Rules in Chapter I provides for the transit of timber and other forest produce by land and vide Chapter II provides for transit of timber and other forest produce by water. 11. 10. The aforesaid Rules in Chapter I provides for the transit of timber and other forest produce by land and vide Chapter II provides for transit of timber and other forest produce by water. 11. In the case at hand we are concerned only with the transit of timber and other forest produce by land as provided under Chapter I of the Rules. 12. Rule 3 of the Rules provides that no forest produce shall be moved into or from within the State of Uttar Pradesh without a transit pass in the Form prescribed in schedule A to the Rules. The transit pass is to be issued by an officer of the forest department or a person duly authorized by it. The transit of forest produce has to be through the route specified in the pass. 13. Rule 4 of the Rules provides about the officers competent to issue transit passes. 14. The controversy in the present case is not with regard to transit pass and as such Rule 3 and Rule 4 has no application. It is only Rule 5 of the Rules which is relevant for our purpose which prescribes the fee payable for different classes of passes. It provides that the forest produce under transportation shall be produced for examination and for payment of transit fee at the check chowki or depot and the transit fee would be payable at the rates prescribed therein. The aforesaid rule is the charging provision for the transit fee and also provides for its computation. The transit fee on forest produce is ordinarily to be collected at the check chowki or depot. 15. Rules 15 authorizes the Conservator of Forest to establish check posts or depots inter alia for the purposes of determining the amount payable regarding bona fide removal of forest produce and the payment thereof to the State Government. Rule 15 of the Rules is re-produced herein below : “15. 15. Rules 15 authorizes the Conservator of Forest to establish check posts or depots inter alia for the purposes of determining the amount payable regarding bona fide removal of forest produce and the payment thereof to the State Government. Rule 15 of the Rules is re-produced herein below : “15. Depots and their purposes : “The Conservator of Forests may establish at such places as he shall deem fit, depots to which forest produce shall be taken- (a) for initial examination or subsequent checking regarding bona fide removal of forest produce; or (b) for determining the amount of money payable on account thereof the State Government, and for the payment of any money so found to be due; or (c) in order that any mark required by law or by these rules to be affixed thereto may be so affixed. (d) to check the legality of the forest produce at collection centre called as depot where the forest produce has been collected/stored for the purpose of trade/sales.” 16. Rule 5 of the Rules which provides for charging of transit fee and its computation on the transport of forest produce reads as under : “5. Fees payable for different classes of passes- At the check chowki or depot established under rule 15 and specified under proviso (ii) to clause (b), sub-rule (1) of Rule 4, the forest produce alongwith the two copies of the pass (duplicate and triplicate) shall be produced for examination of 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) (a) per lorry load of timber of Khair, Sal and Sagaun (Teak) Shisham, Sandal Wood and Red Sanders Rs.200.00 per cubic meter of capacity (b) per lorry load of timber other than of Khair, Sal and Sagaun (Teak) Shisham, Sandal Wood and Red Sanders or other forest produce Rs.75.00 per cubic meter of capacity (ii) (a) per cart load of timber of Khair, Sal and Sagaun (Teak), Shisham, Sandal Wood and Red Sanders Rs.100.00 per cubic meter of capacity (b) per cart load of timber other than of Khair, Sal and Sagaun (Teak) Shisham, Sandal Wood and Red Sanders or other forest produce Rs. 40.00 per cubic meter of capacity (iii) per camel load of timber or other forest produce Rs.9.00 (iv) per camel load of timber or other forest produce Rs.4.00 (v) Per camel load of timber or other forest produce Rs.2.00 17. A bare reading of Rule 5 would reveal that it contemplates of charging transit fee on the forest produce on the basis of Lorry load, Cart load, Camel load; and head load. It does not provide for levy of transit fee on the basis of quantity or weight etc, rather on the basis of capacity of a lorry and cart etc., and at a fixed rate per Camel load or per head load. It does not even contemplate to charge transit fee on transportation of various forest forest produce by any other mode such as Railways or ARW and BPC system. 18. The aforesaid Rules are in the nature of a taxing statute and as such have to be construed strictly in accordance with the usage of language therein putting the tax payer in a advantageous position if the situation so demands. 19. In State of Maharastra v. Mishri Lal Tarachand, AIR 1964 SC 457 , while interpreting the provisions of the Bombay Court fees Act, the Court observed as under : “The Act is a taxing statute and its provisions therefore have to be construed strictly, in favour of the subject-litigant.” 20. In Diwan Brothers v. Central Bank of India and others, AIR 1976 SC 1503 it was again observed that it is well-settled that in case of fiscal statute the provisions must be strictly interpreted giving every benefit of doubt to the subject. The above observations made by the Supreme Court manifestly reveal that the Courts have to interpret the provisions of the fiscal statute strictly so as to give the benefit of doubt to the litigant/assessee/tax payer. 21. It may be important to mention here that normally in a fiscal statute the charging section and the computing provision are different but in the case at hand Rule 5 of the Rules is both the charging section as well as the provision for computing the transit fee. 21. It may be important to mention here that normally in a fiscal statute the charging section and the computing provision are different but in the case at hand Rule 5 of the Rules is both the charging section as well as the provision for computing the transit fee. The manner of computation as provided therein is not applicable, as there is no transportation of forest produce by either of the modes prescribed therein and as such transit fee would not be leviable on the transport of coal through Railways or AWR and BPC system. 22. In C.I.T Bangalore v. B.C. Srinivasa Setty, (1981) 2 SCC 460 , it has been observed that the charging section and the computation provision of a fiscal statute constitute an integrated code and when it is not possible to apply the computation provision, it means that the statute do not intend to levy tax. 23. In Tata Sky Limited v. State of Madhya Pradesh and others, (2013) 4 SCC 656 , it was again observed that it is well-settled that if the collection machinery directed under the Act is such that it cannot be applied to an event, it follows that the event is beyond the charge created by the taxing statute. In observing the aforesaid, the Apex Court not only relied upon C.I.T Bangalore v. B.C. Srinivasa Setty (supra) but also upon the CIT v. Official Liquidator, (1985) 1 SCC 45 and Punjab National Bank v. CIT, (2008) 13 SCC 94 . 24. In A.V. Fernandez v. State of Kerala, AIR 1957 SC 657 , while interpreting the fiscal statues the Apex Court observed as under : “It is no doubt true that in construing fiscal statues and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the Revenue satisfies the Court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter.” 25. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter.” 25. In view of the above decisions it is clear that computation of transit fee on the transport of forest produce/coal as per Rule 5 of the Rules has to be done on the basis of Lorry load, Cart load, Camel load and head load and not otherwise. There is no machinery for assessing the transit fee on the transportation of forest produce/coal by Railway or ARW and BPC system. Therefore, transportation of forest produce/coal by the said modes is beyond the purview of transit fee. 26. Let us also examine the contention of the defendants that a railway wagon would also be a lorry. Therefore, any transportation of coal through railway wagon would be amenable to payment of transit fee under Rule 5 of the Rules. 27. In CST v. Jaswant Singh Charan Singh, AIR 1967 SC 1454 , it was held that while interpreting items in fiscal statutes resort should not be had to the scientific or technical meanings of the terms used therein but to their popular meaning or the meaning attached to them by persons dealing with those terms in a commercial sense. 28. In CST v. G.S. Pai and Company, AIR 1980 SC 611 , it was again laid down that while interpreting entries in taxing legislation, it should be borne in mind that the words used in the entries must be construed not in technical sense but as understood in common parlance. 29. In Indian Cable Co. Ltd. v. CCE, (1994) 6 SCC 610 , it was held that in construing the relevant item or entry in a fiscal statute, the authority concerned must normally construed it in the manner, it is understood in common parlance or in commercial world or trade circles or in the manner, if it is one of everyday use. In other words the item or entry must be given its popular meaning rather than its technical or scientific.This was laid down by following the approach of Lord Esher in Unwin v. Hanson, (1891) 2 QB 115. 30. The Supreme Court in Associated Cement Co. In other words the item or entry must be given its popular meaning rather than its technical or scientific.This was laid down by following the approach of Lord Esher in Unwin v. Hanson, (1891) 2 QB 115. 30. The Supreme Court in Associated Cement Co. Ltd. v. State of M.P. and others, (2004) 9 SCC 727, relying upon CST v. Jaswant Singh Charan Singh (Supra), Minerals and Metals Trading Corporation of India Ltd. v. Union of India, (1972) 2 SCC 620 , Royal Hatcheries (P) Ltd. v. State of Andhra Pradesh, 1994 Supp. (1) SCC 429 and Dunlop India Ltd. v. Union of India, (1976) 2 SCC 241 , reiterated the principle of interpretation that the relevant item or entry in a fiscal statute is to be considered as it is one of everyday use by giving a popular meaning rather in scientific or technical sense. A similar view was expressed in Pleasantime Products v. CCE, (2010) 1 SCC 265 and it was held that the test of “common parlance” ought to be applied in interpreting the meaning of any word appearing in the taxing legislation. 31. In short all the above decisions point out that the meaning of any word used in taxing statute or in any entry thereof has to be as it is understood in “common parlance” in day-to-day life. In this context, now we have to examine the meaning of the word ‘lorry’ as used in Rule 5 of the Rules and if it includes within its ambit the railway wagon. 32. The word ‘lorry’ in his historical form refers to horse-drawn vehicles used for carrying goods as a trolley. It used to be a wooden version of modern car carrying trailer. Later, lorry developed into a sturdier form of a carriage meant for carrying heavier motorcars. They were primarily used as a urban vehicle on paved roads. Subsequently, motor-propelled lorry in the shape of trucks came to be developed. 33. In Britain “lorry” nowadays means any large powered truck. In other words lorry and truck are synonymous these days. 34. A “lorry” is ordinarily defined as a large truck designed to carry heavy loads usually without any sides. It is basically a truck designed to carry freight or goods or to perform special services such as fire fighting. 35. 33. In Britain “lorry” nowadays means any large powered truck. In other words lorry and truck are synonymous these days. 34. A “lorry” is ordinarily defined as a large truck designed to carry heavy loads usually without any sides. It is basically a truck designed to carry freight or goods or to perform special services such as fire fighting. 35. The Cambridge English Dictionary gives the meaning of the “lorry” as a large road vehicle that is used for transporting goods. 36. Collins Cobuild Advanced Learner’s English Dictionary 4th Edition 2003 gives the meaning of the word ‘Lorry’ as a large vehicle that is used to transport goods by road. 37. Oxford English-English-Hindi Dictionary first published in 2008 in its 26th impression February 2013 printed by Oxford University Press also gives the meaning of the word ‘Lorry’ as a large strong motor vehicle that is used by carrying goods by road. 38. Chambers Encyclopedic English Dictionary first published by Chambers in 1994 describes ‘Lorry’ as large heavily built road vehicle for transporting heavy loads. 39. Similarly, The Oxford Thesaurus and Word Power Guide defines ‘Lorry’ as a large, heavy motor-vehicle for transporting goods and troops. It is primarily a heavy truck and is understood as such in common parlance. It does not include a railway wagon, therefore, the use of the word “lorry” in Rule 5 of the Rules would be confined in reference to trucks and would not refer to the railway wagons. 40. Accordingly, the answer to the issue/question No. 1 as formulated in the earlier part of the judgment is that the Rules do not provide for charging transit fee on the transport of forest produce/coal by rail or through AWR and BPC system and as such is outside the purview of transit fee. 41. A reading of Rule 15 and 17 of the Rules make it clear that the Conservator of Forest is the person authorized to establish check posts and depots. According to Rule 17 each check post or the depots is to be managed by an officer appointed by or under the order of the Conservator of Forest or the Divisional Forest Officer. Thus, the check posts or depots have been kept under supervision, control or charge of an officer to be appointed by the Conservator of Forest or the Divisional Forest Officer of the Forest Department. Thus, the check posts or depots have been kept under supervision, control or charge of an officer to be appointed by the Conservator of Forest or the Divisional Forest Officer of the Forest Department. Rule 5 provides for payment of transit fee on the check posts or depots. Thus, obviously transit fee, if at all, has to be collected by the authorized officer of the Forest Department. The Regional Officer, Sonebhadra vide letter dated 11th July 2003 addressed to the NCL on the basis of the letter of the Chief Secretary, U.P. Government dated 14th June 1999 has intimated the NCL that transit fee @ Rs. 5 per ton is realizable on coal mind from its collaries and therefore the requisite amount for the years 1999-2000 and 2000-2001 be paid by the department. 42. The notice dated 12th May 2008 again of the Regional Forest Officer addressed to the NCL directs it to provide with the necessary amount failing which the Railway rakes would be ceased under Section 52 of the Forest Act. Similar letters of the year 2010 directing for realizing Rs. 38/- per tonne for the coal mines have also been produced and relied upon. 43. Under the Rules we were unable to find any provision which authorizes the NCL to deduct, collect or realize the transit fee from the petitioner. The above letters are only demand letters which do not authorizes the NCL to collect transit fee from the purchasers of the coal. In the absence of any Rule or any authorization by the Conservator of Forest or the Divisional Forest Officer authorizing the General Manager, NCL to realize the transit fee from the petitioner, we are of the opinion that the NCL has no authority of law to make any deduction or to realize transit fee from the petitioner not even on the basis of the letters referred to above. 44. The above discussion leads us to answer the second issue/question in favour of the petitioner and we hold that the NCL has no authority to collect the transit fee as it has not been authorized to do so by any competent officer of the forest department. 45. The ancillary issue that the dispute, if any, regarding payment of statutory dues is a subject-matter of arbitration, we are of the opinion that the submission in this regard is completely mis-conceived and is not tenable in law. 45. The ancillary issue that the dispute, if any, regarding payment of statutory dues is a subject-matter of arbitration, we are of the opinion that the submission in this regard is completely mis-conceived and is not tenable in law. In the present case there is no dispute regarding payment of statutory charges between the parties to the contract rather the petitioner is challenging the authority of the forest department in levying and realizing transit fee through the NCL. Thus, the issue is purely legal in nature and beyond reference to any arbitration. If the Statute does not provide for charging of transit fee on transportation of coal by AWR and BPC system or Railways and there is no statutory liability upon the petitioner to pay it, the same cannot be realized by NCL under the contract and would thus be not referable as a dispute for adjudication to the arbitration. 46. In view of the aforesaid facts and circumstances,the respondents are not competent to realize transit fee on the transport of coal by rail or through AWR and BPC system. The writ petitions accordingly stand allowed and a mandamus is issued to the respondents not to realise any transit fee from the petitioner on the transportation of coal through rail mode or AWR and BPC system.