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Manipur High Court · body

2019 DIGILAW 23 (MAN)

Seram Stalon Singh v. State of Manipur

2019-04-10

KH.NOBIN SINGH

body2019
JUDGMENT [1] Heard Shri H.S. Paonam, learned Senior Advocate appearing for the petitioners and Shri H. Debendra, learned Government Advocate for the respondents. [2] The above writ petitions have arisen out of a similar set of facts and therefore, the same are being disposed of by this common judgment and order. WP(C) No. 24 of 2018 [3.1] By the instant writ petition, the petitioners have prayed for issuing a writ of certiorari or any other appropriate writ to quash and set-aside the Notification dated 29.10.2016 issued by the Addl. Chief Secretary (For. Envt.), Government of Manipur classifying trees and other tree species with rates of royalties to be imposed thereon including Kwamana, Panamana, Betel leaves (Leaf), Piper betle as reflected in serial No. 58 thereof. [3.2] Facts and circumstances as narrated in the writ petition, are that the petitioners are agencies/ running shops for selling Kwamana, Panamana, Betel leaves (Leaf), Piper betle at different places in the State of Manipur for the last more than 10(ten) years. [3.3] The product of Kwamana, Panamana Betel Leaves (Leaf), Piper betle (hereinafter referred to as "the betel leaves") is basically a commodity in the State of Manipur as it is considered to be an essential component in every ritual and traditional functions of Manipur including marriage ceremony, shradha ceremony and all kind of religious ceremonies and the betel leaves are imported/ brought from the neighboring states like West Bengal, Assam etc. where they are abundantly planted and grown. The product of betel leaves is said to be a horticulture product and a perishable item which was not included in the list of forest produce for the last many years in the State of Manipur. Very recently and only when the forest authority started levying of royalty, it came to the notice of the petitioners that the said items are found to be included as forest produce as reflected in the impugned Notification dated 29.10.2017. The betel leaves brought from outside the State as such, cannot be treated as forest produce as they are not available and grown in the forest of the State of Manipur but are planted as horticulture or agriculture items by the interested farmers. The betel leaves brought from outside the State as such, cannot be treated as forest produce as they are not available and grown in the forest of the State of Manipur but are planted as horticulture or agriculture items by the interested farmers. Having regard to its availability and uses in the State of Manipur, the transportation of betel leaves in large scale by way of importing from the neighboring States like West Bengal and Assam is the usual norm and practice for the last many years. The plantation of betel leaves as horticulture items is seen in the State of Manipur and in particular, in the District of Kakching where Shri Mayanglambam Ajad Singh, Kakching Lotnung is growing betel leaves in an area of more than 4 hectres on his own lands including the ones at Noney and Jiribam which will amply establish that the betel leaf is not a forest produce in the State of Manipur. [3.4] In other parts of the country and in particular, the neighboring States of Manipur, the betel leaves are included as agriculture products and the marketing and dealing in betel leaves, say, the issuance of licence, is regulated by the law enacted by them. In West Bengal, the issuance of license is regulated by the West Bengal Agricultural Produce Marketing (Regulation) Act, 1972 as amended from time to time and the rules made thereunder and under the provisions of said Act, the betel leaves and betel nuts are included as agricultural items and perishable agricultural products. [3.5] In the State of Manipur, as on date there is no any Marketing Regulation Act enacted by the State Legislature either under the Agriculture Department or the Horticulture Department or the Forest Department to regulate the issuance of license with respect to the business in their respective products and items under their respective jurisdiction which has resulted in the rampant misuse in allowing business transaction of different agricultural forest products. [3.6] In terms of the Notification dated 28.06.2017 issued by the Government of India, Ministry of Finance, certain goods of intra-state supplies are exempted from the purview of Section 9 of the Central Goods and Service Tax Act, 2017, of which the betel leaf is shown at serial No. 93 under tariff item 14049040. [3.6] In terms of the Notification dated 28.06.2017 issued by the Government of India, Ministry of Finance, certain goods of intra-state supplies are exempted from the purview of Section 9 of the Central Goods and Service Tax Act, 2017, of which the betel leaf is shown at serial No. 93 under tariff item 14049040. Therefore, any kind of goods and services tax cannot be levied on betel leaves, as it is one of the goods exempted from the Value Added Tax (VAT) which can be seen from Scheduled A providing list of goods exempted from the VAT under Section 17 of the Act. In the said Schedule, the betel leaf is found at serial No. 4 and therefore, the imposition and levying of VAT on betel leaves is an illegal tax collection. [3.7] The Imposition of levy as transit pass fee and VAT on transportation of betel leaves from outside the State of Manipur by the officials of the Forest Department at forest gates in the State of Manipur and the starting of strict enforcement on collection of royalty has become a serious concern to the agencies and the dealers of betel leaves in the State of Manipur. The petitioners made a request for providing license/or permit for dealing in the items, if so required, subject to payment of fees prescribed as is done in other States like Assam, West Bengal etc. but the officials flatly refused to give any satisfactory reply stating that in terms of the conditions mentioned in the Notification dated 29.10.2016, the agencies/ dealers/ individuals transporting betel leaves are required to give royalty at the rate specified therein. Even though the Notification dated 29.10.2016 clearly provides that VAT will be exempted in respect of items specifically exempted under the relevant law, the forest officials who are collecting and levying royalty, go on collecting VAT on the Trucks transporting and importing betel leaves and as on date, a huge amount has already been collected by way of royalty, GST and VAT. [3.8] Being aggrieved by such erroneous inclusion of betel leaves as forest produce for which the royalty is livable, the Self Help Group, Betel Leaves Sell Vendor, an association formed by individual and agencies dealing in betel leaves in the State of Manipur through its president, submitted a representation dated 03.07.2017 to the Additional Chief Secretary (Forest and Environment), Government of Manipur for consideration of revocation/ cancellation of the inclusion of betel leaves at serial No.58 of the Notification dated 29.10.2016, wherein it has been categorically pointed out that betel leaf which is a perishable product and a basic commodity in the State of Manipur because of its essentiality and uses in every ritual and tradition/ function of Manipur being an agriculture product, shall be removed from the inclusion as livable forest produce as it has highly marginalized demand and uses of betel leaves which are imported from other State. It has also been pointed out that betel leaf as such is an agricultural item/ product in other part of the country and therefore, its inclusion as forest produce would be a mistake deserving its exclusion from the impugned Notification. However, as on date, no positive response has been received from the concerned authority. [3.9] Shri L. Decemhing who desired to know whether the Betel Leaf is a forest produce or not, approached the SPIO/ Additional Chief Secretary (Forest and Environment), Government of Manipur by way of an application dated 02-08-2017 under the RTI seeking information on 5 (five) queries and in respect of information sought for under query (a), (b) and (c), no information was supplied but in response of the query No. d, the Assistant Conservator of Forest, Manipur furnished the information relating to the collection of royalty on betel leaves with details thereof and the area where the royalty is not yet collected like the District of Thoubal. As per the information furnished by the concerned authorities, a sum of Rs. 11,80,270/- (Rupees eleven lakh eighty thousand two hundred seventy) only has been collected. [3.10] Levy of royalty is being done by the Forest Department without having any law to regulate as to how the transaction and transportation of the betel leaves be made a business item; a license/ permit for dealing in the item can be issued; its eligibility criteria etc. [3.10] Levy of royalty is being done by the Forest Department without having any law to regulate as to how the transaction and transportation of the betel leaves be made a business item; a license/ permit for dealing in the item can be issued; its eligibility criteria etc. thereby resulting in the arbitrary exercise of power at the whims and caprice of the Forest Department. The inclusion of betel leaves for levying royalty needs to be considered until and unless a regulation is framed, in this regard, be it treating as forest produce, agriculture item or horticulture item. Betel leaf is not available in forest areas of the State of Manipur and only wild betel leaves growing in the forest areas, are not consumable and therefore, betel leaves transported/ imported from other State like West Bengal where it is specified as agricultural product, cannot be converted into a forest produce in the State of Manipur for the purpose of levying tax or royalty. The agencies/ dealers in the State of Manipur dealing in betel leaves having procured the said items from the dealers in originating point paying the tax which are included in the sale and purchase transaction, are subjected to double taxation by the imposition of royalty which is against the basic tax law and therefore, the imposition of royalty on betel leaves imported from outside the States like West Bengal, Assam etc., warrants immediate interference by this Court. The imposition and collection of VAT as clearly seen from the challans enclosed hereinabove by the officials of the Forest Department at the forest gates in the State of Manipur being illegal collection of tax in view of the Government of India?s Notification dated 28.06.2017 with specifying the exempted goods from the purview of VAT, are liable to be refunded to the petitioners and other dealers. The Notification levying the royalty on the item of betel leaves and collection of VAT thereon have highly infringed upon the fundamental rights as enjoined under Article 14,19 (1) (g) and 21 of the Constitution of India and also the rights conferred by Article 301 of the Constitution of India and therefore, the impugned Notification in respect of betel leaves found at serial No. 58 is liable to be quashed and set aside. The failure on the part of the concerned Department to provide information in response to the RTI application in respect of query (a) (b) and (c) has apparently fortified that the Forest Department has not applied its mind in ascertaining about betel leaves as forest produce or not in the State of Manipur. [4] In the affidavit-in-opposition filed on the respondents, it has been stated that as per the policy decision of the State Government, the betel leaves are included as non-wood forest produce for the last so many years and therefore, in order to regulate the charges/ fee for royalty/ transit pass as per rate fixed by the State Government time to time, the Notification dated 29-10-2016 was issued in exercise of power conferred under Section 32, 41, 42 and 76 of the Indian Forest Act, 1927 read with the Rules 27, 32 and 36 of the Manipur Forest Rule, 1971. Since the betel leaves having appeared at serial no.58, the hearsay knowledge of the petitioners that the product of betel leaves is a horticulture product, is denied. The betel leaves are wild in origin like any other species of plants and since they can be cultivated by someone, they do not become horticulture /agriculture item unless the competent authorities take necessary action to that effect. The betel leaf falls very much within the meaning of forest produce as defined under the Indian Forest Act, 1927 and till date, the betel leaves are treated as non-wood forest produce in the State of Manipur. Like the neighbouring States, the State Government may not have enacted law but the State Government has taken a conscious policy decision to include regulation and realization of government dues at the rate fixed by the competent authority from time to time. As per the policy decision of the State Government as explained, VAT is imposed on betel leaf and in the same manner, the royalty/ transit pass fee on transportation of betel leaves from outside the State of Manipur is being imposed as per the policy decision. Since these two taxes are charged under different heads, the same is permissible in law and therefore, the representation dated 03-07-2017 could not be conceded. Since these two taxes are charged under different heads, the same is permissible in law and therefore, the representation dated 03-07-2017 could not be conceded. As regards the query, it was referred to all the territorial Divisional/ Forest Officers for furnishing information but the fact that royalty/ fee is not realized by the DFO, Tengnoupal does not mean that the existing rules are not enforced throughout the State of Manipur. As the rules in force are being implemented, the question of arbitrary exercise of power at the whims and caprice does not arise. In the Addl. Affidavit filed on behalf of the respondents, it has been stated that the betel leaf is a forest produce and is available in the forest of Tameglong, Churachandpur, Jiribam and other parts of Manipur. The large scale transportation for consumption has necessitated regulating its transit under the relevant provisions of the Indian Forest Act, 1927. Therefore, after due consideration, the State Government took a policy decision and issued a Notification dated 28-04-2018 to the effect that the plants/ trees found growing in the forest shall be forest produce and that it will be regulated under Rule 33-36 of the Manipur Forest rules, 1971. Such an act is a fiscal policy matter of a State and it does not amount to imposition of restrictions on the freedom of trade and commerce between one State and another. Levy of fees by the State for facilitating transit and movement of forest produce in Manipur is empowered under Entry 66 of List-II. In Review Petition No.1 of 2010 [Ref: WA No.94 of 2000], the Gauhati High court, Imphal Bench passed a judgment and order dated 15-09-2010 upholding the action of the State Government in the collection of transit fee/ service charge. It is well settled that traditional concept in a fee of quid pro quo is undergoing transformation and that the fee must have relation to the service rendered of the advantaged conferred, such relation need not be direct, a casual relation may be enough. In Principal Chief Conservator of Forest ors v. Yamthong Haokip, CA No.2532 of 1998, the Hon?ble Supreme Court held that after realizing lease fee under a lease agreement, no royalty can be charged afterwards. Refuting the contention of the State Government in the Addl. In Principal Chief Conservator of Forest ors v. Yamthong Haokip, CA No.2532 of 1998, the Hon?ble Supreme Court held that after realizing lease fee under a lease agreement, no royalty can be charged afterwards. Refuting the contention of the State Government in the Addl. Affidavit, it has been stated in the rejoinder that the provisions of the rules as mentioned therein, are not applicable to the facts of the present case for the reason that Rule 27 will apply in respect of forest produce removed from protected forest and moreover, the imposition of transit fee will arise, only when some kind of service facilitating the transportation are rendered by the State Government. The levy of royalty is permissible on the transportation of betel leaves being exported outside the State of Manipur. WP (C) No. 315 of 2018 [5.1] The validity and correctness of the order dated 13-04-2018 issued by the Under Secretary to Government, Department of Forest Environment, Government of Manipur is under challenge in this writ petition. [5.2] On 06-04-2018 when the writ petition being WP(C) No.24 of 2018 came up for consideration, this court passed an order suspending the Notification dated 29-10-2016 by which the royalty was levied on the betel leaves subject to furnishing of bank guarantee in favour of the Registrar General, High Court of Manipur. In a purported compliance with this court?s order dated 06-04-2018, the State Government issued the order dated 13-04-2018, impugned herein, to the effect that the transportation of betel leaves shall remain suspended within the State of Manipur with immediate effect and until further orders. Being aggrieved by it, the instant writ petition has been filed on the inter-alia ground that the portion of the order cancelling the transportation of betel leaves has infringed the fundamental rights as enjoined under Article 14, 19(1(g) and 21 of the Constitution and also the rights conferred by Article 301 of the Constitution. [5.3] An affidavit-in-opposition has been filed on behalf of the respondent Nos. [5.3] An affidavit-in-opposition has been filed on behalf of the respondent Nos. 1 4 but the averments made therein are similar to that of the affidavit filed in WP(C) No.24 of 2018 and therefore, the same are not repeated here for the sake of brevity WP (C) No. 330 of 2018 [6.1] By the instant writ petition, the petitioner has prayed for issuing a writ of certiorari or any other appropriate writ to quash and set aside the order dated 13-04-2018 issued by the Under Secretary to the Government of Manipur, Department of Forest Environment, Manipur. [6.2] According to the petitioner, he is a transporter of betel leaves from different places outside the State of Manipur for the fifteen years. On 14-04-2018, four TATA DI vehicles loaded with betel leaves, were sent in his name by R.K.Agency from Midnapur, West Bengal under various challans. All the said vehicles were seized by the Forest Department, Government of Manipur as well by the Police on the ground that the transportation of betel leaves had been cancelled vide order dated 13-04-2018. Being aggrieved by it, the same has been challenged by him contending that it has infringed his fundamental rights as enjoined under Article 14, 19(1(g) and 21 of the Constitution and also the rights conferred by Article 301 of the Constitution. WP (C) No. 344 of 2018 [7.1] In this writ petition also, the validity and correctness of the Notification dated 29-10-2016 is under challenge. [7.2] According to the petitioner, he is the transporter of the product of betel leaves from different places outside the State of Manipur for the last about fifteen years. The averments made in the writ petition are more or [ less the same as that of the WP(C) NO.24 of 2018 and therefore, the same are not repeated here for the sake of brevity. Similar is the case with the affidavit-in-opposition filed on behalf of the respondents and there is no need of referring thereto, since a detailed affidavit-in-opposition has already been filed in WP(C) No.24 of 2018 on behalf of the respondents. The same can be referred to at the time of hearing the present case. Similar is the case with the affidavit-in-opposition filed on behalf of the respondents and there is no need of referring thereto, since a detailed affidavit-in-opposition has already been filed in WP(C) No.24 of 2018 on behalf of the respondents. The same can be referred to at the time of hearing the present case. WP(C) No. 1042 of 2018 [8.1] By the instant writ petition, the petitioner has prayed for issuing a writ of certiorari or any other appropriate writ to quash and set aside the Notification dated 28-04-2018 issued by the Joint Secretary (For. Evnt.), Government of Manipur. [8.2] According to the petitioner who is the petitioner in WP(C) No.330 of 2018 and WP(C) No.344 of 2018, he is the transporter of the product of betel leaves from different places outside the State of Manipur for the last about fifteen years. At the time of filing the affidavit-in-opposition in WP(C) No.344 of 2018, a copy of the order dated 28-04-2018 was enclosed wherein it is mentioned that in terms of Section 2(4)(b) of the Indian Forest Act, 1927, the betel leaf is a forest produce, as the same is found growing in the forest of Manipur. Being aggrieved by it, the instant writ petition has been filed on the inter-alia ground that since the betel leaves are not available in the forest of Manipur, the act of issuing the Notification dated 28-04-2018 is an arbitrary exercise of power and without application of mind and that the Notification being a clear notification to overrule and nullify the order passed by this court, is liable to be declared as void. WP(C ) No. 1043 of 2018 [9.1] In this writ petition also, the validity and correctness of the Notification dated 28-04-2018 issued by issued by the Joint Secretary (For. Evnt.), Government of Manipur is under challenge. [9.2] The present petitioners are the petitioners in WP(C) No.24 of 2018 and WP(C) No.315 of 2018 and are the agencies/ running shops selling betel leaves for the last 10 years. In the affidavit-in-opposition filed on behalf of the respondents, a copy of the Notification dated 28-04-2018 was enclosed wherein it is mentioned that in terms of Section 2(4)(b) of the Indian Forest Act, 1927, the betel leaf is a forest produce, as the same is found growing in the forest of Manipur. In the affidavit-in-opposition filed on behalf of the respondents, a copy of the Notification dated 28-04-2018 was enclosed wherein it is mentioned that in terms of Section 2(4)(b) of the Indian Forest Act, 1927, the betel leaf is a forest produce, as the same is found growing in the forest of Manipur. Being aggrieved by it, the instant writ petition has been filed on the inter-alia ground that since the betel leaves are not available in the forest of Manipur, the act of issuing the Notification dated 28-04-2018 is an arbitrary exercise of power and without application of mind and that the Notification being a clear notification to overrule and nullify the order passed by this court, is liable to be declared as void. [10] Relying upon the affidavit filed on behalf of the respondents, it has been submitted by Shri H. Debendra, the learned Government Advocate that as per the policy decision of the State Government, the betel leaves are included as non-wood forest produce for the last so many years and therefore, in order to regulate the charges/ fee for royalty/ transit pass as per the rate fixed by the State Government time to time, the Notification dated 29-10-2016 was issued in exercise of power conferred under Section 32, 41, 42 and 76 of the Indian Forest Act, 1927 read with the Rules 27, 32 and 36 of the Manipur Forest Rule, 1971. In order to substantiate his submission, he has relied upon the decisions rendered by the Hon?ble Supreme Court in Balco Employees Union (Regd) v. Union of India ors., (2002) 2 SCC 333 , the Hon?ble Supreme Court held: "93. Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In other words, it is not for the courts to consider relative merits of different economic policies and consider whether a wiser or better one can be evolved. For testing the correctness of a policy, the appropriate forum is Parliament and not the courts. Here the policy was tested and the motion defeated in the Lok Sabha on 1-3-2001." On the other hand, it has been submitted by Shri H.S Paonam, the learned Sr. For testing the correctness of a policy, the appropriate forum is Parliament and not the courts. Here the policy was tested and the motion defeated in the Lok Sabha on 1-3-2001." On the other hand, it has been submitted by Shri H.S Paonam, the learned Sr. Advocate appearing for the petitioners that the imposition of royalty or VAT on betel leaves imported from outside the States like West Bengal, Assam etc. by the officials of the Forest Department at the forest gates in the State of Manipur are illegal; that that the Notification levying the royalty on betel leaves and collection of VAT thereon has infringed the fundamental rights as enjoined under Article 14,19 (1) (g) and 21 of the Constitution of India and also the rights conferred by Article 301 of the Constitution of India and that the said Notifications are liable to be quashed and set aside. From the pleadings as aforesaid and the submissions of the learned counsel appearing for the parties, the following issues have arisen for consideration by this court: (a) What does the expression "forest produce" as defined in Section 2(4) of the India Forest Act, 1927 mean? (b) Whether the State of Manipur is empowered to levy royalty and VAT on the transportation of betel leaves from outside the State of Manipur? [11] The Indian Forest Act, 1927 was enacted by the British Government in India. It extends to the whole of India except those territories mentioned therein. The word "forest" is not defined in the Act. In T.N Godavarman Thirumulkpad v. Union of India, (1997) 2 SCC 267 , it has been observed by the Hon?ble Supreme Court that the word "forest" must be understood according to its dictionary meaning. This description covers all statutorily recognized forests, whether designated as reserved, protected or otherwise for the purpose of Section 2 (i) of the Forest Conservation Act. The expression "forest produce? is defined in Section 2(4) of the Act but it is an inclusive definition. Section 2 (4) of the Act reads as under: "(4) "forest produce" includes - (a) The following whether found in, or brought from, a forest or not that is to say?timber, charcoal, caoutchouc, catechu, wood-oil, resin, natural varnish, bark, lac, mahua flowers, mahua seeds, [kuth] and myrabolams, and (b) The following when found in, or brought from a forest, that is to say ? (i) Trees and leaves, flowers and fruits, and all other parts or produce not hereinbefore mentioned, of trees, (ii) Plants not being trees (including grass, creepers, reeds and moss), and all parts or produce of such plants, (iii) Wild animals and skins, tusks, horns, bones, silk, cocoons, honey and wax, and all other parts or produce of animals, and (iv) Peat, surface soil, rock and minerals (including lime-stone, laterite, mineral oils, and all products of mines or quarries)." For the present cases, Section 2(4)(b)(ii) of the Act is relevant which states about the expression "plants not being trees (including grass, creepers, reeds and moss) and all parts or produce of such plants" (hereinafter referred to as "the plants"). It may be noted that this expression is qualified by the expression "when found in or brought from a forest". It means that all the plants as mentioned in sub-section (4)(b)(ii) will come within the meaning of "forest produce", only when they are found or brought from a forest. In this regard, the intent of the legislature can b e clearly and succinctly understood, when Section 2(4)(a) too is read simultaneously wherein the items enumerated are qualified by the expression "whether found in, or brought from a forest or not". The difference in the said qualified expressions occurring in Section 2(4)(a) and 2(4)(b)(ii) is quite clear and unambiguous. The origin of the produce is relevant and important, so far as the forest produce in relation to the plants is concerned. The conjoint reading of Section 2(4)(a) and 2(4)(b)(ii) makes it very clear that so far as the plants are concerned, they will come within the meaning of "forest produce" when they are found or brought from a forest. In other words, in the context of Manipur, the forest produce means the produce found or brought from the forest of Manipur and only then, the State of Manipur will be competent to levy royalty, otherwise not. The plants similar to that of the ones mentioned in Section 2 (4)(b)(ii) of the Indian Forest Act, 1927, if planted and grown in the agricultural fields or any land other than the forest, will not come within the meaning of forest produce. The plants similar to that of the ones mentioned in Section 2 (4)(b)(ii) of the Indian Forest Act, 1927, if planted and grown in the agricultural fields or any land other than the forest, will not come within the meaning of forest produce. Therefore, the betel leaves which are either imported or brought from other States which are treated as horticulture or agricultural product in their States, cannot be said to be forest produce in the State of Manipur for the reason that they are neither found nor have they been brought from the forest of Manipur. In short, the State of Manipur will have jurisdiction for purpose of imposing royalty or a transit fee on the transportation of the plants when they are found or brought from the forest of Manipur and it cannot assume jurisdiction over the plants which are found or brought from a forest in other States, leave alone the plants planted and grown in the agricultural fields which can never be said to be ?forest produce?. [12] In exercise of power conferred by various provisions of the Indian Forest act, 1927, the Manipur Forest Rules, 1971 came to be made [ wherein, it may be noted, the term "forest" is not defined nor is the expression "forest produce" defined. In order to decide the issues involved herein, certain provisions of the Manipur Forest Rules, 1971 need to be gone into and the same are: "Levy of royalty "27. The Chief Conservator of Forests shall levy rates of royalty payable for each kind of forest produce removed from protected forests according to schedule fixed by the Govt. from time to time. Mode of removal 33.(a) No forest produce shall be removed except as provided in Sub-Rule (b) of this Rule unless covered by a pass which shall be in the form of :- (i) a permit issued by a duly authorized Forest Officer in the case of forest produce where the transit is to take place within the State and by the State Government or by an officer duly authorised by the Government in this behalf where the forest produce is to be transported outside the State. Provided that for transport of minor forest produce like Dalchini, Agar, Cane and Bamboo (except Timber of any kind) outside the State of Manipur, the Divisional Forest Officers concerned shall continue to issue necessary pass by realizing transit pass fee (No. 51/25/81 ? or dt.21/4/86). (ii) a certificate of origin (in the form prescribed in Appendix A) in the case of forest produce from private lands for which nothing is due to Government. Such certificate must be issued by the owner of such land or his duly authorized agent and must bear such signature or stamp of the owner or his agent as has been previously registered in the Forest Office and such certificate shall be produced by the holder at the Revenue station specified therein to be dealt with as noted hereafter. NOTE: The Certificate of origin must be issued in all cases whether the owner himself or any other person removes the produce. (iii) a transit pass (in the form prescribed in Appendix "B") issued by a Forest Officer, in token of full payment of all amounts due to government an account of the forest produce covered by it. In special cases, the Chief Conservator of Forests may permit the issue of transit passes by any person duly authorized by him. Provided that no certificate of origin or other pass shall be required for the transport of home grown bamboos. No. royalty will be realized on bamboos of any kinds unless they are known to have come from Government forest. (b)(i) Lac intended for export can be moved within a plains area or to a plains area from a neighboring hill area without a transit pass or permit from the place of origin to the storage godown or premises of the purchaser, subject to the provision of items (i) and (ii) below. (ii) All traders who at any time store lac exceeding 50 maunds in their godown or premises must register such godowns or premises with the Chief Conservator of Forests. All traders in lac not coming under the definition will remain as therefore under the condition of Rule 33(a). (iii) All traders who register godowns or premises under (i) will pay the royalty due on lac brought to such godowns or premises, other than lac covered by certificate of origin within 7 days of its receipt and receive a storage receipt for the amount. (iii) All traders who register godowns or premises under (i) will pay the royalty due on lac brought to such godowns or premises, other than lac covered by certificate of origin within 7 days of its receipt and receive a storage receipt for the amount. (iv) Transit passes will be issued free on request for export of lac against storage receipt issued under item (iii). (v) The stock held in registered storage godowns or premises is subject to check at any time by any Forest Officer and all facilities etc. for such check must be given by the owners of registered storage godown or premises. 35.(a) All forest produce is transit covered by a permit or certificate of origin shall be taken to the nearest revenue stations Staffed by Government on the route of extraction except in cases provided for in Rule 36 by the person or person in charge of such forest produce and detained there for examination, measurement, or counting and marking, if necessary, by the Officer in Charge of the Revenue Station. Forest produce in transit to be detained at the nearest Revenue Station (b) In the case of forest produce in transit covered by a permit or a certificate of origin and intended to be exported beyond the area within which it has been collected, a transit pass as prescribed hereinbefore, shall be obtained by the person in charge of such forest produce from the duly authorized Forest Officer-in-charge of a Revenue station in exchange for the permit or the certificate of origin and such forest produce shall not be booked or moved by rail, steamer or boat unless covered by Forest produce in transit to be detained at the nearest Revenue Station such transit pass. When the destination of such forest produce is within the area the permit or certificate of origin shall be endorsed by the duly authorized Officer in-charge for the Revenue stations in token of full payment of all amounts due to government and such endorsed permit or certificate of origin shall be deemed to be transit pass required under these Rules Provided that it shall be within the power of the Officer-in-charge of a Revenue Station to refuse to grant a transit pass or endorse a permit or a certificate of origin if he has reason to believe the permit or the certificate of origin covering the forest produce to be false or if full payment of all amounts due to govt. in respect of the forest produce has not been made. Permission to any forest produce in transit which are not taken to Revenue Station 36.(a) Should the person or person in-charge of any forest produce in transit desire to stop, land cut up, convert or utilize any such produce before taking the same to a Revenue Station, he or they shall obtain the permission in writing of the Officer-in-charge of the nearest Revenue Station. Such Officer shall if he deems fit, grant the permission, proceed in respect of the forest produce as if it had been taken up by a Revenue Station. (b) A fee in lieu of the service rendered in the course of transit as may be prescribed by the State government from time to time shall be levied in respect of forest produce from private land covered by a certificate of origin or in respect of forest produce covered by a permit or in respect of forest produce of which full royalty has been paid." [13] As has been observed hereinabove, the only plants which are found or brought from a forest, will come within the meaning of "forest produce", the ancillary issue is as to whether the betel leaves which are transported from the neighboring State like Assam, West Bengal etc. can be said to be "forest produce" as defined in Section 2(4)(b)(ii) of the Indian Forest Act, 1927 or not. The answer is in the negative for the simple reason that the betel leaves as aforesaid are not found nor are they brought from the forest of Manipur but are brought from neighboring States where the betel leaves have been treated as "agricultural produce". The answer is in the negative for the simple reason that the betel leaves as aforesaid are not found nor are they brought from the forest of Manipur but are brought from neighboring States where the betel leaves have been treated as "agricultural produce". Section 2(1)(i) of the Assam Agricultural Produce Market Act, 1972 defines "agriculture produce" as any produce whether processed or non-processed of agriculture, horticulture, animal husbandry, pisciculture, sericulture and forest as specified in the Schedule wherein the betel leaves have been shown at serial No. XI (8). Similar is the case with the State of West Bengal. In its West Bengal Agriculture Produce Marketing (Regulation) Act, 1972 as amended vide Notification dated 31-03-2017, the expression "agricultural produce" has been defined with the betel leaves being shown in the Schedule. The agricultural produce brought from other States, cannot be said to be "forest produce" in the State of Manipur. The forest produce in respect of plants, in short, means those items, as enumerated in Section 2(4) of the India Forest Act, 1927 which are found or brought from a forest. The betel leaves which are transported/ brought from other States into the State of Manipur, are not the ones found nor are they brought from the forest of Manipur. In this regard, Rule 33 of the Manipur Forest Rules, 1971 provides that no forest produce shall be removed except as provided in sub-rule (b) unless covered by a pass and such a pass shall be in the form of permit issued by an authorized Forest Officer in the case of forest produce where the transit is to take place within the State. Such a permit is to be issued by the State Government where the forest produce is to be transported outside the State. The transportation of forest produce, as contemplated in this rule, can be categorised into two -one, within the State and two, outside the State. It is thus, clear that the transportation of forest produce from outside into the State of Manipur is nowhere contemplated in the rule. [14] As regards the second issue, it may be noted that Rule 37 provides that the Chief Conservator of Forest shall levy rates of royalty for each kind of forest produce removed from the protected forest according to Schedule fixed by the Government from time to time. [14] As regards the second issue, it may be noted that Rule 37 provides that the Chief Conservator of Forest shall levy rates of royalty for each kind of forest produce removed from the protected forest according to Schedule fixed by the Government from time to time. The duty to levy royalty is cast upon the Chief Conservator of Forest but its duty can be discharged only when two conditions are fulfilled - one, the forest produce shall be removed from the protected forest and two, the rates shall be fixed by the State Government. The term "royalty" is also not defined in the Manipur Forest Rules, 1971. The dictionary meaning of the term "royalty" as given in Prem?s Judicial Dictionary is- "Royalties are payments which the Government may demand for the appropriation of minerals, timber or other property to the Government. Two important feature of royalty have to be noticed, they are, that the payment made for the privilege of removal the articles is in proportion to the quantity removed, and the basis for the payment is in agreement". From the law lexicon, the term "royalty? is a payment to a patentee by any agreement on every article made according to his patent; or to an author by a publisher on every copy of his book sold; or to the owner of minerals for the right of working the same on every ton or other weight raised. Royalty is a feudalistic euphemism for the price of the timber. In State of West Bengal v. Kesoram Industries Ltd. ors., (2004) 10 SCC 201 , it has been held by the Hon?ble Supreme Court that royalty is not a tax but the cess on royalty is a tax. It is thus seen that royalty is something which can be levied by the owner from a person who is utilizing his land, mineral, book etc. The idea behind the levy of royalty appears to be that the State Government is the owner of the forest and any person removing forest produce therefrom, is liable to pay royalty. It is thus seen that royalty is something which can be levied by the owner from a person who is utilizing his land, mineral, book etc. The idea behind the levy of royalty appears to be that the State Government is the owner of the forest and any person removing forest produce therefrom, is liable to pay royalty. In the present case, since the State of Manipur is not the owner of the land where the betel leaves, brought from outside the State, are grown nor are they found or brought from a forest in the State of Manipur, the levy of royalty on the said betel leaves is impermissible and consequently, the rate fixed by the State Government as regards the levy of royalty on the said betel leaves is beyond its jurisdiction. Therefore, this court is of the view that the impugned Notifications dated 29-10-2016 and 28-04-2018 are bad in law and are liable to be quashed and set aside. [15] On the issue relating to levy of VAT on the transportation of betel leaves from outside the State, it has been submitted by Shri H.S. Paonam, the learned Sr. Advocate appearing for the petitioners that the betel leaves have been exempted from the levy of VAT. His contention has force and merit for the reason that certain items including betel leaves, are exempted from the payment of tax under the provisions of the GST Act, 2017. On top of that, the Ministry of Finance, Government of India, in exercise of power conferred by Section 11 of the GST Act, 2017, issued a Notification dated 28-06-2017 exempting intra-state supplies of goods, the description of which is given therein, from the whole of the central excise tax leviable thereon under Section 9 of the GST Act, 2017. Thus, it can be safely held that the State of Manipur has no power at all to levy VAT on the betel leaves transported or brought from outside the State. [16] It has been submitted by Shri H. Debendra, the learned Government Advocate that the money collected by the State Government on the transportation of betel leaves from outside the State of Manipur is not in the form of royalty or for that matter, VAT but in the form of transit fee, for which he relied upon the decision rendered by the Hon?ble Supreme Court in State of UP ors. v. Sitapur Packing Wood Suppliers ors., (2202) 4 SCC 566 wherein the Hon?ble Supreme Court has held that the question of quid pro quo is necessary when a fee is compensatory. It is well settled that for every fee, quid pro quo is not necessary. The transit fee being regulatory, it is not necessary to establish the factum of rendering service. There is no question of a levy of transit fee being invalidated on the ground that quid pro quo has not been established. It is not in dispute that the transit fee can be imposed by the State Government on the transportation of forest produce as defined in the Indian Forest Act, 1927. What does the expression "forest produce" mean, has been observed in the preceding paragraphs to mean only produce found or brought from the forest of Manipur, so far as the State of Manipur is concerned. In the present case, the said betel leaves are neither found nor are they brought from the forest of Manipur but are brought from the neighboring States for consumption in the State of Manipur. From the copies of the challans filed along with the writ petitions, it is seen that what has been charged on the said betel leaves, is not the transit fee but the royalty and the VAT and moreover, the transit fee too can be imposed on the forest produce transported within the State or to other places outside the State as is evident from Rule 33 of the Manipur Forest Rules, 1971. Since the betel leaves are brought from outside the State of Manipur, the imposition of transit fee thereon is impermissible. As regards the argument advanced by the learned Government Advocate with respect to policy decisions, it is true that it is the domain of the State Government to make policy decisions but it cannot do so contrary to the provisions of the Constitution of India or any other provisions of a Statute. The expression "forest produce" is defined in Section 2 (4) of the India Forest Act, 1927 and the exercise of power by the State as regards the imposition of transit fee on betel leaves, leave alone royalty and VAT shall be confined to it and cannot go beyond its jurisdiction. The State Government shall exercise its powers within the bounds of the provisions of the Indian Forest Act, 1927 as observed hereinabove. The State Government shall exercise its powers within the bounds of the provisions of the Indian Forest Act, 1927 as observed hereinabove. [17] Admittedly, pursuant to the Notifications impugned herein, a large sum of money has been collected by the State Government either in the form of royalty or VAT or the transit fee which is found to be erroneous and illegal as has been held hereinabove. The said Notifications having been held hereinabove that they are bad in law, the question whether the petitioners are entitled to refund the same, needs to be considered by this court. The State Government being an institution as well as a welfare State, the money being collected by it has become public money. In the peculiar facts and circumstances of the present case and in view of the fair submission of the learned counsel appearing for the petitioners that the prayer for refund will be given up in the event of the issues being decided by this court in their favour, this court is of the view that no order need be passed by this court for refund of the said amount of money collected from the petitioners. [18] In view of the above and for the reasons stated hereinabove, the instant writ petitions are allowed and consequently, the Notifications dated 29-10-2016 issued by the Addl. Chief Secretary (Forest Environment), Government of Manipur; the order dated 13-04-2018 issued by the Under Secretary to Government, Department of Forest Environment, Government of Manipur and the Notification dated 28-04-2018 issued by the Joint Secretary (Forest Environment) Government of Manipur are quashed and set aside with no order as to costs.