Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Indian Laws Indian Laws + SC Indian Laws - 2017 (9) TMI SC This

  • Login
  • Cases Cited
  • Referred In
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2017 (9) TMI 1901 - SC - Indian Laws


Issues Involved:
1. Levy of transit fee by the States of Uttar Pradesh, Uttarakhand, and Madhya Pradesh.
2. Validity of transit fee rules and amendments.
3. Interpretation of the term "forest produce."
4. Impact of the Mines and Minerals (Development and Regulation) Act, 1957 on the Indian Forest Act, 1927.
5. Legality of transit fee on manufactured goods and minerals.
6. Refund of transit fee collected under invalidated rules.

Detailed Analysis:

I. Levy of Transit Fee:
The primary issue was the levy of transit fee by the States of Uttar Pradesh, Uttarakhand, and Madhya Pradesh on the transportation of forest produce. The States levied this fee under the Indian Forest Act, 1927, and respective state rules. The Supreme Court consolidated various appeals challenging the validity of these levies.

II. Validity of Transit Fee Rules and Amendments:
The Court examined the validity of the Uttar Pradesh Transit of Timber and other Forest Produce Rules, 1978, and its amendments. The Fourth and Fifth Amendment Rules were struck down by the Allahabad High Court for being excessive and confiscatory. The Supreme Court upheld this decision, noting that the amendments were excessive and changed the fee's character into a tax.

III. Interpretation of "Forest Produce":
The Court clarified that the term "forest produce" includes items like stone grits, stone chips, coal, limestone, and marble slabs, which do not lose their character as forest produce even after processing. However, items like fly ash, clinker, and synthetic gypsum were not considered forest produce.

IV. Impact of the Mines and Minerals (Development and Regulation) Act, 1957:
The Court held that the Indian Forest Act, 1927, and the Rules framed under Section 41 are neither overridden nor impliedly repealed by the Mines and Minerals (Development and Regulation) Act, 1957. Both legislations operate in different spheres and fields.

V. Legality of Transit Fee on Manufactured Goods and Minerals:
The Court ruled that the crushing of stones into grits, chips, and dust does not result in a new commodity different from forest produce. Similarly, coal, limestone, and marble slabs remain forest produce. The Court also upheld the validity of transit fees on these items, rejecting the argument that they lose their character as forest produce after processing.

VI. Refund of Transit Fee Collected Under Invalidated Rules:
The Court directed that the writ petitioners from whom transit fee was realized with effect from 01.05.2016 under the Fifth Amendment to 1978 Rules are entitled to claim a refund along with interest at 9%, provided they establish that they have not passed on the burden to any other person.

Separate Judgments:
The Court delivered a separate judgment for the State of Madhya Pradesh, allowing its appeals and setting aside the High Court's decision that quashed the notification fixing the transit fee. The Court held that the State was justified in fixing the rate of transit fee and that the notification was within the power of the State under Rule 5 of the 2000 Rules framed under the 1927 Act.

Conclusion:
The Supreme Court's judgment addressed the validity of transit fee levies, the interpretation of "forest produce," the impact of the MMDR Act, and the legality of transit fees on processed goods and minerals. The Court upheld the striking down of excessive amendments to transit fee rules and provided guidelines for the refund of fees collected under invalidated rules.

 

 

 

 

Quick Updates:Latest Updates