2011 (12) TMI 474 - HC - VAT and Sales Tax

Registration fee - import of coal - Held that - In the present case the petitioners are bringing coal from the collieries of Coal India Limited purchased by e-auction. They also purchase coal from the traders of Jharkhand Bihar and Assam. There is no provision under the Indian Forest Act 1927 and the Rules of 1978 for registration of any dealer. There is only a provision of registration of marks for issuance of foreign passes. The petitioners are not the importer of coal from outside the India nor exports the coal within the country to outside India. Thus the insistence for registration and for charging the registration fees is beyond the authority conferred upon the respondents under the Indian Forest Act 1927 and the Rules of 1978. W.P. allowed.

Summary

Issues:
1. Requirement of registration fee for the import of coal under the U.P. Value Added Tax Act, 2008.
2. Interpretation of rules 20 and 21 of the U.P. Transit of Timber and other Forest Produce Rules, 1978.
3. Applicability of registration provisions under the Indian Forest Act, 1927 and Rules of 1978 to dealers importing forest produce in the State of U.P.

Analysis:
1. The petitioners, engaged in coal trading and registered under the U.P. Value Added Tax Act, sought relief from the imposition of registration fees on coal imports. The respondents argued that rules 20 and 21 of the U.P. Transit of Timber Rules, 1978 necessitate registration for forest produce imports. However, the court found no provision for dealer registration under the Indian Forest Act or Rules of 1978, limiting registration to property marks and foreign passes for timber. The petitioners' coal imports did not fall under these categories, leading the court to rule against the registration fee requirement.

2. The court referenced section 41(2)(i) and 41A of the Forest Act, 1927, emphasizing that registration pertains solely to property marks for timber imports and movements across customs frontiers. Notably, the Act and Rules do not mandate dealer registration for forest produce importers in U.P. The judgment clarified that the Rules of 1978 only apply to the issuance of transit passes for forest produce movement within or outside the state, not for dealer registration. The court highlighted a previous case, NTPC Limited v. State of U.P., which extensively analyzed the Rules' applicability.

3. Given the absence of legal grounds for dealer registration under the Forest Act and Rules of 1978, the court held that demanding registration fees from the petitioners exceeded the authorities' scope. The judgment allowed the petitioners to forego registration for coal movement within U.P., directing the refund of any erroneously charged fees. The petitioners were instructed to continue obtaining transit passes and paying applicable fees in line with the U.P. Transit of Timber Rules. This decision aligned with the precedent set in NTPC Limited case, reinforcing the limited scope of registration requirements for forest produce traders in the state.