2012 (4) TMI 545 - HC - VAT and Sales Tax

Registration fee on the 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 India nor exports the coal within the country to outside India. On the aforesaid facts and circumstances 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 to the extent that the petitioners will not be required to obtain registration for movement of coal within the State of U.P. If any registration fee is charged from the petitioners, the same shall be returned to them.

Summary

Issues:
1. Requirement of registration fee for the import of coal under the U.P. Value Added Tax Act.
2. Interpretation of rules 20 and 21 of the U.P. Transit of Timber and other Forest Produce Rules, 1978.
3. Applicability of section 41(2)(i) and section 41A of the Indian Forest Act, 1927.
4. Necessity of registration for dealers importing forest produce in the State of U.P.
5. Judgment in NTPC Limited v. State of U.P. regarding the movement of forest produce.

Analysis:

1. The petitioners, involved in coal trading, sought a writ against charging registration fees for coal import under the U.P. Value Added Tax Act. The respondents argued for registration under rules 20 and 21 of the U.P. Transit of Timber and other Forest Produce Rules, 1978.

2. Rules 20 and 21 of the 1978 Rules mandate registration for forest produce imported into Uttar Pradesh and outline requirements for foreign passes and property marks. However, the Act's rule-making powers under section 41(2)(i) and 41A pertain to property marks for timber, not dealer registration for importing forest produce.

3. Section 41(2)(i) delegates powers for timber property mark registration and fee imposition, while section 41A allows the Central Government to regulate timber movement across customs frontiers. The Act extends to India's territories, and rules under section 41 are subject to those under section 41A.

4. The Act and the 1978 Rules focus on registering marks for timber and foreign passes, not on dealer registration for importing forest produce in Uttar Pradesh. The petitioners' coal import activities do not fall under the Act's registration requirements.

5. Referring to NTPC Limited v. State of U.P., the court clarified that registration under the Rules is not necessary for moving forest produce within Uttar Pradesh. The petitioners were exempted from registration for coal movement and were entitled to a refund if charged registration fees, while still required to obtain transit passes and pay transit fees as per the 1978 Rules.

This judgment highlights the distinction between registration requirements for timber marks and dealer registration for importing forest produce, ultimately ruling in favor of the petitioners regarding coal import registration and fees under the U.P. Value Added Tax Act.