1990 (10) TMI 368 - SC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the Orissa Forest Produce (Control of Trade) Act, 1981 and its subsequent amendments.
2. Applicability of the Act to pre-existing bamboo contracts.
3. Legality of the rescission of contracts and grants of profits a prendre.
4. Validity of the notifications issued u/s 1(3) of the Act.
5. Constitutionality of Section 1(3) concerning excessive delegation.
6. Impact of the Act on the contractors' rights and interests.

Summary:

1. Validity of the Orissa Forest Produce (Control of Trade) Act, 1981 and its subsequent amendments:
The Supreme Court upheld the validity of the Orissa Forest Produce (Control of Trade) Act, 1981 ('Act 22 of 1981') and its amendments, including the Orissa Forest Produce (Control of Trade) (Amendment and Validation) Act, 1987 ('Act 16 of 1987') and the Orissa Forest Produce (Control of Trade) (Amendment) Act, 1989 ('Act 4 of 1989'). The Court referenced its previous decision in M/s. Utkal Contractors and Joinery (P) Ltd. v. State of Orissa, which upheld the validity of the 1987 Amendment.

2. Applicability of the Act to pre-existing bamboo contracts:
The Court found that the bamboo contracts, which granted exclusive rights to cut and remove bamboos, were rescinded by Act 22 of 1981, which came into force on 1-10-1988 for bamboos. The contractors' contention that their rights were in the nature of profits a prendre and not susceptible to statutory rescission was rejected. The Court held that these rights were contractual and not independent grants.

3. Legality of the rescission of contracts and grants of profits a prendre:
The Court ruled that the statutory rescission of contracts and grants of profits a prendre was valid. The amendments made by Act 4 of 1989, which included grants of profits a prendre, were deemed clarificatory. The Court emphasized that no right or interest could survive statutory repudiation or repeal by retrospective amendment.

4. Validity of the notifications issued u/s 1(3) of the Act:
The notifications issued on 21/09/1988, which brought the Act into force for bamboos in Government forests from 1-10-1988, were held valid. The Court dismissed the argument that a second notification was required to bring the amended provisions into force, stating that the deeming provisions of Act 4 of 1989 projected its provisions into the principal Act from the date of its original notification.

5. Constitutionality of Section 1(3) concerning excessive delegation:
The Court upheld the constitutionality of Section 1(3), which allowed the State Government to bring the Act into force in different areas and for different forest produce on different dates. The provision was characterized as conditional legislation and not excessive delegation.

6. Impact of the Act on the contractors' rights and interests:
The Court concluded that the contractors lost all their rights under the bamboo contracts as of 1-10-1988. The Act's provisions were intended to control and regulate trade in forest produce by creating a State monopoly, which was deemed reasonable and in the public interest. The contractors were given sufficient notice to remove felled bamboos and were offered compensation through a refund of proportionate royalty.

The appeals and writ petitions were dismissed with costs.