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Issues Involved:
1. Legislative Competence 2. Constitutional Validity under Article 14 3. Adequate Machinery for Tax Assessment 4. Additional Tax under Section 3(4) 5. Violation of Article 19(1)(g) and Article 301 Detailed Analysis: 1. Legislative Competence: The primary issue was whether the Bihar Restoration and Improvement of Degraded Forest Land Taxation Act, 1992, was within the legislative competence of the State Legislature under Entry 49 of List II (State List) of the Seventh Schedule of the Constitution. - Entry 49 List II: The Court held that the tax imposed under Section 3 read with the Schedule was not a "tax on land" as a unit but rather a tax on certain activities and uses of land, such as excavation and non-forest use. The tax did not bear a definite relationship to the land itself but was based on the activities conducted on the land, making it beyond the scope of Entry 49 List II. - MMRD Act: The Court also found that the Act encroached upon the field occupied by the Mines and Minerals (Regulation and Development) Act, 1957, a Central Act under Entry 54 of List I. The MMRD Act and the rules framed thereunder comprehensively covered the regulation and development of mines and minerals, leaving no room for the State Legislature to impose additional taxes on mining activities. - Forest (Conservation) Act, 1980: The Court noted that the Forest (Conservation) Act, 1980, also restricted the State's legislative competence in matters related to the use of forest land for non-forest purposes, requiring prior approval from the Central Government. 2. Constitutional Validity under Article 14: The Act was challenged on the grounds of being vague, arbitrary, and conferring unguided and uncanalised power, violating Article 14 of the Constitution. - Vagueness and Uncertainty: The Court found several provisions of the Act to be vague and uncertain. Terms like "biological reclamation," "mechanical reclamation," and "vegetative density" were not clearly defined, leaving room for arbitrary interpretation. - Arbitrary Power: The Act conferred wide discretionary powers on the authorities without any guidelines or principles, making it susceptible to arbitrary and discriminatory application. For instance, the power to amend the Schedule by rules and impose additional taxes without any clear guidelines was deemed unconstitutional. 3. Adequate Machinery for Tax Assessment: The Act was also challenged for not providing an adequate machinery for the assessment and levy of tax, violating Article 14. - Absence of Proper Machinery: The Court observed that the Act did not lay down any clear procedures for the assessment of tax, such as filing of returns, survey, inspection, or hearing. The Rules framed under the Act were also found inadequate in providing a proper mechanism for tax assessment. - Principle of Natural Justice: The absence of a proper machinery and the lack of provisions for hearing and appeal at the assessment stage violated the principles of natural justice, which are part of Article 14. 4. Additional Tax under Section 3(4): The validity of Section 3(4), which allowed the State Government to impose a lump-sum tax in addition to the tax under Sub-section (1), was questioned. - Uncontrolled Power: The Court found this provision to be unconstitutional as it conferred wide and uncontrolled power on the State Government to impose additional taxes without any guidelines or limits. This was deemed a violation of Article 14 and beyond the scope of permissible delegated legislation. 5. Violation of Article 19(1)(g) and Article 301: The Act was also challenged for violating the right to carry on trade and commerce under Article 19(1)(g) and the freedom of trade, commerce, and intercourse under Article 301. - Unreasonable Restriction: The Court held that the tax imposed was not only excessive but also lacked a proper procedural framework, making it an unreasonable restriction on the right to carry on trade and commerce. - Confiscatory Nature: The tax was found to be confiscatory in nature, especially given the high rates imposed for activities like mechanized open-cast excavation, which could go up to Rs. 55 lakhs per hectare. Conclusion: The Bihar Restoration and Improvement of Degraded Forest Land Taxation Act, 1992, was declared unconstitutional and void on multiple grounds, including lack of legislative competence, violation of Article 14 due to vagueness and arbitrary power, absence of adequate machinery for tax assessment, and unreasonable restriction on trade and commerce under Article 19(1)(g) and Article 301. All actions taken under the Act were also declared void, and a writ of mandamus was issued directing the Respondents not to give effect to the Act in any manner.
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