STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE CRUSHER

It is submitted that any other interpretation would render the term to be in conflict with the tenn 'found in a forest'. It is submitted that the High Court has referred to various dictionary meanings of word 'brought' and after relying on said definition the Division Bench held that the words 'brought from' mean 'brought through forest'. (iv) (a) One more submission which has been raised by the writ petitioners is that the word 'forest' as used in 1927 Act as well as in Transit Fee Rules, 1978 has to be read as 'forest' as enumerated in the 1927 Act, i.e., a reserved forest, a village forest and a protected forest. Thus, transit fee can be charged only when forest produce transit through a reserved forest, a village forest or a protected forest. It is submitted that the Division Bench in its judgment dated 11.11.2011 has adopted a very c expansive definition of forest when it held that the forest has to be understood as a large track of land covered with trees and undergrowth usually of considerable extent, on the principles of sound ecological and scientific basis reflecting sociological concerns. Learned counsel for the petitioners submits that the definition of forest as adopted by the Division D Bench ofUttarakhandHigh Court in Mis. Gupta Builders in Writ Pe'tition No.993 of 2004 giving rise to C.A.No. 1008 of 20ll(State of Uttar Pradesh vs. Mis. Gupta Builders & Ors.) is a correct definition of forest. It is submitted that Uttarakhand High Court has rightly adopted a restrictive meaning of forest in the Forest Act, 1927. E (b) The above submission oflearned counsel for the petitioners is opposed by the State of U.P. It is submitted by learned senior counsel that the word 'forest' has to be understood broadly and the definition of forest as given by this Court in T.N. Godavarman Thiru11111/kpad vs. U11ion ofIndia and others, 1997 (2) SCC 267, is to be followed and the Division Bench in its judgment dated 11.11.2011 has correctly interpreted the word 'forest'. (v) (a) Some of the writ petitioners have submitted that although they arc not passing through any forest but still transit fee is charged by the State on the ground that several State highways, PWD roads and several roads have been declared protected forests by the State of U.P. by issuing notification under the provisions of 1927 Act. It is submitted that passing through National highways and State highways cannot be treated akin to passing from any kind of forest so as to attract leviability of transit fee. H

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A (b) Learned Additional Advocate General for the State of U.P. submits that the roads from which the petitioners claim to have passed are roads which have been declared as protected forests. Hence, forest produces transiting from the above roads are liable to pay transit fee. In support ofhis submission he refers to notification dated I 0.02.1960 issued under proviso to sub-section (3) of Section 29 as well as Section 80A of B 1927 Act. (vi) (a) One of the submissions raised by learned counsel for the petitioner is that Rule 3 read with Schedule A of 1978 Rules is totally independent of Rule 5 and saI1Je has no correlation with each other. Ruic 3 and Schedule Anowhe~e contemplates or has a column prescribing charging c of a fee. It is submitted that transit fee is chargeable on transit pass issued under Ruic 4(b) which is required to be checked under Ruic 6(4) only. Referring to Rule 5, it is submitted that Rule 5 contemplates charging a fee in those cases in which transit is done on the transit pass issued under Ruic 4(1)(b) and checked under Ruic 6(4). D (b) It is submitted that fee cannot be charged in any other case. The above submissions have been refuted on behalf of the State. It is contended that on all transit pass issued under the Rule 1978 transit fee is required to be paid. (vii) The petitioners further submitted that although no final notification has been issued under Section 20 of 1927 Act but still the Forest Department treats several areas in the District of Soncbhadra and other Districts as forest area and transit fee is asked for treating the said areas as forest area. It is submitted that Section 4 notification is only a preliminary notification which cannot be treated as notification declaring the area as reserved forest. (viii) (a) Learned counsel for the petitioners submitted that the Constitution Bench judgment of this Court in State of West Bengal vs. Kesoram b1d11stries a11d Or~-., (2004) JO SCC 201 where Constitution Bench held that Union's power to regulate and control do~'S not result in depriving the States of their power to levy tax or fees within their legislative competence without trenching upon the field of regulation and control of the Union, need not be relied on. (b) The Constitution Bench also interpreted Seven- Judge Bench decision in Synthetics amt Chemicals Ltd. etc. vs. State of U. P. and H

STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 639 CRUSHER [ASHOK BHUSHAN, J.]

Ors., (1990) J sec 109. It is submitted that with regard to the A interpretation put by the Constitution Bench in State of West Bengal v.~. Kesoram Indastries (supra) a reference has already been made to a Nine Judge Bench by reference order dated 30.03.2011 in .Mineral Area Development Authority vs. Steel A11tltority of llldia & Ors., (20Il) 4 sec 450. B (ix) The State ofU .P. cannot realize transit fee as per Third Amendment Rules dated 09.09.2004. Third Amendment Rules having been substituted by Fourth & Fifth Amendment Rules and Fourth & Fifth Amendment Rules having been struck down by judgment dated l l.l l.2011, Third Amendment Rules shall not revive. Third Amendment Rules are not in existence. c VIII. Following arc the submissions on behalf of State of U.P. in support of Civil Appeals filed by them and their reply by the writ petitioners thereto:-

57Copy pinpoint57. Shri Ravindra Srivastava, learned senior counsel leading the D arguments on behalf of the State of U.P. contends that this Court in State of U.P. and others vs. Sitapur Packing Wood Suppliers and other.~, 2002(4)See 566, has upheld the validity of 1978 Rules and has pronounced that transit fee is regulatory in nature and for regulatory fee quid pro quo is not necessary. The High Court for its judgment has relied on Jindal St<d11/ess Ltd.(2) and Am: Vs. Stale ofHaryana and E Ors., 2006 (7) SCC 241, which has been overruled by 9-Judgcs Constitution Bench in Jindal Stainless Ltd. & AllT. v. State ofHaryaua & Ors., 2016(1) Scale 1, the very basis of the judgment of the High Court is knocked out. The State being entitled to levy transit fee it can change the basis of levy of transit fee. That option on the basis of F advalorem is also permissible both for fee and tax and no exception can be taken to the Fifth Amendment on the ground that the Fifth Amendment adopts advalorem basis for fixing the fee. The increase in transit fee by Fourth and Fifth Amendments cannot be held to be arbitrary or excessively disprop01tionate. The finding of the High Court that the State had not provided any data to justify the increase in transit fee is incorrect G s.i nee the State had in fact by a table which itself has been noted in paragraph 85 of the judgment has mentioned the income and expenditure related to transit fee, a perusal of which could indicate that the expenditure of State Government was much more than collection of transit fee even H

640 SUPREME COURT REPORTS [2017] l l S.C.R.

A after Fifth Amendment. The value of timber and other forest-produce has increased manifold. The increase in levy of transit fee had become necessary to meet the ever increasing expenditure incurred by the State. The High Court committed error in striking down Fourth and Fifth Amendments without there being any sufficient and valid ground.

58Copy pinpoint58. Learmid counsel for the writ petitioners have vehemently opposed the above submission and supported the judgment of the High Com1 striking down the Fourth and Fifth Amendment Rules. It is submitted that Jindal Stai1tless (2) overruled by the judgment of 9-Judges constitution Bench docs not have much bearing in th1: facts of the present case. The High CoUJ1 independent ofreliance placed on Jindal Stainless c (2) has hdd that transit fee is excessive in nature and the State ofU.P. had not produced data for justifying the increase in the transit fee. It is true that for regulatory fee quid pro quo is not to be proved but the State was obliged to prove a broad correlation between the levy of transit fee and the expenditure incurred by the State on the transit of forcst- D produce. The Hig~ Court in paragraph l 77 to 186 has considered the issue in detail and has returned findings to support its conclusion that exorbitant increase in transit fee has robbed the regulatory character of the transit fee whiqh has become confiscatory and has partaken character of tax. The figures given in paragraph 85 of the judgment are figures of expenditure of the entire forest department which can have no correlation with the collection of transit fee. The entire expenditure of the forest department cannot be met by collection of transit fee. The State does not give any dcta1il of expenditure which it has actually incurred in regulation oftran$it of the forest-produce.

59Copy pinpoint59. Learned counsel for the writ petitioners have demonstrated by different charts.of the respective increase in the transit fee by Fourth and Fifth Amendment Rules as compared to fee which was being charged under Third Amendment Rules. It is submitted that regulatory fee could not have been charged on adva/orem basis which is generally adopted for levying a tax and not a fee. The charging of transit fee by Fourth and G Fifth Amendment Rules, is for the purposes of augmenting the Revenue of the State and not for regulation of transit which changes the character of transit fee into <1 tax, which is not permissible under law.

60Copy pinpoint60. Aller noticing the respective submissions of both parties, we now proceed to consider them in the same scriatum. H

STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 641 CRUSHER [ASHOK BHUSHAN, J.]

IX. Whether by Manufacturing process/chemical Treatment as claimed bv the writ petitioners. the forest produce looses its character of forest produce.

61Copy pinpoint61. We first take the case of stone boulders which arc crushed into stone grits, stone chips and stone dust etc. Stone boulders are obtained from riverbed, stone rocks & stone mines. After crushing of the stone boulders, stone grits, stone chips and stone dust are obtained which does not transform into any new commodity, except that the stone in smaller pieces and shapes arc obtained. The Allahabad High Court. in its judgment in Kumar Stone Works (Supra) decided on 27.04.2005 has given a detailed reasoning for not accepting stone grits, stone chips and stone dust as a new commodity. It held that the character of Forest Produce is not lost c by such crushing of the stone. High Court of Uttarakhand has taken a contrary view in its judgment dated 01.07.2004 in Kumaon Stone Crusher (Supra), as noted above.

62Copy pinpoint62. Learned counsel for the writ petitioners have relied on few judgments of this Court which need to be noticed. Reliance is placed on D Two Judge Bench in Sures/I Loltiya vs. State of Jlfaltaraslttra and auotlter, (1996) JO SCC 397. In the above case, the question for consideration was, as to whether, the Bamboo mat is a Forest Produce. The definition of 'Timber' and 'tree', given in sub clause 6 and sub clause 7 of Section 2 was noticed which is to the following effect: E "2. (6) 'timber' includes trees when they have fallen or have been felled, and all wood whether cul up or fashioned or hollowed out for any purpose or not; and

2. (7) 'tree' includes palms, bamboos, stumps. brushwood and canes." F 63.The above judgment of this court was based on 'consideration of definition of timber and tree' as given in Section 2 (6) & 2 (7). This Court held that definition of timber included tree and all wood whether cut or fashioned or hollowed out for any purposes. This Court held that said definition oftimber cannot be read in definition of tree which includes G Bamboo hence, fashioned Bamboos are not included in the definition of tree. The Bamboo mat was thus held, not to be a Forest Produce. The above judgment was based on its own facts and does not help the writ petitioner in the present case.

642 SUPREME COURT REPORTS [2017] ll S.C.R.

64Copy pinpoint64. In CST vs. Lal Kunwa Stone Crusher (P) Ltd., (2000) 3 SCC 525, the Court was considering liability of Trade Tax on stone chips, gittis and stone ballast. The question raised before the Court was, as to whether, the stone gittis, sand chips and dust continue to be stone grits. chips and dust or after crushing them, they get converted into a new commercial products, so as IQ attract the tax on their sale. The B case of dealer wa~ that at the time of purchase of goods sales tax has been paid hence, goods emerging out of same arc not liable to be taxed again. This Court held that the word 'stone' is wide enough to accept various forms of grits, gitti, kankar and ballast hence, no tax was leviable on the sand chips, grits & dust etc. In para 5 following was held: c "'5. The view taken by the Tribunal as affirmed by the High Court is that the goods co/1/inue to be stone and they are not commercially different goods lo be identified differently for the purposes of' sales tax. The decision relied on by the minori~v view in the Tribunal in Reliable Rocks Builders & D Suppliers v. State of Karna/aka turned on tlze concept of consumption uf guuds fur the purpose uf bringing into existence new goods. In that case the Court was not concemed with an entry of the nature with which we are concerned in the present case. Where the dealer had brought into existence neiv co111n1ercial goods b_v co11sun1ing the E boulders to bring out small pieces of stone, it was held that such activity attracted purchase tax. Jn the present case, however. stone, as such, and gitti and arTicles of stones are all of similar nature though by si:e they may be different. Even (l gitti, kankar, stone ballast. etc. may all be looked F llJJOl1 as separate in comniercial character j'rom stone boulders offered for sale in the market, yet it cannot he presumed that Ent1:i1 40 of the notification is intended tu describe the same as not stone at all. fn fact the term "stone" is wide enough to include the various forms such as gitti, kankar. stone ballast. fn that view of the matte1; we think G that the view taken by the majority of the Tribunal and affirmed by the High Court stands to reason. We are, therefore, not inclined to interfere with the same. "

65Copy pinpoint65. The above judgment held that the nature and character of the stone remains the same, even after, crushing the boulders into small H

STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 643 CRUSHER [ASHOK BHUSHAN, J.]

stones, dust etc. Reliance by the writ petitioner is also placed on judgment in (2003) 3 SCC 122, Tej Ba/1ad11r Dube (Dead by Lrs.) vs. Forest Range Officer F. S. (S. IV.), Hyderabad. In the above case, the appellant was charged for violation of Rule 3 to 7 of the A.P. Sandalwood and Red Sanderswood Transit Rules, 1969. The asscssee was found transporting finished sandalwood products. He was charged with the violation of aforesaid rules. Assessee's case was that he has obtained permission of the authorities for converting sandalwood purchased by him into various types of handles which arc ultimately used in other sandalwood handicrafts. This Court held that sandalwood products which have been converted into such products after obtaining proper permission was not prohibited, in para 6 following was held: c "6. As noticed above. the original appellant was a holder of a licence to deal in and stock sandalwood. From the material on record, it is seen that the said appellant had obtained necessary permit from the competent authorities for converting the sandalwood purchased by him into various types of handles which are ultimately used in other sandalwood handicrafts which permission was valid up to 31-12-1982 period covering the period of sei::ure. The appellant had contended that it is pursual1t to the said permission he had converted the sandalwood pellets into handles to be 11sed in the other sandalwood artefacts and he had informed the authorities concerned about such conversion as per Exts. P-18 to P-27. ft is also the case of the appellant that converted sandalwood artefacts or parts thereof do not require any transit permit and it is only sandalwood in its original form or chips and powder of sandalwood which requires a transit permit. The trial court has agreed with this submission of the appellant. We also notice under the Rules and the Act what is prohibited is the transportation of sandalwood as defined in Section 2(o) of the Act and not sandalwood products which have been converted into such products after obtaining proper permission jYom the authorities. Such converted sandalwood products under the Rules do not require any transit permit. We say so because the Rules referred to in these proceedings do not contemplate such transit permit and the respondents have not produced any other Rules to show such transit H

644 SUPREME COURT REPORTS [2017] 11 S.C.R.

A permit is required. On the contrary, the respondent argues that even converted sandalwood products require transit permit because they remained to be sandalwood as contemplated under Section 2(o) of the Act. In the absence of any specific rules or provisions in the Act tu this effect. we are unable to agree with this argument. We are of the B opinion that once sandalwood is subjected to a certain process from which a sandalwood product is lawji11/y obtained. then such product ceases to be sandalwood as understood in Section :J(o) of the Act. "

66Copy pinpoint66. The above case also does not lend any support to the case of c writ petitioners. In the above case, appellant had obtained permission of the competent authority for converting the sandalwood into various types of handles hence, the transportation was not found violative of rules.

67Copy pinpoint67. In this context, it is necessary to refer to a Three Judge Bench J udgmcnt of this court in Kamataka Forest Development Corporation D Ltd. vs. Ca11treads Private Limited a11d others (1994) 4 SCC 455. This Court had occasion to consider Karnataka Forest Act, 1963. Caoutchouc or latex covers natural covering sheets of various grades or not, was the question under consideration. After noticing the various dictionary meanings of caoutchouc, it was held that since processing E does not result in bringing out a new commodity but it preserves the same and rendered it fit for markets, it does not change its character hence, it remained a Forest Produce. Thus rubber sheets converted from caoutchouc continue to be a Forest Produce. In the above case. this court has also held that a 'test of commercial parlance' by considering entries in sales tax is not applicable while considering the definition of F Forest Produce.

68Copy pinpoint68. The Court observed that the definition of Forest Produce is in technical or botanical sense. The above judgment fully supported the contention of the State that while considering the definition of the Forest Produce, scientific and botanical sense has to be taken into consideration and commercial parlance test may not be adequate in such cases.

69Copy pinpoint69. We thus are of the view that judgment of Division Bench of the Allahabad High Court dated 27.04.2005 in Kumar Stone Works deserved to be approved and judgment ofUttarakhand dated 01.07 .2004 in K11111ao11 Stone Crusher deserves to be set aside in so far as above aspect is concerned.

STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 645 CRUSHER [ASHOK BHUSHAN, J.]

70Copy pinpoint70. Now, we come to the case of_marble slabs & tiles, chips etc. Writ A Petitioners have placed reliance on Three Judge Bench Judgment in Income Tax Officer, Udaipur vs. Aril1ant Tiles a11d ·Marbles Private Limited, (2010) 2 SCC 699. The question of consideration in the above case was that whether conversion of raw marbles blocks into final products or polished marble slabs or tiles in factory constitute B 'manufacture or production' so as to entitle the assessee relief under 80-1A(2)(iii). This Court held that process which was applied by the assessec will come in the category of 'manufacture or production'. In para 16 of the judgment following was stated: "16. In the present case, we have extracted in detail the process undertaken by each of the respondents before us. C Jn the present case, we are not concerned on(v with cutting of marble blocks into slabs. In the present case we are also concerned with the activity of polishing and ultimate conversion of blocks into polished slabs and tiles. What we find from the process indicated hereinabove is that there are D various stages through which the blocks have to go through before they become polished slabs and tiles. Jn the circumsrances, we are of the view that on the facts of the cases in hand, there is certainly an activity which will come in the category of "manufacture" or "production" under Section 80-IA of the Income Tax Act. " E

71Copy pinpoint71. In the above view, this Court held that assessee was entitled for the benefit of Section 80-1 A of the Income Tax Act, 1961. The above case was directly concerned as to what was the 'manufacture or production', which was defined in the Act itself and the marble slabs or tiles were held to be covered by 'manufacture or production'. The case F was on its own facts and the Court was not concerned, as to whether, the marble blocks after it became marble slabs or tiles loses its nature or character of Forest Produce. The said judgment does not help in the present case.

72Copy pinpoint72. This Court in Akbar Badrttdi11 Gbvtmi vs, Collector of G Customs, Bombay, (1990) 2 SCC 203, again reiterated that the general principle of interpretation oftariff entries according to any tax statutes of a commercial nomenclature can be departed from where the application of commercial meaning or trade nomenclature runs counter · to the statutory context. In the present case statutory context of Forest H

646 SUPREME COURT REPORTS [2017) l I S.C.R.

A Produce as defined in Act, 1927 has to be taken in its botanical and scientific sense.

73Copy pinpoint73. We thus conclude that the Transit Fee on marble slabs and tiles cannot be denied and the State did not commit any error in demanding the Transit Fee Qn transit of aforesaid goods. B

74Copy pinpoint74. It goQs without saying that on forest produce which arc exempted by notification issued under Proviso to Rule 3 of 1978, no transit foe is lcviable. One of such notification dated 29.03.2010 has been brought on record. X. Whether coal (and its various varieties), lime stone, dolomite, c fly ash, clinker, gypsum, veneer and plywood arc forest produce?

75Copy pinpoint75. Coal is formed from plant substances preserved from complete decay in a normal environment and later altered by various chemical and physical agencies. There are four stages in coal formation: peat, D lignite, bituminous and anthracite. The stage depends upon the conditions to which the plant remains arc subjected after they were buried - the greater the pressl)re and heat, the higher the rank of coal. Higher-ranking coal is denser and contains less moisture and gases and ha~ a higher heat value than lower-ranking coal.

76Copy pinpoint76. The formation of coal itself is due to large tracts of forest getting buried under the ground due to natural processes such as floods and sedimentation. Further, a major portion of the coal reserves of the country are sitm\ted beneath forest lands and clearance for mining of the same from forest lands. Coal, thus, is clearly a forest produce.

77Copy pinpoint77. Hard ~oke and soft coke are made from coal. Coke can be formed naturally as well as by synthetic method. Hard coke, soft coke, coal briquettes ate all different variations of coal which do not shed their natural characteristic and arc all forest produce.

78Copy pinpoint78. Limestone is express! y mentioned in definition of forest produce, G slake lime/quick lime/hydrated lime are all produce oflimestone. Fw·ther, produce known quicklime is produced by heating oflimestone, upon which limestone breaks down into Calcium oxide (quicklim1:) and carbon dioxide. That upon adding water to the same, the quicklime is converted into slaked lime and tl1creafter, upon being carbonated, the produce will revc11 to its natural state of being limestone. Hence, the said process does not H

STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 647 CRUSHER [ASHOK BHUSHAN, J.J

change the nature of the product, as the basic ingredient is essentially A limestone. and merely upon heating and addition of water, the nature of the produce i.e. limestone, does not chang~. Hence, limestone is a forest produce.

79Copy pinpoint79. Dolomite is a sedimentary rock. Dolomite is formed by the post depositional alicration oflime mud and limestone by magnesium- B rich ground water. Dolomite and limestone are very similar stones and arc forest produce.

80Copy pinpoint80. Coming to fly ash. clinker and gypsum, learned Additional Advocate General has submitted before us that the State has accepted that fly ash, clinker an synthetic gypsum are not forest produce. Thus, c fly ash, clinker and synthetic gypsum arc not forest produce. Gypsum is naturally found and obtained in the natural form, hence it is a forest produce. Veneer and waste plywood

81Copy pinpoint81. The veneer is nothing but thin sheets of wood which arc cut from existing logs & planks, which is then again glued upon planks of wood. The essential nature of the product of veneer is merely sliced/cut up wood. Hence, it continues to be a forest produce.

82Copy pinpoint82. The waste plywood that is remains of plywood and veneer arc nothing but cut-up logs. The process of manufacturing involves placing logs and wood into a specialized machine, which cuts out thin sheets of wood from the log. That when the logs reaches a certain diameter of thickness, the same can no longer be suitable for extraction by the machines and unutilized wood is left behind in the process of slicing as well. Essential character of the product docs not change. hence, it comes within the definition of timber and forest produce. XI. FOREST ACT 1927 & MMDR ACT, 1957

83Copy pinpoint83. We now proceed to consider the impact of 1957 Act on Forest Act, 1927 and the Transit Fee Rules 1978 framed nnder Section 41 of 1927 Act. The Indian Forest Act, 1927 is a pre-constitutional legislation enacted by Indian legislature as per Section 63 of Government of India Act, 1915. 1927 Act was the law enforced in the territory of India immediately before the commencement of the Constitution and by.virtue of Article 372 of the Constitution oflndia, 1927 Act continues in force until altered or repealed by a competent legislation. The 1927 Act was H

648 SUPREME COURT REPORTS (2017] 11 S.C.R.

A enacted to consolidate the law relating to forests, the transit of forest- produce and the cluty Jeviable on timber and other forest-produce. The 1957 Act was enacted for regulation of mines and clevdopment of minerals under the control of the Union. The 1957 Act was enacted under Entry 54 of List I of the Constitution which is to the following effect: B 'Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest."

84Copy pinpoint84. List II also contains Entry 23 which relates to regulation of c mines and miner11l development. Entry 23 List II is as follows: "Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union. "

85Copy pinpoint85. Entry 23 of List II has been made subject to provisions of D List I. The Parliamentary legislation in reference to Entry 54 to the extent regulation and development of minerals declared under control of the Union of India is extracted from the legislative field of the State.

86Copy pinpoint86. The writ petitioners contend that State is denuded with legislative compclence regarding mineral. its regulation or transportation. E Learned counsel for the writ petitioners have referred and relied on the various pronounqements of this Court in referem:e to Parliamentary enactment 1957. It is not necessary to refer to a large number of cases of this Court on the subject, the reference of only few of such cases shall serve the purpose for the present case.

87Copy pinpoint87. The Ccmstitution Bench judgment of this Court in Hillgir- Rm11pur Coal Co., Ltd. and otlters vs. Tlte State o/Orissa and otlters, AIR 1961 SC 459, needs to be noted. The State ofOrissa has enacted Orissa Mining Neas Development Fund Act, 1952 by which levy and demand was raised. The appellant challenged the enactment on the G ground that legislation covers the same field which was occupied by 1957 Act referable to Entry 54 of List I. Considering the submission of the appellant, the Constitution Bench stated following: "23 .... .lf Parliament by its law has declared that regulation and development of mines should in public interest be under the control of the Union, to the extent of such declaration H

STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 649 CRUSHER [ASHOK BHUSHAN, J.]

the jurisdiction of the State Legislature is excluded. In other words, if~o Centro/ Ac.I hos been passed which contains ~ dee/oration by Parliament as required by Emry 54, and if the said declaration covers the field occupied by the impugned Act the impugned Act would be ultra· vires, not because of any. repugnance between the two statlltes but because the State Legislature had no jurisdiction to pass the law. The /imitation imposed by the latter part of Entry 23 is a limitation on the legislative competence of the State Legislature itself This position is not in dispute.

88Copy pinpoint88. The validity of 1957 Act was considered in the context of Industries (Development and Regulation) Act,1951 and Mines and C Minerals(Development and Regulation) Act, 1948. This Court repelled challenge to the 1957 Act on the ground that the declaration under 1948 Act was not referable to Entry 54.

89Copy pinpoint89. The next judgment which needs to be considered is State of Orissa vs. M.A. T11llocli and Co., 1964(4)SCR 461. Orissa Mining D Areas Development Fund Act, 1952 came for consideration in reference to Mines and Minerals (Development and Regulation) Act, 1957. This Court held that 1952 Act was enacted by virtue of legislative power under Entry 52 of List II whereas 1957 Act was enacted in reference to Entry .54 of List I. This Court held. that Central Act 1957 contained a E declaration as contained in Section 2 which ls to the following effect: "Section 2.Declaration as to tlte e.<rpediency of Union control.- It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the F extent hereinafter provided."

90Copy pinpoint90. After noticing the above declaration, this Court laid down following: '· "It does not need much argument to realise that to the extent to which the Union Government had taken under "its control" · G the regulation and development of minerals" so much. was withdrawn from the ambit of the power of the State Legislature under Entry 23 and legislation of the State which had rested on the existence of power under that entry would to th(! ext(!nt 9f that "control" be superseded or be rendered · H

650 SUPREME COURT REPORTS (2017) II S.C.R.

A ineffective. for here we have a case not of mere repugnancy between the provisions of the two enactments but of a denudation or deprivation of State legislative power by the declaration which Parliament is empowered to make and has n1ade."

91Copy pinpoint91. This Court further held that intention of the Parliament was to cover the entire field. The Court held that after enactment of 1957 Act, 1952 Act shall dlisappear. This Court, thus, upheld the demands which were raised for the period upto June, 1958.

92Copy pinpoint92. There cannot be any dispute to the proposition as laid down in c the above noted cases and several other subsequent judgments of this Court reiterating the above proposition. The ratio laid down above, however, is not attracted in the facts of the present case. The present is not a case where the legislation, 1927 Act and Rules 1978 are referable to Entry 23 of List IL The present is a case where we are concerned with a pre-constitutional legislation which is 1927 Act which has been continued as per Article 372 of the Constitution. Article 372 sub-clause (I) is as follows: "372.Contin11ance in force of existing laws and their adaptation.- (1) Notwithstanding the repeal by this Constitution of the enactments referred to in Article 395 but subject ti,/ the other provisions of this Constitution, all the laws in f&rce in the territory of India immediately before the commencement of this Constitution shall continue in force therein until altered or repealed or amended by a competent legislature or other competent authority. "

93Copy pinpoint93. The law which has been continued in force by virtue ofArticle 372 is to continue until altered or repealed or amended by a competent legislature. Several pre-constitutional laws which have been continued under Article 372 came before this Court for consideration wherein Article 254 was also considered.

94Copy pinpoint94. A Constitution Bench of this Court in B.V. Patattkar and others vs. CG Sastry, AIR 1961 SC 272, had occasion to consider Mysore House Rent and Acco.mmodation Control Order, 1948, which . was a pre-constitution law and by Part B States (Laws) Act, 1951 extended the operation ofTransfer of Property Act, 1882 in the State of H Mysore. In the above case arguments were raised that the House Rent

STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 651 CRUSHER [ASHOK BHUSHAN, J.]

and Accommodation Control Order, 1948 as extended in Mysore from A April, 1951 became repugnant and was repealed. It was l:!eld that the ·pre-constitutional law which was saved by Article 372 remained unaffected by Article 254. Following -was stated in paragraph 7: "7. .... The argument, therefore, that as from April 1, 1951, as a result of repugnancy the House Rem Comrol Order of B 1948 stood repealed must be repelled as unsound and cannot be sustained, because it was an existing law which was saved by Article 372 of the Constitution and remained unaffected · by Article 254.... " ·

95Copy pinpoint95. In Pankajakshi (Dead) Through Legal Representatfres c and others vs. Chandrika and others, 2016 (6) SCC 157, a Constitution Bench of this Court had occasion to co_nsider a pre-constitutional law, i.e., Travancore"Cochin High Court Act in the context of Code of Civil Procedure{Amendmen\) Act, 1976. In the above.case an earlier judgment of this Court, namdy, Kulwant Kaur and others vs. Gurdial Singh . Mann (Dead) by Lrs. And others, 2001 (4) SCC 262, came to be D consid~red wherein· this Court ruid occasion to consider Section 42 of Punjab Courts Act, 1918. This Court held that Article 254 of the . Constitution would have no application to such a Jaw for the silnple reason that it is not a Jaw made by the legislature of a State. but is ail existing law. continued by virtue of Article 372 of the Censtitution of India. In E paragraph 27 following has been held: "27. Even the reference lo Article 254 of the Constitution was not correctly made by this Court in the said decision in Ku/want Kaur case. Section 41 of the Punjab Courts Act is of 1918- vintage. Obviously, therefore, it is not a law made F by the legislature of a· State after the Constitution of India has come into force. It is a law made by a Provincial legislature under Section 80-A of the Government of India Act, i915, which law was continued, being a law in force in British India, immediately before the commencement. of the Government of India Act, 1935, by Section 292 thereof Jn d h11n, after the Constitution of India came into force and, by Article 395, repealed the Government of1ndia Act, 1935, the Punjab Courts Act was conti1111ed being a law in force in the territory of India immediately before the commencement of the Constitution of India by virtue of Article 372(1) of the H ,--::-,

652 SUPREME COURT REPORTS [2017] ll S.C.R.

A Constitution of India. This being the case, Article 254 of the Constitution of India would have no application to such a law for the simple reason that it is not a law made by the Legislature of a State but is an existing law continued by virh1e of 4rticle 372 of the Constitution of India. If at all, it is Article 372(1) alone that would apply to such law which B is to cont(nue in force until altered or repealed or amended by a competent legislature or other competent authority. We have already found that since Section 97(1) of the Code of Civil Procedure (Amendment) Act, 1976 has no application to Section 41 of the Punjab Courts Act, it would necessarily c continue as a law in force. Shri Viswanathan s reliance upon this authority, therefore, does not lead his argument any fi1rthe1: "

96Copy pinpoint96. Thus, ta find out as to whether the 1927 Act and Rules, 1978 framed thereunder survive even after enforcement of 1957 Act, we have not to look into Article 254 but we have to find out as to whether the above pre-constitutional law is altered or repealed or amended by a competent l~gislaturc. To find out this competent legislation as contemplated by ~uh-clause ( 1) of Article 3 72 in the context of pre- constitutional law the nature and content of pre-constitutional law has to be found out. There cannot be any dispute that Act, 1927 was enacted to consolidate the law relating to forests, the transit of forest-produce and the duty le.viable on timber and other forest-produce. Essentially the 1927 Act is related to the forest. In the Constitution initially the forest was in Entry 19 of List II. Thus, it was the State legislature which was competent to alter or repeal or amend the said law. Various amendments in the 1927 Act were made by the State ofU .P. in different provisions of 1927 Act in exercise of its legislative power as conferred by List 11.

97Copy pinpoint97. By the Constitution (Forty-second· Amendment) Act, 1976, with effect from 03.01.1977 Entry 19 was omitted from List II and transferred in List III as Entry 17A. Entry 17 A is "Forests". Thus, with effect from 03.01.1977, both the Parliament and the State legislature arc competent legislature within the meaning of Article 372 sub-clause {I). The question to be answered thus is as to whether a competent legislature has altered or repealed or amended 1927 Act.

98Copy pinpoint98. Writ Petitioners have also contended that 1927 Act in so far as Section 41 and Transit Fee Rules, 1978 are concerned, stand impliedly H

STATE OF UTTARAKHAND & 01.'rn: v. MIS. KUMAON STONE 653 CRUSHER [ASHOK BHUSHAN, J,] .

repealed by virtue of 1957 AC! and in ariy view of the matter after A amendment of 1957 Act by Act 38of1999 by which specific provisions regarding transport of minerals were inserted in 1957 Act, Section 4( 1A) and Section 23C which were inserted with effect from 18.12. I 999.

99Copy pinpoint99. Justice G.P. Singh in Principles of Statutory Interpretation, 14'" Edition. explained the implied repeal as follows: B "There is a presumption against a repeal by implication; and the reason of this rule is based on the theory that the Legislature while enacting a law has complete knowledge of the existing laws on the same subject-m<11ter, and therefore; when it does not provide a repealing provision, it gives out c an intention not to repeal the existing legislation. When the new Act conta.ins a repealing section mentioning the Acts which it express~v repeals, the presumption against implied repeal of other laws is further strengthened on the principle expressio unius est exc/usio alterius. Further, the presumption will be comparatively strong in' case of virlually contemporaneous. Acts;. The. continuance of existing legislation, in the absence of an express provision of repeal, being presumed, the burden to show that there has been a repeal by implication lies on the party asserting the same. The presumption is, however, rebutted and a repeal is inferred by necessary implication when the provisions of the later Act are so inconsistent with or repugnant to the provisions of the earlier Act 'that the two cannot stand together·. But, if the two may be read together and some application may be made of the words in the earlier Act, a repeal will not be inferred ... " F

f 00. This Court in Municipal Cotmcil, Pillai tltrouglt tlte ,, Com111issio11er of f.f1111icipal Cdu11cil, Paiai vs. T.i. joseph in AIR 1963 SC 1561, has elaborated the concept ofimplied repeal in following weirds: G "9. It is undot1btedly true that the legislature can exercise the power of repeal by implication. But it is an equally well- seitled principle of law that there is a presumption against· an implied repeal. Upon the assumption that the legislature enacts lmvs with a complete knowledge of all existing laws pertaining to the same subjeCt the failure to add a repealing H

654 SUPREME COURT REPORTS [2017] 11 S.C.R.

A clause indicates that the intent was not to repeal existing legislation. Of course, this presumption will be rebutted if the provisions of the new act are so inconsistent with the old ones that (he two cannot stand together. As has been observed by Crawford on Statutory Construction. p. 631, para 311: B. "There must. be what is often called 'such a positive repugnanay between the two provisions of the old and the new statu/es that they cannot be reconciled and made to stand together'. In other words they must be absolutely repugnant or irreconcilable. Otherwise, there can be no c implied repeal ... for the intent of the legislature to repeal the old enactment is utterly lacking. " The reason for the rule that an implied repeal will take place in the event .of clear inconsistency or repugnancy, is pointed out in Crosby v. Patch and is as follows: D "As laws are presumed to be passed with deliberation, and with full knowledge of all existing ones on the same subject, it is but reasonable to conclude that the Legislature, in passing a statute, did not intend to interfere with or abrogate any former law relating to the same matter, unless E· the repugnancy between the two is irreconcilable. Bowen v. Lease (5 Hill 226). It is a rule, says Sedgv,.ick, that a general statute without negative words will not repeal the particular provisions of a former one, unless the two acts are irrecon~ilably inconsistent. 'The reason and philosophy of the rule, 'says the author. 'is, that when the mind of the legislator has been h1rned to the details of a subject, and he has acted upon it, a subsequent statute in general terms, or treating the subject in a general manner, and not expressly contradicting the original act, shall not be considered as intended to effect the more particular or positive previous provisions, unless it is absolutely necessary to give the latter act such a conslniction, in order that its.words shall have any meaning at all." For implying a repeal the next thing to be considered is whether the /wo statutes relate to the same subject-matter and have the same purpose. Crawford has stated at p. 634:

STAT!fOF UITARAKHAND & ORS. v. MIS. KUMAON STONE 655 CRUSHER [ASHOK BHUSHAN, J.)

"And, as we have already suggested, it is essential that the new statute cover the entire subject matter of the old; otherwise there is no indication of the intent of the legislature to abrogate the old lai;( Consequently, the later enactment will be construed as a continuation of the old one. .. B The third question to be considered is whether the new statute . purports to replace the old one in its entirely or only partially. Where replacement of an earlier statute is partial, a question like the one which the court did not choose to answer in the Commissioners of Sewers case would arise for decision. c

10. It must ·be remembered that at the basis of the doctrine of implied repeal is the presumption that the legislature which must be deemed to know the existing law did not intend to create any confusion in the law by retaining conflicting provisions on the statute book and, therefore, when the court applies this doctrine it does no more than give effect to the intention of the legislature ascertained by it in .the usual way i.e. by examining the scope and the object of the two enactments, the earlier and the later. " I 0 I. The question of repeal by implication arises when two statutes · become inconsistent to the extent th.at competence of.one is not possible without disobedience to other. I02. The pririciples for ascertainirig the inconsistency/repugnancy between two statutes were laid down by this Court iri Deep Chand vs. State of U.P and others, AIR 1959 SC 648. K. Subba Rao, J. speaking for the Court stated following in paragraph 29: F "29 ......Repugnancy between two statutes may thus be ascertained on the basis of the jollowing three principles: (1) Whether there is direct conflict between the twa provisions; G (2) Whether Parliament intended to lay down an exhaustive code in respect of the subject-matter replacing the Act of the State Legislature and (3) Whether the law made by Parliament and the law 11)ade by the State Legislature occupy the same field. " · H

656 SUPREME COURT REPORTS (2017] 11 S.C.R

A I 03. The Constitution Bench in State ofKera/a and otliers vs. Mar Appraem Kuri Company Limited and a11otlier, 2012 (7) SCC 106, had occasion to consider when by a subsequent enactment the case of pro tanto repeal can be read. In the above case State of Kerala had enacted Kerala Chitties Act, 1975. The Seventh Schedule of the B Constitution, List III Entry 7 pertains to contracts including special forms of contracts. The'1Parliament enactment, Chit Funds Act, 1982 and State legislature Keral1ChittiesAct, 1975, the subject being under concurrent list, in paragraph 7, the Court held that when there is a conflict in respect of a matter in the concurrent list between Parliamentary and the State legislations, parliamentary legislation will pre-dominate by virtue of non C obs/ante clause of Article 254 and by reason of Article 372 sub-clause (I). This Court held that the legislative intent to abrogate or wipe off the former enactment is to be looked into to find out whether it is a case of pro tanto repeal. Following was stated in paragraph 19: "19. Further. the learned counsel emphasised on the words D "to the extent of the repugnancy'" in Article 254(/). He submitted that the said words have to be given a meaning. The learned counsel submitted that the said words indicate that the entire State Act is not rendered void under Article 254(1) merely by enactment of a Central law. In this connection, it was submitted that the words ""if any provision of a law" and the words "to the extent of the repugnancy" used in Article 254{1) militate against an interpretatio11 that the entir¢ State Act is rendered void as repugnant merely upon e11a¢tment by Parliament of a law on the same subject. •· I 04. A repeal may be brought about by subsequent legislation without any reference to the legislation intended to be repealed, since, it • matters little as to whether repeal is done expressly or inferentially. As noted above, 1957 Act was enacted in reference to Entry 54 of List I to provide for the regulation of mines and the development of minerals whereas the subject of the legislation under the 1927 Act was the forest, transit of forest-produce and the duty leviable on timber and other forest- produce.

105. It is sine qua non that both the sets of laws must deal with. "the same subject matter". In the instant case, under the Forest Act "transit of forest-produce" itself is subject of primary legislation as can be seen from the preamble and the provisions to Section 41 & 42 of the

STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 657 CRUSHER [ASHOK BHUSHAN, J.]

Act. In contrast, the 1957 Act in view of Section 2 thereof, gives control of the "Regulation ofMines and Development ofMinerals"to the Union. The detailed provisions as primary legislation. deal with regulation of mines and development of minerals (Section 4 to 17 and Section 18). For the purposes of Regulation of Mines and Development of Minerals, it is provided that no mining operation can be undertaken without the license or permit as per Section 4. Provisions relating to transport or storage are only incidental and ancillary in nature. But the main point of difference in the subject matter of legislation under the 1957 Act is "Regulation of Mines and Development of Minerals". I 06. When the minerals are forest-produce by definition under the 1927 Act under Section 2(4), validity of Which is not challenged, c forest-produce and its transit is altogether a different subject matter than the subject matter governed by 1957 ~ct. The object of the two legislations is different. The regulation' is different. The Forest Act comprehensively deals with forest and forest wealth with a different object and the 1957 Act deals with mines and mineral wealth. D I 07. Much emphasis has been given by the counsel for the writ petitioners on Section 4( I A) and Section 23C. Section 4(lA) is couched in negative as follows: . "No per.van shall transport or store or cduse to be transported 'or stored any mineral otherwise than in accordance with the E provisions of this Act and the niles made thereunder." I 08. Section 23C provides power of State Government to make riiles for preventing illegal mining, transportation and storage of minerals. I 09. The Rules may cover inspection, checking and search of F · minerals at the place of excavation as well as transit of the minerals. The Rules under Section 23C are only incidence ofregulation of minerals which is the subject matter of the 1957 Act. 110, The 1927 Act is a comprehensive statute relating to transit of forest-produce and the duty leviable on timber and other forest-produce. G

111. The 1927 Act provides comprehensive provision.~ with regard to reserved forest, village forest and protected forest. The forests are directly linked with environment and ecological balance but because of large human development, exploitation of forests arid other natural resources and deforestation, the international community has been H

658 SUPREME COURT REPORTS [2017] II S.C.R.

A alarmed, several international conventions and treaties were made including Kyoto Ptotocol and Paris Convention to which India is a signatory.

112. Article 48A also inserted by the Forty-second Amendment Act, ! 976 which is to the following effect: B ..48A. Pro(ection and improvement of environment and safeguarding of forests and wild life.- The State shall endeavour to protect and improve the environment and to safeguard the forests and and wild life of the country. "

113. Article 5 IA of the Constitution lays down as one of the c fundamental duties that every citizen to protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compassion for living creatures.

114. As per the National Forest Policy, 1988 issued by the Ministry of Environment & Forests, one of the basic objectives ifthe State is to D 'encourage efficient utilization of forest produce and maximizing substitution of wool!' and states that "the principal aim of Forest Policy must be to ensure C11vironmental stability and maintenance of ecological balance including at1nospheric equilibrium, which are vital for sustenance of all lifeforms, hl)lnan, animal and plant. The derivation of direct economic benefit mµst be subordinated to this principal aim."

115. The subjects of 1927 Act and 1957 Act are: thus distinct and separate. The 1957 Act was on development and regulation of mines and minerals. Mines and minerals are also" found in forests. The definition of forest-produce as contained in Section 2 sub-section (4) of the Act includes peat, surface oil, rock and minerals(including lime-stone, laterite, mineral oils, and all products of mines or quarries).

116. The State has been empowered to regulate transit of forest- producc under Section 41 of the Act. Regulation of transit of forest- produce is a larger activity covering transit of different kinds of forest- G produce including minerals. Both the legislations being on different subject matters the provisions relating to transportation of minerals as contained in 1957 Act can at best be said to be incidentally affecting the 1927 Act, incidental encroachment of one legislation with another is not forbidden in the constitutionatscheme of distribution oflegislative powers.

STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 659 CRUSHER [ASHOK BHUSHAN, J.]

117. This Court has time and again emphasised that in the event . A any overlapping is found in two Entries of Seventh Schedule or two legislations, it is the duty ofthe Court to find out its true intent and purpose and to examine the particular legislation in its pith and substance. In Kartar Singh vs. State of Punjab, 1994 (3) SCC 569, paragraphs 59, 60 and .61 following has been held: B "59 .... But befor.e we do so we may briefly indicate the principles that are applied for construing the-.·elftries in the legislative lists: It has been laid down that the entries must not 'be construed in a narrow and pedantic sense and that '. widest' amplitude must be given to the language of these entries. Sometimes the entries in different lists or the same C list may be found to overlap or to be in direct conflict with each other. In that event it is the duty of the court to find out its true intent and purpose and to examine the particular legislation in its 'pith and substance' to detennfne whether it fits in one or other of the lists. [See : Synthetics and D Chemicals Ltd. v. ·State of U.P.; India Cement Ltd. v. State of T.N."

60. This doctrine of 'pith and substance' is applied when the legislative competence of a legislature with regard to a particular enactment is challenged with reference to the entries in the various lists i.e. a law dealing with the subject in one list is. also touching on a subject in another list. Jn such a case, what has to be ascertained is the"pith and substance of the enactment. On a scrutiny of the Act in question, if found, that the legislation is in substance one on a matter assigned to the legislature enacting that statute, then that Act as a whole must be held to be val id notwithstanding any incidental trenching upon matters beyond its competence i.e. on a matter included in the list belonging /o the other legislature. To say differently, · . incidental encroachment is not a/together forbidden.

118. In A.S. Krishna and others vs. State ofll'Jadras, AIR 1957 SC 297 this Court laid down following in paragraph 12: "12. This point arose directlyfor decision befor;e •the Privy Council in Prafulla Kumar Mukherjee v:~fhe Bank of H

660 SUPREME COURT REPORTS [2017] 11 S.C.R.

A ·Commerce, Ltd. {1946 74 I.A. 23 There, the question was whether the Bengal Money-Lenders Act, 1940, which limited the amount recoverable by a money-lender for principal and interest on his loans, was valid in so far as it related to promissory notes. Money-lending is within the exclusive competence of the Provincial Legislature under Item 27 of B List II, but promissory note is a topic reserved for the center, vide List I, Item 28. ft was held by the Privy Council that the pith and substance of the imp11gned legislation begin money- /ending, it was valid notwithstanding that it incidentally encroached on a field of legislation reserve for the center c under Enter 28. After q11oti11g its approval the observations of Sir Ma11rice Gwye,. C.J. in S11brahmanyan Chettiar v. M11tt11swami Goundan, (s11pra) above quoted, Lord Porter observed: "Their Lordships agree that this passage correctly describes D · the gro11nds on which the rule is founded, and that' it applies · to Indian as well as to Dominion legislation. No do11bt experience of pas.I· diffic11lties has made the provisions of the Indian Act more exact in some particulars, and the existence of the Conc11rrent List has made it easier E. to distinguish between those matters which are essential in determining to which list particular provision sho11ld be attributed and those which are merely incidental. But the overlapping of subject-matter is not avoided by substituting three lists for two, or even by arranging for a hierarchy of jurisdictions. Subjects m11st still overlap, and where they do, the question m11sf be asked what in pith and substance is the effect of the enactment of which complaint is made, and in what list is its trne natrire and character to be found. If these questions could not be asked, m11st beneficent legislation wo11ld be satisfied at birth, and many of the s11~jects entrusted to Provincial legislation could never effectively be dealt with."

119. Further in Union ofIndia and others vs. Shah Govedltan L. Kabra Teachers' College, 2002 (8) SCC 228 in paragraph 7 following was laid down: H

STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 661 CRUSHER [ASHOK BHUSHAN, J.)

"7. It is further a well-settled principle that entries in the different lists shauld be read together without giving a narrow meaning to any of them. Power of Parliament as well as the State Legislature are expressed in precise and definite tenns. While an entry is to be given its widest meaning but it cannot be so interpreted as to override another entry or make another entry meaningless and in case of an apparent conflict between different entries, it is the duty of the court to reconcile them. When it appears to the court that there is apparent overlapping between the two entries the doctrine of '"pith and substance" has to be applied to find out the trne nature of a legislation and the entry within Jfhich it would fall. In case of conflict between entries in Lisi I and . List II, the same has to be decided by .application of the_ principle of '"pith and substance". The doctrine of ""pith and substance" means that if an em1ctment substantially falls within the powers expressly conferred by the Constitution 0 upon the legislature which enacted it, it cannot be held to be invalid, merely because ii incidentally encroaches on matters assigned to another legislature. When a law is impugned as being ultra vires of the legislative competence, what is required to be ascertained is the true character of the legislation. If on such an examination it is found that the legislation is in substance one on a mailer assigned lo the legislature then ii must be held lo be ya/id in its entire~v even though it might incidentally trench on matters which are beyond its competence. In order to examine the true character of the enaetment, the entire Act, its object, scope and effect, is required to be gone into. The question of .invasion into the territory of anoiher legis/a/i()n LY to .be determined not by degree but by substa11ce. The doctrine of '"pith and si1bstance" has to be applied not only in cases of conflict between the powers of two legislatures but in any case where _the question arises whether a legislation is covered by particular legislative power in exercise of which it is purported to be made. "

120. Thus, even it is assumed that, in working of two legislations which pertain to different subject matters, there is an incidental H

662 SUPREME COURT REPORTS (2017] II S.C.R.

A encroachment in respect of small area of operation of two legislations. Legislation cannot be struck down as being beyond legislative competence nor it can be he!~ that one legislation repeals the other. Thus, when we look into the pith and substance of both the legislations, it is clear that they operate in different field and the submission cannot be accepted that 1957 Act i~pliedly repeals the 1927 Act in so far as Section 41 and B 1978 Rules are croncerned.

121. We, thus, conclude that the submission of learned counsel for the writ petitioners that in view of the 1957 Act especially as amended by Act 38of199,, the provisions of 1927 Act & 1978 Rules have become void, inopemtiveand stand repealed, cannot be accepted. c . XII. Interpretalion of Section 2(4)(bl of 1927 Act .

122. The meaning of words 'brought from' as used in Section 2 sub-section (4) sub-clause (b) has become very significant in the present case sirn:e it is a case of large number writ petitioners that the goods which they are transiting did not originate from any forest area rather they have been taken from non-forest area, hence, there is no liability to pay transit fee. Whether forest produce as defim:d in Section 2 sub- . section (4) sub-qlause (b) should be forest produce which originated from forest or ev~n the forest produces which are merely passing through a forest area shall attract the liability of transit fee is the question to be answered.

123. The Division Bench judgment of the Allahabad High Court in Kumar Stone Works, although has referred to various definitions of meaning of wore! 'brought' but it did not advert to the fact as to what meaning has to be attributed to word 'from' with which word the word F 'brought' is prefixed. The word 'from' has been defined in Advanced . .Law Lexicon by P. Ramanatha Aiyar, 3'" Edition in following words: "From: As used as a function word, implies a starting.point, whether it be of time, place, or condition: and meaning having 4 starling point of motion, noting the point of G departurlf, origin, withdrawal, etc., as he travelled 'from" New York to Chicago. Silva V. MacAuley, 135 Cal App. 249, 26 P.2d 887. One meaning of 'from" is "out of" Word 'from" or "<ifter" and even/ or day does not have an (lbsolute and i11va11iable meaning but each should receive an inclusion or exclusion constniction according to intention with which H

STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 663 CRUSHER [ASHOK BHUSHAN, J.]

such word is used. Acme Life Ins. CO. v. White, Tex. Civ. A App. 99 SW 2d 1059, 1060. Words "from" and "to", used in contract, may be given meaning to which reason and sense entitles them, under circumstances of case. Woodruff v. · Adams, 134 Cal App.490, 25 P. 2d 529."

124. The word 'from' is used to denote a point of time, a place or B · a period. Both the words 'found in or brought from' have been used before word 'forest'. Both the words that is 'found in' and 'brought from', has clear nexus with forest. The true meaning of the words 'brought from' has to be appreciated when read in the context of word 'found in'. The word 'brought from' is an expression which conveys the idea of the items having their origin in the forests and they have been taken out from the forest. The word 'from' refers to the place from which the goods have been-moved out that is from the place of their original location. The forest is birth place, the origin ofthe items mentioned in sub-clauses (I) to (iv) of sub-clause(b) of Section 2(4). The 'found in' means that the item which has origin from the forest, is found in the forest while 'brought from' means that items having origin in forest have moved out from the forest.

125. The 1978 Rules framed under Section 41 of the 1927 Act also reflect that rule making authority has also understood the meaning of word 'brought from' in the above sense. As per Rule 3 no forest produce shall be moved to or from or within the State ofU.P. except or without a transit pass in the form in the Sche~ule A. The Schedule A of the Rules contains the form. Item No ..I of the form is as follows: "I. Locality of origin; (a) name and situation of forest, F (b) name of forest owner."

126. The above Item No. I also thus clearly refers to locality of qrigin of the produce and form requires name and situation offorest and name of the forest owner. Thus, locality of origin is related to a forest G which supports the interpretation as placed by us.

127. Learned counsel for the writ petitioners have also placed reliance oi:t a judgment of the ·Division Bench of the Karnataka High Court in Yeslrwant MonyDodamani and Ors. (1962 CRLJ 832). The Division Bench had occasion to consider the definition of forest H

664 SUPREME COURT REPORTS [2017) I l S.C.R.

A produce as contained in sub-section (4) of Section 2 of the Act. In paragraph 6 of the judgment following has been stated: "6. On a plain reading of these expressions "found in' or 'brought from', there can hardly be any doubt that both of them indicate the forest to be the source or original depository B of the forest produce in question. The learned Government Pleader /ras very strenuously contended that the expressio11 'found in' a forest merely means 'come across' or 'discovered' in a fores( irrespective of the fact whether the article·or goods so discovered were originally sourced or deposited or grown in a forest or some other place which is not a forest. All that c is necessary, according to the learned Goveniment Pleader. is that somebody (meaning apparently a forest officer or a forest guard or other person acting under the authority of the Act or Rules) finds or discovers these goods within, the area of a forest Same argument, however. is not available D nor is it pressed with, reference to other expression "brought from' a forest. It is conceded that the expression 'brought from' a forest certainly excludes the idea of a thing being brought from outside the forest but taken through it. It is, however, contended that if an article so brought from outside the forest is "fou11d' i.e., discovered by somebody within a E forest, ii would come within the defi11ition. We find it difficult to accept this argument which places extreme strain both on the language and upon logic. The expression at the commencement of Clause (b) of Section 2(4) should be compared with the expressio11 at the commencement of Clause F (a) of Sectio11 2(4). The articles listed u11der Clause (a) become forest~produce by virtue of their own nature, whether they 'are found in a '"forest or not, or brought fro"! a forest or. not. On thi other hand, the articles .listed under Clause (b) become forest-produce, not by virtu.e of their nah1re alone, but. by virtue of the fact that they are found in or brought G from a forest. The. term "found in 'a forest does not 11ecessarily. · in our opinion, require an.actual discovery of those items by a living person before those items can become forest-produce. In our opinion, the term "found in' actually refers to things growing in a forest like timber trees, ji1el trees, fruits, flowers H

STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 665 CRUSHER [ASHOK BHUSHAN, J.]

etc. or min{!ral deposits or stones existing in the forest. The A distinctive feature is either the existence or the growth or deposit within the area of a forest and not their discovery by ..some living person. The idea underlying the expression 'brought from' is equally emphatic of the source of the thing so brought being within the area of a forest. The conveyance B . or transport involved in the idea of a thing being brought undoubted(v has its beginning in the forest by virtue of the use of the expression 'from. "'

128. We are of the view that Kamataka High Court has correctly interpreted the word "brought from" as occurring in clause (b) of Section C 2(4). We are, thus, of the view that the word 'brought from' has to be understood in the above manner. We, however, may clarify that the origin .,,.- of forest produce may be in any forest situate within the State ofU.P. or outside the State ofU.P. Since, transit pass is necessary as per Rule 3 for moving a forest produce into or from or within the State ofU .P. Any produce, goods entering within or the outside the -State which is the D forest produce having originated in the forest requires a transit pass for transiting in the State ofU.P. Conversely, any goods which did not originate. in forest whether situate in the State of U.P. or outside the State but is only passing through a forest area may not .be fon:st produce answering the description of fores I produce within the meaning of Section 2(4)(b ). E XIII. Meaning of 'Forest' I 29. Safeguarding of forest has also been recognised by our Constitution under Article 48A which oblige the State to protect arid improve the environment and to safeguard the forests and wild life of the country. Article 5 lA sub-clause(g) enumerates the fundamental duty F of every citizen oflnc\ia to protect and improve the natural environment including the forests, lakes, rivers, wildlife.

130. The Forest Conservation Act, I 980 is another Parliamentary enactment which has been specifically enacted to provide for the conservation of the forest and for matters connected therewith. The G definition of forest cannot be confined only to reserved forests, village forests and protected forests as enumerated in 1927 Act. This Court has l\lready held in T.N. Godavarman Thir11111ulkpad vs. Union of India and. others, 1997 (2) sec 267, that the word "forest" must be understood according to its dictionary meaning, in paragraph 4 following is stated: · H

666 SUPREME COURT REPORTS [2017] 11 S.C.R.

A "4.... The word "forest" must be understood according to its dictionary meaning. This description covers all statutorily recognised.forests. whether designated as reserved. protected or otherwise for the purpose of Section 2(i) of the Forest Conservation Act. The term "forest land", occurring in Section 2, will not only include ''forest" as understood in B the dictionwy sense, but also any area recorded as forest in the Goverl(lment record irrespective of the ownership. This is how it has to be understood for the purpose of Section 2 of the Act. The provisions enacted in the Forest Conservation Act, 1980 for the conservation of forests and the matters c connected therewith must apply clearly to all forests So · - · understood irrespective of the ownership or classification thereof .. "

131. Thus, forest shall include all statutorily recognised forests, whether designated as reserve, protected or otherwise. The term "forest D land", occwTing in Section 2, will not only include "forest" as understood in the dictionary sense, but also any area recorded as forest in the Government reco~s irrespective of the ownership. The restrictive meaning of forest a$ given by the Uttarakhand High Court in Mis Gupta Builders cannot be approved.

E 132. It is relevant to note that even before this Court's definition iu T. N. Godavarma11 case (supra) in expansive manner, the forest was understood by the State legislature in a very wide manner. This is reflected by definition of forest and forest land as given in Section 38A inserted by Uttar Pradesh Amendment Act 5 of 1956 with effect from 3.12.1955. The definitions of'forest' as given in Section 38A(b) and F 'forest land' in 38A(c) of 1927 Act are as fol-lows: · "38A(b) ''forest" means a /rack of land covered with trees, shrubs, bu1rhes or woody vegetation whether of natural growth or planted by human agency. and existing or being maintained with or without human effort, or such tract of G land on which such growth is likely to lwve an effect on the supply of limber, fuel, forest-produce, or grazing facilities, or on climate, stream-flow, protection of land from erosion, or other such matters and shall include-

STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 667 CRUSHER (ASHOK BHUSHAN, J.]

(i) land covered with stumps of trees of a forest; A (ii) land which is part of a forest or was lying within a forest on the first day of July, 1962; (iii)such paswre land, water-logged or non-cultivable land, lying within, or adjacent to, a forest as may be declared to be a forest by the State Government. B 38A(c) ""forest land" means a land covered by forest or intended to be utilized as a forest; "

133. The definition of forest as contained in Section 38A(b), as noticed above, gives very wide definition of forest and giving restrictive c meaning of forest in view of the wide definition given by the State legislature cannot be accepted. We, thus, are of the view that the interpretation of forest as given by the Division Bench in its judgment dated 11.11.2011 has to be approved and the restrictive definition as given by the Uttarakhand High Court in its judgment dated 26.6.2007 in Mis. Gupta Builders cannot be approved. We, thus, reject the submission D of learned counsel for the petitioners to adopt a restrictive meaning of word 'forest'. XIV. Whether Notification dated 10.02.1960 declares Roads as Protected Forest E

134. Whether passing through the roads as notified by notification dated 10.02.1960 can be treated to be passing through a protected forest is the question to be answered. The notification which has been relied by learned AdditionalAdvocate General is notification dated 10.02.1960. · It is useful to extract the contents of the said notification: F "February I 0, 196.0 No.1115/XJV-331-50,cWhereas the Governor Uttar Pradesh, is of the opinion that the making of enquiry and record contemplated under sub-section(3) ofsection 29 of the Indian Forest Act 1927(Act no.XVI of027), will occupy such length of time as in the meantime to endanger the rights of the State G Government, now therefore, in exercise of the powers conferred by the proviso to the aforesaid sub-section and by the sub-section(!} of the said section,. read with section • H '

668 SUPREME COURT REPORTS [2017] II S.C.R.

A 80-A of the aforesaid Act, the Governor of Uttar Pradesh is pleased to declare that pending such enquiry and record the provisions of Chapter IV of the said Act to be applicable to the larldr specified in the schedule here to : A)

B Schedule District Serial N1n1e of Miieage to be declared as Description No. Road, Reser,·ed or Protected of Forest boundary 4 4 c From To M <o M <o " i.Meerut I . Meerut- 3 0 " 0 3l 2 0 The Baghpat boundary of Road the land has been demarcated on the ground by stone oillars .... .... .... ... ... ... ... ... . ....... .. .. .... ... . ....... ·~ ........................"

135. A per~al of the schedule indicates that in 48 Districts as they existed in 1960, different roads have been declared to be protected forests from mileage to mileage. A perusal of the schedule which is part of notification issued by the State of U.P. indicates that in the various roads mentioned in the Schedule National highways are also included.

136. For finding the consequences ofnotification dated 10.02.1960 F proviso to the sub-section (3) of Section 29 read with Section 80A, referred in the notification needs to be looked into. Section 29 contained in Chapter IV (deals with protected forests) is quoted below: "29. Protected Forests.-(]) The [State Government} may, by notification in the [official gazette}. declare the provisions G of this Chapter applicable to any forest-land or waste-land which is not included in a reserved forest but which is the property of the Government, or over which the Government has proprietary rights, or to the whole or any part of the forest-produce of which the Government is entitle. H

STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 669 CRUSHER [ASHOK BHUSHAN, J.]

(2) The forest-land and waste-lands comprised in any such notification shall be called a "protected forest". (3) No such notification shall be made unless the liat11re and extent of the rights of Government and of private persons in or over the forest-land or waste-land comprised therein have been inquired into and recorded at a survey or settlement, or in s11ch .other manner as the [State government] thinks sufficient.. Every such record shall be presumed to be correct until the contrary is proved. Provided that, if; in the case of any forest-land or waste land, the [State Government] thinks that such inquiry and c record are necessary, but that they will oct11py such length of time as in the meantime to endanger the rights of Government, the [State Government] may, pending such inquiry and record, declare such land to be a protected forest, b11t so as not to abridge or affect any existing rights of individuals or communities. " D 13 7. Section 80A which has been referred in the notification is a provision which has been inserted by U.P. Act 18 of 1951 with effect from 06.10.1951. Section 80A is as follows: "BOA. The State Government may, by notification in the E Official Gazette, declare that any of the provisions of or under this Act, shall apply to a/l . or any land on the bankv of canals or the sides of roads which are the property of the State Government or a local authori(v, and thereupon such provisions shall app(v accordingly." F

138. Under Section 80Athc State Government may, by notification declare that any <if the provisions of Act shall apply on the banks of canals or the sides of roads which arc the property of the State Government or a l.ocal authority. Section 80A is included in Chapter Xlll which is a miscellaneous Chapter. Section 80A empowers the State to declare any land on the banks of canals or the sides of roads as G protected forest on which any other provisions of the Act can be applied. Notification dated 10.02.1960 declared that provisions of Chapter IV of the Act shall be applied. Thus land mentioned in the schedule is declared as protected forest. · H

670 SUPREME COURT REPORTS (2017] ll S.C.R.

A 139. SeCtion 80A delineates the legislative scheme of declaring protected forests on banks of canals or the sides of roads. The State while issuing notification under Section 80A can only effectuate, the object and purpos~ of Section 80A as enacted by the State legislature.

140. The nQtificationdated 10.02.1960 has to be read in the light of the substantive provisions contained under Section 80A. When Section 80A empowers the State to declare any land on the banks of canals or the sides of roa~s as protected forests State can do only which is permitted by the State and no more. Section 80A read with notification dated I 0.02.1960 shall only mean thatbo.th the sides of the roads which have been mentioned in the Schedule are now declared protected forests. The purpose for such declaration is not far to seek. Both sides of canals or both sides of the roads can be declared as protected forests for maintenance and management of the same by applying the different provisions of the Act. Maintenance of forests on both sides of canals is with the object and purpose of environment protection. Maintenance of protected forests on both the sides of the road is for the same purpose and object, and.also with object to combat the vehicular pollution and to improve the environment and ecology. By notification under Section 80A, it cannot be accepted that road itself has been declared as protected forest. The object i~ not to declare the road as protected forest so as to apply different provlsions of 1927 Act on the roads itself. The interpretation put by the State that roads declared by notification dated I 0.02.1960 have become protected forests is not compatible with provisions of Chapter IV. The State cannot exercise its power under Section 30 nor any Rules under Section 32 can be framed by the State for the roads itself. The maintenance and regulation of roads are governed by different statutes and principles oflaw. We, thus, reject the submissions oflearned counsel for the State that merely because both sides of roads are declared protected forests, the roads itself have become protected forests. We, thus, conclude that merely passing through the roads as included in the notification dated I 0.02.1960, it cannot be held that the goods or forest produce are passing through the protected forests. G · XV. Whether Ruic 3 is independent of Rule 5

141. Rule 3 is couched in negative term providing that " ...... no forest produce shall be moved into or from or within the State ofUttar Pradesh except as hereinafter provided without a transit Pass in the form in Schedule A ...... ". Thus transit of forest produce is permissible

STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE . 671 . CRUSHER [ASHOK BHUSHAN, J.]

only with a transit pass. Rule 4( I) contains provisions regarding officers and persons who issue passes. Rule 4( I) is as follows: Officers and "Rule 4.(1): The following officers and Persons to persons shall have power to lvsue posses iss11e passes under these rules:- (a) For forest produce belongings to Government or not owned· B by any other person. the Conservator of Forest, the Divisional Forest Officer, the Sub-Divisional Forest Officer or any other officer authorized in this behalf in writing by conservator of Forest or the Divisional Forest Officer; (b) For forest produce owned by any person, such person or his C agent if so authorized in writing by the Divisional Forest Officer- (i) Provided that any person who desires to obtain a transit pass or authorization to is.vue passes under clause (b) of sub-rule(I) above shall apply in the form in 0 Schedule 'B' and the Divisional Forest Officer may, before issuing the transit pass or authorization to issue such passes, conduct such inquiry and call fpr such information as considered necessary; (ii) Such authorization shall specify the period during E which it shall remain in force, and shall also specify the route to be adopted and check Chawki or depot through which lo produce must pass; and (iii) Any authorization may at any time be changed (on request or otherwise) or cancelled by the Division F Forest Officer or Conservation of Forests."

142. Now we come to Rule (5) which provides for fees payable for different passes; Rule 5 along with its Marginal note (as originally frained) is as follows: Fees Payable 5. At the check Chawki or depot established under G for different nde 15 and specified°under proviso (ii) to clause(b), ciasses of sub-nile (I) of nile 4, the forest produce along-with passes the two copies of the pass(dup/ica'te and triplicate) shall ·be produced for examination· under sub-rule(4) of rule 6 and for payment of transit fee 011 the forest H

672 SUPREME COURT REPORTS [2017) II S.C.R.

A produce calculated at the following rates; ' .. ..... '! ,corresponding receipt shall be granted in the form ' gilven in Schedule C-(i) per lorry load of timber or o~her forest produce ... ... Rs. 5. 00 per tonne of J capacily(ii) per cart load of timber or other forest produce ... ... Rs. 2.50(iii) per camel load of timber B or other forest produce ... ... Rs.J.25(iv) per pony load of timber or other forest produce ... ... Rs.0.50(v) per head load of timber or other forest produce ..... .Rs. 0.25"

C 143. Referring to Chawki or depot established under Rule 15 and specified under proviso( ii) to clause(b), sub-rule (I) of Rule 4, learned counsel contends that transit passes as referred to under proviso (ii) to clause(b) of sub-rule (I) of Rule 4 are only to be charged with transit fees.

144. Rule 4 as noticed above contains provisions regarding officers and persons who have power to issue passes. Under Rule 4(l)(a) for the forest produce belonging to government or not owned by any other person various officers of the forest department are authorized to issue passes. Ruic 4 clause (b) relates to various produce own by any person. Pass can be issued by such persons or his agents if so authorized in writing by the Divisional Forest Officer. Any person who is referred to in Rule 4(b) has to apply in the form in Schedule B to the Divisional Forest Officer whereon authorization hasto be issued by the authorized Divisional officer. The words in Rule 5 namely " .... Chawk.i or depot established under Rule 15 and specified under proviso( ii) to clause(b), sub-rule (I) of Rule 4" are the words qualifying the words chawk.i or depots. The fee has to be paid for different passes at chawki or depot where it shall be produced for examination and payment of transit fees. All forest produces are to be produced at chawk.i or depot for payment of transit fee. Reading ofRule 5 does not indicate any intention that only one category of passes as referred to in Rule 4( I )(b) are leviable with transit fee: The.words" ...specified under proviso(ii) to clause(b), sub- rule( 1) of Rule 4 only refer to check Chawk.i or depot where forest produce is to be produced for examination. The Marginal Note of Rule 5 also clarifies the intent of the Rule. The Marginal note reads as "Fees payable for different classes of passes." Thus Marginal Note clarifies that transit fee is payable at all kinds ofpasses and submission is incorrect H

STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE 673 CRUSHER [ASHOK BHUSHAN, J.] t . that leviablity of fee is only on one category of passes as referred to in A Rule 4( I )(b). Marginal note has been held to be an internal aid to statutory interpretation of a statute. Justice G.P.Singh in Principles of Statutory interpretation 14•• Edition regarding marginal note states as follows: " ... Marginal notes appended to Articles of the Constitution have been held to constitute part of the B Constitution as passed by the Constituent Assembly and therefore they have been made use of in construing the Articles, e.g. Article 286, as farnLvhing 'prima facie '. 'some clue as to the meaning and purpose of the Article'. A note appended to a statutory provision or subordinate c legislation. is mere/;: explanatory in nature and does not dilute _the rigour of the main provision. Notes under the rules cannot control the rules but they can provide an aid for interpretation ofthose rules. Further, (I note which is made contemporaneously with the rules is part of the rule, and is not inconsistent with the n1/e, but makes explicit what is implicit in the rule. " 14 5. This Court has also occasion to consider the value of marginal note in several ca5es. In 2004 (2) SCC 579, N.C.Dhou11dial versus Unio11 oflndiu & Ors., It was laid down in paragraph 15 that heading or marginal note can be.relied upon to clear any doubt or ambiguity in the interpretation of the provision and to listen the legislative intent. Following was laid down in para 15: "15.... The language employed in the marginal heading is another indicator that it is a jurisdictional limitation. It is a settled rule of interpretation that the section heading or marginal note can be relied upon· to clear any doubt or ambiguity in the interpretation of the provision and to discern the legislative intent (vide Uttam Das Che/a Sunder Das v. Shiromani Gurdwara Parbandhak Committee and Bhinka v. Charon Singh). " G

146. In event the interpretation as put by learned counsel for the petitioner is accepted that fee under Rule 5 is chargeable only on passes obtained under Rule 4( I )(b) only, the easiest manner to avoid IJayment of transit fee is not to apply in form B for obtaining the booklet for is·suance of pass by the person or from its authorized representative, H

674 SUPRIEME COURT REPORTS [2017] ll S.C.R.

A which cannot be the intent of the Rule. Rule 4 is a rule made with regard to the persons and officers who have power to issue passes that has nothing to do wi~h payment of fee which is separatdy provided in Rule 5 and is applicable to all kinds of passes.

147. Rule 6(4) on which also emphasis has been given by learned B counsel for the petitioner only provides that the first copy cf the triplicate forms of pass shall form the counterfoil and second and third parts shall be given to the person in-charge of the produce under transit and shall be produced whenever required by any checking officer. Schedule A which is appended to the Rules also use the word counterfoil and all passes are to be issued in form A as required by Rule 3 as well as Rule C 6( 1). When all transit passes have to be in same form and in triplicate we fail to see that how it can be read that only on one category of passes fee is leviable and Rule 5 is not applicable and is completely independent ofRule 3.

148. We thus are of the view that the submissions of learned D counsel of the petitioner that transit fee is payable only with regard to passes issued under Rule 4( 1)(b) which are required to be checked under Rule 6(4), cannQt be accepted. Pay ability of transit fee is attached with transit pass issued under form A except in cases where no transit pass is required for the removal of forest produce as enumerated in proviso to E Rule 3. We thus do not accept the interpretation of Rule 3, 4, 5 & 6 as contended by learned counsel forthe petitioner in respect of pay ability of transit fee on transit passes issued under 1978 Rules. XVI. Non-issuance of Section 20 Notification after Section 4 Notification of 1927 Act

F 149. At this juncture, it is also necessary to notice one submission raised by the learned counsel for the petitioners. It is contended that the State of Uttar Pradesh although issued notification under Section 4 of 1927 Act proposing to constitute a land as forest but no final notification having been issued under Section 20 of 1927 Act the land covered by a G notification issued under Section 4 cannot be regarded as forest so as to levy transit fee on the forest produce transiting through that area. With reference to above submission, it is sufficient to notice Section 5 as inserted by Uttar Pradesh Act 23 of 1965 with effect from 25.11.1965. By the aforesaid U.P. Act 23 of 1965 Section 5 has been substituted to the following effect: H

STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 675 CRUSHER [ASHOK BHUSHAN, J.)

"Section 5. Bar of accnial of forest rights.- After the issue of the notification under section 4 no right shall be acquired in or over the land comprised in such notification, except by succession or under a grant or a contract in writing made or entered into by or 011 behalf of the Government or some person in whom s1ich right was vested when the notification was issued; and no fresh clearings for cultivation or for any other p111pose shall be made in such land, nor any tree therein felled, girdled. lopped, tapped, or burnt, or its bark or leaves stripped off, or the -same othenilise damaged, nor any forest-produce removed therefrom, except in accordance with such rules as may be made by the State Government in this behalf"

150. Section 5 clearly provides that after the issue of the notification under Section 4 no forest produce can be removed therefrom, except in accordance with such rules as may be made by the State Government in this behalf. The regulation by the State thus comes into p operation after the issue of notification under Section 4 and thus the submission of the petitioners that since no final notification under Section 20 has been issued they can not be regulated by Rules 1978 cannot be accepted.

151. We, however, make it clear that we have not entered into the E issue as to whether actually after Section 4 notification State has taken any further steps including notification under Section 20 or not.

152. In so far as submission of learned counsel for the writ petitioner that Constitution Bench judgment in State of West Bengal vs. Kesoranr Industries (surpa) having been referred to a Nine Judge F Ben.ch which reference having not been answered, the interpretation given by the Five fodge Bench of Syntlletics and Chemicals vs. State of U. P. and ors cannot be relied, suffice it to say for the purposes of this batch of cases it is not necessary for us to r~st our decision on the preposition as laid down in Kesoram Industries. Independent of proposition as laid down by the Constitution Bench 'inKesoramlndustries G there are clear pronouncement of this court as noticed above by us for deciding the issues raised in this batch of cases.

153. The writ petitioners have contended that in view of striking down Fourth and Fifth Amendment Rules to 1978 Rules, the Third H

676 SUPREME COURT REPORTS (2017] ll S.C.R.

A Amendment dated 0~.2004 could not have been resorted to for realising the traflsit fee at the rate ofRs.38/-. The petitioners relying on judgments of Firm A. T.B Mehtab Majid and Co. vs. State of Madras and another, AIR 1963 SC 928; B.N. Tiwari vs. Union of India, AJR 1965 SC 1430 and State of U.P. and others vs. Hirendera Pal B Singh, 2011 (5) SCC 305, have submitted that the earlier Rule does not revive even when substituted Rule is struck down by the Court. Shri D .K. Singh, learned Additional Advocate General has refuted the submission and placed reliance on judgment of this Court in Supreme Court Advocate-on-record Association vs. Union of lndia, 2016(5)SCC J. This Court in the interim order dated 29.10.2013 has c expressly direct~d that "the State shall be free to recover transit fee for forest produce removed from within the State ofU.P. at the rate stipulated in the Third amendment to the Rules mentioned in the earlier part of this order." Further, after noticing the striking down of Fourth and Fifth Amendment Rules by the High Court, this Court in the same interim order permitted the State to recover transit fee in terms of the Third D Amendment Rules.

154. It is, further, relevant to note that the High Court in its judgment dated l l.l l.20ll has issued following directions in the last paragraph ofthci judgment which contained operative portion as below:

E "188. Alli the writ petitions are consequently allowed. The Notifications dated 20.10.2010, by which the ·u.P. Transport of Timber and Other Forest Produce Rules, 1978', was amended by the 4" Amendment; and the Notification dated 4.6.2011. by which the ·u.P. Transport of Timber and Other Forest Produce Rules, 1978' was amended by the 5" F Amendment, are quashed. It will be open to the Respondents to impose and coilect the transit fees on such forest produce prevailing on such rates as it was being charged prior to the 411' Amendment to the Rules notified on 20./0.20IO, i.e. at the rate of Rs.381- per tonne of capacity per lony load of G timber or other forest produce; Rs. 191- per tonne of capacity per cart load of timber or other forest produce; Rs. 1.25 per camel load of timber and other forest produce; Rs.4/- per pony load of timber or other forest produce and Rs.21- per head load of timber or other forest produce. We also declare that the imposition of transit fee on 'Sponge Iron' which is H

STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 677 CRUSHER [ASHOK BHUSHAN, J.]

not a forest produce after undergoing the process of manufacture, converting it into a commercially different commodity than forest produce, and Tendu Patta', the trade and transportation of which is monopolized by the State Government, is not valid in law, and restrain Respondents from 1-.equiring transit passes and transit fees on it. The costs are made easy. Petitions di/owed. 15 5. The High Court has thus even though had struc.k down Fourth and Fifth Amendment Rules but has clearly permitted the State to recover transit fee in accordance with the rate as was applicable prior to Fourth c Amendment Rules. We, thus, do not find any infirmity in the State's recovery of transit fee at the rate of Third Amendment Rules. There being express order by the High Court on 11.11.2011 as well as interim order by this Court on 29.10.2013 permitting the State to recover transit fee as per the rate as was prevalent by Third Amendment Rules prior to enforcement to Fourth Amendment Rules, we are of the view that the D question as to whether by striking down Fourth and Fifth Amendment Rules, Third Amendment Ruic does not revive need not be' gone into in the present case. In view of the order of the Division Bench of the High Court dated 11 .11.2011, the State was fully competent to recover the transit fee as per Third Amendment Rule, which direction of the High E Court we duly affirm. · · · xvn; VALIDITY OF FOURTH AND FIFTH AMENDMENT RULES

156. We now proceed to consider the respective contentions of the parties on the Fourth and Fifth Amendment Rules. Before we proceed F to consider the rival contentions, it is necessary to have broad over-view of the concept.of fee and tax. Further, the nature ofregulatory fee and its essential characteristic also needs to be looked into.

157. The locus classicus on the concept of fee and tax is the judgment of this Court in The Co111missio11er, Hind11 Religio11s G Endowments, Madras vs. Sri Lakshmindra Tlrirtlra Swamiar of Sri· Slrirur Mutt, AIR 1954 SC 282, B.K. Mukherjea, J. speaking for 7- Judge Bench has elaborately defined the tax and fee in paragraphs 43 and 44 which are quoted below: ·

678 SUPREME COURT REPORTS [2017] 11 S.C.R.

A "43. A neat definition of what "tax" means has been given by Latham C.J. of the High Court of Australia in Matthews v. Chicory Marketing Board (60 C.L.R. 263, 276.) . ..A tax", according to the learned Chief Justice, "'is a compu1sory exaction of money by public authority for B public purposes enforceable by law and is not payment for services rendered". This definition brings out, in our opinion, the essential characteristics of a tax as distinguished from other forms of imposition which, in a general sense, are included within it. It is said that the essence of taxation is compulsion, that is to c say, it is imposed under statutory power without the taxpayers consent and the payment is enforced by law (Vide Lower Mainland Dairy v. Orystal Dairy Ltd. 1933 AC 168.). The second characteristic of tax is that it is an imposition made for public purpose without reference to any special D benefit to be conferred on the payer of the tax. This is expressed by saying that the levy of tax is for the purposes of geneml revenue, which when collected form part of the public revenues of the State. As the object of a tax is not to confer any special benefit upon any particular individual, there is, as it is said, no element of quid pro quo between the taxpayer and the public authority (See Findlay Shirras on ..Science of Public Finance", Vol. p. 203'.). Another feature of taxation is that as it is a part of the common burden, the quantum of imposition upon the taxpayer depends generally upon his capacity to pay.

F 44. Coming now lo fees, a 'fee' is generally defined to be a charge for a special service rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service, though in many cases the costs are arbitrarily assessed. Ordinarily, the fees are 11nifon11 and no account is taken of the varying abilities of different recipients to pay (Vide Lutz on "Public Finance" p. 215.). These are undoubtedly some of the general characteristics, but as there may be various kinds of fees, it is not possible to formulate a definition that would be applicable to all cases.

STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE 679 CRUSHER [ASHOK BHUSHAN, J.]

158. Further, on distinction between tax and fee following was stated in paragraphs 45 and 46: "45 ... The distinction between a tax and a fee lies primarily in the fa.ct that a tax is levied as a part of a common burden, while a fee is a payment for a special benefit or privilege. Fees confer a special capacity, although the special advantage, as for example in the case of registration fees for documents or marriage licences, is secondary to the primary motive of regulation in the public interest (Vide Findlay Shirras 01; "Science of Public F'inance" Vol. I, p. 202.). Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives. As Seligman says, it is the spei:ial benefit accruing to the individual which is the reason for payment in the case of fees; in the case of a tax, the particular advantage if it exists at all is an incidental result of State action (Vide Seligman 's Essays on Taxation, p. 408.). D