Govind Coal Traders and Others vs State of U.P. and Others

We have heard learned counsel for the petitioner. Shri S. B. Tripathi, standing counsel appears for the State respondents. The affidavits have been exchanged. The petitioner in Writ Petition No. 948 of 2012 are proprietorship concern involved in trading of coal registered under the provisions of the U.P. Valued Added Tax Act, 2008 and are registered under the U.P. Value Added Tax Act with a valid tax identification number. They purchase coal from Coal India Ltd. as per policy of e-auction from the traders of Jharkhand, Bihar and Assam. While importing and transporting coal from coalfields or after purchase from traders of other States to the business premises of the petitioner and on transportation, they are subjected to transit fees by the Forest Department under the U.P. Transit of Timber and Other Forest Produce Rules, 1978. This court has in NTPC Limited and Another Vs. State of U.P. and others decided on November 11, 2011 declared the 4th and 5th Amendments to the U.P. Transit of Timber and Other Forest Produce Rules, 1978 as arbitrary and ultra vires the provisions of the Indian Forest Act. The Third Amendment for charging Rs. 38 per tonne was, however, upheld as administrative charges for issuance of transit pass for recording valid movement of forest produce. Many other issues were decided. Some of the petitioners have filed special leave petitions in which the Supreme Court has passed an interim order directing that until the decision of the SLP there shall be no demand and realisation of transit fees.

In the other connected writ petitions the petitioners are carrying coal or other minerals including marble.

By these writ petitions the petitioners are aggrieved by the charge of "pratikar" on every movement of truck at the rate of Rs. 1,800 per truck. One of the receipts in Schedule C under the Rules of 1978, Book No. 1955 issued by the Deputy Forest Ranger/Forester, Chandauli Range dated January 30, 2012 on Truck No. JH12A/9436 shows that apart from Rs. 38 on 14 tonnes of coal the Forest Department has charged Rs. 1,800 as "pratikar".

The respondents were required to file counter-affidavit to justify the charge of "pratikar".

In the counter-affidavit it is stated in paragraphs 5, 6 and 7 as follows:

That, in reply to the contents of paragraph No. 5 of the writ petition, it is submitted that the answering respondents are demanding and realizing the transit fee at the rate of Rs. 30 per ton in pursuance of judgment dated November 11, 2011, passed by this honourable court rendered in Writ Petition No. 327 of 2008 ( NTPC Limited and Another Vs. State of U.P. and others ).

That in reply to the contents of paragraph Nos. 6, 7 and 8 of the writ petition, it is submitted that the Forest Department is demanding pratikar/compensation from the petitioners as they are violating rules 20 and 21 of the U.P. Transit of Timber and other Forest Produce Rules, 1978 framed under sections 41 and 42 of the Indian Forest Act, 1927 and are transporting their forest produce (coal) without obtaining any forest pass and getting the same registered by paying registration fee. As the said non-compliance of the rules is an offence under the Indian Forest Act, the pratikar/compensation is being charged/imposed by the authorities in pursuance of the provisions of section 68 of the Indian Forest Act, 1927.

It is submitted that according to section 68 of the Indian Forest Act, the State Government can notify the forest officer empowering him to take pratikar/compensation from any person against whom a reasonable suspicion existing of having committed any forest offence other than the offence specified in sections 62 and 63 of the Act, a sum of money by way of compensation for the offence which such person is suspected to have committed. For perusal of this honourable court section 68(1)(a) of the Indian Forest Act, 1927 along with Hindi version of the same is being quoted hereinbelow for the convenient perusal of this honourable court.

S. 68. Power to compound offences.--(1) The State Government may, by notification in the Official Gazette, empower a forest officer--

(a) to accept from any person against whom a reasonable suspicion exists that he has committed any forest-offence, other than an offence specified in section 62 or section 63, a sum of money by way of compensation for the offence which such person is suspected to have committed, and

That in reply to the contents of paragraph Nos. 9, 10, 11, 12, 13 and 14 of the writ petition, the facts stated in preceding paragraphs of this counter-affidavit are reiterated. The pratikar/compensation as such is being rightly demanded from the petitioners for non-compliance of the rules 20 and 21 which is forest offence for which compensation money can be realized under the Act.

Rules 20 and 21 of the Rules of 1978 are quoted as below:

Foreign pass.--All the forest produce imported into the State of Uttar Pradesh will have to follow the rules made by the... Union Government u/s 40A of the Indian Forest Act, 1927 (Act No. XVI of 1927) in addition to the Rules and shall be covered by a foreign pass registered under rule 2 and in the case of timber, by a foreign property mark registered under rule 23.

Form, etc., of foreign passes must be registered in Conservator''s Office.--Every foreign pass must be in a form which has been registered in the office of the conservator of forests of the circle into which it is sought to import forest produce thereunder and must be signed by an official whose designation is registered in the office of the said Conservator, and every foreign property mark must be of description which has been registered under rule 23 in the said office. At the time of applying for registration of the foreign pass in the office of the conservator of forest of circle concerned, a declaration will have to be submitted duly verified by the competent authority concerned that there is no objection to the exporting of the desired forest produce to the State of Uttar Pradesh and custom excise duty or other duties, if any, leviable have been paid by the party concerned to the competent authority:

Provided that at the request of the neighbouring State Governments passes signed by the contractors or their authorized agents whose signatures have been duly registered in the office of the Divisional Forest Officer in whose division forest produce is taken, may be allowed:

Provided further that the passes used by such contractors or their authorized agents should bear an official stamp of the officer, who has been authorized by the State Government to issue books of passes to contractors.

Rule 20 provides for issuance of valid pass. We do not find that there is any such section 40A in the Forest Act. So far as foreign pass under rule 2 and in case of timber foreign property mark under rule 23 are concerned, we find that section 41(2)(i) and section 41A of the Forest Act, 1927, are the only rule-making powers referable to provide registration. These sections are quoted as below:

Power to make rules to regulate transit of forest produce.--

(1) and (2)(a) to (h)....

(i) regulate the use of property marks for timber, and the registration of such marks; prescribe the time for which such registration shall hold good; limit the number of such marks that may be registered by any one person, and provide for the levy of fees for such registration.

41.A. Powers of Central Government as to movements of timber across customs frontiers.--Notwithstanding anything in section 41, the Central Government may make rules to prescribe the route by which alone timber or other forest produce may be imported, exported or moved into or from the territories to which this Act extends across any customs frontier as defined by the Central Government, and any rules made u/s 41 shall have effect subject to the rules made under this section.

The delegation of powers u/s 41(2)(i) refers to registration of property marks for timber and prescribe the time for which the registration will hold good; limit the number of such marks and provide for the levy of fees for such registration. The reference to rule 40A appears to be a mistake in making the order. There is no such section 40A in the Act.

Section 41A would show that the registration is provided only for property marks for timber or other forest produce, which may be imported, exported or moved into or from the territories to which this Act extends. The Indian Forest Act, 1927 extends to the territory of India across any customs frontier as defined by the Central Government, and any Rules made u/s 41 shall have effect subject to the Rules made u/s 41A.

The Indian Forest Act, 1927 and the U.P. Transit of Timber and other Forest Produce Rules, 1978, provide for registration of marks of timber and foreign pass. There is no requirement for the registration of any dealer, who imports or transports the forest produce in the State of U.P. or through the State of U.P.

The transit pass is required to be issued under the Rules of 1978 for movement of the forest produce in the State of U.P. whether imported from outside State of U.P., moved inside the State of U.P. or exported to outside the U.P.

The petitioners bring coal from the collieries of Coal India Ltd. purchased by e-auction. In other connected writ petitions, the petitioners bring minor minerals either from within the State of U.P. or transport such minerals through the State of U.P. The Rules of 1978 do not provide for registration of any such dealers. The petitioners are not importers of coal from outside the country or coal or minor minerals from outside the country, nor exports the coal or minerals from within the country to any other country.

We may observe here that section 68 has undergone amendment by State of U.P. The U.P. Amendments to section 68 provide as follows:

Uttar Pradesh--(i) In section 68, in sub-section (3), for the word ''fifty'', substitute the words ''five hundred''.

(Vide Uttar Pradesh Act 21 of 1960, section 8 (with effect from November 23, 1960).)

(ii) In section 68, in sub-section (3)--

(i) omit the words ''and is in receipt of a monthly salary amounting to at least one hundred rupees'';

(ii) for the words ''five hundred rupees'', substitute the words ''five thousand rupees for the first offence and for second and subsequent offences of the same nature shall not be less than five thousand rupees or more than ten thousand rupees.

(Vide Uttar Pradesh Act 1 of 2001, section 16).

For compounding of the offence firstly any offence may be committed for which penalty is prescribed in law. The offence may only thereafter make a voluntary request to compound offence. It is on such request that competent authority may compound the offence in accordance with law.

In the present case there is no order passed by the authority, i.e., forest officer empowered by the State Government, nor the receipt by which the compounding is alleged to have been made, signed by the forest officer, who may be competent to compound the offence. All the receipts charging "pratikar" have been issued by the Deputy Forest Ranger/Forester. We also find that the rates prescribed for compounding of the offence, namely, for the first offence the compounding fee to be at Rs. 5,000 and for the second and subsequent offences at not less than Rs. 5,000 or more than Rs. 10,000 may be imposed as compounding fees. In the present case the compounding have been done on varying amount between Rs. 1,800 to Rs. 15,000 per truck. These amounts are not in consonance with the amount prescribed u/s 68 as amended in the State of U.P. by U.P. Act No. 1 of 2001 vide section 60.

For the aforesaid reasons, we are of the view that the "pratikar" is being imposed by the respondents arbitrarily without any authority, for the offences, which may have been committed by the petitioners, on arbitrary rates, by the officer, who is not competent to compound the offence. The amounts have been charged arbitrarily in complete ignorance of the powers, which are sought to be referred in defence of the charging the amount. All the writ petitions are allowed, with directions that the respondents shall not recover any amount as "pratikar" from the petitioners for the import/transportation of coal or other forest produce. In case of imposition of any compounding fees, the respondents shall strictly follow the law as it is prescribed with reference to rules 20 and 22 of the Rules of 1978 and section 68 of the Indian Forest Act, 1927 as amended by U.P. Act No. 1 of 2001. So far as refund of the amount already realised from the petitioner as "pratikar", which is sought to be justified as compounding charges is concerned, it will be open to the petitioners to make applications along with necessary details including the attested copies of the receipts on form C to the concerned authorities, who will pass appropriate orders for refund to those persons, who have actually paid the amount.