State of
Tripura & Ors Vs. Sudhir Ranjan Nath
[1997] INSC 160 (13 February 1997)
B.P.
JEEVAN REDDY, SUJATA V. MANOHAR B.P.
JEEVAN REDDY, J.
ACT:
HEAD NOTE:
Leave
granted. Heard the counsel for the parties.
The Gauhati
High Court has declared Rule 3 of the Transit Rules framed by the Government of
Tripura under Section 41 and 42 of the Indian Forest Act, 1927 as illegal and ultravires
the Constitution. The correctness of the said decision is challenged by the
State of Tripura.
The
Indian Forest Act, 1927 [the Act] was enacted to consolidate the law relating
to forests, the transit of forest-produce and the duty leviable on timber and
other forest-produce. The Act was extended to the then Union Territory of Tripura
by the Union Territories [Laws] Act, 1950 [Act 30 of 1950]. It continues to be
applicable to the State of Tripura. The
Indian Forest Act is thus a post- constitutional enactment, so far as Tripura
is concerned, vide Mithan Lal v. The State of Delhi & Anr. [1959 S.C.R. 45]
and New Delhi Municipal Committee v. State of Punjab etc.etc. [1997 (1) J.T. (S.C.) 40].
Chapter
II of the Act deals with reserved forests while Chapter III deals with village
forests. Chapter IV deals with protected forests and while Chapter V with State
government control over forests and lands not being the property of the
government. Chapter VI provides for levy of duty on timber and other
forest-produce. Chapter VII provides for control on timber and other
forest-produce in transit. Chapter VIII deals with drift timber. Chapters IX,
XI and XIII contain machinery provisions. A perusal of the provisions of the
Act shows that the Act is designed to protect and increase the forest wealth
and its proper utilisation for the purposes of the State and the people.
For
the purpose of the present case, it is not necessary to notice the provisions
of the several chapters of the Act except Chapters VI, VII and XII. Section 39
in Chapter VI confers upon the Central Government the power to levy duty on
timber and other forest-produce. Section 39 reads as follows:
"39.
Power to impose duty on timber and other forest-produce--(1) The Central
Government may levy a duty in such manner, at such places and at such rates as
it may declare by notification in the Official Gazette on all timber or other
forest-produce-- (a) which is produced in the territories to which this Act
extends, and in respect of which the Government has any right;
(b) which
is brought from any place outside the territories to which this Act extends.
(2) In
every case in which such duty is directed to be levied as valorem the Central
Government may fix by like notification the value on which such duty shall be
assessed.
(3)
All duties on timber or other forest-produce which, at the time when this Act
comes into force in any territory, are levied therein under the authority of
the State Government, shall be deemed to be and to have been duly levied under
the provisions of this Act.
(4)
Notwithstanding anything in this section, the State Government may, until
provision to the contrary is made by Parliament, continue to levy any duty
which it was lawfully levying before the commencement of the Constitution,
under this section as then in force;
Provided
that nothing in this sub- section authorises the lev of any duty which as
between timber or other forest-produce of the State and similar produce of the
locality outside the State, discriminates in favour of the former, or which, in
the case of timber or other forest- produce of localities outside the State,
discriminates between timber or other forest-produce of one locality and
similar timber or other forest-produce of another locality." Sub-section
(1) thus confers the power to levy duty only upon the Central Government and
not upon the State governments. Sub-section (3), however, says that if any duty
levied under the authority of the State government on timber or other
forest-produce is in force in any territory on the date of coming into force of
the said Act, the same shall be deemed to be and to have been levied under the
said section.
Sub-section
(4) says that until a provision is made to the contrary by Parliament, the
State government may "continue to levy any duty which it was lawfully
levying before the commencement of the Constitution, under this section as then
in force". These sub-sections are referred to for the reason that an
argument is built upon them by the appellant-State, which we shall refer to at
a later stage.
Section
41 vests in the State government control of all rivers and their banks as
regards the floating of timber as well as the control of all timber and other
forest-produce in transit by land or water. It also empowers the State
government to make rules "to regulate the transit of all timber and other
forest-produce". Sub-section (2) elucidates several matters in respect of
which rules can be framed. It would be appropriate to set out Section 41 in its
entirety:
"41.
Power to make rules to regulate transit of forest produce.
-- (1)
The control of all rivers and their banks as regards the floating of timber, as
well as the control of all timber and other forest-produce in transit by land
or water, is vested in the State Government, and it may make rules to regulate
the transit of all timber and other forest-produce.
(2) In
particular and without prejudice to the generality of the foregoing power such
rules may-- (a) prescribe the routes by which alone timber or other forest-
produce may be imported, exported or moved into, from or within the State;
(b)
prohibit the import or export or moving of such timber or other produce without
a pass from an officer duly authorised to issue the same, or otherwise than in
accordance with the conditions of such pass;
(c) provide
for the issue, production and return of such passes and for the payment of fees
therefor;
(d)
provide for the stoppage, reporting, examination and marking of timber or other
forest-produce in transit, in respect of which there is reason to believe that
any money is payable to the Government on account of the price thereof, or on
account of any duty, fee, royalty or charge due thereon, or, to which it is
desirable for the purposes of this Act to affix a mark;
(e)
provide for the establishment and regulation of depots to which such timber or
other produce shall be taken by those in charge of it for examination, or for
the payment of such money, or in order that such marks may be affixed to it,
and the conditions under which such timber or other produce shall be brought
to, stored at and removed from such depots;
(f)
prohibit the closing up or obstructing of the channel or banks of any river
used for the transit of timber or other forest-produce, and the throwing of
grass, brushwood, branches or leaves into any such river or any act which may
cause such river to be closed or obstructed;
(g) provide
for the prevention or removal of any obstruction of the channel or banks of any
such river, and for recovering the cost of such prevention or removal from the
person whose acts or negligence necessitated the same;
(h)
prohibit absolutely or subject to conditions, within specified local limits,
the establishment of sawpits, the converting, cutting, burning, concealing or
making of timber, the altering or effacing of any marks on the same, or the
possession or carrying of marking hammers or other implements used for making timber;
(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.
(3)
The State Government may direct that any rule made under this section shall not
apply to any specified class of timber or other forest-produce or to any
specified local area." Chapter XII confers an additional power upon the
State government to make rules. Sections 76, 77 and 78 occurring therein read
as follows:
"76.
Additional powers to make rules. -- The State Government may make rules -- (a)
to prescribe and limit the powers and duties of any Forest- officer under this Act;
(b) to
regulate the rewards to be paid to officers and informers out of the proceeds
of fines and confiscation under this Act;
(c)
for the preservation, reproduction and disposal of trees and timber belonging
to Government, but grown on lands belonging to or in the occupation of private
persons; and (d) generally, to carry out the provisions of this Act.
77.
Penalties for breach of rules.
-- Any
person contravening any rule under this Act, for the contravention of which no
special penalty is provided, shall be punishable with imprisonment for a term
which may extend to one month, or fine which may extend to five hundred rupees,
or both.
78.
Rules when to have force of law. -- All rules made by the State Government
under this Act shall be published in the Official Gazette, and shall thereupon,
so far as they are consistent with this Act, have effect as if enacted
therein." A reading of Sections 41 and 74 discloses that besides vesting
total control over the forest-produce in the State government and empowering it
to regulate the transit of all timber or other forest-product, the State
government is also empowered to make rules "generally, to carry out the
provisions of this Act". Thus, any rule made by the State government which
purports to give effect to any of its provision would be within the four
corners of the Act.
In
exercise of the powers conferred upon it by the Act, the State government has
framed the Transit Rules. Rule 3, with which alone we are concerned, reads
thus:
3(1).
Any person importing, exporting or moving into, from or within, or who has
imported, exported or moved into from or within the State of Tripura any forest
product, shall present it to the Forest Officer in Charge of the place of
origin or entry of the forest produce, or to the Forest Officer in Charge of
the area nearest to the place of origin or entry of the same through which it
is transported, for examination and check, and shall pay the amount, if any,
due thereon & obtain a transit pass in Form C of the Appendix to these rules.
(2) No
person shall remove or cause to be removed from the State for the purpose of
trade or otherwise any timber and firewood to any other place outside the state
and no trading depot shall be set up or established in the State at any place
without licence for such purpose from the Divisional forest Officer having the
jurisdiction over the area subject to approval of Conservator of Forests of the
circle.
(3)
Every application for grant of licence under the aforesaid rule shall be made
to the Divisional Forest Officer having the jurisdiction over the area in the
Form appended to this Rules and on payment of non-refundable application fee
amounting to Rs.1,000/-.
(4)
Every order granting or refusing a licence under these Rules shall be in
writing and in case of refusal, shall contain the reasons therefor. The licence
fee of Rs.2,000/- shall be paid and deposited in Government
Treasury/sub-Treasury by challan and the receipted copy of the challan must
accompany the licence.
(5) A
licensee shall be required to pay the export duty for export of timber and
firewood from this State to other States which shall not exceed 100% of the
market value of such timber/firewood as will be assessed by the Divisional
forest Officer.
(6)
The conditions of the licence, the route or routes through which the timbers/firewoods
are to be transported to a place outside the State and the period of validity
of the licence shall be such as may be notified by the state Government in the
Official Gazette.
Provided
further that such period of validity shall not exceed 6 (six) months.
(7)
Every licence granted under this Rules may be renewed. An application for
renewal of licence shall be made in form-E within 30 (thirty) days before the
expiry of the licence. the Divisional forest Officer having the jurisdiction
over the area shall on receipt of application for renewal of licence, make such
inquiry as he may think fit and within a period of 60 (sixty) days from the
date of receipt of such application, either grant or refuse to grant renewal of
the licence;
Provided
that no renewal of licence shall be granted unless the Divisional forest
Officer is satisfied about the location, availability of the raw materials,
financial capacity, past records in business and relevant antecedent of such person.
Whether the Divisional Forest Officer refuses to grant such renewal of licence,
he shall record the reasons therefor and such reasons shall be communicated to
the person in writing. For the purpose of inquiry under this rules, the Divisional Forest officer may enter into or upon any land, survey and
demarcate the same, make a map thereof or authorises any Officer to do so and
also call for such documents as he deems necessary for ascertaining the merit
of the application.
Provided
further that no application for renewal of licence shall be rejected unless the
holder of such licence has been given an opportunity of presenting his case and
unless the Divisional Forest Officer is satisfied that the application for such
renewal has been made after the period specified therefor or any statement made
by the person making such application for grant of renewal of the licence was
incorrect or materially false or such person has contravened any of the terms
and conditions of the licence or any provision of the Indian Forest Act or the
Rules made thereunder or such person does not fulfil the terms and conditions
of such licence.
(8)
The quantity of timber and firewood which will be permissible for export by a
export licensee shall be determined on the basis of availability of forest
produce after catering to the needs of the local people of the State and those
of the Forest trade licence holder for trading in forest produces within the
State meeting the requirement of the people of the State.
[Sub-rules
(2) to (8) were added by Notification dated May 7, 1990.] Rule 3(1) obligates any person
importing, exporting or transporting any forest-produce into, from or within,
the State of Tripura to present the same to the appropriate officer for
examination and check and also to pay the amount, if any, due thereon. He is
also obligated to obtain a transit pass in Form-C prescribed by the Rules for
any of the above purposes. Sub-rule (2) provides that no person shall remove or
transport any timber and firewood from within the State to any place outside
the State except under a licence granted by the appropriate Divisional Forest
Officer. The sub-rule also prohibits setting up of any depot in the State
without such a licence. Sub-rule (3) says that an application for licence shall
be submitted in the prescribed form and shall be accompanied by a
non-refundable application fee of Rs.1,000/-. Sub-rule (4) provides that a licence,
if granted, shall be issued on payment of licence fee of Rs.2,000/-. [These
amounts are fixed irrespective of the value of the forest-produce involved.]
Sub-rule (5) provides that on export of timber from the State of Tripura to other States, an export fee not
exceeding hundred percent of the market value of the timber/firewood concerned
would be leviable. Sub-rule (6) empowers the government to notify the route or
routes along which the forest-produce shall be transported to a place outside
the State. Sub-rule (7) deals with renewal of licences, Sub-rule (8) says that
the quantity of timber and firewood to be exported from the State shall be
determined on the basis of availability of forest-produce after catering to the
needs of the local people of the State and the requirements of the people of
the State.
The
High Court has declared that the levy of application fee of Rupees one thousand
and of licence fee of Rupees two thousand amounts to levy of tax and is bad.
This is on the ground that the State has not established the service rendered
in lieu of the said fees. The High court has also held that sub-rule 5), which
levies export duty on export of timber from the State is beyond the rule-making
power conferred upon the State government by Section 41. It has also found
fault with sub-rule 98). The High Court has been of the further opinion that
rule 3 violates Article 301 of the Constitution and since the proviso to clause
(b) of Article 304 has not been complied with, the rule is liable to be
declared unconstitutional.
The
correctness of the judgment is challenged in this appeal by Sri S.S. Javali,
learned counsel appearing for the State of Tripura. we have also heard Sri Har Dev Singh, learned counsel for the
respondent who supported the reasoning and conclusion of the High Court besides
submitting that the power to regulate conferred by section 41 of the Act does
not empower the State government to prohibit the export of forest-produce from
within the State to a place outside the State as provided by sub-rule (8) of
rule 3. Counsel submitted that the power to regulate does not include the power
to prohibit.
We
shall first deal with the validity of sub-rule (5) of rule 3 which empowers the
State government to levy export duty extending upto hundred percent of the
market value of timber/firewood concerned. We agree with the High Court that
there is nothing in Section 41 which empowers the State government to levy
export duty. The power to levy duty is conferred only upon the Central
Government by Section 39 and that power is neither delegated to the State
government nor is the State government empowered to make rules with respect to
the said levy. Neither the powers conferred upon the State government by
Section 41 nor the power conferred by Section 76 comprehend the levy of export
duty. The power to levy duty is conferred only upon one named authority, viz.,
the Central Government. it must accordingly be held that sub-rule (5) has been
rightly declared bad.
We
next take up the validity of the levy of application fee and licence fee of
rupees one thousand and Rupees two thousand respectively. In our opinion, the High
Court was not right in holding that the said fee amounts to tax on the ground
that it has not been proved to be compensatory in nature. In our opinion the
fee imposed by sub-rules (3) and (4) is a fee within the meaning of clause (c)
of sub-section (2) of section 41. It is regulatory fee and not compensatory
fee. The distinction between compensatory fee and regulatory fee is well
established by several decisions of this Court.
Reference
may be made to the decision of the Constitution Bench in Corporation of
Calcutta v. Liberty Cinema [1965 (2) S.C.R.477]. It has been held in the said
decision that the expression "licence fee" does not necessarily mean
a fee in lieu of services and that in the case of regulatory fees, no quid pro
quo need be established. The following observations may usefully be quoted;
This
contention is not really open to the respondent for s.548 does not use the word
`fee'; it uses the words `licence fee' and those words do not necessarily mean
a fee in return for services. In fact in our Constitution fee for licence and
fee for services rendered are contemplated as different kinds of levy. The
former is not intended to be a fee for services rendered.
This
is apparent from a consideration of Art.110(2) and Art.199(2) where both the
expressions are used indicating thereby that they are not the same.
In Shannon v.Lower Mainland Dairy Products
Board, 1938 A.C.708: (AIR 1939 PC 36) it was observed at pp.721-722 (of AC):
(at pp.38-39 of AIR):
`if licences
are granted, it appears to be no objection that fees should be charged in order
either to defray the costs of administering the local regulation or to increase
the general funds of the Province or for both purposes.....It cannot, as their
Lordships think, be an objection to a licence plus a fee that it is directed
both to the regulation of trade and to the provision of revenue.' It would,
therefore, appear that a provision for the imposition of a licence fee does not
necessarily lead to the conclusion that the fee must be only for services rendered.
This
decision has been followed in several decisions, including the recent decisions
of this Court n Vam Organic Chemical Industries v. Collector of Central Excise,
Bombay [1997 (1) J.T. (S.C.) 641) and Bihar Distillery & Anr. v. Union of India [1997
(2) J.T. (S.C>) 20]. The High Court was, therefore, not right in proceeding
on the assumption that every fee must necessarily satisfy the test of quid pro
quo and in declaring the fees levied by sub-rules (3) and (4) of rule 3 as bad
on that basis. Since we hold that the fees levied by the said sub-rules is
regulatory in nature, the said levy must be held to be valid and competent,
being fully warranted by Section 41.
So far
as sub-rule (20 is concerned, it merely provides for a licence for removal of
timber or firewood from within the State to any place outside the State and
also for setting up or establishing a trading depot within the State.
This
sub-rule is equally within the four corners of Section
41.
Indeed, clause (d) of Section 76 which empowers that State government to make
rules generally to carry out the provisions of this Act also serves as an
authority for the said sub-rule.
Objection
is next taken to sub-rule (8). It is submitted that the power to regulate
conferred upon the State government by Section 41 does not take in the power to
prohibit whereas sub-rule (8) empowers the State government to prohibit the
export of timber and firewood if such a course is necessary to cater to the
needs of the local people or for meeting the requirements of the people of the
State. This in turn raises the question, what is the meaning and ambit of the
expression "regulate" in Section 41(1) of the Act? [Section 41(1)
empowers the State government "to regulate the transit of all timber and
other forest- produce".] The expression is not defined either in the Act
or in the rules made by the State of Tripura. We must, therefore, go by its normal meaning having regard to the
context in which, and the purpose to achieve which, the expression is used. As
held by this Court in Jiyajee Cotton Mills Ltd. & Anr. v. Madhya Pradesh
Electricity Board & Anr. [1989 Suppl. (2) S.C.C.52], the expression
"regulate" `has different shades of meaning and must take its colour
from the context in which it is used having regard to the purpose and object of
the relevant provisions, and as has been repeatedly observed, the court while
interpreting the expression must necessarily keep in view the object to be
achieved and the mischief sought to be remedied" [at Page 79]. Having regard
to the context and other relevant circumstances, it has been held in some cases
that the expression "regulation" does not include
"prohibition" whereas in certain other contexts, it has been
understood as taking within its fold "prohibition" as well. it has been
held in K.Ramanathan v. State of Tamil Nadu & Anr. [1985 (2) S.C.C.116]
that:
The
word `regulation' cannot have any rigid or inflexible meaning as to exclude
`prohibition'. The word `regulate' is difficult to define as having any precise
meaning. it is a word of broad import, having a broad meaning, and is very
comprehensive in scope.....It has often been said that the power to regulate
does not necessarily include the power to prohibit, and ordinarily the word
`regulate' is not synonymous with the word `prohibit'. This is true in a
general sense and in the sense that mere regulation is not the same as absolute
prohibition. At the same time, the power to regulate carries with it full power
over the thing subject to regulation and in absence of restrictive words, the
power must be regarded as plenary over the entire subject. it implies the power
to rule, direct and control, and involves the adoption of a rule or guiding
principle to be followed, or the making of a rule with respect to the subject
to be regulated. The power to regulate implies the power to check and may imply
the power to prohibit under certain circumstances, as where the best or only
efficacious regulation consists of suppression. It would therefore appear that
the word `regulation' cannot have any inflexible meaning as to exclude
`prohibition'. It has different shades of meaning and must take its colour from
the context in which it is used having regard to the purpose and object of the legislation,
and the court must necessarily keep in view the mischief which the Legislation
seeks to remedy.
To the
same effect is the decision of this Court in State of Tamil nadu v. M/s. Hind stone & Ors. [1981
(2) S.C.C.205]. Dealing with the contention that Section 15 of the Mines and
minerals [Regulation and Development] Act, 1957 authorises the making of rules
regulating the grant of mining leases and that the power does not take in power
to prohibit the grant of leases, this court held:
We do
not think that `regulation' has that rigidity of meaning as never to take in
`prohibition'.
Much
depends on the context in which the expression is used in the Statute and the
object sought to be achieved by the contemplated regulation. it was observed by
Mathew, J. in G.K.Krishnan v. State of Tamil nadu [1975 (1) S.C.C.375]:
`The
word `regulation' has no fixed connotation. Its meaning differs according to
the nature of the thing to which it is applied'. In modern statutes concerned
as they are with economic and social activities, `regulation' must, of
necessity, receive so wide an interpretation that in certain situations, it
must exclude competition to the public sector from the private sector. More so
in a welfare State. It was pointed out by the Privy Council in commonwealth of
Australia v. Bank of New South Wales [1950 A.C.235 = (1949) 2 ALL.E.R.755 (PC)]
- and we agree with what was stated therein - that the problem whether an
enactment was regulatory or something more or whether a restriction was direct
or only remote or only incidental involved, not so much legal as political,
social or economic consideration and that it could not be laid down that in no
circumstances could the exclusion of competition so as to create a monopoly,
either in a State or commonwealth agency, be justified. Each case, it was said,
must be judged on its own facts and in its own setting of time and
circumstances and it might be that in regard to some economic activities and at
some stage of social development, prohibition with a view to State monopoly was
the only practical and reasonable manner of regulation. The statute with which
we are concerned, the Mines and Minerals [Development and Regulation] Act, is
aimed, as we have already said more than once, at the conservation and the
prudent and discriminating exploitation of minerals. Surely, in the case of a
scarce mineral, to permit exploitation by the State or its agency and to
prohibit exploitation by private agencies is that most effective method of
conservation and prudent exploitation. if you want to conserve for the future,
you must prohibit in the present.
We
have no doubt that the prohibiting of leases in certain cases is part of the
regulation contemplated by Section 15 of the Act.
We do
not think that it is necessary to multiply the decisions except to point out
that in a different context, the power to regulate is held not to include the
power to prohibit [see State of Uttar Pradesh v. Hindustan Aluminium
Corporation (1979 (3) S.C.C.229 at 243)].
Sri Har
Dev Singh, learned counsel for the respondent, however, brought to our notice a
decision of the constitution Bench of this Court in State of Mysore v. H. Sanjeeviah
[1967 (2) S.C.R.361]. Section 37 of the Mysore Forest Act is in pari-materia
with Section 41(1) of the Indian Forest Act. Similarly, clause (b) of
sub-section (2) of Section 37 of the Mysore Act is in pari-materia with clause
(b) of sub-section (2) of Section 41 of the Indian Forest Act. By virtue of the
rules made under the Mysore Forest Act, the Government of Mysore totally
prohibited the transport of forest-produce between 10.00 P.M. and sunrise.
It
also placed certain restrictions on the movement of the forest-produce between
sunset and 10.00 P.M. as well. This court held that the
power to regulate conferred by Section 37(1) read with Section 37(2)(b) does
not empower the State government to prohibit the movement/transport of forest-
produce altogether, observing: "prima facie a rule which totally prohibits
the movement of forest-produce during the period between sunset and sunrise is
prohibitory or restrictive of the right to transport forest-produce. A rule
regulating transport in its essence permits transport, subject to certain
conditions devised to promote transport;
such a
rule aims at making transport orderly so that it does not harm or endanger
other persons following a similar vocation or the public and enables transport
to function for the public good". The said decision is, however, of no
help to the respondent inasmuch as Rule 3 framed by the State of Tripura is not
only relatable to Section 41 but also to clause (d) of Section 76. Clause (d)
of Section 76, which has been extracted hereinbefore, empowers the State
government to make rules generally to carry out the provisions of the Act,
which means the carrying out the object and purposes of the Act. The object f
the Act is to preserve and protect the forest wealth of the country and to
regulate the cutting, removal, transport and possession of the forest-produce
in the interest of the States and their people. It is for achieving the above
purpose that the Act provides for declaration of reserve forests, formation of
village forests and declaration of protected forests. It is for achieving the
very purpose that the Act vests, in the government, control over forest and lands
not being the property of the government controls even the collection and
movement of drift and stranded timber. It is not a taxing enactment but an
enactment designed to preserve, protect and promote the forest wealth in the
interests of the nation. It must necessarily take within its fold catering to
the needs to the people of the State and that is what sub-rule (8) provides. In
our opinion, therefore, sub-rule (8) of Rule 3 is perfectly valid.
We
shall now consider the attack based upon Article 301. In our opinion, the
reason for which Rule 3 has been held to be in contravention of Article 301 of
the Constitution are unsustainable in law. The impugned Rule 3 is made by the
State as the delegate of the Parliament to carry out the purposes of the Act.
It is not a law made by the legislature of the State of Tripura nor is it a
rule made by the Government of Tripura in its capacity as the Government of Tripura.
This is the basic distinction between the present case and the decision in H. Sanjeeviah
where the enactment concerned was a law made by the State legislature and had,
therefore, to comply with clause (b) of Article 304. We have also pointed out
hereinabove that the Indian Forest Act is a post-constitutional Parliamentary
enactment insofar as Tripura is concerned for the reason that it has been
extended to Tripura [which was then a Union Territory] by the Union Territories
[Laws] Act, 1950. Sections 41 and 76 are, therefore, laws within the meaning of
Article 302 of the Constitution which empowers the Parliament to impose such
restrictions on the freedom of trade, commerce and intercourse between one
State and another or within any part of the territory of India, as may be
required in the public interest. If Sections 41 and 76 are saved by Article
302, any rule made to carry out the purposes of the said provisions or to
elucidate the meaning and purport of the said provisions must equally be
protected by Article 302, as held by this Court in M/s. Krishan Lal Praveen
Kumar v. State of Rajasthan [1981 (4) S.C.C. 550].
It is
relevant to notice that Article 302 uses the expression
"restrictions". In other words, it empowers the Parliament to impose
such restrictions on the freedom of trade, commerce and intercourse between one
State or another or within any part of the territory of India, as may be
required in the public interest. Though the expression "restrictions"
in this article is not qualified by the word "reasonable", we shall
proceed on the assumption, for the purposes of this case, that such
restrictions ought to be reasonable. Even so, it would be evident that the
provision in Article 302 has a close parallel with clauses (2) to (6) of
Article 19. Under clauses (2) to (6) of Article 19, it has been held by this
Court that the power to impose reasonable restrictions takes in the power to prohibit
also in appropriate situations [see Narendra Kumar v. Union of India (1960 (2)
S.C.R. 361)]. It may also be mentioned that the prime example of the exercise
of power under Article 302 is the Essential Commodities Act, 1955, which not
only empowers the making of the rules for the purpose of regulating the
production, supply and distribution of essential commodities but also for
prohibiting the production, supply and distribution of essential commodities
and trade and commerce therein. For the above reasons, we are of the opinion
that Rule 3 of the Tripura Transit Rules cannot be said to be violative of
Article 301 nor is it required to comply with the requirement of the proviso to
clause (b) of Article 304 of the Constitution.
The
levy of duty is sought to be sustained by the learned counsel for the State of Tripura
with reference to sub-section (3) and/or sub-section (4) of Section 39. It is
submitted that the Princely State of Tripura has imposed the said duty and that
the same is being continued after the commencement of the Constitution. Article
305 of the Constitution is also invoked in this behalf. We are unable to
appreciate the submission. No order or proceeding of the Princely State of Tripura
has been produced before the High Court or this Court levying the duty. We also
do not know at what rate and on what basis, if any, the duty was being levied.
We are also not sure whether the said plea can fall within the four corners of
either sub-section (3) or sub- section (4). Sri Javali requested for grant of
sometime to enable the State to produce the proceedings. We are not inclined to
accede to this plea either. Having not produced the proceedings/orders either
before the High Court or before this Court all these years, the State cannot
reasonably ask for more time to produce the same when the matter has come up
for final hearing.
For
the above reasons, the appeal is allowed in part.
Rule 3
of the Tripura Transit Rules, except sub-rule (5) thereof, is declared to be
perfectly valid and effective.
The judgment
of the High Court is set aside to the above extent.
No
costs.
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