# l 1 S.C.R. 591 STATE OF UTTARAKHAND & ORS v. M/S. KUMAON STONE CRUSHER

- **Citation:** [2017] 11 S.C.R. 591
- **Court:** Supreme Court of India
- **Decided:** 2017-09-15
- **Case number:** Civil Appeal No. 14874 of2017
- **Bench:** A. K. Sikri, Ashok Bhushan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/l-1-s-c-r-591-state-of-uttarakhand-ors-v-m-s-kumaon-stone-crusher-31596
- **Pages:** 122

## Headnote

Forest Act, 1927:
A
B
s.41 - Levy of transit fee on forest produce by three StatesUttar Pradesh, Uttarakhand and Madhya Pradesh - Validity of -
C
Notification dated 28.05.2001 prescribing fee for issuing pass for
transit afforest produce - Held: Levy of transit fee is valid -
Notification dated 28.05.2001 issued by the Stale of Madhya
Pradesh cannot be said to be beyond the scope of 1: 5 of 2000
Rules and s. 41 of the 192 7 Act - State of Madhya Pradesh was
D
fully justified in fixing rate of transit fee at the rate of Rs. 71- and
Rs.41- per tonne which was well within the power of the Stale ulr. 5
of 2000 Rules - High Court committed error in quashing the order
dated 28.05.2001 - Notification prescribing fee is valid - Uttar
Pradesh Transit of Timber & other Forest Produce Rules, 1978 -
Madhya Pradesh Transit (Forest Produce) Rules, 2000.
E
Transit fee - Levy oj; on transit afforest produce - Stones,
stone boulders converted into stone grits, stone chips and stone
dust, if looses its character of.forest produce and transit fee is
/eviable - Held: Crushing of stones, stone boulders into stone grits,
stone chips and stone dust does not result into a new commodity
F
different .fi"om forest produce - Crushed materials continue to be
sione and retain their nature afforest produce and transit fee is
leviable.
Transit fee - Levy of on transit of forest produce - Marbles
blocks, marble slabs, marble chips, if.forest produce and /eviability
G
of transit fee on the said goods - Held: Marbles blocks, marble
slabs, marble chips are all forest produce - Transit Fee 011 marble
slabs and tiles cannot be denied - State did not commit any error in
demanding the Transit Fee on transit of the said goods.
H
591
592
A
B
c
D
E
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SUPREME COURT REPORTS
[20 l 7] 11 S.C.R.
Flay ash, clinker. synthetic gypsum, ifforest produce - Held:
Flay ash. clinker. ;ynthetic gypsum are not forest produce - However,
Gypsum is naturally found and ob1ained in the nalllral form, hence,
is a forest produr;e.
Coal with its various varieties, limestone, hydrated lime, quick
limestone, slake lime: and veneer and p~ywood waste, ifforesl
produce - Held: Formation of coal is due to large tracts of forest
getting buried unrfer the ground due to natural processes, thus, is a
forest produce - Since the essential character of the other products
dues nut change. thus, all are forest produce.
Mines and Minerals (Development and Regulation) Act,
IY57 - 1957 Act if impliedly repeals the 1927 Act - Held: Forest
Act, 1927 and the Rules }i"amed 11/s. 41 are neither overridden nor
impliedly repea/4d, altered or amended by the 1957 Act and the
Rules framed thereunder - On looking into the pith and substance
of both !he legisl41tions, it is clear that both the legislations operate
in different spheres and fields - Forest Act deals with forest and
forest wealth with a different object and the 1957 Act deals with
mines and mineral wealth - it cannot he said that in view of the
1957 Act especially as amended by Act 38 of 1999, the provisions
of' 1927 A,;·t and' 1978 Rules have become void, inoperative and
stand repealed - Constitution of India - Arts. 254 and 372.
s. 2(4)(b) - Words "brought jrom" ins. 2(4)(b) - Interpretation
of - Held: Words "brought fi'om" in s. 2(4J(b) means brought ji-om
forest Ji'om wherd forest produce has originated - Words 'brought
from forest' cannot be read as "brought through forest" - For an
item to be treated as forest produce, its origin may be in any forest
within the State of UP. or in a forest outside the State of UP.
s. 38A(b) - Forest - Meaning of - Held: Definition of forest
cannot be confined only to reserved forests, village forests and
protected forests 41s enumerated in 1927 Act - Forest shall include
all statutorily recognised forests, whether designated as reserve,
protected or othenwise and also shall include any area regarded as
forest in the Government record irrespective of the ownership.
s. BOA - Whether goods or forest produce passing th

## Text

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[2017] l 1 S.C.R. 591
STATE OF UTTARAKHAND & ORS.
v.
M/S. KUMAON STONE CRUSHER
(Civil Appeal No. 14874 of2017)
SEPTEMBER 15, 2017
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
Forest Act, 1927:
A
B
s.41 - Levy of transit fee on forest produce by three StatesUttar Pradesh, Uttarakhand and Madhya Pradesh - Validity of -
C
Notification dated 28.05.2001 prescribing fee for issuing pass for
transit afforest produce - Held: Levy of transit fee is valid -
Notification dated 28.05.2001 issued by the Stale of Madhya
Pradesh cannot be said to be beyond the scope of 1: 5 of 2000
Rules and s. 41 of the 192 7 Act - State of Madhya Pradesh was
D
fully justified in fixing rate of transit fee at the rate of Rs. 71- and
Rs.41- per tonne which was well within the power of the Stale ulr. 5
of 2000 Rules - High Court committed error in quashing the order
dated 28.05.2001 - Notification prescribing fee is valid - Uttar
Pradesh Transit of Timber & other Forest Produce Rules, 1978 -
Madhya Pradesh Transit (Forest Produce) Rules, 2000.
E
Transit fee - Levy oj; on transit afforest produce - Stones,
stone boulders converted into stone grits, stone chips and stone
dust, if looses its character of.forest produce and transit fee is
/eviable - Held: Crushing of stones, stone boulders into stone grits,
stone chips and stone dust does not result into a new commodity
F
different .fi"om forest produce - Crushed materials continue to be
sione and retain their nature afforest produce and transit fee is
leviable.
Transit fee - Levy of on transit of forest produce - Marbles
blocks, marble slabs, marble chips, if.forest produce and /eviability
G
of transit fee on the said goods - Held: Marbles blocks, marble
slabs, marble chips are all forest produce - Transit Fee 011 marble
slabs and tiles cannot be denied - State did not commit any error in
demanding the Transit Fee on transit of the said goods.
H
591
592
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[20 l 7] 11 S.C.R.
Flay ash, clinker. synthetic gypsum, ifforest produce - Held:
Flay ash. clinker. ;ynthetic gypsum are not forest produce - However,
Gypsum is naturally found and ob1ained in the nalllral form, hence,
is a forest produr;e.
Coal with its various varieties, limestone, hydrated lime, quick
limestone, slake lime: and veneer and p~ywood waste, ifforesl
produce - Held: Formation of coal is due to large tracts of forest
getting buried unrfer the ground due to natural processes, thus, is a
forest produce - Since the essential character of the other products
dues nut change. thus, all are forest produce.
Mines and Minerals (Development and Regulation) Act,
IY57 - 1957 Act if impliedly repeals the 1927 Act - Held: Forest
Act, 1927 and the Rules }i"amed 11/s. 41 are neither overridden nor
impliedly repea/4d, altered or amended by the 1957 Act and the
Rules framed thereunder - On looking into the pith and substance
of both !he legisl41tions, it is clear that both the legislations operate
in different spheres and fields - Forest Act deals with forest and
forest wealth with a different object and the 1957 Act deals with
mines and mineral wealth - it cannot he said that in view of the
1957 Act especially as amended by Act 38 of 1999, the provisions
of' 1927 A,;·t and' 1978 Rules have become void, inoperative and
stand repealed - Constitution of India - Arts. 254 and 372.
s. 2(4)(b) - Words "brought jrom" ins. 2(4)(b) - Interpretation
of - Held: Words "brought fi'om" in s. 2(4J(b) means brought ji-om
forest Ji'om wherd forest produce has originated - Words 'brought
from forest' cannot be read as "brought through forest" - For an
item to be treated as forest produce, its origin may be in any forest
within the State of UP. or in a forest outside the State of UP.
s. 38A(b) - Forest - Meaning of - Held: Definition of forest
cannot be confined only to reserved forests, village forests and
protected forests 41s enumerated in 1927 Act - Forest shall include
all statutorily recognised forests, whether designated as reserve,
protected or othenwise and also shall include any area regarded as
forest in the Government record irrespective of the ownership.
s. BOA - Whether goods or forest produce passing thro11gh
the roads as notified by notijication dated 10.02.1960 can he treated
to be passing thm11gh a protected forest - Held: Roads notified by
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE
CRUSHER
notification dated 10.02.1960 uls. 80A cannot be read lo mean that
such roads have been declared as protected forest - Notification
can only be read to mean that both sides of the road have been
declared as protected forest on which Chapter JV of the 1927 Act
shall be applicable - ft cannol be said that merely because both
sides of roads are declared protected forests, the roads itself have
become protected forests - Thus, merely passing through the roads
as included in the notification dated 10.02.1960. it cannot be held
that the goods or forest produce are passing through the protected
forests.
ss. 4 and 20 - Non-issuance of s. 20 Notification after s. 4
Notification of 1927 Act - Submission that State of UP although
issued notification u/s 4 of 1927 Act propo.iing to constitute a land
as forest but no final notification having been issued uls. 20 of
1927 Act, the land covered by a notificatio11 issued u/s. 4 cannot be
regarded as forest so as to levy transit fee on the forest produce
transiti11g through that area - Held: Ajier the issue of the 11otification
u/s. 4 no j'orest JJroduce can be re1noved there.,fron1, except in
accorclance 1vith such rules as 1nay be n?ocie b.v the State Govern1nent
593
A
B
c
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in this behalf- Regulation by the State thus comes into operation
after the issue of notification uls. 4 and thus, the submission that
si11ce 110 final notification 11/s. 20 has been issued they cannot be
regulated by Rules 1978 cannot be accepted - After issuance of E
notification u/s. 4 of 1927 Act, removal afforest produce therefram
shall be governed by the Rules fi'amed by the State - The fact that
no notification u/s. 20 has been issued does not mean that restriction
put by the State Government by Rules are not applicable.
Uttar Pradesh Transit of Timber & other Forest Produce Rules,
1978:
rr. 3, 5 -
r. 3 wherein transit of forest produce is permissible
on(v with a transit pass and r. 5 providing for fees payable for
different passes - r 3 if independent ~l r. 5 - Held: Rule 3 is not
independent of r. 5 - Transit of forest produce is permissible only
with a transit pass - Transit fee is payable on all kinds of transit
passes and cannat be confined only to transit passes as referred lo
in r. 4(1)(b) on(11.
F
G
Faurth and Fifth Amendment Rules to 1978 Rules by which
transit fee "was increased - Validity al- Held: Transit fee charged H
594
SUPREME COURT REPORTS
[2017] l l S.C.R.
A . under 1978 Rules is reg11lato1y fee in character -- For regulutory
fee, State is n~t to prove any quid pro quo - Regulatory fee can be
charged, even if. no services are rendered by the State in lieu of fee
realized - In 1ase of transit fee where the object and purpose is
regulation oftransit afforest produce adoption of advalorem
B principle for levy of Transit fee was not appropriate and such levy
changed the character of fee into a tax as held b_v the High Court -
High Court rightly struck down Fourth and Fifih Amendment Rules
to 1978 Rules ~1s being excessive and confiscatory in narure - High
Court nghrly h~ld that increase in transit fee 1>as excessive and the
character of the fee has changed from simple regulatory fee to a
C ji!e lvhich is ji:Jr raising revenue - On j(1cts, interin1 order lvas passed
by the Supreme Court for recovery offee as per third amendment ·-
State tu consider the claim of refimd provided transit fee has not
passeli on to th'e consun1er lvhich n1a;' result into unjust e11ric/1111e11t.
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Disposing of the matters, the Court
HELD: 1. I The crushing of stones, stone boulders into
stone grits, stone chips and stone dnst docs not result into a new
commodity diO'crent from forest produce. The crushed materials
continue to be stone and retain their nature of forest produce.
Coal with its various varieties, limestone, hydrated lime, quick
limestone, slake lime, veneer and plywood waste arc all forest
produce. Marble blocks, marble slabs, marble chips arc all forest
produce. Flay ash, clinker, synthetic gypsum are not forest
produce. Gypsum, however, is a forest produce.
II. The Fbrcst Act, 1927 and the Rules framed under Section
41 are neither overridden nor impliedly repealed, altered or
amended by Mines and Minerals (Dcvclopmc,nt and Regulation)
Act, 1957 and the Rules framed thereunder. Both the legislations
operate in different spheres and fields.
Ill. The words "brought from" as occurring in Section
2(4)(b) of 1927 Act means brought from forest from where forest
produce has o~iginated. The words 'brought from forest' cannot
be read as "brought through forest". For an item to be treated as
forest produce, its origin may be in any forest within the State of
U.P. or in a forest outside the State of U.P.
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE
CRUSHER
IV. The forest has to be u uderstood according to its
dictionary meaning which covers the statutory recognised forest
and also shall include any area regarded as forest in the
Government record irrespective of the ownership. The meaning
of forest cannot be restricted only to reserve forests, protected
forests and village forests.
595
A
B
V. The roads notified by notification dated 10.02.1960 under
Section 80A of 1927 Act cannot be read to mean that such roads
have been declared as protected forest. The notification dated
10.2.1960 can only be read to mean that both sides of the road
have been declared us protected forest on which Chapter IV of
the 1927 Act shall be applicable.
C
VI. Ruic 3 of the Uttar Pradesh Transit of Timber & other
Forest Produce Rules, 1978 is not independent of Ruic 5 of 1978
Rules. Transit fee is payable on all kinds of transit passes and
cannot be confined only to transit passes as referred to in Rule
4(l)(b) only.
VII. After issuance of notification under Section 4 of 1927
Act, removal of forest produce therefrom shall be governed by
the Rules framed by the State in view of U.P. Act 23 of 1965 by
which original Section 5 has been substituted in its application in
D
the State of U.P. The fact that no notification under Section 20
E
has been issued docs not mean that restriction put by the State
Government by Rules arc not applicable.
VIII. The Division Bench of the High Court rightly struck
down Fourth and Fifth Amendment Rules to 1978 Rules as being
excessive and confiscatory in nature.
F
IX. The notification dated 28.05.2001 issued by the State
of Madhya Pradesh in exercise of power under Rule 5 of 2000
Rules cannot be said to be beyond the scope of Ruic 5 of 2000
Rules and Section 41 of 1927 Act. The State of Madhya Pradesh
was fully justified in fixing rate of transit fee at the rate of Rs.7/-
G
ai1d Rs.4/- per tonne which was well within the power of the State
under Ruic 5 of 2000 Rules framed under the 1927 Act. [Para
221] [710-D-H; 711-A-F]
H
596
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SUPREME COURT REPORTS
[2017] I l S.C.R.
Whether by manufacturing process/chemical treatment, the forest
produce looses its character of forest produce:
2.1 As regards stone boulders which are 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 arc
obtained which ldoes not transform into any ne" commodity, except
that the stone in smaller pieces and shapes arc obtained. The
Allahabad High Court, in its judgment in *Kumar Stone Works
decided on 27.04.2005 has given a detailed reasoning for not
accepting stoqc grits, stone chips and stone dust as a new
commodity. It held that the character of :Forest Produce is not
lost by such crushing of the stone. High Court of Uttarakhand
took a contrary view in its judgment dated 01.07.2004 in
**K11111ao11 .'>to11e Crusher. The judgment of Kumar Sto11e Works is
approved and judgment in K11111ao11 Sto11e Crusher is set aside.
[Paras 61, 69[ [641-B-C; 644-H]
2.2 The general principle of interpretation of tariff entries
according to ariy 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. [Para
72] [645-G-H]
2.3 The 'transit Fee on marble slabs and tiles cannot be
denied and the State did not commit any error in demanding the
Transit Fee on transit of the said goods. [Para 73]
2.4 The statutory context of Forest Produce as defined in
F
Act, 1927 has to be taken in its botanical and 1;cientific sense. On
forest produce which are exempted by notification issued under
Proviso to Ruic 3 of 1978, no transit fee is leviablc. One of such
notification dated 29.03.2010 has been brought on record. [Paras
72, 74] [645-H; 646-A, B-C[
G
*Kumar Stone Works and others '" Stale of' UP and
others 2005 (3) AWC 2177 - approved.
H
**Mis Kumaon Stone Crusher vs. State of U.P & Ors.
Writ Petition No. 1124 (M-B) of 2001, Judgment
dated 01.07.2004 - disapproved.
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE
CRUSHER
Suresh Lohiya v. State of Maharashtra and another
(1996) 10 sec 397 : (1996] 5 Suppl. SCR 130; CST v.
Lal Kunwa Stone Crusher (P) Ltd. (2000) 3 SCC 525 :
[2000] 2 SCR 276; Tej Bahadur Duhe (Dead by Lrs.)
v. Forest Range Officer F. S. (S. W), Hyderabad (2003)
3 SCC 122; Karnataka Forest Development
Corporation Ltd. v. Cantreads Private Limited and
others (1994) 4 SCC 455; Income Tax Officer. Udaipur
v. Arihant Tiles and Marbles Private Limited (2010) 2
SCC 699 : [2009] (16) SCR 21; Akbar Badnidin Giwani
v. Collector of Customs, Bombay (1990) 2 SCC 203:
[1990] 1 SCR 369 - referred to.
Whether coal (and its ''arious varieties), lime stone, dolomite, fly
ash, clinker, gvpsum, veneer and plywood arc forest produce:
3.1 Coal is formed from plant substances preserved from
complete decay in a normal environment and later altered by
various chemical and physical agencies. There arc four stages in
coal formation: peat, lignite, bituminous and anthracite. The stage
depends upon the conditions to which the plant remains arc
subjected after they were buried-the greater the pressure and
heat, the higher the rank of coal. Higher-ranking coal is denser
and contains less moisture and gases and has a higher heat value
than lower-ranking coal. [Para 75] [646-C-E]
3.2 The formation of coal itself is due to large tracts of forest
getting buried under the ground due to natural processes snch
as floods and sedimentation. Further, a major portion of the coal
reserves of the country arc situated beneath forest lands and
clearance for mining of the same from Forest lands. Coal, thus, is
clearly a forest produce. [Para 76] [646-E-F]
3.3 Hard coke and soft coke arc made from coal. Coke can
be formed naturally as well as by synthetic method. Hard coke,
soft coke, coal.briquettes arc all different variations of cual which
do not shed their natural chanictcristic and arc itll forest produce.
[Para 77] [646-F-G]
597
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3.4 Limestone is expressly mentioned in definition of forest
produce, slake lime/quick lime/hydrated lime arc all produce of
limestone. Further, produce known quicklime is produced by H
598
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SUPREME COURT REPORTS
[2017] ll S.C.R.
heating of lim~stone, upon which limestone breaks down into
Calcium oxide (quicklime) and carbon dioxide. That upon adding
water to the same, the quicklime is converted into slaked lime
and thereafter, $pon being carbonated, the produce will revert to
its natural state of being limestone. Hence, the said process docs
not change the nature of the product, as the basic ingredient is
essentially lime$tone, and merely upon heating and addition of
water, the nature of the produce i.e. limestone, docs not change.
Hence, limestone is a forest produce.[Para 78][646-G-H; 647-A]
3.5 Dolomite is a sedimentary rock. Dolomite is formed by
the post depositional alteration of lime mud and limestone by
magnesium-rich ground water. Dolomite and limestone arc very
similar stones and arc forest produce. [Para 791 [647-81
3.6 Fly ash, clinker and synthetic gypsum are not forest
produce. Gypsum is naturally found and obtained in the natural
form, hence it is a forest produce. [Para 80] (647-C)
Veneer and waste plywood
4.1 The veneer is nothing but thin sheets of wood which
arc cut from existing logs & planks, which is then again glued
upon 11lanks of wood. The essential nature of the product of veneer
is merely sliced/cut up wood. Hence, it continues to be a forest
produce. [Para ~11 (647-DI
4.2 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 c)l:traction by the machines and unutilizcd 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. [Para 82] (647-E-F]
Forest Act, 1927 and MMDR Act, 1957:
5.1 The l l>27 Act which has been continued in force by
virtue of Article 372 is to continue until altered or repealed or
ame·nded by a competent legislature. To find out as to whether
the 1927 Act and Rules, 1978 framed thereunder survive even
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE
599
CRUSHER
after enforcement of 1957 Act, Article 254 is not to be looked
into but it is to be found as to whether the above pre-constitutional
Jaw is altered or repealed or amended by a competent legislature.
To find out this competent legislation as contemplated by subclause (I) of Article 372 in the context of pre-constitutional law
A
B
c
the nature and content of pre-constitutional law has to be found
out. There cannot be any dispute that 1927 Act was enacted to
consolidate the law relating to forests, the transit of forest-produce
and the duty Ieviablc 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 Slate of U.P. in different provisions of 1927 Act in
exercise of its legislative power as conferred by List II. By the
Constitution (Forty-second Amendment) Act, 1976, with effect
from 03.01.1977 Entry 19 was omitted from List II and transferred
D
in List III as Entry 17A. Entry l7A 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 subclause (I). (Paras 93, 96, 97] (650-D-F; 652-D-GJ
5.2 The question of repeal by implication arises when two
statutes become inconsistent to the extent that competence of E
one is not possible without disobedience to other. 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. 1957 Act
was enacted in reference to Entry 54 of List I to provide for the
F
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 uud the duty leviable on timher aud other
forest-produce. [Paras 101, 104] (655-E; 656-F-G]
5.3 It is sine qua non that both the sets of laws must deal
G
with "the same subject matter". Jn 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 Act. In contrast, the 1957 Act in view of
Section 2 thereof, gives control to the Union of "Regulation of
H
600
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SUPREME COURT REPORTS
[2017] l l S.C.R.
Mines and Development of Minerals". Provisions relating to
transport or storage arc only incidental and ancillary in nature.
But the main ppint of difference ls the subject matter of legislation
under the 1957 Act "Regulation of Mines and Development of
Minerals". [Para 105) (656-H; 657-A-BJ
5.4 When the minerals are forest-produce by definition
under the 1927 Act under Section 2(4), validity of which is not
challenged, fo~est-produce and its transit is altogether a different
subject mattet than the subject matter governed by 1957 Act.
The object of the two legislations is different. The regulation is
different. The Forest Act comprehensively d<:als with forest and
forest wealth with a different object and the 1957 Act deals with
mines and mineral wealth. [Para 106] (657-C-D]
5.5 The l927 Act provides comprehensive provisions with
regard to reserved forest, village forest and protected forest.
The forests arc directly linked with environment and ecological
D
balance hut because of large human development, exploitation
of forests and other natural resources and deforestation, the
international ciimmunity has been alarmed, several international
conventions and treaties were made including Kyoto Protocol
and Paris Convention to which India is a signatory. [Para ll l)
E
[ 657-G-H; 658-A]
F
G
H
5.6 The subjects of 1927 Act and 1957 Act arc thus distinct
and separate. The 1957 Act was on development and regulation
of mines and minerals. Mines and minerals arc 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, ancl all
products of mines or quarries). The State has been empowered
to regulate transit of forest-produce under Section 41 of the Act.
Regulation of transit of forest-produce is a larger activity covering
transit of different kinds of forest-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 constitutional scheme of distribution of
legislative powers. [Paras 115, 116] (658-E-HJ
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE
601
CRUSHER
5.7 In t~ event any overlapping is found in two Entries of A
Seventh Schedule or two legislations, 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. Thus, even it is assumed
that, in working of two legislations which pertain to different
subject matters, there is an incidental encroachment in respect
of small 11rea of operation of two legislations, legislation cannot
be struck down as being beyond legislative competence nor it
can be held that one legislation repeals the other. Thus, on looking
into the pith and substance of both the legislations, it is clear that
they operate in different field and it cannot be accepted that 1957
Act impliedly repeals the 1927 Act in so far as Section 41 and
l 978 Rules are concerned. Thus, it cannot be said that in view of
the 1957 Act especially as amended by Act 38 of I 999, the
provisions of_ 1927 Act & 1978 Rules have become void,
inoperative and stand repealed. [Paras 120, 121] (661-H; 662-AC]
;
Hingir-Rampur Coal Co., Ltd. and others v. The State of
Orissa and others AIR 1961 SC 459: (19611 SCR 537;
State ()f Orissa v. MA. Tulloch muf Co. (19641 (4) SCR
461; B. V. Patankar and Ors. "· C.G Sastry AIR 1961 SC
272: (1961] SCR 591; Pa11kajakshi (Dead) Through Legal
Representatives and others v. Cha11drika and Ors. (2016) 6
SCC 157: (2016] 3 SCR 1018; Ku/want Kaur and others v.
Gurdial Singh Mann (Dead) by Lrs. and Ors. (200 I) 4 SCC
262 : [2001] 2 SCR 525; Mu11icipal Council, Pulai through
the Commissioner ofM1111icipal Council, Palai v. TJ. Joseph
AIR 1963 SC 1561 : [1964] SCR 87; Deep Cha11d v. State
of UP imd Ors. AIR 1959 SC 648: (1959( Suppl. SCR 8;
Slate of Kera/a and Ors. v. Mar Appraem Kuri Company
Li111i1ed and Am: (2012) 7 SCC 106 : (20121 4 SCR 448:
Kartar Singh v. State of Punjab (1994) 3 SCC 569: [19941
2 SCR 375; A.S. Krishna and others"· State a/Madras AIR
1957 SC 297: [19571 SCR 399; Union oflndia and Ors. v.
Shah Govedhan L. Kabra Teachers' College (2002) 8 SCC
228 : [2002] 3 Suppl. SCR 220- referred to.
Principles of Statutory Interpretation hy.Justice G.P Singh
14" Edu - referred to.
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SUPREME COURT REPORTS
[2017] 11 S.C.R.
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Interpretation of Section 2(4)(bl of 1927 Act
6.1 The meaning of words 'brought from' as used in Section
2(4)(b) has bcc~mc very significant in the instant case since it is
a case of large number writ petitioners that the goods which they
arc transiting did not originate from any forest area rather they
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have been take!) from non-forest area, hence, there is no liability
to pay transit f¢e. [Para 122] [662-D]
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6.2 The word •from' is used to denote a point of time, a
place or 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 >rord '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 of the items mentioned in subclauses (1) to (iv) of sub-clause(b). of Section 2(4). The 'found in'
means that the iiem 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. [Para 124] (663-B-D]
6.3 The 1978 Rules framed under Section 41 of the 1927
Act also rctlect that rule making authority has also understood
the meaning of word 'brought from' in the above sense. As per
Ruic 3 no forest produce shall be moved to or from or within the
F
State of ll.P. exqept or without a transit pass in the form in the
Schedule A. The Schedule A of the Rules contains the form. The
Item No.l of the form also clearly refers lo locality of origin of
the produce and form requires name and situation of forest and
name of the forest owner. Thus, locality of origin is related to a
forest which supports the interpretation. [Parns 125, 126] (663G E-G]
H
6.4 The word "brought from" as occurring in Section 2(4)(b)
indicate forest to be source or original depository of the forest
produce. Thus, the word 'brought from' has to be understood in
the abovt' mann~r. However, it is clarified that the origin of forest
STATE OF UTTARAKHAND & ORS. v. M/S. KUMAON STONE
CRUSHER
produce may be in any forest situate within the State of U.P. or
outside the State of U.P. since, transit pass is necessary as per
Rule 3 for moving a forest produce into or from or within the
State of U.P. Any produce, goods entering within or the outside
the State which is the forest produce having originated in the
forest requires a transit pass for transiting in the State of U.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 forest produce answering the
description qf forest produce within the meaning of s. 2(4)(b).
[Para 128] [665-C-E]
Kumar Stone Works and others v. State of U.P. and
othe1:~ 2005 (3) AWC 2177 - referred to.
Yeshwant Many Dodamani and Ors. 1962 CRLJ 832 -
approved.
603
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Advanced Law Lexicon by P. Ramanatha Aiyar 3'•
D
Edn. - referred to.
Meaning of 'Forest'
7. The Forest Conservation Act, 1980 is a Parliamentary
enactment which has been specifically enacted to provide for the
conservation of the forest and for matters connected therewith.
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The definition of forest cannot be confined only to reserved
forests, village forests and protected forests as enumerated in
1927 Act. Thus, forest shall include all statutorily recognised
forests, whether designated as reserve, protected or othenvise.
The term "forest land", occurring in Section 2, will not only include· F
"forest" as understood in the dictionary sense, but also any area
recorded as forest in the Government records irrespective of
the ownership. The definition of forest as contained in Section
38A(b ), gives very wide definition of forest and giving restrictive
meaning of forest in view of the wide definition given by the State
legislature cannot be accepted. Thus, the interpretation of forest
as given by the Division Bench in its judgment dated 11.11.2011
has to be approved and the and the restrictive definition as given
by the Uttarakhand High Court in its judgment dated 26.6.2007
in M/s. Gupta Builders cannot be approved. (Paras 130, 131, 133(
[665-E, G; 666-D-E, 667-C-D]
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SUPREME COURT REPORTS
[2017] ll S.C.R.
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Mis. Ajay Trading (Coal) Co.& Ors. vs. State UP &
Ors. Writ Petition No.963 of 2011 Judgment dated
11/21.11.2011 - approved.
Mis Gupta Builders vs. Stale of Ut1ara11chal & Ors. Writ
Petition No. 993 of 2004 Judgment dated 26.06.2007 -
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disapprov~d.
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Whether Notifilcation dated I 0.02.1960 declares Roads as
Protected Forest
8.1 Section 80A which has been referred in the notilkalion
is a provision which has been inserted by U.P. Act 18 of 1951
with effect from 06.10.1951. Under Section 80A the State
Government may, by notification declare that any of the provisions
of Act shall upph on the banks of canals or the sides of roads
which are the property of the State Government or a local
authority. Section 80A is included in Chapter XIII which is a
miscellaneous Chapter. Section SOA empowers the State to
declare any land on the banks of canals or the sides of roads as
protected forest on which any other provisions of the Act can be
applied. Notifica~ion elated 10.02.1960 declared that provisions
of Chapter IV of lhe Act shall be applied. Thus land mentioned in
the schedule is declared as protected forest. Section 80A
delineates the legislative scheme of declaring protected forests
on banks of cam!ls or the sides of roads. The State while issuing
notification under Section SOA can only effectuate, the object and
purpose of Section SOA as enacted by the State legislature. [Paras
137-139] [669-D-E, F-H; 670-A]
8.2 The notification dated 10.02.1960 has to be read in the
light of the substantive provisions contained under Section SOA.
When Section 80A empowers the State to declare any land on the
banks of canals pr the sides of roads as proteded forests State
can do only which is permitted by the State and no more. Section
80A read with notification dated 10.02.1960 shall only mean that
both the sides o( the roads which have been mentioned in the
Schedule arc 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
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE
CRUSHER
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 mad itself has been declared as protected forest. The object
is not to declare the road as protected forest so as to apply
different provisions of 1927 Act on the roads itself. The
interpretation put by the State that roads declared by notification
dated 10.02.1960 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 of law.
T_he submissions that merely because both sides of roads arc
declared protected forests, the roads itself have become
protected forests, is rejected. Thus, merely passing through the
roads as included in the notification dated 10.02.1960, it cannot
be held that the goods or forest produce are passing through the
protected forests. [Para 140] [670-B-G)
Whether Rule 3 is independent of Rule 5
9.1 Ruic 3 is couched in negative term pro"viding that
" ...... no forest produce shall be moved into or from or within the
State of Uttar Pradesh except as provided without a transit Pass
in the form in Schedule A ...... ". Thus transit of forest produce is
permissible only with a transit pass. Ruic 4(1) contains provisions
regarding officers and persons who issue passes. Ruic (5)
provides for fees payable for diffcrcnt passes. Referring to
Chawki or depot established under Ruic 15 and specified under
proviso {ii) to clause {b), sub-rule (1) of Ruic 4, it was submitted
that transit passes us referred to under proviso (ii) to clause {b)
of sub-rule (1) of Ruic 4 are only to be charged with transit fees.
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 arc to be produced at chawki or depot
for payment of transit fee. Reading of Ruic 5 docs not indicate
any intention that only one category of passes as referred to in
Ruic 4{l)(b) arc lc\iablc with transit fee. The words''. .. spcciflcd
under proviso(ii) to clause{b), sub-rule(!) of Rnlc 4 only refer to
605
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SUPREME COURT REPORTS
(2017] l l S.C.R.
check Chawki 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 classc$ of passes." Thus, Marginal Note clarifies that
transit fee is pqyable at all kinds of passes and submission is
incorrect that Ieviablity of fee is only on one category of passes
as referred to in Rule 4(l)(b). Marginal note hns been held to be
an internal aid t" statutory interpretation of a statute. [Paras 141,
143, 144) (670-G-H; 671-A; 672-C, F-H; 673-A]
9.2 In event the interpretation as put by the petitioner is
accepted that fee under Rule 5 is chargeable only on passes
obtained under ~ule 4(l)(b) only, the easiest manner to avoid
payment of tran$it fee is not to apply in form B for obtaining the
booklet for issuance of pass by the person or from its authorized
representative, 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 pl)sses that has nothing to do with payment of fee
which is separately provided in Ruic 5 and is applicable to all
kinds of passes. When all transit passes have to be in same form
and in triplicate jt cannot be seen how it can be read that only on
one category of passes fee is leviablc and Ruic 5 is not applicable
and is completcl~ independent of Ruic 3. The submission that
transit fee is payable only with regard to passes issued under
Ruic 4(1)(b) which arc required to be checked under Ruic 6(4),
cannot 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 Rule 3. Thus, the interpretation of Ruic 3, 4, 5 & 6 in
respect of pay abUity of transit fee on transit passes issued under
1978 Rules cannot be accepted. [Paras 146-148] (673-G-H; 674A, CJ
Non-issuance of Section 20 Notification after Section 4 Notification
of 1927 Act
IO.I Section 5 as inserted by Uttar Pradesh Act 23 of 1965
with effect from 25.04.1965 clearly provides that after the issue
of the notification under Section 4 no forest produce can be
removed thcrefrol;n, except in accordance with such rules as may
be made by the Slate Government in this behalf. The regulation
STATE OF UTTARAKHAND & ORS. v. MIS. KUMAON STONE
607
CRUSHER
by the State thus comes into operation after the issue of A
notification under Section 4 and thus, the submission that since
no final notification under Section 20 has been issued they cannot
be regulated by Rules 1978 cannot be accepted. [Para 150] [675D]
10.2 The High Court has thus even though had struck down
B
Fourth and Fifth Amendment Rules but clearly permitted the State
to recover transit fee in accordance with the rate as was applicable
prior to Fourth Amendment Rules. Thus, no infirmity is found in
the State's recovery of transit fee at the rate of Third Amendment
Rules. There being express order by the High Court on
C
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, the question as to whether by striking
clown Fourth and Fifth Amendment Rules, Third Amendment Ruic
docs not revive need not be gone into in the instant case. Jn D.
view of the order of the High Court dated 11.11.2011, the State
was fully competent to recover the transit ·rec as per Third
Amendment Rule, which direction of the High Court is affirmed.
[Para 155] [677-C-E]
State of West Bengal v. Keshoram Industries and Ors.
E
(2004) lO SCC 201 : [2004) 1 SCR 564; Synthetics
and Chemicals Ltd etc v. State of U. P. and Ors. (1990)
1 SCC 109 : [19891 l Suppl. SCR 623; Firm A.T.B
Mehtab Majid and Co. v. State af Madras and anathe1;
AlR 1963 SC 928: [1963) Suppl. SCR 435; B. N. Tiwari
v. Union of India, AIR 1965 SC 1430 : [1965) SCR
· F
421; State of U. P. and others v. Hirendera Pal Singh
(2011) 5 SCC 305: [2010) 15 SCR 854; Supreme Court
Advocate-on-record Association v. Union of llldia 2016
(5) sec 1 - referred to.
Validity of Fourth And Fifth Amendment Rules
G
11.1 Transit fee charged under 1978 Rules is regulatory
fee in character. For regulatory fee, State is not to prove any quid
. pro quo. Regulatory Fee can be charged, even if, no services ure
rendered by the State in lieu of fee realised. [Paras 164, 1751
[683-F-G; 689-AJ
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SUPREME COURT REPORTS
(2017] I l S.C.R.
11.2 By the Uttar Pradesh Transit of Timber and other
Forest Product (Third Amendment) Rules, 2004 fee prescribed
in Rule 5 was lncreased, for example per lorry load of timber or
other forest pr0duce in place of Rs.5/- per tonne of capacity fee
of Rs.38/- pet tonne of capacity is shown. In the Fourth
Amendment Rules, 2010 dated 20.10.2010, the fee which was
Rs.38/- for per tonne per lorry load of timber or other forest
produce was increased as Rs.200/- per cubic meter of capacity
other than ofKhair, Sal and Sagaun (Teak), Shisham, Sandal Wood
and Red Sanders. In the Fifth Amendment Rules,2011 dated
04.06.20ll, Rule 5 was amended where the basis of levy of fee
was changed into advalorem at the rate of 5% or minimum
Rs.2,000/- for per lorry load of timber or other than of Khair, Sal
and Sagaun (Teak), Silisham, Sandal Wood and Red Sanders. (Para
168] [685-F-G]
11.3 Initially when Transit Fee Rules were framed in 1978,
Transit Fee on per lorry load of timber was Rs. 5 per tonne of
capacity. By 3" amendment with effect from 14.06.2004 Rs. 5/-
was increased a1s Rs. 38 per tonne of capacity. By 4" amendment
rules, the Trans1it Fee was increased as Rs. 200/- per cubic meter
with regard to timber, Khair, Sal & Sagaun, Sisham, Sandal wood
and Red Sande~s and with regard to other timber Rs. 75 per cubic
meter.