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2013 Supreme(Kar) 880
High Court of Karnataka
S. ABDUL NAZEER, J.
KIOCL Limited (Formerely Kudremukh Iron Ore Company Limited)
Versus
Railway Board, New Delhi & Others
W.P. No. 532 of 2010 (GM RES)
Decided on: 17-04-2013
For the Petitioner:D.L.N. Rao, Sr. Advocate for Mrs. S.R. Anuradha & Anirudh Anand, Advocates.
For the Respondents: V.K. Narayana Swamy, CSG.
Headnote:RAILWAYS ACT, 1989 - Sections 30 & 31: [S. Abdul Nazeer, J] Levy of additional charges on iron Ore pellets for export - Held, Fixation of tariff by the Government for carriage of goods and passengers is a complex fiscal exercise. Guidelines are issued from time to time fixing the tariff. It is a policy decision of the Central Government which cannot be questioned unless it is shown that the policy is violative of any statutory provision or the Constitution. The Court should not ordinarily interfere with the same unless there is a clear violation of law or clear arbitrariness. Wisdom and advisability of economic policies are ordinarily not amenable to judicial review. It is not for the Court to consider the relative merits of different economics policies and consider whether a wiser or better one can be evolved.
Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In the case of a policy decision on economic matters, the Courts should be very circumspect in conducting any enquiry or investigation and must be most reluctant to impugn the judgment of the experts who may have arrived at a conclusion unless the Court is satisfied that there is illegality in the decision itself.
It is not necessary to enter upon any exercise for finding out the wisdom in the policy decision of the State Government. It is immaterial if a better or more comprehensive policy decision could have been taken. It is equally immaterial if it can be demonstrated that the policy decision is unwise and is likely to defeat the purpose for which such decisions has been taken. It should be borne in mind that expect for the limited purpose of testing a public policy in the context of illegality and unconstitutionality, Court should avoid "embarking on uncharted ocean of public policy."
The impugned circular has made a distinction in pelletization units receiving iron ore for conversion to pellets for domestic consumption and for export of pellets. Movement of iron ore for pellatization plants for purposes of export which is charged in addition to Class 180, the levy of distance based charges. This has been done under Section 30 of the Railways Act. It is a policy decision of the Central Government. The respondents have clarified that the circulars levying additional charges for transportation of iron ore or iron ore pellets is quite distinct and separate with that of domestic consumption. Petitioner cannot contend that there cannot be any distinction between such transportation for the purpose of domestic violence consumption or for transport of value added material. Impugned clause in the circular is neither discriminatory nor arbitrary and is not violative of any statutory provisions.
RAILWAYS ACT, 1989 - Sections 30 & 31: [S. Abdul Nazeer, J] Challenge to Circular levying additional charges to the tariff for domestic and non-domestic consumption of Iron Ore pellets for export as well as Iron Ore moved for pelletization for export - Held, Fixation of tariff by the Government for carriage of goods and passengers is a complex fiscal exercise. Guidelines are issued from time to time fixing the tariff. It is a policy decision of the Central Government which cannot be questioned unless it is shown that the policy is violative of any statutory provision or the Constitution. The Court should not ordinarily interfere with the same unless there is a clear violation of law or clear arbitrariness. Wisdom and advisability of economic of economic policies are ordinarily not amenable to judicial review. It is not for the Courts to consider the relative merits of different economic policies and consider whether a wiser or better one can be evolved.
Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In the case of a policy decision on economic matters, the Courts should be very circumspect in conducting any enquiry or investigation and must be most reluctant to impugn the judgment of the experts who may have arrived at a conclusion unless the Court is satisfied that there is illegality in the decision itself.
It is not necessary to enter upon any exercise for finding out the wisdom in the policy decision of the State Government. It is immaterial if a better or more comprehensive policy decision could have been taken. It is equally immaterial if it can be demonstrated that the policy decision is unwise and is likely to defeat the purpose for which such decision has been taken. It should be borne in mind that except for the limited purpose of testing a public policy in the context of illegality and unconstitutionality, Court should avoid "embarking on uncharted ocean of public policy."
The impugned circular has made a distinction in pelletization units receiving iron ore for conversion to pellets for domestic consumption and for export of pellets. Movement of iron ore for pellatization plants for purposes of export which is charged in addition to Class 180, the levy of distance based charges. This has been done under Section 30 of the Railways Act. It is a policy decision of the Central Government. The respondents have clarified that the circulars levying additional charges for transportation of iron ore or iron ore pellets is quite distinct and separate with that of domestic consumption. Petitioner cannot contend that there cannot be any distinction between such transportation for the purpose of domestic consumption or for transport of value added material. Impugned clause in the circular is neither discriminatory nor arbitrary and is not violative of any statutory provisions.
1. In this case, the petitioner has called in question the legality and validity of para 5 of the circular at Annexure ‘B’ bearing No.TCR/1078/2007/3 dated 1.6.2009 issued by the Railway Board, under the Ministry of Railways, Government of India and for certain other reliefs.
2. The petitioner is a Government of India Enterprise. It is a company incorporated under the provisions of the Companies Act, 1956. It has a pelletization plant, which is 100% export oriented unit and blast furnace unit in Mangalore. The petitioner procures its raw materials in the form of iron ore fines from M/s NMDC Limited, a Central Government undertaking from its mines at Donimalai in Bellary District as well as its mines at Bailadilla Sector in Chattisgarh. The petitioner is having its own private railway siding at Panambur, Mangalore for unloading raw materials transported through railways. It has long term contracts for supply of raw material with M/s NMDC. Iron ore fines procured by petitioner will be converted into iron oxide pellets which are considered as value addition and same is exported and also marginally sold at domestic market.
3. Under the Railways Act, 1989 (‘Act’ for short), various duties have been classified for the purpose of determining rates to be charged for carriage of such goods and commodities. The rates are fixed based on classification of commodities. Goods Tariff No.45, Part I (Volume II) contains the classification of Commodities. Iron and steel is classified as Class 180. There was no distinction on the transportation of iron ore through railways for making pellets or steel which are sold either locally in domestic market or exported. The Railway Board issued Rate Circular after obtaining sanction from Central Government from time to time towards freight charges for transportation of iron ore. One such circular issued by the Railway Board is at Annexure ‘A’ dated 1.7.2008. It is clear from the said circular that pelletization units receiving iron ore in their private or assisted sidings for conversion into iron ore pellets for consumption of iron and steel manufacturing plans will be treated on par with steel manufacturing units. The Railway Board issued yet another rate circular at Annexure B’ dated 1.6.2009 which makes a distinction in pelletization units receiving iron ore for conversion to pellets for domestic consumption and for export of pellets. In other words, any movement or traffic of iron ore meant for domestic consumption for manufacture of iron and steel as well as cement will be charged at Class 180 without levy of distance based charges prescribed at para 1 of circular whereas same pellets if exported will attract additional levy of distance based charge. Thus, the distinction was made in so far as movement of iron ore for pelletization plants for purposes of export, which will be charged in addition to Class 180 the levy of distance based charges. The relevant portion of the said circular is as under:
“5. Pelletization Unit: Pelletization units receiving iron ore in their private or assisted sidings for conversion into iron ore pellets for domestic consumption of iron and steel manufacturing plants will be treated at par with steel manufacturing units. However, they will need to comply with provisions of Para 3(B) for availing freight rates as prescribed in Para 2. The Iron Ore Pellets for export as well as Iron Ore moved for such pelletization (for export) will be charged at Class 180 along with levy of Distance Based Charge.”
4. The Divisional Commercial Manager, South Western Railways, Hubli, issued a letter dated 21.10.2011 calling upon the petitioner to furnish the details of iron ore pellets manufactured and exported from out of iron ore sourced from Hubli division by rail to take further necessary action in the matter. This notice was issued in pursuance of the rate circular at Annexure ‘B’ dated 1.6.2009. The petitioner has sent a reply to the said notice at Annexure ‘G’.
5. The petitioner co
