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High Court Of Calcutta
AJIT KUMAR SENGUPTA , S. K. SEN
KESORAM INDUSTRIES LTD.(TEXTILE DIVISION) - Appellant
Versus
COAL INDIA LTD. - Respondent
Appeal . Of 1992
Decided On : 11/25/1992
The issue before the Court was to determine whether the levies of cess on coal imposed by the State of West Bengal were beyond the legislative competence of the State Legislature. The Court held that the levies were unconstitutional and ultra vires. The Court also held that the provisions of the West Bengal Primary Education Act, 1973 and the West Bengal Rural Employment and Production Act, 1976 which purported to levy cess on the basis of value of coal were beyond the competence of the State Legislature. The Court further held that the amendments to the West Bengal Primary Education Act 1973 and the West Bengal Rural Employment and Production Act 1976 made by the West Bengal Taxation Laws (Amendment) Act 1992 did not make any change of consequence as to the character of the levies and were therefore also ultra vires.
Fact of the Case:
The appellant, a coal consumer, challenged the constitutional validity of the levies of cess on coal imposed by the State of West Bengal under the Cess Act, 1880, the West Bengal Primary Education Act, 1973 and the West Bengal Rural Employment and Production Act, 1976. The appellant contended that the levies were beyond the legislative competence of the State Legislature and were therefore ultra vires.
Finding of the Court:
The Court held that the levies were unconstitutional and ultra vires. The Court also held that the provisions of the West Bengal Primary Education Act, 1973 and the West Bengal Rural Employment and Production Act, 1976 which purported to levy cess on the basis of value of coal were beyond the competence of the State Legislature. The Court further held that the amendments to the West Bengal Primary Education Act 1973 and the West Bengal Rural Employment and Production Act 1976 made by the West Bengal Taxation Laws (Amendment) Act 1992 did not make any change of consequence as to the character of the levies and were therefore also ultra vires.
Issues: 1. Whether the levies of cess on coal imposed by the State of West Bengal were beyond the legislative competence of the State Legislature? 2. Whether the provisions of the West Bengal Primary Education Act, 1973 and the West Bengal Rural Employment and Production Act, 1976 which purported to levy cess on the basis of value of coal were beyond the competence of the State Legislature? 3. Whether the amendments to the West Bengal Primary Education Act 1973 and the West Bengal Rural Employment and Production Act 1976 made by the West Bengal Taxation Laws (Amendment) Act 1992 made any change of consequence as to the character of the levies?
Ratio Decidendi: 1. The Court held that the levies were unconstitutional and ultra vires because they were directly on coal and were therefore beyond the legislative competence of the State Legislature. 2. The Court held that the provisions of the West Bengal Primary Education Act, 1973 and the West Bengal Rural Employment and Production Act, 1976 which purported to levy cess on the basis of value of coal were beyond the competence of the State Legislature because they were directly on coal and were therefore beyond the legislative competence of the State Legislature. 3. The Court held that the amendments to the West Bengal Primary Education Act 1973 and the West Bengal Rural Employment and Production Act 1976 made by the West Bengal Taxation Laws (Amendment) Act 1992 did not make any change of consequence as to the character of the levies because they were still directly on coal and were therefore beyond the legislative competence of the State Legislature.
Final Decision: The Court held that the levies were unconstitutional and ultra vires. The Court also held that the provisions of the West Bengal Primary Education Act, 1973 and the West Bengal Rural Employment and Production Act, 1976 which purported to levy cess on the basis of value of coal were beyond the competence of the State Legislature. The Court further held that the amendments to the West Bengal Primary Education Act 1973 and the West Bengal Rural Employment and Production Act 1976 made by the West Bengal Taxation Laws (Amendment) Act 1992 did not make any change of consequence as to the character of the levies and were therefore also ultra vires.
( 1 ) THIS appeal is from an order dated 7/05/1992 vacating an earlier order dated 10/12/1991 of stay of recovery of cess on coal made in an application filed under Art. 226 of the Constitution. It is submitted on behalf of the appellant/writ petitioner that the controversy lies within a short compass and the basic questions involved are concluded by the judgments of the Supreme Court in India Cement Limited v. State of Tamil Nadu, AIR 1990 SC 85 and Orissa Cement Ltd. v. State of Orissa, AIR 1991 SC 1676.
( 2 ) ACCORDING to the appellants the 3 levies under the three Acts namely, Cess Act, 1880, West Bengal Primary Education Act, 1973 and the West Bengal Rural Employment and Production Act, 1976 in so far as they purport to levy cess on the basis of despatches of coal are beyond the legislative competence of the State legislature on the principles laid down in the aforesaid Supreme Court decisions in India Cement and Orissa Cement (supra ). The appellants contend that this court is only to examine whether the 3 levies (including the amendments thereof) which are in question are pari materia with the levies which were declared to be unconstitutional by the Supreme Court in India Cement (supra) and Orissa Cement (supra ).
( 3 ) THE writ petition was filed in Sept. 1991. On 10/12/1991 the learned trial Judge made an interim order restraining Eastern Coalfields Limited and Coal India Limited from including in the sale bills of coal any amount representing any levy of cess under the Cess Act, 1980. The West Bengal Primary Education Act, 1973 and West Bengal Rural Employment and Production Act, 1976 as well as an injunction restraining the State of West Bengal from realising any cess through the said coal companies under the aforesaid 3 Acts. This order was made presumably on the basis of the order of the Supreme Court dated 18th Nov. 1991 in Writ Petition (Civil) No. (s) 993/91 (Coal Consumers Association of Eastern v. State of West Bengal) where on a petition filed under Art. 32 of the Constitution by the Coal Consumers Association of Eastern India challenging the three levies, the Supreme Court had granted an ex parte stay of realisation of cess. It appears that by a subsequent reasoned order dated 20/12/1991 the Supreme Court vacated the order of stay made on 18th Nov. 1991. The interim order granted by the learned trial Judge in this matter on 10/12/1991 was subsequently continued by him by order dated 12/03/1992. But on 7/05/1992 the learned trial Judge vacated the interim order. It is pointed out that the learned trial Judge did so after his attention was drawn to the order dated 20/12/1991 made by the Supreme Court in the writ petition filed by the Coal Consumers Association of Eastern India. The propriety of vacating the interim order dated 10/12/1991 as continued by 12/03/19921 is questioned in this appeal.
( 4 ) THIS appeal was filed on 25/05/1992. When the matter came up before this Court for considering the question of interim stay the learned counsel for the appellant did not press of any interim order as we acceded to the request of the parties that the appeal itself could be disposed of if the aforesaid decisions of the Supreme Court covered the field and accordingly by our order dated 4/08/1992 fixed the appeal for hearing on 26/08/1992.
( 5 ) THE Court was informed by learned counsel for the parties that a number of writ petitions are pending in this court involving the same issues and that some of them were heard in September and November, 1991 and judgment reserved but no judgment has yet been delivered.
( 6 ) THE learned Counsel appearing for the parties made their respective submissions in the course of hearing of the appeal and also suggested that they would file brief notes of submissions which were submitted on 9th Sept. 1991. In the written notes submitted by the parties the point made in the course of hearing were more or less reiterated except that in the notes submitted on b
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