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2014 Supreme(All) 1871

ALLAHABAD HIGH COURT
BEFORE : TARUN AGARWALA AND RAJAN ROY, JJ.
M/s. SINGH TIMBER TRADER AND OTHERS - Petitioners
Versus
STATE OF U.P. AND OTHERS - Respondents
(Civil Misc. Writ Petition Nos. 72465 of 2011, 75365, 70386, 72724 of 2010, 67911, 73956, 74002, 74138, 74151, 75691, 75397 of 2011, 160, 163, 167 of 2012, 76045, 76060, 76062, 76064, 76245, 76303, 76365 of 2011, 338, 1040, 1056 of 2012, 67843, 75844, 76583 of 2011, 6290, 6561, 10369, 10794, 9466, 19191, 19610, 16962, 21534, 21720, 24266, 31869, 32280, 32013, 53979 of 2012, 52809, 789, 49143 of 2013, 60439, 54283 of 2012, 108 of 2013, 18597, 60204, 66867, 65002, 44573 of 2012, 71434 of 2013 and 505, 2011, decided on 23rd December, 2014).

Advocates:
Counsel :
Bharatji Agarwal, Rahul Agarwal, Ravi Kiran Jain, Vinod Kumar Agarwal, Ansul Kumar Singhal, Udit Chandra and K.K. Mani for the Petitioners; Ram Krishna and Ravi Shanker Prasad for the Respondents.

Headnote:(Indian) Forest Act, 1927—Sections 51-A, 2(6), 2(7)—Forest Conservation Act, 1980—Section 2—U.P. Establishment and Regulation of Saw Mills Rules, 1978—Rules 2, 3, 3-A, 4, 5, 6, 11 [as amended by 4th Amendment) Rules, 2010—Licence—Saw Mills—Fees for renewal—Substitution of Rule 11 as such—Validity of—Petitioners are manufactures of plywood and veneer, mostly using poplar trees for their product—Licence fees has been enhanced many folds—Justification—Whether the enhanced fee does not have any co-relationship with the cost of administering the regulation—Such regulatory fee is required to be justified with reference to cost of such regulations—Principle of quid pro quo does not apply—Increase in cost of raw material or increase in the sale price of the finished products has no co-relationship with the cost incurred in enforcing the regulation—Petitioners neither purchase wood in cubic metres nor maintain their stock in cubic metres and that entire transaction of purchase of sale of wood by petitioners is in quintals—State Government failed to justify their expenses leading to an arbitrary increase in the licence fee—Notification dated 20.10.2010 substituting Rule 11 is illegal—No distinction can be made between a saw mill, a veneer unit and a plywood unit—As per impugned notification Rs. 25,000 per unit is being charged as a licence fee for a saw mill and veneer factory, Rs. 50,000 per unit is being charged for plywood unit and Rs. 75,000 for veneer and plywood—Impugned notification quashed. [Paras 44 to 87]

       Result; Petition Allowed.

JUDGMENT

Hon’ble Tarun Agarwala, J.—In this group of petitions, the petitioners are engaged in the manufacture of plywood and veneer and have prayed for the quashing of the notification dated 20th October, 2010 by which Rule 11 of “The U.P. Establishment and Regulation of Saw Mills Rules, 1978” (hereinafter referred to as the Rules of 1978) have been substituted by “The U.P. Establishment and Regulation of Saw Mills (Fourth Amendment) Rules, 2010” (hereinafter referred to as the Fourth Amendment), The petitioners have further prayed for a writ of mandamus commanding the respondents to renew their licence at the rates applicable prior to 20th October, 2010. By the said amendment, the licence fee has been enhanced 15 times from Rs. 5,000/- per year to Rs. 75,000/- per year per 25 HP. For facility, Writ Petition No. 72465 of 2011, M/s Singh Timber Traders and others v. State of U.P. Through its Secretary, Forest, Lucknow and others have been made the leading case and, for facility, the facts in this petition is being taken into consideration.

2. The petitioners are manufactures of plywood and veneer for which the basic raw material is wood. The petitioners contend that they are mostly using poplar trees for the manufacture of their product. The petitioners contend that they are not purchasing this wood either from the State Government from the U.P. Forest Corporation but are purchasing the wood from the farmers, who grow poplar trees on the margin of their fields. The petitioners contend that poplar trees grow very fast and have a maximum life of 10 years and that cutting the poplar tree does not harm the environment. The petitioners further contend that for the manufacture of veneer or plywood, the basic machine required is, a saw mill for cutting the wood into various shapes and sizes.

3. Before proceeding further, it would be essential to give a brief background, which has led to the filing of the writ petitions.

4. The Indian Forest Act, 1927 (hereinafter referred to as the Act of 1927) was enacted in order to consolidate the law relating to trees, forest produce and duty leviable on timber and other forest produce. By the 41st Amendment 1976, Entry No. 17(A) was inserted in the concurrent list of the VIIth Schedule of the Constitution by which the subject matter of “forest” was inserted and the entry “forest” in Entry No. 19 of List II of the VIIth Schedule was omitted. Chapter VIII-A of the Act of 1927 deals with the regulation, manufacture and preparation of articles based on forest produce. Under Section 51A, the government is empowered to make Rules relating to the establishment of licence, permit or otherwise of saw mills and units including factories engaged in the manufacture or preparation of various articles as defined therein. For facility, Section 51A of the Act of 1927 is extracted hereunder :

“51A. Power to regulate manufacture and preparation of articles based on forest product.—(1) The Government may make rules—

(a) to provide for the establishment and regulation by licence, permit or otherwise (and the payment of fees therefor), of saw mills and units including factories engaged in the manufacture or preparation of the following articles—

(i) Katha (Catechin) or Cutch out of Khair wood;

(ii) Plywood, veneer and wood-panel products;

(iii) preparation of match-boxes and match splints;

(iv) boxes including packing cases made out of wood;

(v) such other articles based on forest-produce as the State Government may, by notification in the Official Gazette, from time to time, specify;

(b) to provide for the regulation by licence, permit or otherwise of procurement of raw materials for the preparation of the articles mentioned in clause (a), the payment and deposit of fees therefor and for due compliance of the conditions thereof, the forfeiture of the fees so deposited or any part thereof for contravention of any such conditions, and the adjudication of such forfeiture by such authority as the State Government may, b





































































































































































































































































































































































































































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