The State of Kerala lacked legislative competence to impose a cess on seafood exporters due to absence of an employer-employee relationship and previous Supreme Court rulings against similar levies.

JUDGMENT

[WA Nos.987/2019, 944/2019, 955/2019, 1048/2019, 1445/2019, 1441/2019, 1457/2019, 1495/2019, 1482/2019, 1456/2019, 1452/2019, 1497/2019, 1464/2019, 1545/2019, 1550/2019, 1514/2019, 1520/2019, 1522/2019, 1551/2019, 1546/2019, 1578/2019, 1665/2019, 1749/2019, 1770/2019, 1791/2019, 1750/2019, 1787/2019, 1767/2019, 1804/2019, 1805/2019, 1803/2019, 1773/2019, 1774/2019, 1768/2019, 1806/2019, 1810/2019, 1821/2019, 1818/2019, 1812/2019, 1838/2019, 1822/2019, 1861/2019, 1814/2019, 1879/2019, 1825/2019, 1815/2019, 1850/2019, 1839/2019, 1852/2019, 1870/2019, 1880/2019, 1883/2019, 1888/2019, 1917/2019, 1937/2019, 1966/2019, 1972/2019, 1984/2019, 2138/2019, 2066/2019, 2112/2019]

1. Among the captioned writ appeals, WA No.987/2019 is the lead case arising out in the adjudication of W.P. (C)No.30322/2010 wherein the Association called Seafood Exporters Association of India, Kerala region and other individual exporters altogether had challenged the competence of the State in promulgating an Act called Kerala Fishermen’s And Allied Workers Welfare Cess Act, 2007 , primarily on two grounds:

(i) State did not have the legislative competence to cause a declaration that the exporters of seafood are liable to pay Cess, interest on penalty under the Act.

(ii) There had already been an adjudication on the issue by the Constitutional Bench of the Supreme Court inKoluthara Export v.State of Kerala [2002 (2) SCC 459] whereby provisions of Section 4 (2) of Kerala Fishermen’s Welfare Fund Act, 1985 was held to be unconstitutional.

2. State in the year 1985 had brought into force Kerala Fishermen’s Welfare Fund Act, 1985 (hereinafter called ‘the 1985 Act’) with objects and reason that the fishermen who belong to weaker section of Society have not been able to achieve the purpose for which earlier schemes were promulgated and the aforementioned Welfare Fund for promotion of the welfare of the fishermen was incorporated. Section 2 (a), 2(bb) and 2(d) of the Act defined 'Allied Workers', ‘Contributions’ and ‘Dealer’. The Clauses which are relevant for adjudication of the present intra court appeals are Allied worker, Contribution and Dealer. The same are extracted hereinbelow:

"allied worker" means any person who is engaged mainly in fishery related activities for his livelihood and who does not come under the definition of the term fisherman in clause (e) of section 2 of the Kerala Fisherman's Welfare Societies Act, 1980 (7 of 1981) and includes beach workers, small scale fish distributors, fish curers, peeling workers and small scale processing plant workers, who are not members or not eligible to get membership, in any other Statutory Welfare Scheme.

2(bb) “contribution” means the sum of money payable to the fund under section 4 ;

2(d). “dealer” means any person who carries on, within the State of Kerala the business of buying or selling or processing fish or exporting fish (in raw or in processed form) or fish products and includes,”

3. Section 4 envisaged the procedure for contribution to the fund. It is extracted hereinbelow:

“(1) Every fisherman shall contribute to the Fund every year at such rate, as may be fixed by the Government, from time to time on the recommendation of the Board.

(1A) Every allied worker shall contribute to the Fund, every month, at such rate as may be fixed by the Government from time to time, on the recomm