Advocates:
['DR A SARAF SR ADV', '', 'P BARUAH', 'Z ISLAM', 'P DAS', 'SP SHARMA', 'P ROY', 'S SAIKIA', 'J SAIKIA', 'SK SINGH', 'A GOYAL', 'A KUMAR', 'AG MEGHALAYA', '', 'K KHAN', 'SR GA MEGHALAYA', 'H KHARMIH GA MEGHALAYA', 'A KHARMAWPHLANG GA', 'R COLNEY', 'GA', 'KP BHATTACHARJEE GA MEGHALAYA', 'S SARAOGI']

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Serial Nos.05 & 6

Supplementary List

HIGH COURT OF MEGHALAYA

AT SHILLONG

WP (C) No.280/2016 with

WP (C) No.281/2016

Date of Order: 09.02.2022

Megha Technical & Engineers Pvt. Ltd Vs. State of Meghalaya & ors

Star Cement Limited

Vs. State of Meghalaya & ors

Coram:

Hon’ble Mr. Justice Sanjib Banerjee, Chief Justice

Hon’ble Mr. Justice W. Diengdoh, Judge

Appearance:

For the Petitioner/Appellant(s)

: Dr. A Saraf, Sr.Adv

For the Respondent(s)

: Mr. A Kumar, Advocate General with

Mr. H Kharmih, GA

i) Whether approved for reporting in

Yes/No

Law journals etc.:

ii) Whether approved for publication

in press:

Yes/No

JUDGMENT: (per the Hon’ble, the Chief Justice) (Oral)

The challenge in these two writ petitions is to the validity of a

State enactment that already stands repealed upon the goods and service tax

regime having taken over.

2.

According to the petitioners, the cess imposed by the State of

Meghalaya by the Meghalaya Cement Cess Act, 2010 (Act No.5 of 2011)

was completely illegal, without any authority and grossly prejudicial to the

petitioners and others connected with the cement industry. The petitioners

submit that when a tax is imposed by a State or the Union in accordance

with law, a further levy may be added thereto by way of a cess, where the

quantum realised by way of the cess is earmarked for a special public

beneficial purpose. The petitioners refer to the education cess which is

imposed on income-tax and cess charged in various other fields by way of

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an additional levy but which is earmarked for a special purpose and may

not be subsumed as a part of the general revenue of the Union or the State.

3.

Section 3 of the impugned Act of 2010 is the charging section:

“3. On and from the coming into force of this Act, there shall be

levied and collected a cess on produced Cement from any person

or factory who produce cement within the State.”

4.

Section 4 of the Act indicates the rate of cess. Section 6 of the

Act, on which much emphasis has been placed by the State, provides for the

manner of collection and payment of cess. Section 6 of the Act is set out:

“6. (1)

The cess under this Act shall be leviable and payable

in the manner as may be prescribed.

(2)

Unless the cess due under this Act has been paid no

person shall remove or transport or attempt to remove or

transport any produced cement from any factory, stack-

yard, warehouse and godown for sale or transfer.”

5.

According to the petitioners, for any State to impose a tax or

collect a cess thereon, the relevant field has to be discovered in List-II of

the Seventh Schedule to the Constitution. The petitioners submit that since

the charging section makes it incumbent on the person manufacturing or

producing cement within the State to be liable to pay cess, it amounts to a

kind of additional excise duty which is sought to be imposed though in the

guise of cess.

6.

In such connection, the petitioners place Entry 84 from the Union

List as it stood prior to the 101^st Amendment to the Constitution which was

effected in 2016. Entry 84 of the Union List, at the time that the impugned

Act was enacted, read thus:

“84. Duties of excise on the following goods manufactured or

produced in India, namely:-

a) Petrol crude;

b) High speed diesel;

c) Motor spirit ( commonly known as petrol);

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d) Natural gas;

e) Aviation turbine fuel; and

f) Tobacco and tobacco products.”

7.

It is evident that since cement was not included as one of the

excepted products in Entry 84 of List I, no impost could have been levied

by any State on the manufacture of cement notwithstanding such process of

manufacture being within the geographical limits of the State. And, for the

same reason that the State had no authority to impose an