M/S North East Iodised Salt Private Limited vs Union Of India And 3 Ors

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GAHC010162482026

2026:GAU-AS:15481
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/4599/2026
M/S NORTH EAST IODISED SALT PRIVATE LIMITED
A PRIVATE LIMITED COMPANY DULY INCORPORATED UNDER THE
COMPANIES ACT 2013 HAVING ITS REGISTERED OFFICE AT
BHADRAPALLI P.O GANDHIGRAM, WEST TRIPURA, TRIPURA 799012,
INDIA. REPRESENTED BY ITS AUTHORISED REPRESENTATIVE MR HARI
PRASAD SHARMA
VERSUS
UNION OF INDIA AND 3 ORS
REPRESENTED BY THE SECRETARY, MINISTRY OF RAILWAYS, RAILWAY
BOARD, RAIL BHAWAN, NEW DELHI 110001
2:THE EXECUTIVE DIRECTOR
TRAFFIC COMMERCIAL (RATES)
RAILWAY BOARD
RAIL BHAWAN
NEW DELHI 110001
3:THE GENERAL MANAGER
N F RAILWAY
MALIGAON
GUWAHATI
ASSAM 781011
4:THE GENERAL MANAGER
WESTERN RAILWAY
OLD BUILDING
1ST FLOOR M K ROAD
CHURCHGATE MUMBAI 40002
Advocate for the Petitioner : MR. K P MAHESWARI, MR. DIVYAM RATHI,MR. DIVYANSH

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RATHI
Advocate for the Respondent : DY.S.G.I., MRS. A GAYAN(C.G.C.)

BEFORE
HON’BLE MR JUSTICE ARUN DEV CHOUDHURY

For the Petitioner : Mr. D. Rathi, Advocate.
For the Respondents : Ms. A. Gayan, CGC.
Date on which Judgment is
Reserved : NA
Date of pronouncement of
Judgment : 13.10.2026
Whether the pronouncement
is of the operative part of the
Judgment : NA.
Whether the full Judgment has
been pronounced : Yes.

JUDGMENT & ORDER (ORAL)
(A.D.Choudhury, J)

1. Heard Mr. D. Rathi, learned counsel for the petitioner. Also heard Ms.
A. Gayan, learned CGC representing the Railways.
2. The petitioner has challenged Rates Circular No. 05 of 2026
(Corrigendum No. 63 dated 25.03.2026) issued by the Railway Board,

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whereby the existing freight rates of transportation of salt have been
revised/rationalised with effect from 01.04.2026.
3. The principal grievance of the petitioner is that a subsequent rate
circular could not have withdrawn the concession in freight rates granted
for transportation of ordinary, non-refined salt, meant for human
consumption, under Rate Instruction No. 16 of 2003 dated 30.04.2003.
4. By the aforesaid Rate Instruction dated 30.04.2003, the Central
Government had sanctioned graded concessions in freight rates for
transportation of ordinary, non-refined salt, meant for human
consumption. The concessions varied according to the distance of
transportation, with higher concessions for longer distances.
5. Subsequent to this, many other revised rate circulars were issued,
based on the sanction of the Central Government.
6. The petitioner contends that since the concession was granted with
the sanction of the Central Government, the Railway Board could not
have withdrawn it through an administrative circular without the sanction
of the Central Government and/or without following the procedure
prescribed under Section 198 and 199 of the Railways Act, 1989.
Reliance has also been placed upon Section 21 of the General Clauses
Act, 1897 (hereinafter referred to as Act, 1897), in this regard.
7. It is further contended by the learned counsel for the petitioner that
the impugned circular is self-contradictory and it is not compatible with
Clause 1.1 of the General Conditions.

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8. Per contra, Ms. Gayan, learned CGC, contends that the impugned
circular has been issued in exercise of the power under Sections 30 and
31 of the Act, 1989, which deal with the fixation and revision of freight
rates. It is submitted that the Railway Board has been vested with the
necessary powers by the Central Government not only under the said
provisions, but also under Section 2 of the Railways Act, 1989
(hereinafter referred to as the Act, 1989), as well as Section 2A of the
amended Act, 2025.
9. It is further argued that an earlier concession did not confer any
permanent right upon the petitioner to insist upon its continuance.
10. This Court has given anxious consideration to the submissions
advanced by the learned counsel for the parties, and has also perused
the materials available on record.
11. Section 198 of the Act, 1989 confers the general power to make rules
for carrying out the purposes of the Act, while Section 199 of the Act,
1989 provides for laying such rules before the Parliament.
12. Sections 30 and 31 of the Act, 1989, on the other hand, specifically
deal with the fixation of rates for the carriage of goods and the
classification of commodities for determining the applicable rates. Section
31 also empowers the competent authority to increase or reduce the
rates and other charges.
13. After reading the impugned circular, it is the opinion of this Court
that it does not purport to make any rule under Section 198 of the Act,
1989. On the contrary, it revises the freight rates for the transportation of

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salt in railway wagons and containers and replaces the earlier
arrangement governing the charging of freight for the commodity.
14. Therefore, the exercise undertaken is one of fixing and revising
freight rates under Sections 30 and 31 of the Act.
Merely because the decision has been communicated through a circular,
it does not become a rule under Section 198 of the Act, 1989. Therefore,
the requirement of laying rules before Parliament under Section 199 of
the Act, 1989, does not apply to the impugned circular.
15. The challenge to the competence of the Railway Board must be
examined in light of the statutory provisions governing its constitution
and the powers conferred on it.
Section 2 and Section 2(A)(1) inserted by the Railway Amendment Act
2025 provide for the constitution of the Railway Board; empower the
Central Government by notification to confer upon the Board or any of
the powers and functions of the Central Government under the Act,
either without conditions or subject to conditions.
16. A Circular No. 990 dated 31.03.1999 was admittedly issued investing
the Railway Board with all the powers and functions of the Central
Government under Sections 30 and 31 of the Railways Act, 1989 in terms
of Section 2 of the Railways Act, 1890. Therefore, the objection as to the
competence of the Railway Board to issue such a circular cannot be
accepted.
17. The fixation and revision of freight rates fall within the scope of

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Sections 30 and 31 of the Act, 1989. Therefore, the Board was
competent to revise the rates subject to conditions prescribed by law.
18. As to the argument on the continuance of such freight benefits, this
Court is of the opinion that the fact that the concession was granted in
2003 and remained in force for a considerable period of time does not by
itself make it permanent. A concession in freight is a part of the tariff
structure and determines the amount payable for carriage for a particular
commodity.
19. When the statute empowers the authority to fix and/or revise rates
from time to time, the continuance of a particular rate or concession for
several years does not take away that power. The concession operated
for the period it remained in force, but that duration does not confer a
right to its indefinite continuance.
20. Reliance on Section 21 of the General Clauses Act also requires
consideration.
The said provision recognizes that the power to issue an order ordinarily
includes the power to amend, vary, or rescind it in a like manner, subject
to the same sanction and condition. However, in the present case, the
power flows from Sections 30 and 31 of the Railways Act, and it is a
statutory power that governs the manner and method of fixing freight,
as well as the power to vary and revise it.
21. Another significant consideration is that once such power is traceable
in the statute and has been conferred upon the Railway Board by the
requisite notification, the withdrawal of the earlier concession cannot be

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held invalid merely because it was effected through a subsequent rate
circular.
The requirement of Section 21 of acting in a like manner and subject to
the same sanction and condition, does not mean that every tariff revision
must be made in the same form as the earlier instrument.
The significant factor in this regard is as to whether the competent
authority has exercised its power in accordance with law and subject to
the conditions governing that power.
In the opinion of this Court, the same is available in the present case.
22. The expression "sanction of the Central Government," appearing in
the Rate Instruction dated 30.04.2003, has also been considered along
with the absence of a similar provision in the impugned circular.
The said expression records the sanction granted for introducing the
concession. However, it does not, by itself, establish that the concession
was intended to be permanent or that every subsequent revision of the
freight structure required separate sanction of the Central Government,
irrespective of the statutory power vested in the Railway Board, as
discussed hereinabove.
23. This Court finds it appropriate to record that fixation of freight rate is
primarily a matter of policy, and the Court does not sit in appeal over the
wisdom of the authority in fixing prices. The Constitution Bench in Shri
Sitaram Sugar Company Limited versus Union of India, reported
in 1990 3 SCC 223 , held that the Court does not substitute its own

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assessment for that of the authority entrusted with the task of price
fixation. Judicial review remains available where the decision is contrary
to law or is arbitrary, which, as discussed hereinabove, I find none in the
present case.
24. Mr. Rathi, learned counsel for the petitioner, has placed heavy
reliance on the principle laid down in State of Maharashtra versus
Reliance Industries Limited , reported in 2026 INSC 296 , to contend
that the petitioner and similarly situated persons ought to have been
granted at least a period of one year.
25. In the opinion of this Court, said determination has to be understood
in the context of the said case. In the facts of that case, the exemption
from electricity duty was granted as an industrial policy measure to
encourage industries to generate electricity for their own consumption.
The exemption was granted and, thus, intended to promote industrial
self-sufficiency in power generation, and the industries had arranged
their financial and operational affairs on that basis. In that context, the
Supreme Court held that a reasonable transitional period should be
allowed before withdrawal is effected.
26. The present case stands on a different footing. The concession
granted in the year 2003 was a concession in freight rates for the
transportation of ordinary, non-refined salt meant for human
consumption. It was not granted under any industrial incentive policy, or
as an inducement to establish an industry, or to make a particular
investment. It formed part of a freight structure applicable to the
transportation of the commodity and was subject to the power of the

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competent authority to revise the rates in accordance with law. Further,
Sections 30 and 31 do not statutorily prescribe any such transitional
period.
27. On the totality of the matter, this Court finds that the rate circular is
an exercise of power to fix and revise freight rates under Sections 30 and
31 of the Act 1989 and is not a rule made under Section 198 of the Act,
1989 requiring placement before Parliament under Section 199 of the
Act, 1989.
28. The Railway Board has the due authority to issue such circular. The
petitioner has failed to establish any violation of any mandatory or
statutory requirement, or any other ground warranting interference by
this Court with the impugned circular in the exercise of its power of
judicial review.
29. Accordingly, the writ petition stands dismissed.
30. Parties to bear their own costs.
JUDGE
Comparing Assistant