Full Judgment Text
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PETITIONER:
STATE OF TRIPURA & ORS.
Vs.
RESPONDENT:
SUDHIR RANJAN NATH
DATE OF JUDGMENT: 13/02/1997
BENCH:
B.P. JEEVAN REDDY, SUJATA V. MANOHAR
ACT:
HEADNOTE:
JUDGMENT:
J U D G M E N T
B.P. JEEVAN REDDY, J.
Leave granted. Heard the counsel for the parties.
The Gauhati High Court has declared Rule 3 of the
Transit Rules framed by the Government of Tripura under
Section 41 and 42 of the Indian Forest Act, 1927 as illegal
and ultravires the Constitution. The correctness of the said
decision is challenged by the State of Tripura.
The Indian Forest Act, 1927 [the Act] was enacted to
consolidate the law relating to forests, the transit of
forest-produce and the duty leviable on timber and other
forest-produce. The Act was extended to the then Union
Territory of Tripura by the Union Territories [Laws] Act,
1950 [Act 30 of 1950]. It continues to be applicable to the
State of Tripura. The Indian Forest Act is thus a post-
constitutional enactment, so far as Tripura is concerned,
vide Mithan Lal v. The State of Delhi & Anr. [1959 S.C.R.
45] and New Delhi Municipal Committee v. State of Punjab
etc.etc. [1997 (1) J.T. (S.C.) 40].
Chapter II of the Act deals with reserved forests while
Chapter III deals with village forests. Chapter IV deals
with protected forests and while Chapter V with State
government control over forests and lands not being the
property of the government. Chapter VI provides for levy of
duty on timber and other forest-produce. Chapter VII
provides for control on timber and other forest-produce in
transit. Chapter VIII deals with drift timber. Chapters IX,
XI and XIII contain machinery provisions. A perusal of the
provisions of the Act shows that the Act is designed to
protect and increase the forest wealth and its proper
utilisation for the purposes of the State and the people.
For the purpose of the present case, it is not necessary to
notice the provisions of the several chapters of the Act
except Chapters VI, VII and XII. Section 39 in Chapter VI
confers upon the Central Government the power to levy duty
on timber and other forest-produce. Section 39 reads as
follows:
"39. Power to impose duty on timber
and other forest-produce--(1) The
Central Government may levy a duty
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in such manner, at such places and
at such rates as it may declare by
notification in the Official
Gazette on all timber or other
forest-produce--
(a) which is produced in the
territories to which this Act
extends, and in respect of which
the Government has any right;
(b) which is brought from any place
outside the territories to which
this Act extends.
(2) In every case in which such
duty is directed to be levied as
valorem the Central Government may
fix by like notification the value
on which such duty shall be
assessed.
(3) All duties on timber or other
forest-produce which, at the time
when this Act comes into force in
any territory, are levied therein
under the authority of the State
Government, shall be deemed to be
and to have been duly levied under
the provisions of this Act.
(4) Notwithstanding anything in
this section, the State Government
may, until provision to the
contrary is made by Parliament,
continue to levy any duty which it
was lawfully levying before the
commencement of the Constitution,
under this section as then in
force;
Provided that nothing in this sub-
section authorises the lev of any
duty which as between timber or
other forest-produce of the State
and similar produce of the locality
outside the State, discriminates in
favour of the former, or which, in
the case of timber or other forest-
produce of localities outside the
State, discriminates between timber
or other forest-produce of one
locality and similar timber or
other forest-produce of another
locality."
Sub-section (1) thus confers the power to levy duty
only upon the Central Government and not upon the State
governments. Sub-section (3), however, says that if any duty
levied under the authority of the State government on timber
or other forest-produce is in force in any territory on the
date of coming into force of the said Act, the same shall be
deemed to be and to have been levied under the said section.
Sub-section (4) says that until a provision is made to the
contrary by Parliament, the State government may "continue
to levy any duty which it was lawfully levying before the
commencement of the Constitution, under this section as then
in force". These sub-sections are referred to for the reason
that an argument is built upon them by the appellant-State,
which we shall refer to at a later stage.
Section 41 vests in the State government control of all
rivers and their banks as regards the floating of timber as
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well as the control of all timber and other forest-produce
in transit by land or water. It also empowers the State
government to make rules "to regulate the transit of all
timber and other forest-produce". Sub-section (2) elucidates
several matters in respect of which rules can be framed. It
would be appropriate to set out Section 41 in its entirety:
"41. Power to make rules to
regulate transit of forest produce.
-- (1) The control of all rivers
and their banks as regards the
floating of timber, as well as the
control of all timber and other
forest-produce in transit by land
or water, is vested in the State
Government, and it may make rules
to regulate the transit of all
timber and other forest-produce.
(2) In particular and without
prejudice to the generality of the
foregoing power such rules may--
(a) prescribe the routes by which
alone timber or other forest-
produce may be imported, exported
or moved into, from or within the
State;
(b) prohibit the import or export
or moving of such timber or other
produce without a pass from an
officer duly authorised to issue
the same, or otherwise than in
accordance with the conditions of
such pass;
(c) provide for the issue,
production and return of such
passes and for the payment of fees
therefor;
(d) provide for the stoppage,
reporting, examination and marking
of timber or other forest-produce
in transit, in respect of which
there is reason to believe that any
money is payable to the Government
on account of the price thereof, or
on account of any duty, fee,
royalty or charge due thereon, or,
to which it is desirable for the
purposes of this Act to affix a
mark;
(e) provide for the establishment
and regulation of depots to which
such timber or other produce shall
be taken by those in charge of it
for examination, or for the payment
of such money, or in order that
such marks may be affixed to it,
and the conditions under which such
timber or other produce shall be
brought to, stored at and removed
from such depots;
(f) prohibit the closing up or
obstructing of the channel or banks
of any river used for the transit
of timber or other forest-produce,
and the throwing of grass,
brushwood, branches or leaves into
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any such river or any act which may
cause such river to be closed or
obstructed;
(g) provide for the prevention or
removal of any obstruction of the
channel or banks of any such river,
and for recovering the cost of such
prevention or removal from the
person whose acts or negligence
necessitated the same;
(h) prohibit absolutely or subject
to conditions, within specified
local limits, the establishment of
sawpits, the converting, cutting,
burning, concealing or making of
timber, the altering or effacing of
any marks on the same, or the
possession or carrying of marking
hammers or other implements used
for making timber;
(i) regulate the use of property
marks for timber, and the
registration of such marks;
prescribe the time for which such
registration shall hold good; limit
the number of such marks that may
be registered by any one person,
and provide for the levy of fees
for such registration.
(3) The State Government may direct
that any rule made under this
section shall not apply to any
specified class of timber or other
forest-produce or to any specified
local area."
Chapter XII confers an additional power upon the State
government to make rules. Sections 76, 77 and 78 occurring
therein read as follows:
"76. Additional powers to make
rules. -- The State Government may
make rules --
(a) to prescribe and limit the
powers and duties of any Forest-
officer under this Act;
(b) to regulate the rewards to be
paid to officers and informers out
of the proceeds of fines and
confiscation under this Act;
(c) for the preservation,
reproduction and disposal of trees
and timber belonging to Government,
but grown on lands belonging to or
in the occupation of private
persons; and
(d) generally, to carry out the
provisions of this Act.
77. Penalties for breach of rules.
-- Any person contravening any rule
under this Act, for the
contravention of which no special
penalty is provided, shall be
punishable with imprisonment for a
term which may extend to one month,
or fine which may extend to five
hundred rupees, or both.
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78. Rules when to have force of
law. -- All rules made by the State
Government under this Act shall be
published in the Official Gazette,
and shall thereupon, so far as they
are consistent with this Act, have
effect as if enacted therein."
A reading of Sections 41 and 74 discloses that besides
vesting total control over the forest-produce in the State
government and empowering it to regulate the transit of all
timber or other forest-product, the State government is also
empowered to make rules "generally, to carry out the
provisions of this Act". Thus, any rule made by the State
government which purports to give effect to any of its
provision would be within the four corners of the Act.
In exercise of the powers conferred upon it by the Act,
the State government has framed the Transit Rules. Rule 3,
with which alone we are concerned, reads thus:
3(1). Any person importing,
exporting or moving into, from or
within, or who has imported,
exported or moved into from or
within the State of Tripura any
forest product, shall present it to
the Forest Officer in Charge of the
place of origin or entry of the
forest produce, or to the Forest
Officer in Charge of the area
nearest to the place of origin or
entry of the same through which it
is transported, for examination and
check, and shall pay the amount, if
any, due thereon & obtain a transit
pass in Form C of the Appendix to
these rules.
(2) No person shall remove or cause
to be removed from the State for
the purpose of trade or otherwise
any timber and firewood to any
other place outside the state and
no trading depot shall be set up or
established in the State at any
place without licence for such
purpose from the Divisional forest
Officer having the jurisdiction
over the area subject to approval
of Conservator of Forests of the
circle.
(3) Every application for grant of
licence under the aforesaid rule
shall be made to the Divisional
Forest Officer having the
jurisdiction over the area in the
Form appended to this Rules and on
payment of non-refundable
application fee amounting to
Rs.1,000/-.
(4) Every order granting or
refusing a licence under these
Rules shall be in writing and in
case of refusal, shall contain the
reasons therefor. The licence fee
of Rs.2,000/- shall be paid and
deposited in Government
Treasury/sub-Treasury by challan
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and the receipted copy of the
challan must accompany the licence.
(5) A licensee shall be required to
pay the export duty for export of
timber and firewood from this State
to other States which shall not
exceed 100% of the market value of
such timber/firewood as will be
assessed by the Divisional forest
Officer.
(6) The conditions of the licence,
the route or routes through which
the timbers/firewoods are to be
transported to a place outside the
State and the period of validity of
the licence shall be such as may be
notified by the state Government in
the Official Gazette.
Provided further that such period
of validity shall not exceed 6
(six) months.
(7) Every licence granted under
this Rules may be renewed. An
application for renewal of licence
shall be made in form-E within 30
(thirty) days before the expiry of
the licence. the Divisional forest
Officer having the jurisdiction
over the area shall on receipt of
application for renewal of licence,
make such inquiry as he may think
fit and within a period of 60
(sixty) days from the date of
receipt of such application, either
grant or refuse to grant renewal of
the licence;
Provided that no renewal of licence
shall be granted unless the
Divisional forest Officer is
satisfied about the location,
availability of the raw materials,
financial capacity, past records in
business and relevant antecedent of
such person. Whether the Divisional
Forest Officer refuses to grant
such renewal of licence, he shall
record the reasons therefor and
such reasons shall be communicated
to the person in writing. For the
purpose of inquiry under this
rules, the Divisional Forest
officer may enter into or upon any
land, survey and demarcate the
same, make a map thereof or
authorises any Officer to do so and
also call for such documents as he
deems necessary for ascertaining
the merit of the application.
Provided further that no
application for renewal of licence
shall be rejected unless the holder
of such licence has been given an
opportunity of presenting his case
and unless the Divisional Forest
Officer is satisfied that the
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application for such renewal has
been made after the period
specified therefor or any statement
made by the person making such
application for grant of renewal of
the licence was incorrect or
materially false or such person has
contravened any of the terms and
conditions of the licence or any
provision of the Indian Forest Act
or the Rules made thereunder or
such person does not fulfil the
terms and conditions of such
licence.
(8) The quantity of timber and
firewood which will be permissible
for export by a export licensee
shall be determined on the basis of
availability of forest produce
after catering to the needs of the
local people of the State and those
of the Forest trade licence holder
for trading in forest produces
within the State meeting the
requirement of the people of the
State.
[Sub-rules (2) to (8) were added by
Notification dated May 7, 1990.]
Rule 3(1) obligates any person importing, exporting or
transporting any forest-produce into, from or within, the
State of Tripura to present the same to the appropriate
officer for examination and check and also to pay the
amount, if any, due thereon. He is also obligated to obtain
a transit pass in Form-C prescribed by the Rules for any of
the above purposes. Sub-rule (2) provides that no person
shall remove or transport any timber and firewood from
within the State to any place outside the State except under
a licence granted by the appropriate Divisional Forest
Officer. The sub-rule also prohibits setting up of any depot
in the State without such a licence. Sub-rule (3) says that
an application for licence shall be submitted in the
prescribed form and shall be accompanied by a non-refundable
application fee of Rs.1,000/-. Sub-rule (4) provides that a
licence, if granted, shall be issued on payment of licence
fee of Rs.2,000/-. [These amounts are fixed irrespective of
the value of the forest-produce involved.] Sub-rule (5)
provides that on export of timber from the State of Tripura
to other States, an export fee not exceeding hundred percent
of the market value of the timber/firewood concerned would
be leviable. Sub-rule (6) empowers the government to notify
the route or routes along which the forest-produce shall be
transported to a place outside the State. Sub-rule (7) deals
with renewal of licences, Sub-rule (8) says that the
quantity of timber and firewood to be exported from the
State shall be determined on the basis of availability of
forest-produce after catering to the needs of the local
people of the State and the requirements of the people of
the State.
The High Court has declared that the levy of
application fee of Rupees one thousand and of licence fee of
Rupees two thousand amounts to levy of tax and is bad. This
is on the ground that the State has not established the
service rendered in lieu of the said fees. The High court
has also held that sub-rule 5), which levies export duty on
export of timber from the State is beyond the rule-making
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power conferred upon the State government by Section 41. It
has also found fault with sub-rule 98). The High Court has
been of the further opinion that rule 3 violates Article 301
of the Constitution and since the proviso to clause (b) of
Article 304 has not been complied with, the rule is liable
to be declared unconstitutional.
The correctness of the judgment is challenged in this
appeal by Sri S.S. Javali, learned counsel appearing for the
State of Tripura. we have also heard Sri Har Dev Singh,
learned counsel for the respondent who supported the
reasoning and conclusion of the High Court besides
submitting that the power to regulate conferred by section
41 of the Act does not empower the State government to
prohibit the export of forest-produce from within the State
to a place outside the State as provided by sub-rule (8) of
rule 3. Counsel submitted that the power to regulate does
not include the power to prohibit.
We shall first deal with the validity of sub-rule (5)
of rule 3 which empowers the State government to levy export
duty extending upto hundred percent of the market value of
timber/firewood concerned. We agree with the High Court that
there is nothing in Section 41 which empowers the State
government to levy export duty. The power to levy duty is
conferred only upon the Central Government by Section 39 and
that power is neither delegated to the State government nor
is the State government empowered to make rules with respect
to the said levy. Neither the powers conferred upon the
State government by Section 41 nor the power conferred by
Section 76 comprehend the levy of export duty. The power to
levy duty is conferred only upon one named authority, viz.,
the Central Government. it must accordingly be held that
sub-rule (5) has been rightly declared bad.
We next take up the validity of the levy of application
fee and licence fee of rupees one thousand and Rupees two
thousand respectively. In our opinion, the High Court was
not right in holding that the said fee amounts to tax on the
ground that it has not been proved to be compensatory in
nature. In our opinion the fee imposed by sub-rules (3) and
(4) is a fee within the meaning of clause (c) of sub-section
(2) of section 41. It is regulatory fee and not compensatory
fee. The distinction between compensatory fee and regulatory
fee is well established by several decisions of this Court.
Reference may be made to the decision of the Constitution
Bench in Corporation of Calcutta v. Liberty Cinema [1965 (2)
S.C.R.477]. It has been held in the said decision that the
expression "licence fee" does not necessarily mean a fee in
lieu of services and that in the case of regulatory fees, no
quid pro quo need be established. The following observations
may usefully be quoted;
This contention is not really open
to the respondent for s.548 does
not use the word ‘fee’; it uses the
words ‘licence fee’ and those words
do not necessarily mean a fee in
return for services. In fact in our
Constitution fee for licence and
fee for services rendered are
contemplated as different kinds of
levy. The former is not intended to
be a fee for services rendered.
This is apparent from a
consideration of Art.110(2) and
Art.199(2) where both the
expressions are used indicating
thereby that they are not the same.
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In Shannon v.Lower Mainland Dairy
Products Board, 1938 A.C.708: (AIR
1939 PC 36) it was observed at
pp.721-722 (of AC): (at pp.38-39 of
AIR):
‘if licences are granted, it
appears to be no objection that
fees should be charged in order
either to defray the costs of
administering the local regulation
or to increase the general funds of
the Province or for both
purposes.....It cannot, as their
Lordships think, be an objection to
a licence plus a fee that it is
directed both to the regulation of
trade and to the provision of
revenue.’
It would, therefore, appear that a
provision for the imposition of a
licence fee does not necessarily
lead to the conclusion that the fee
must be only for services rendered.
This decision has been followed in several decisions,
including the recent decisions of this Court n Vam Organic
Chemical Industries v. Collector of Central Excise, Bombay
[1997 (1) J.T. (S.C.) 641) and Bihar Distillery & Anr. v.
Union of India [1997 (2) J.T. (S.C>) 20]. The High Court
was, therefore, not right in proceeding on the assumption
that every fee must necessarily satisfy the test of quid pro
quo and in declaring the fees levied by sub-rules (3) and
(4) of rule 3 as bad on that basis. Since we hold that the
fees levied by the said sub-rules is regulatory in nature,
the said levy must be held to be valid and competent, being
fully warranted by Section 41.
So far as sub-rule (20 is concerned, it merely provides
for a licence for removal of timber or firewood from within
the State to any place outside the State and also for
setting up or establishing a trading depot within the State.
This sub-rule is equally within the four corners of Section
41. Indeed, clause (d) of Section 76 which empowers that
State government to make rules generally to carry out the
provisions of this Act also serves as an authority for the
said sub-rule.
Objection is next taken to sub-rule (8). It is
submitted that the power to regulate conferred upon the
State government by Section 41 does not take in the power to
prohibit whereas sub-rule (8) empowers the State government
to prohibit the export of timber and firewood if such a
course is necessary to cater to the needs of the local
people or for meeting the requirements of the people of the
State. This in turn raises the question, what is the meaning
and ambit of the expression "regulate" in Section 41(1) of
the Act? [Section 41(1) empowers the State government "to
regulate the transit of all timber and other forest-
produce".] The expression is not defined either in the Act
or in the rules made by the State of Tripura. We must,
therefore, go by its normal meaning having regard to the
context in which, and the purpose to achieve which, the
expression is used. As held by this Court in Jiyajee Cotton
Mills Ltd. & Anr. v. Madhya Pradesh Electricity Board & Anr.
[1989 Suppl. (2) S.C.C.52], the expression "regulate" ‘has
different shades of meaning and must take its colour from
the context in which it is used having regard to the purpose
and object of the relevant provisions, and as has been
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repeatedly observed, the court while interpreting the
expression must necessarily keep in view the object to be
achieved and the mischief sought to be remedied" [at Page
79]. Having regard to the context and other relevant
circumstances, it has been held in some cases that the
expression "regulation" does not include "prohibition"
whereas in certain other contexts, it has been understood as
taking within its fold "prohibition" as well. it has been
held in K.Ramanathan v. State of Tamil Nadu & Anr. [1985 (2)
S.C.C.116] that:
The word ‘regulation’ cannot have
any rigid or inflexible meaning as
to exclude ‘prohibition’. The word
‘regulate’ is difficult to define
as having any precise meaning. it
is a word of broad import, having a
broad meaning, and is very
comprehensive in scope.....It has
often been said that the power to
regulate does not necessarily
include the power to prohibit, and
ordinarily the word ‘regulate’ is
not synonymous with the word
‘prohibit’. This is true in a
general sense and in the sense that
mere regulation is not the same as
absolute prohibition. At the same
time, the power to regulate carries
with it full power over the thing
subject to regulation and in
absence of restrictive words, the
power must be regarded as plenary
over the entire subject. it implies
the power to rule, direct and
control, and involves the adoption
of a rule or guiding principle to
be followed, or the making of a
rule with respect to the subject to
be regulated. The power to regulate
implies the power to check and may
imply the power to prohibit under
certain circumstances, as where the
best or only efficacious regulation
consists of suppression. It would
therefore appear that the word
‘regulation’ cannot have any
inflexible meaning as to exclude
‘prohibition’. It has different
shades of meaning and must take its
colour from the context in which it
is used having regard to the
purpose and object of the
legislation, and the court must
necessarily keep in view the
mischief which the Legislation
seeks to remedy.
To the same effect is the decision of this Court in
State of Tamil nadu v. M/s. Hind stone & Ors. [1981 (2)
S.C.C.205]. Dealing with the contention that Section 15 of
the Mines and minerals [Regulation and Development] Act,
1957 authorises the making of rules regulating the grant of
mining leases and that the power does not take in power to
prohibit the grant of leases, this court held:
We do not think that ‘regulation’
has that rigidity of meaning as
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never to take in ‘prohibition’.
Much depends on the context in
which the expression is used in the
Statute and the object sought to be
achieved by the contemplated
regulation. it was observed by
Mathew, J. in G.K.Krishnan v. State
of Tamil nadu [1975 (1) S.C.C.375]:
‘The word ‘regulation’ has no fixed
connotation. Its meaning differs
according to the nature of the
thing to which it is applied’. In
modern statutes concerned as they
are with economic and social
activities, ‘regulation’ must, of
necessity, receive so wide an
interpretation that in certain
situations, it must exclude
competition to the public sector
from the private sector. More so in
a welfare State. It was pointed out
by the Privy Council in
commonwealth of Australia v. Bank
of New South Wales [1950 A.C.235 =
(1949) 2 ALL.E.R.755 (PC)] - and we
agree with what was stated therein
- that the problem whether an
enactment was regulatory or
something more or whether a
restriction was direct or only
remote or only incidental involved,
not so much legal as political,
social or economic consideration
and that it could not be laid down
that in no circumstances could the
exclusion of competition so as to
create a monopoly, either in a
State or commonwealth agency, be
justified. Each case, it was said,
must be judged on its own facts and
in its own setting of time and
circumstances and it might be that
in regard to some economic
activities and at some stage of
social development, prohibition
with a view to State monopoly was
the only practical and reasonable
manner of regulation. The statute
with which we are concerned, the
Mines and Minerals [Development and
Regulation] Act, is aimed, as we
have already said more than once,
at the conservation and the prudent
and discriminating exploitation of
minerals. Surely, in the case of a
scarce mineral, to permit
exploitation by the State or its
agency and to prohibit exploitation
by private agencies is that most
effective method of conservation
and prudent exploitation. if you
want to conserve for the future,
you must prohibit in the present.
We have no doubt that the
prohibiting of leases in certain
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cases is part of the regulation
contemplated by Section 15 of the
Act.
We do not think that it is necessary to multiply the
decisions except to point out that in a different context,
the power to regulate is held not to include the power to
prohibit [see State of Uttar Pradesh v. Hindustan Aluminium
Corporation (1979 (3) S.C.C.229 at 243)].
Sri Har Dev Singh, learned counsel for the respondent,
however, brought to our notice a decision of the
constitution Bench of this Court in State of Mysore v. H.
Sanjeeviah [1967 (2) S.C.R.361]. Section 37 of the Mysore
Forest Act is in pari-materia with Section 41(1) of the
Indian Forest Act. Similarly, clause (b) of sub-section (2)
of Section 37 of the Mysore Act is in pari-materia with
clause (b) of sub-section (2) of Section 41 of the Indian
Forest Act. By virtue of the rules made under the Mysore
Forest Act, the Government of Mysore totally prohibited the
transport of forest-produce between 10.00 P.M. and sunrise.
It also placed certain restrictions on the movement of the
forest-produce between sunset and 10.00 P.M. as well. This
court held that the power to regulate conferred by Section
37(1) read with Section 37(2)(b) does not empower the State
government to prohibit the movement/transport of forest-
produce altogether, observing: "prima facie a rule which
totally prohibits the movement of forest-produce during the
period between sunset and sunrise is prohibitory or
restrictive of the right to transport forest-produce. A rule
regulating transport in its essence permits transport,
subject to certain conditions devised to promote transport;
such a rule aims at making transport orderly so that it does
not harm or endanger other persons following a similar
vocation or the public and enables transport to function for
the public good". The said decision is, however, of no help
to the respondent inasmuch as Rule 3 framed by the State of
Tripura is not only relatable to Section 41 but also to
clause (d) of Section 76. Clause (d) of Section 76, which
has been extracted hereinbefore, empowers the State
government to make rules generally to carry out the
provisions of the Act, which means the carrying out the
object and purposes of the Act. The object f the Act is to
preserve and protect the forest wealth of the country and to
regulate the cutting, removal, transport and possession of
the forest-produce in the interest of the States and their
people. It is for achieving the above purpose that the Act
provides for declaration of reserve forests, formation of
village forests and declaration of protected forests. It is
for achieving the very purpose that the Act vests, in the
government, control over forest and lands not being the
property of the government controls even the collection and
movement of drift and stranded timber. It is not a taxing
enactment but an enactment designed to preserve, protect and
promote the forest wealth in the interests of the nation. It
must necessarily take within its fold catering to the needs
to the people of the State and that is what sub-rule (8)
provides. In our opinion, therefore, sub-rule (8) of Rule 3
is perfectly valid.
We shall now consider the attack based upon Article
301. In our opinion, the reason for which Rule 3 has been
held to be in contravention of Article 301 of the
Constitution are unsustainable in law. The impugned Rule 3
is made by the State as the delegate of the Parliament to
carry out the purposes of the Act. It is not a law made by
the legislature of the State of Tripura nor is it a rule
made by the Government of Tripura in its capacity as the
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Government of Tripura. This is the basic distinction between
the present case and the decision in H. Sanjeeviah where the
enactment concerned was a law made by the State legislature
and had, therefore, to comply with clause (b) of Article
304. We have also pointed out hereinabove that the Indian
Forest Act is a post-constitutional Parliamentary enactment
insofar as Tripura is concerned for the reason that it has
been extended to Tripura [which was then a Union Territory]
by the Union Territories [Laws] Act, 1950. Sections 41 and
76 are, therefore, laws within the meaning of Article 302 of
the Constitution which empowers the Parliament to impose
such restrictions on the freedom of trade, commerce and
intercourse between one State and another or within any part
of the territory of India, as may be required in the public
interest. If Sections 41 and 76 are saved by Article 302,
any rule made to carry out the purposes of the said
provisions or to elucidate the meaning and purport of the
said provisions must equally be protected by Article 302, as
held by this Court in M/s. Krishan Lal Praveen Kumar v.
State of Rajasthan [1981 (4) S.C.C. 550].
It is relevant to notice that Article 302 uses the
expression "restrictions". In other words, it empowers the
Parliament to impose such restrictions on the freedom of
trade, commerce and intercourse between one State or another
or within any part of the territory of India, as may be
required in the public interest. Though the expression
"restrictions" in this article is not qualified by the word
"reasonable", we shall proceed on the assumption, for the
purposes of this case, that such restrictions ought to be
reasonable. Even so, it would be evident that the provision
in Article 302 has a close parallel with clauses (2) to (6)
of Article 19. Under clauses (2) to (6) of Article 19, it
has been held by this Court that the power to impose
reasonable restrictions takes in the power to prohibit also
in appropriate situations [see Narendra Kumar v. Union of
India (1960 (2) S.C.R. 361)]. It may also be mentioned that
the prime example of the exercise of power under Article 302
is the Essential Commodities Act, 1955, which not only
empowers the making of the rules for the purpose of
regulating the production, supply and distribution of
essential commodities but also for prohibiting the
production, supply and distribution of essential commodities
and trade and commerce therein. For the above reasons, we
are of the opinion that Rule 3 of the Tripura Transit Rules
cannot be said to be violative of Article 301 nor is it
required to comply with the requirement of the proviso to
clause (b) of Article 304 of the Constitution.
The levy of duty is sought to be sustained by the
learned counsel for the State of Tripura with reference to
sub-section (3) and/or sub-section (4) of Section 39. It is
submitted that the Princely State of Tripura has imposed the
said duty and that the same is being continued after the
commencement of the Constitution. Article 305 of the
Constitution is also invoked in this behalf. We are unable
to appreciate the submission. No order or proceeding of the
Princely State of Tripura has been produced before the High
Court or this Court levying the duty. We also do not know at
what rate and on what basis, if any, the duty was being
levied. We are also not sure whether the said plea can fall
within the four corners of either sub-section (3) or sub-
section (4). Sri Javali requested for grant of sometime to
enable the State to produce the proceedings. We are not
inclined to accede to this plea either. Having not produced
the proceedings/orders either before the High Court or
before this Court all these years, the State cannot
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reasonably ask for more time to produce the same when the
matter has come up for final hearing.
For the above reasons, the appeal is allowed in part.
Rule 3 of the Tripura Transit Rules, except sub-rule (5)
thereof, is declared to be perfectly valid and effective.
The judgment of the High Court is set aside to the above
extent.
No costs.