Simplex Infrastructures LTD vs. The State Of Assam And 5 Ors

Held

The Court held that the impugned communications demanding forest royalty and other charges did not suffer from illegality, arbitrariness, or want of jurisdiction. The Court reasoned that the petitioner's claim regarding the source-wise utilization of excavated earth and cut-and-fill calculations involved disputed questions of fact. Such factual issues, relating to technical data, measurement records, and factual conclusions arrived at by the competent authority, cannot be effectively adjudicated in a writ petition under Article 226, which is primarily concerned with the decision-making process. The Court found that the respondents had conducted a structured statutory exercise under the Assam Minor Mineral Concession Rules, 2013, involving notice, inspection, record verification, and assessment, and that the petitioner was afforded reasonable opportunities. The Court distinguished the cases cited by the petitioner, noting that they involved situations without clear statutory determination or proper contractual authority, unlike the present case which was founded on a statutory enquiry. The EPC Agreement also placed the onus on the contractor to comply with statutory requirements. Therefore, the writ petition was dismissed. However, the petitioner was granted liberty to avail remedies before the appropriate forum for adjudication of disputed factual issues.

Facts

The petitioner, Simplex Infrastructures Ltd., a construction company, was awarded an EPC contract by NHIDCL on January 16, 2017, for the four-laning of NH-37 in Nagaon district. The petitioner required significant quantities of earth, sand, boulders, and stone aggregates. They contend that 1,08,482.04 CuM of earth was excavated from within the project site itself and reused, for which no royalty was payable. The Divisional Forest Officer, Nagaon Division, issued a communication on March 9, 2023, demanding Rs. 1,45,84,055/- towards forest royalty, price of minor minerals, GST, income tax, and penalty. This demand was based on an assessment that treated a substantial portion of the excavated earth as procured from external sources, contrary to the petitioner's claim. Subsequent communications reiterated this demand. The petitioner challenged these demands through a writ petition.

Key Issues

1. Whether the impugned communications dated 09.03.2023, 17.03.2023, and 22.03.2023, raising a demand for forest royalty, price of minor minerals, GST, income tax, and penalty, are illegal, arbitrary, or suffer from want of jurisdiction, warranting interference under Article 226 of the Constitution of India? Petitioner's Arguments: - The petitioner argued that earth excavated from within the project site (Right of Way) and reused within the same project alignment is not subject to royalty, citing the Assam Minor Mineral Concession Rules, 2013. They claimed that their assessment of 1,08,482.04 CuM of excavated and reused earth was accurate. - They contended that the spot enquiry conducted by the Forest Department was unilateral, without their association, and based on visual estimation, rendering it unreliable. - Principles of natural justice were violated as they were not properly associated with the enquiry and their explanation was not duly considered. - Reliance was placed on cases like Md. Muslim Ali and Dipayan Paul, where unilateral deductions from bills without due process were held impermissible. Revenue/State's Arguments: - The respondents argued that the petitioner failed to substantiate their claim of internal utilization with contemporaneous records and statutory documentation. - The assessment was based on a structured statutory exercise under the Rules of 2013, involving notice, verification, inspection, and assessment under Rules 63 and 64. - The contractual agreement (EPC Agreement dated 23.01.2017) placed the obligation on the contractor to obtain all permits and bear all statutory dues. - The Forest Department's actions were justified under Rule 63 of the Rules of 2013, which is attracted once extraction is found to be without valid concession.