Chaman Tulsyan Through Its Authorized Signatory Namely, Navin Kumar vs. The State Of Jharkhand, Through Its Secretary, Department Of Industries, Mines And Geology

Facts

The petitioner, Chaman Tulsyan, is engaged in mining minor minerals in Sahibganj district, Jharkhand. The State of Jharkhand, through the Department of Mines, implemented a 'Composition User Fee' via the JIMMS Portal from February 1, 2022, at the time of generating Transport Challans for mineral transportation. This fee, levied on a 'to and fro' basis at Rs. 600/- per way (totaling Rs. 1200/- per challan), was purportedly enacted pursuant to the Jharkhand Highways Fee (Determination of Rates and Collection) Rules, 2021. The petitioner contends this levy is contrary to the Rules of 2021, lacks proper notification, and is arbitrary, violating Articles 14 and 19(1)(g) of the Constitution. The petitioner seeks to quash Letter No. 2089 dated 28.12.2021, which established this mechanism.

Held

The Court held that the levy of 'Composition User Fee' under the Jharkhand Highways Fee (Determination of Rates and Collection) Rules, 2021, and its subsequent amendments, is beyond the scope of Section 2 of the Indian Tolls Act, 1851. The Court found that the State Government has levied this fee on mineral-carrying vehicles for using state roads or commuting in mining areas with the sole intent to generate state revenue, which is not permissible under the Act of 1851. The Court observed that the element of quid pro quo is missing as the fee is levied irrespective of whether the vehicle actually uses the toll road. Furthermore, the taxable event has been altered from the 'plying of vehicles on roads' to 'commuting mechanical vehicles carrying minerals', making it inconsistent with the Parent Act. The classification made, imposing the fee only on vehicles carrying minerals above a certain weight while exempting others, was also found to be violative of Article 14 of the Constitution, lacking a nexus with the object sought to be achieved. Consequently, the Rules of 2021 and amendments imposing the 'Composition User Fee' were struck down. The writ petition was disposed of in terms of a previous judgment in W.P.(C) No.1532 of 2022 and analogous cases.

Key Issues

1. Whether the levy of 'Composition User Fee' by the Respondent-State of Jharkhand through the JIMMS Portal at the time of generating Transport Challans for mineral transportation is contrary to the provisions of the Jharkhand Highways Fee (Determination of Rates and Collection) Rules, 2021, specifically concerning the absence of a notification under Rule 3(2) or a scheme under Rule 3A for its collection? (Question of law) 2. Whether the mechanism prescribed in the JIMMS Portal for levying 'Composition User Fee' on each transaction of generating a Mining Challan/Transport Challan is arbitrary and unreasonable, violating Articles 14 and 19(1)(g) of the Constitution of India? (Question of law and fact) Petitioner's Arguments: The petitioner argued that the levy is contrary to the Rules of 2021 as no notification under Rule 3(2) or scheme under Rule 3A was issued. They contended that the mechanism is arbitrary and unreasonable, violating Articles 14 and 19(1)(g) of the Constitution. The petitioner also argued that the levy is not a compensatory fee for the use of roads but a tax aimed at augmenting state revenue, which is impermissible under the Indian Tolls Act, 1851. They highlighted the lack of quid pro quo and the arbitrary classification based on the nature of the material transported. Revenue/State's Arguments: The judgment does not explicitly record arguments made by the Revenue/State.