Sultan Stone Crusher And Others vs. State Of Punjab And Others

Facts

The petitioners, Sultan Stone Crusher and others, challenged a show cause notice (Annexure P-4) issued by respondent No. 3. This notice followed the seizure of their vehicles carrying minor minerals. The seizure occurred because the drivers did not possess the required documents under Sub Rule (2) of Rule 74 of the Punjab Minor Mineral Rules, 2013, when crossing the border into Punjab. The show cause notice threatened compounding fees under Rule 75(i) and prosecution under Rule 76 of the Punjab Rules, 2013. The petitioners argued that while they had sale invoices, delivery challans, and GST invoices, they lacked the specific 'Form X' (transit pass) required for entry into Punjab. They contended that the vehicles were challaned and compounding fees were paid under the Himachal Pradesh Minor Minerals (Concession) and Minerals (Prevention of Illegal Mining Transportation and Storage) Rules, 2015, by Himachal Pradesh officials. They claimed this prior compounding barred further proceedings by Punjab authorities.

Held

The Court held that the writ petition lacks merit and is dismissed. The impugned show cause notice (Annexure P-4) is maintained and affirmed. The Court reasoned that while Section 23A of the Mines and Minerals (Development and Regulation) Act, 1957, provides for compounding of offences, the framing of respective mineral concession Rules by the States of Punjab and Himachal Pradesh is done in exercise of powers derived from the parent Act and in alignment with Article 304 of the Constitution of India, which permits reasonable restrictions on inter-State trade. The Court found that the Rules formulated by the states are to facilitate and regulate inter-State commerce, preventing smuggling. The Court concluded that the compounding of offences by Himachal Pradesh officials was limited to vehicles subsequently entering Himachal Pradesh and did not authorize the illegal entry of vehicles into Punjab without a valid transit pass. Therefore, the vehicles caused a breach of the relevant provisions of both the Himachal Pradesh Rules and the Punjab Rules. The Court found the argument that the vehicles were doubly jeopardized to be misplaced, and the issuance of the show cause notice by the State of Punjab was deemed valid.

Key Issues

1. Whether the issuance of the impugned show cause notice (Annexure P-4) by the State of Punjab, and the impounding of the petitioners' vehicles, is illegal, given that the offence of not possessing a transit pass was already compounded by the State of Himachal Pradesh, in light of Section 23A(2) of the Mines and Minerals (Development and Regulation) Act, 1957 (the 'Act of 1957')? Petitioner's Arguments: - The petitioners argued that Section 23A(2) of the Act of 1957 prohibits further proceedings once an offence has been compounded under Section 23A(1). They relied on 'Jayant Vs. State of Madhya Pradesh' (2021 AIR (SC) 496) to support this. They further contended that delegated legislation (Rules framed by states) must align with the parent Act and cannot override statutory bars like Section 23A(2), citing 'Kerala State Electricity Board and Others Vs. Thomas Joseph @ Thomas M.J. and Others' ((2023) AIR (SC) 126). Revenue's Arguments: - The State argued that inter-State trade is regulated by Article 304 of the Constitution of India. The Rules framed by Punjab and Himachal Pradesh are deemed to impose reasonable restrictions on trade. The issuance of the show cause notice was valid as the vehicles illegally entered Punjab without the requisite transit pass, breaching Rule 79 of the Himachal Rules and Rules 74 and 75 of the Punjab Rules. The compounding by Himachal Pradesh officials was limited to vehicles entering Himachal Pradesh and did not permit illegal entry into Punjab.