M/S Super Leaves Processor vs. State Of Chhattisgarh

Facts

The petitioners, various proprietorship firms, filed writ petitions challenging letters dated June 21, 2018, issued by Respondent No. 3 (Chhattisgarh State Minor Forest Produce (T&D) Cooperative Federation Limited). These letters levied a Forest Development Cess at 3% on the purchase of tendu leaves. The petitioners sought a writ of mandamus to quash these letters and to declare that they are liable to pay tax only under the Central Goods and Services Tax Act, 2017, and the Chhattisgarh Goods and Services Tax Act, 2017, not under the Chhattisgarh Karadhan Adhiniyam, 1982. The petitions were filed in 2018. During the pendency of these petitions, Section 7 of the Chhattisgarh Karadhan Adhiniyam, 1982, was omitted, and Section 6 was inserted by the Chhattisgarh Karadhan (Sanshodhan) Adhiniyam, 2018, which included a saving clause.

Held

The Court noted the submissions made by the learned counsel for the parties. The respondents pointed out that Section 7 of the Chhattisgarh Karadhan Adhiniyam, 1982, was omitted and Section 6 was inserted by the Chhattisgarh Karadhan (Sanshodhan) Adhiniyam, 2018, which included a saving clause. This saving clause, according to the respondents, meant that the validity of actions already taken, such as the impugned letters, could not be questioned. The petitioners' counsel endorsed these submissions and stated that the petitioners wished to challenge the validity of the impugned letters and the constitutionality of Section 6 of the Adhiniyam of 2018 by filing fresh petitions. The Court, having considered the submissions, disposed of the petitions by reserving liberty in favour of the petitioners to avail the remedy available under the law. This included the liberty to challenge the impugned letters and the validity of the saving clause (Section 6) of the Adhiniyam of 2018.

Key Issues

1. Whether the impugned letters levying Forest Development Cess @ 3% on the purchase of tendu leaves are liable to be quashed and set aside? (Question of law) 2. Whether the petitioners are liable to pay tax only under the Central Goods and Services Tax Act, 2017, and the Chhattisgarh Goods and Services Tax Act, 2017, and not under the Chhattisgarh Karadhan Adhiniyam, 1982? (Question of law) Petitioner's arguments: The petitioners argued that the impugned letters were illegal and that they should only be taxed under the GST regime. They sought to challenge the validity of the letters and the constitutionality of Section 6 of the Chhattisgarh Karadhan (Sanshodhan) Adhiniyam, 2018. Respondent's arguments: The respondents contended that Section 7 of the Chhattisgarh Karadhan Adhiniyam, 1982, was omitted and Section 6 was inserted by the Chhattisgarh Karadhan (Sanshodhan) Adhiniyam, 2018, which contained a saving clause. They argued that this saving clause protected actions taken prior to the amendment, and therefore, the validity of the impugned letters could not be questioned without challenging the saving clause itself.