Bharat Coking Coal, Limited Vs. State of Bihar and ors. - Court Judgment

Excerpt:
cess and other taxes on minerals (validation) act, 1992 section 2(2) - levy of cess--valid after decision of supreme court reported in air 1996 sc 2560--it has been validated by validation act of 1992--thus, state government is entitled to recover cess even before 4.4.1991--view of supreme court is binding. - - air1996sc2560 .the supreme court while upholding the validity of the validation act declared that no distinction can be drawn between the person who has paid the cess and the person who has not paid it because the act indicates the intention to validate imposition as well as collection. we are also unable to find any words in section 2 or' anywhere else in the impugned enactment limiting the levy only to the extent of the taxes/cesses already collected on or before 4th day of april, 1991. nor are we satisfied that absence of a clause or words corresponding to clause-c in section 3(1) of the sugarcane cess (validation) act, makes any difference. on the contrary, the said words indicate the intention o validate the imposition as well as collection. it means future collection as well. r.a. sharma and a.k. prasad, jj.1. the petitioner has filed this writ petition challenging the orders. annexures-1, 2 and 3, passed by the respondents demanding cess on royalty and dead rent. while entertaining this writ petition, this court on 13.11.1990 passed the following order:it is ordered that in the event the petitioner fails in this application, it will pay the amount that may be found due against it as cess with interest at the rate of eighteen per cent per annum from the date of demand till the date of payment.2. we have heard the learned counsel for the parties.3. the state government's right to impose impugned levy under the bengal cess act (9 of 1980) was struck down by the court. thereafter the parliament intervened and enacted the cess and other taxes of minerals (validation) act, 1992, validating the imposition and collection of the cess and certain other taxes on minerals under the states, laws. the said validation act was challenged before this court and the division bench of this court in the tata iron and steel co. ltd. and anr. v. union of india and ors. decided on 17.1.1996, 1996 (1) pur 404, although upheld its validity, but declared that 'the taxes collected before 4.4.1991 are not required to be refunded, but the act does not sanction the recovery of any tax after 4.4.1991'. the effect of the said division bench judgment is that if the cess was realised by the state prior to 4.4.1991, it is not liable to be refunded, but if it could not be realised till then the state will have no right to recover it thereafter.4. after the aforesaid judgment of this court, the supreme court also considered and decided the same controversy relating to the validity and scope of the very same validation act in appeal from madras in p. kannadasan v. state of tamil nadu and ors. : air1996sc2560 . the supreme court while upholding the validity of the validation act declared that no distinction can be drawn between the person who has paid the cess and the person who has not paid it because the act indicates the intention to validate imposition as well as collection. the relevant extracts from the judgment of the supreme court are re-produced below:the third contention which has been urged by every counsel appearing for appellants-petitioners with great vehemence is this: the impugned act is designed to and provides only for validating the taxes and cesses already recovered under the relevant proviosions of the enactment mentioned in the schedule. the impugned act does not, however, empower or authorise the parliament or its agencies to recover taxes and cesses which are payable under the said provisions but have not been recovered on or before 4th day of april 1991. the statement of objects sand reasons and the language in sub-section (2) of section 2 are relied upon in support of this contention. it is also pointed out that section 2 does not contain a clause or words corresponding to clause (c) sub-section (1) of section 3 of the sugarcane cess (validation) act, 1961, referred to hereinbefore. it is not possible to accede to this contention either. section 2 enacts the relevant provisions of the enactments mentioned in the schedule with retrospective effect. the provisions so enacted to create the levy. indeed, unless the levy is. validated, recoveries already made cannot be validated. it is not this reason that the preamble to the act says that it is an act 'to validate the imposition and collection of cesses and certain other taxes on minerals under certain state laws'. once the provisions, which create the levy, are deemed to have been enacted by parliament, the levy is very much there with retrospective effect. once there is a valid levy not only the tax already collected need not be refunded but the taxes and cesses which have not already been collected can also be collected. it is impossible to see any distinction in principle between both.***we are, therefore, of the clear opinion that once the levy is created or validated, as the case may be, no distinction can be drawn between the person who has paid and the person who has not paid. we are also unable to find any words in section 2 or' anywhere else in the impugned enactment limiting the levy only to the extent of the taxes/cesses already collected on or before 4th day of april, 1991. nor are we satisfied that absence of a clause or words corresponding to clause-c in section 3(1) of the sugarcane cess (validation) act, makes any difference. the said clauses merely sets out the consequence following, from the validation contained in the main limb of section 3(1), by way of abundant caution. it cannot be treated as a substantive provision. sri v. prasaran then submitted that the words, 'imposition and collection' in the preamble do evidence the intention to confine the imposition to amounts already collected. it is not possible to agree. by reading them conjunctively, their meaning cannot be cut down. on the contrary, the said words indicate the intention o validate the imposition as well as collection.' 'collection' does not mean what is already collected alone. it means future collection as well. neither the preamble nor section 2 say that what is already collected alone is validated. this contention too accordingly fails.5. in view of the judgment of the supreme court mentioned above, the state government is entitled to recover the cess which was imposed before 4.4.1991.6. in the end, the learned counsel for the petitioner submitted that as against the judgment of this court in the tata iron and steel co. ltd. v. anr. v. union of india and ors. (supra) the state government has filed s.i.p. before the supreme court, it is appropriate to await the decision of the supreme court because till this court's judgment in the tata iron steel company's case is set aside by the supreme court, it is binding upon us. it is not possible to accede to this submission. normally a judgment given by a division bench is binding on a bench of co-ordinate jurisdiction and it is not open to the latter bench to differ from the decision of the earlier bench and if the latter bench does not agree with the earlier decision, the only course open to it is to refer the matter to the full bench. but in the instant case the position is different. the supreme court has already decided the same controversy pertaining to the same validation act, which was the subject matter before this court, in the tata iron steel company's case. the decision of the supreme court is binding on this court and it is neither open to us to take a view contrary to what has been laid down by the supreme court, nor is it proper for us not to follow the law declared by the supreme court on the pretext that against the judgment of this court, s.i.p. has been decided. the position would have been different, if the decision given by the supreme court was in respect of the another act, though similar to the act, which was the subject matter of consideration before the division bench in the tata iron steel company's case. we are, therefore, bound by the law declared by the supreme court in p. kannadasan v. state of tamil nadu and ors. (supra).7. in view of the decision of the supreme court mentioned above, this writ application is dismissed. no cost.8. the state government is entitled to recover the amount to levy with interest at the rate of 18% per annum in terms of the interim order passed by this court on 13.11.1990.

Judgment:

R.A. Sharma and A.K. Prasad, JJ.

1. The petitioner has filed this writ petition challenging the orders. Annexures-1, 2 and 3, passed by the respondents demanding cess on Royalty and dead rent. While entertaining this writ petition, this Court on 13.11.1990 passed the following order:

It is ordered that in the event the petitioner fails in this application, it will pay the amount that may be found due against it as cess with interest at the rate of eighteen per cent per annum from the date of demand till the date of payment.

2. We have heard the learned Counsel for the parties.

3. The State Government's right to impose impugned levy under the Bengal Cess Act (9 of 1980) was struck down by the Court. Thereafter the Parliament intervened and enacted the cess and other Taxes of Minerals (validation) Act, 1992, validating the imposition and collection of the cess and certain other taxes on minerals under the states, laws. The said Validation Act was challenged before this Court and the Division Bench of this Court in the Tata Iron and Steel Co. Ltd. and Anr. v. Union of India and Ors. decided on 17.1.1996, 1996 (1) PUR 404, although upheld its validity, but declared that 'the taxes collected before 4.4.1991 are not required to be refunded, but the Act does not sanction the recovery of any tax after 4.4.1991'. The effect of the said Division Bench judgment is that if the cess was realised by the State prior to 4.4.1991, it is not liable to be refunded, but if it could not be realised till then the State will have no right to recover it thereafter.

4. After the aforesaid judgment of this Court, the Supreme Court also considered and decided the same controversy relating to the validity and scope of the very same Validation Act in appeal from Madras in P. Kannadasan v. State of Tamil Nadu and Ors. : AIR1996SC2560 . The Supreme Court while upholding the validity of the validation Act declared that no distinction can be drawn between the person who has paid the cess and the person who has not paid it because the Act indicates the intention to validate imposition as well as collection. The relevant extracts from the judgment of the Supreme Court are re-produced below:

The third contention which has been urged by every Counsel appearing for appellants-petitioners with great vehemence is this: the impugned Act is designed to and provides only for validating the taxes and cesses already recovered under the relevant proviosions of the enactment mentioned in the Schedule. The impugned Act does not, however, empower or authorise the Parliament or its agencies to recover taxes and cesses which are payable under the said provisions but have not been recovered on or before 4th day of April 1991. The statement of objects sand reasons and the language in Sub-section (2) of Section 2 are relied upon in support of this contention. It is also pointed out that Section 2 does not contain a clause or words corresponding to Clause (c) Sub-section (1) of Section 3 of the Sugarcane Cess (Validation) Act, 1961, referred to hereinbefore. It is not possible to accede to this contention either. Section 2 enacts the relevant provisions of the enactments mentioned in the schedule with retrospective effect. The provisions so enacted to create the levy. Indeed, unless the levy is. validated, recoveries already made cannot be validated. It is not this reason that the preamble to the Act says that it is an Act 'to validate the imposition and collection of cesses and certain other taxes on minerals under certain state laws'. Once the provisions, which create the levy, are deemed to have been enacted by Parliament, the levy is very much there with retrospective effect. Once there is a valid levy not only the tax already collected need not be refunded but the taxes and cesses which have not already been collected can also be collected. It is impossible to see any distinction in principle between both.

***

We are, therefore, of the clear opinion that once the levy is created or validated, as the case may be, no distinction can be drawn between the person who has paid and the person who has not paid. We are also unable to find any words in Section 2 or' anywhere else in the impugned enactment limiting the levy only to the extent of the taxes/cesses already collected on or before 4th day of April, 1991. Nor are we satisfied that absence of a clause or words corresponding to Clause-C in Section 3(1) of the Sugarcane Cess (Validation) Act, makes any difference. The said clauses merely sets out the consequence following, from the validation contained in the main limb of Section 3(1), by way of abundant caution. It cannot be treated as a substantive provision. Sri V. Prasaran then submitted that the words, 'imposition and collection' in the preamble do evidence the intention to confine the imposition to amounts already collected. It is not possible to agree. By reading them conjunctively, their meaning cannot be cut down. On the contrary, the said words indicate the intention o validate the imposition as well as collection.' 'collection' does not mean what is already collected alone. It means future collection as well. Neither the preamble nor Section 2 say that what is already collected alone is validated. This contention too accordingly fails.

5. In view of the judgment of the Supreme Court mentioned above, the State Government is entitled to recover the cess which was imposed before 4.4.1991.

6. In the end, the learned Counsel for the petitioner submitted that as against the judgment of this Court in the Tata Iron and Steel Co. Ltd. v. Anr. v. Union of India and Ors. (Supra) the State Government has filed S.I.P. before the Supreme Court, it is appropriate to await the decision of the Supreme Court because till this Court's judgment in the Tata Iron Steel Company's case is set aside by the Supreme Court, it is binding upon us. It is not possible to accede to this submission. Normally a judgment given by a Division Bench is binding on a Bench of co-ordinate jurisdiction and it is not open to the latter Bench to differ from the decision of the earlier Bench and if the latter Bench does not agree with the earlier decision, the only course open to it is to refer the matter to the Full Bench. But in the instant case the position is different. The Supreme Court has already decided the same controversy pertaining to the same Validation Act, which was the subject matter before this Court, in the Tata Iron Steel Company's case. The decision of the Supreme Court is binding on this Court and it is neither open to us to take a view contrary to what has been laid down by the Supreme Court, nor is it proper for us not to follow the law declared by the Supreme Court on the pretext that against the judgment of this Court, S.I.P. has been decided. The position would have been different, if the decision given by the Supreme Court was in respect of the another Act, though similar to the Act, which was the subject matter of consideration before the Division Bench in the Tata Iron Steel Company's case. We are, therefore, bound by the law declared by the Supreme Court in P. Kannadasan v. State of Tamil Nadu and Ors. (Supra).

7. In view of the decision of the Supreme Court mentioned above, this writ application is dismissed. No cost.

8. The State Government is entitled to recover the amount to levy with interest at the rate of 18% per annum in terms of the interim order passed by this Court on 13.11.1990.