Dismissed

M/S Bharat Coking Coal Ltd. v. State of Bihar And Ors.

Jharkhand HC5 Sept 2018CWJC/3073/2000

Case brief

AI extract

What is this about?

Petitioner sought quashing of additional tax demands and a 1998 circular revising forest land values retrospectively. The Court dismissed the plea, holding that the demand's nature (ad hoc vs final) could not be adjudicated in writ due to missing letters and that the circular was valid given prior provisions for yearly revisions.

What did the court decide?

The writ petition was dismissed, and the circular dated 28.05.1998 was upheld. The interim order was vacated.

M/S Bharat Coking Coal Ltd. Vs State of Bihar And Ors. — Property and Title | Jharkhand HC (2018)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI

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C.W.J.C. No.3073 of 2000 (R)

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M/s. Bharat Coking Coal Ltd., A Government company within the meaning of Section 617 of the Companies Act having its registered office at Koyla Bhawan, Koyla Nagar, (Dhanbad), District Dhanbad, through its Constituted Attorney. … Petitioner Versus

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The State of Bihar.

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The Divisional Forest Officer, Dhanbad Division, Dhanbad, District Dhanbad.

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The Secretary, Ministry of Forest and Environment, Patna.

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… … Respondents

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CORAM: HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

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For the Petitioner : Mr. Indrajeet Sinha, Advocate : Mr. Kaustav Panda, Advocate For the Respondent-State: Mr. Kaustav Roy, A.C. to Sr. S.C. III

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13/05.09.2018 Heard Mr. Indrajeet Sinha, counsel appearing on behalf of the petitioner.

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2. Heard Mr. Kaustav Roy, counsel appearing on behalf of the respondents.

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3. This writ petition has been filed for the following reliefs: “For quashing of additional illegal demand made by the respondent no.2 initially of Rs.1,62,927.98 by his letter of demand no.1685 dated 06.05.2000 and thereafter enhanced to Rs.26,16,717.20 by his demand letter no.3180 dated 21.8.2000 followed by letter dated 28.2.2000 and letter no.3452 dated 2.9.2000 containing threat for recovery of the amount by initiating certificate proceeding which is wihout jurisdiction despite the full payment made by way of transfer fee as assessed for transfer of Forest Lan apart from making available land of corresponding area for afforestation And an appropriate writ / order/ direction for quashing the order of the state Government contained in circular no. Forest Law Mining (2) 13/97, 398E, dated 28.5.1998 directing revision in the rate of net value of Forest Land with retrospective effect form 1991-92 and a writ of or in the nature of Mandamus commanding upon the concerned respondents to forbear from giving effect to or acting pursuant to or in furtherance of the said

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impugned orders as contained in Annexure- 5, Annexure – 7, Annexure – 8, Annexure – 9 and Annexure – 10 hereto.”

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4. Counsel for the petitioner submits as follows:

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a) The Government of India, Ministry of Forest and Environment vide letter dated 12.01.1996 approved 25.70 hectares forest land for Madhuban Washery Project of the petitioner in the District of Dhanbad and a demand of Rs.45,64,202/- was raised including the cost of forest produce, the net present value and cost of compensatory afforestation.

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b) Further in respect of Muraidih Open Cast Project, the Government of India vide letter dated 04.07.1984 approved transfer of 60 hectares of forest land in the District of Dhanbad, and a demand of Rs.5,19,757/- was raised. The aforesaid amount was duly deposited and possession was also granted to the petitioner.

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c) However, vide letter No.1175 and 1176 both dated 26.05.1997, an additional amount of Rs.1,34,096.00 and Rs.28,831.98 respectively were demanded in respect of the transferred land which was transferred pursuant to letter issued in the year 1984. Counsel submits that the said letter dated 26.05.1997 was issued on the basis of some audit objection raised by the Accountant General Office and an additional demand was raised on account of sales tax and additional tax and accordingly the petitioner raised objection to the said demand vide letter dated 08.01.1998.

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d) Thereafter, the petitioner was served with another demand vide letter No.1685 dated 06.05.2000 for an amount of Rs.1,62,927.98 and the said letter relates to additional demand on account of sales tax, additional tax and royalty and the petitioner again responded to the said letter and objected it vide another letter dated 01.08.2000.

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e) Counsel further submits that the aforesaid objections which were raised by the petitioner were not appreciated by the

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respondents and vide another demand notice dated 21.08.2000, additional amount of Rs.26,16,717.20 was demanded from the petitioner in connection with the properties which were subject matter of Muraidih Project and a letter of reminder was also issued and ultimately a letter dated 02.09.2000 was issued to the petitioner threatening to recover the amount through certificate proceeding. Immediately thereafter the instant writ petition was filed for the aforesaid relief.

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f) Counsel for the petitioner submits that the specific case of the petitioner is that the demand is founded on deliberate misinterpretation of provisions of Indian Forest Act, Bihar Sales Tax Act (Finance Act) and of the Mines and Minerals (Regulation and Development) Act as also based on State Government’s order of enhancement of net value of land with a retrospective effect and he refers to the notification dated 28.05.1998, wherein, the rate of net value of the land has been revised with retrospective effect for the period of 1991-92 onwards.

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g) Counsel for the petitioner has raised mainly two folds arguments. Firstly, the additional demand which has been raised pursuant to audit objection are not sustainable in the eyes of law, and secondly the net value of the property which has been revised vide notification dated 28.05.1998 with retrospective effect is also not sustainable in the eyes of law.

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h) He submits that the transaction stood concluded as back as in the year 1984 and 1996 when the petitioner paid the amount demanded by the respondents in terms of the letter issued by the Government of India, Ministry of Environment and Forest read with the terms and conditions of the State Government. Therefore, the net value of the property could not have been revised with retrospective effect and could not have affected the concluded transactions.

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5. Counsel for the petitioner has also referred to a judgment reported in (2013) 15 SCC 1 para – 35 and 39 and has submitted

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that although the respondents have power to revise the rate from time to time but they certainly do not have the power to revise the rate with retrospective effect.

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6. Counsel appearing on behalf of the respondents on the other hand submits as follows:

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a) The Auditor has raised objection in connection with the amount of sales tax, additional tax and royalty which was wrongly calculated and accordingly the same is payable by the petitioner.

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b) He further submits that so far as the ‘net present value’ is concerned, initially vide circular dated 2^nd November, 1991, the rate of the ‘net present value’ was prescribed with a clear rider that the ‘net present value’ will be revised on the basis of ‘market rate every year’ and accordingly the revision of rate of the ‘net present value’ was already contemplated in the circular letter dated 2^nd November, 1991 and in terms of the said circular, the revision of rate of the ‘net present value’ has been done by the impugned Circular dated 28.05.1998 and since the revision was done in the year 1998 after 02.11.1991, the same was made effective from the year 1991-92.

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c) He submits that the revision of rate was duly contemplated in the circular of the year 1991 itself, therefore, there is no illegality or perversity in connection with issuance of the revision of the rate vide notification dated 28.05.1998 with effect from the year 1991-92.

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d) Counsel for the respondents further submits that the petitioner has not filed the letter issued by the State Government the amount the was whereby payable by petitioner communicated in terms of the letter issued by the Government of India. He refers to letter dated 12.01.1996 filed as Annexure – 1 to the writ petition which indicates that the clearance given by the Government of India was subject to following conditions which are:

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i. “The legal status of the forest land will remain unchanged.

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ii. The Forest land will not be used for any purpose other than that specified in the proposal.

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iii. Compensatory afforestation shall be taken up by the Forest Department on equivalent non-forest land at the cost of user agency.

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iv. Any other condition that the State Government may impose.”

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e) He submits that the respondents have taken a specific stand in their counter-affidavit at para – 5 that the amount which was asked to be deposited by the petitioner, the same was on ad hoc basis and accordingly the revision of rate which was issued only in the year 1998 was applicable to the petitioner as the demand which was raised by the respondent-State was not full and final.

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f) He further submits that the petitioner has not enclosed the copy of letter of demand issued by the State Government pursuant to the clearance given by the Union of India and accordingly the point as to whether the demand was ad hoc or final or what was the terms and conditions of the demand raised by the respondents have not been filed along with the writ petition. Accordingly, this issue cannot be decided in writ jurisdiction and if certificate proceeding is initiated then certainly the petitioner will have an opportunity to raise these points before the Certificate Officer who may consider the points in accordance with law.

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g) He further submits that in this view of the matter, the points involved in this case arise out of disputed questions of facts and the writ petition itself is pre-mature. He further submits that the respondent-State was conscious of the fact that in spite of the revision of rate being contemplated in the circular issued in the year 1991 which was to be revised every year, the same was not revised, therefore ad hoc demand were raised by the respondents subject to finalization of the rate.

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7. Counsel for the petitioner in response submits that the plea of original demand being ad hoc has been raised only with reference to demand of the year 1984 and not with reference to the demand of the year 1996, so the issue relating to the year 1996 at least be decided.

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8. After hearing the counsel for the parties and after considering the materials on record, this Court finds that as per the case of the petitioner, clearance from the Union of India was given in connection with the properties involved in this case as back as in the year 1984 and in the year 1996 and, the petitioner has annexed only one of the clearance which is dated 12.01.1996 and so far as the other clearance of the year 1984 is concerned, the same has not been filed. This Court cannot assume that contents of both the clearance letters are identical.

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9. It appears from the letter of clearance dated 12.01.1996 that the State Government was within its right to put any other conditions over and above the conditions which were imposed by the Government of India, Ministry of Environment and Forest. The petitioner has not filed before this Court, the letter issued by the respondents raising the initial demand and therefore this Court is not in a position to ascertain as to what was the condition imposed by the State Government while raising the demand upon the petitioner. The respondents have taken a stand in the counter-affidavit that the demand was ad hoc, but respondents have also not filed the letter by which demand was issued by the State Government to the petitioner. The letters raising initial demand, both for the year 1996 and 1984 are not on record. In absence of the letters which was issued by the respondents to the petitioner, it is not possible for this Court to find out the conditions which were imposed by the State Government while issuing follow up letter pursuant to the letters of clearance issued by the Union of India, particularly, the fact as to whether the demand raised was full and final or it was ad hoc

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or it was raised subject to the contemplated revision of rate which was already contemplated in the circular issued in the year 1991, vide notification dated 02.11.1991 which has been produced by the respondents during the course of hearing and kept on record. 10. So far as the legality and validity of the circular dated 28.05.1998 is concerned, the petitioner has challenged it only to the extent, it has been given retrospective effect from the period 1991-92. This Court is of the considered view that merely because the circular has been given retrospective effect, is not sufficient to hold it invalid in view of the fact that the impugned Circular dated 28.05.1998 has to be read with the earlier Circular dated 02.11.1991 which itself, contemplated yearly revision of rate based on market rate.

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11. So far as the applicability of this circular upon the petitioner is concerned, the petitioner may certainly have an occasion to challenge its’ applicability if the transactions or the demand raised upon the petitioner pursuant to the clearance given by the Union of India, and the demand raised by the State government was full and final.

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12. This Court further finds that if the demand raised upon the petitioner pursuant to the clearance given by the Government of India and condition imposed by the State Government was itself ad hoc or was in contemplation of revision of rate, then certainly the petitioner would be guided by the aforesaid notification dated 28.05.1998 as no right crystalized upon the petitioner pursuant to the demand raised by the State if the demand itself was ad hoc or subject to revision.

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13. This Court is of the considered view that merely because the notification dated 28.05.1998 has been issued with revision of rate from the year 1991-92, the same is not sufficient to hold the retrospective effect of this Circular as invalid as it was already mentioned in the Circular dated 02.11.1991 that there would be yearly revision of rate based on market rate. So far as the

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judgment passed by the Hon’ble Supreme Court reported in (2013) 15 SCC 1 is concerned, the same relates to giving retrospective effect to the rule and term “from time to time” used in statute has been considered.

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14. This Court finds that the terms “time to time” has not been used in the Circular issued by the State Government in the year 1991. The term used is ‘yearly revision of rate based on market rate’. This Court is of the considered view that the term ‘yearly revision of rate based on market rate’ is totally different from the term “time to time” and therefore the Court finds that the judgment relied upon by the petitioner does not apply to the facts and circumstances of this case.

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15. In such circumstances, this Court finds that the aforesaid judgment which has been relied upon by the petitioner does not help the petitioner in any manner as the provisions which was subject matter of interpretation in the aforesaid judgment are totally different from the impugned circular issued in the year 1998 by which the rate was notified from the period of 1991-92 onwards. This notification of the year 1998 cannot be read in isolation but has to be read with the notification of the year 1992 which itself contemplated yearly revision of rate based on market rate. This Court finds that the follow up letters issued by the State Government after letter of clearance issued by Union of India, being not on record, the issue in connection with applicability of retrospective notification of present value of the property from the year 1991-92 upon the petitioner cannot be decided in this writ petition and the same may be raised by the petitioner before the Certificate Officer before whom the proceeding is contemplated vide impugned notice dated 02.09.2000 under the provisions of Bihar and Orissa Public Demand Recovery, Act, 1914.

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16. Counsel for the petitioner in response had submitted that the claim of the demand being ad hoc is only in relation to the

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year 1984 and not with respect to the transaction of the year 1996. This contention cannot be appreciated as the initial letter of demand itself is not on record and this Court is not in a position to ascertain as to what was the condition which were imposed by the State Government while raising the demand upon the petitioner.

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17. So far as the other point in connection with raising of additional demand of tax on the basis of audit objection is concerned, this Court finds that the respondent have raised the demand solely on account of audit objection and the demand in connection with sales tax, etc. is subject to assessment by the concerned authorities under the Sales tax legislation. What exactly happened pursuant to the audit objection in connection with sales tax etc. is not on record. It is also not on record as to what amount the respondents paid ultimately to the concerned authorities under the sales tax and accordingly. The additional demand raised on account of sales tax etc. on the basis of audit objection also cannot be decided in this writ petition because the complete picture and the follow up action pursuant to the audit objection is not on record.

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18. As a cumulative effect to the aforesaid findings, this writ petition is dismissed and the Circular dated 28.05.1998, is upheld. So far as applicability of this Circular upon the petitioner is concerned, it will be open to the petitioner to raise these points before the Certificate Officer as and when any proceeding is filed by the respondents before the Certificate Officer as contemplated by the impugned letters issued by the respondents. 19. This Court finds that there was an interim order dated 20.11.2001, of no coercive steps against the petitioner, as this writ petition is dismissed, the interim order dated 20.11.2001 stands vacated.

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(Anubha Rawat Choudhary, J.)

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Saurav /NAFR

M/S Bharat Coking Coal Ltd. v. State of Bihar And Ors.

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M/S Bharat Coking Coal Ltd. v. State of Bihar And Ors.

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