Case Note & Summary
The Goa Rural Improvement and Welfare Cess Act, 2000 was enacted to augment revenue for improvement of infrastructure and health, to promote welfare of people residing in rural areas affected by use of plastics, dumping of garbage and spillage of materials. The Act imposed a cess on transportation of certain goods into the State of Goa. Petitioners, companies engaged in mining iron ore, extraction, processing, transportation and export, challenged the constitutional validity of the Act, the Rules framed thereunder and notifications issued under the Act. Lead petitioner Sesa Sterlite Limited and others transported iron ore and coal from Karnataka and other States through Goa for export from Mormugao Port or for use in their pig iron plant at Amona-Goa. The cess was levied on both mineral ore and coal transported through Goa. The Act was passed by the Goa State Legislative Assembly and received Governor's assent on 28 September 2000, notified on 16 October 2000. Rules were framed on 12 January 2006 under Sections 4, 5 and 8 of the Act. The appointed date of 1 February 2006 was notified on 23 January 2006 under Section 1(3). The Rules were amended on 1 December 2008. By notification dated 13 May 2008, the rates of cess were revised tenfold, leading to the filing of the lead writ petition on 13 April 2009. The petitioners sought a declaration that the Act, Rules and notifications were ultra vires the Constitution, a writ of mandamus to strike them down, a writ of certiorari to quash the corrigendum dated 8 October 2010, and refund of Rs.1,74,68,240 collected as cess between April 2008 and March 2009 with 12% interest. Earlier, a Division Bench of the Bombay High Court at Goa in Sociedade De Fomento Industrial Pvt. Ltd. v. State of Goa, AIR Online 2018 Bom 1112, by judgment dated 26 September 2018, upheld the constitutional validity of the Goa Cess Act, the Rules and notifications, but expressly kept open other grounds raised in companion petitions, including the present ones. The present batch of writ petitions raised grounds of violation of Articles 301, 303, 304 and Article 14 of the Constitution, and lack of legislative competence after the GST regime subsumed the State cess. The High Court recorded that the earlier Division Bench had only decided legislative competence and retrospective application, and had not foreclosed these other grounds. The judgment index indicates that the Court proceeded to analyze whether the levy was a tax or fee, whether it violated Articles 301, 303, 304, whether it violated Article 14, and whether the GST laws subsumed the levy. The extracted text does not include the substantive analysis or final decision on these grounds.
Headnote
A) Constitutional Law - Freedom of Trade and Commerce - Articles 301, 303, 304 Constitution of India - Challenge to Cess on Inter-State Transportation - Petitioners contended that the Goa Rural Improvement and Welfare Cess Act, 2000 and notifications imposed restrictions on free movement of iron ore and coal into Goa, violating Articles 301, 303, and 304; the High Court noted that an earlier Division Bench in Sociedade De Fomento Industrial Pvt. Ltd. v. State of Goa had upheld the Act but expressly left these grounds open for adjudication in companion petitions. Held that the present grounds were not foreclosed and required independent examination (Paras 2-5).
B) Constitutional Law - Equality Clause - Article 14 Constitution of India - Differential Levy on Goan and Non-Goan Ore - Petitioners alleged discrimination because cess was levied on two classes of items, Goan ore on which royalty was paid and non-Goan ore without royalty; the Court framed the issue for adjudication under Article 14. Held no final determination is available in the extracted text (Paras 2, 9-10).
C) Goods and Services Tax - State Legislative Competence - Goa Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017 - Subsumption of State Cess - Petitioners contended that after the GST regime, the State lacked power to sustain the cess under the Goa Cess Act as the levy was subsumed by GST laws; the Court listed the issue for analysis in Section G(III) of the judgment. Held that the final determination is not included in the provided text (Paras 2, 83-86).
Issue of Consideration
Whether the Goa Rural Improvement and Welfare Cess Act, 2000 imposes an unconstitutional cess; whether the levy is violative of Articles 301, 303, and 304 of the Constitution; whether the implementation violates Article 14 due to differential levy on Goan and non-Goan ore; whether the State lacks legislative competence after the Goa Goods and Services Tax Act and Central Goods and Services Tax Act, 2017 subsumed such levy
Law Points
- Goa Rural Improvement and Welfare Cess Act
- 2000 imposes cess on transportation of goods for rural welfare
- challenge grounds include Articles 14
- 301
- 303
- 304 of Constitution
- petitioners alleged discrimination between Goan and non-Goan ore
- petitioners alleged State denuded of power after GST
- earlier Division Bench upheld Act but left these grounds open
- legislative competence and retrospective application already decided in Sociedade De Fomento Industrial Pvt. Ltd. v. State of Goa
Case Details
2024 LawText (BOM) (01) 242
Writ Petition No.244 of 2009 with Civil Application No.38 of 2014, along with Writ Petition Nos.233 of 2009, 593 of 2009, 277 of 2010, 232 of 2009, 594 of 2009, 474 of 2012, 842 of 2009, and 575 of 2009
G. S. Kulkarni, Bharat P. Deshpande
Venkatesh Dhond, Abhijit Gosavi, Ivo D'Costa, Amey Phadte, Guruprasad V. Naik, G. Kerkar, Y. V. Nadkarni, Sanket Kamat, Simran Khadilkar, Parikshit Sawant, Ramchandra S. Apte, Harshal Nahata, Nikhil Vaze, Susan Linhares, Geetesh R. Shetye, Sapna Mordekar, Shubham Priolkar, Shivdutt P. Munj, Deep D. Shirodkar, Sulekha Kamat, Tukaram Gawas, Prashil Arolkar
Sesa Sterlite Limited through Company Secretary Chandrashekhar D. Chitnis & Anr.; D. B. Bandodkar And Sons Pvt. Ltd. through Director & Anr.; Tata Metaliks Limited & Anr.; Renuka Sugars Ltd & Anr.; Orient (Goa) Pvt. Ltd. through Director Shashikala Kakodkar & Anr.; Tata Metaliks Limited And Anr.; J.K. Cement Ltd Rep. By Senior General Manager (Legal) & Anr.; Global Coke Limited & Anr.; Prasanna V. Ghotage
State of Goa through Chief Secretary & Anr.
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Nature of Litigation
Writ petitions under Article 226 of the Constitution of India challenging the constitutional validity of the Goa Rural Improvement and Welfare Cess Act, 2000, the Rules framed thereunder, and notifications levying cess on transportation of iron ore and coal into the State of Goa.
Remedy Sought
Petitioners sought a declaration that the Goa Rural Improvement and Welfare Cess Act, 2000, Rules and notifications are ultra vires the Constitution; a writ of mandamus to strike down the Act, Rules and notifications; a writ of certiorari to quash the corrigendum dated 08/10/2010; and refund of Rs.1,74,68,240 collected as cess between April 2008 and March 2009 with interest at 12% per annum.
Filing Reason
Petitioners were engaged in mining, transportation, processing and export of iron ore and coal. Cess was levied on mineral ore and coal transported through the State of Goa. A notification dated 13 May 2008 revised the rates tenfold, causing grievance leading to the filing of the petition on 13 April 2009.
Previous Decisions
A Division Bench of the Bombay High Court at Goa in Sociedade De Fomento Industrial Pvt. Ltd., Goa Vs. State of Goa, AIR Online 2018 Bom 1112, by judgment dated 26 September 2018, upheld the constitutional validity of the Goa Cess Act, the Rules, and notifications, but expressly kept open other grounds including Articles 14, 301, 303, 304 and GST subsumption, for adjudication in companion petitions like the present ones.
Issues
Whether the Goa Rural Improvement and Welfare Cess Act, 2000 imposes an unconstitutional cess
Whether the levy is violative of Articles 301, 303 and 304 of the Constitution of India
Whether the implementation violates Article 14 of the Constitution due to differential levy on Goan and non-Goan ore
Whether the State is denuded of power to sustain the levy after the Goa Goods and Services Tax Act and Central Goods and Services Tax Act, 2017 subsumed such cess
Submissions/Arguments
Petitioners contended that the Goa Cess Act imposes an unconstitutional cess
Petitioners contended that the levy violates Articles 301, 303 and 304 of the Constitution by restricting free trade and movement of goods
Petitioners contended that implementation violates Article 14 because cess is levied on two classes of items, Goan ore on which royalty is paid and non-Goan ore on which royalty is not paid
Petitioners contended that the State lacks legislative competence after the GST regime because the cess stands subsumed by the Goa Goods and Services Tax Act and Central Goods and Services Tax Act, 2017
Petitioners sought refund of cess collected between April 2008 and March 2009 with interest
Judgment Excerpts
The Goa Rural Improvement and Welfare Cess Act, 2000 (for short ‘ the Goa Cess Act ’) enacted with an object to augment revenue for improvement of infrastructure and health, to promote welfare of the people residing in rural areas, being affected by the use of plastics, dumping of garbage and spillage of materials is the subject matter of challenge in this batch of petitions.
The challenge of the petitioners is primarily mounted on the following counts : (i) that the Goa Cess Act imposes an unconstitutional cess; (ii) The levy as imposed is violative of Articles 301, 303, and 304 of the Constitution of India; (iii) the implementation of the Goa Cess Act violates the petitioner’s rights under Article 14 of the Constitution of India.
When this Petition along with the group of Writ Petitions came up for hearing, the Counsel in other petitions requested that the two arguments raised in this Petition, that is legislative competence of the State and retrospective application, are common in almost all matters and they requested to be heard in support when this Petition is heard. The Counsel requested that after the decision is rendered in this petition, the other petition be taken up for consideration on other individual grounds.
Procedural History
The Goa State Legislative Assembly passed the Goa Rural Improvement and Welfare Cess Act, 2000, which received assent from the Governor of Goa on 28 September 2000 and was notified on 16 October 2000. Rules were framed on 12 January 2006 under Sections 4, 5 and 8. The appointed date of 1 February 2006 was notified on 23 January 2006 under Section 1(3). The Rules were amended on 1 December 2008. Rates were revised by notification dated 13 May 2008. The lead writ petition was filed on 13 April 2009. An earlier Division Bench by judgment dated 26 September 2018 in Sociedade De Fomento Industrial Pvt. Ltd. v. State of Goa upheld the Act and Rules and notifications but kept open the present grounds. The present common judgment was delivered on 10 January 2024.
Acts & Sections
- Goa Rural Improvement and Welfare Cess Act, 2000: 1(3), 3(2), 4, 5, 8
- Constitution of India: 14, 301, 303, 304
- Goa Goods and Services Tax Act, 2017:
- Central Goods and Services Tax Act, 2017:
