Sesa Sterlite Ltd. v. State of Goa

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The Tax Publishers 2024 TaxPub(GST) 310 (Bom-HC) IN THE BOMBAY HIGH COURT BHARAT P. DESHPANDE AND G.S. KULKARNI, JJ. Sesa Sterlite Ltd. v. State of Goa Writ Petition Nos. 244 of 2009 & oths., Civil Application No. 38 of 2014 10 January, 2024 Petitioner by: Venkatesh Dhond, Abhijit Gosavi, Ivo D'Costa, Amey Phadte, Guruprasad V. Naik, G. Kerkar, Y.V. Nadkarni, Sanket Kamat, Simran Khadilkar and Parikshit Sawant, Advs. Respondent by: Ramchandra S. Apte, Harshal Nahata, Nikhil Vaze, Ms. Susan Linhares, Geetesh R. Shetye, Ms. Sapna Mordekar, Shubham Priolkar, Shivdutt P. Munj, Deep D. Shirodkar, Sulekha Kamat, Tukaram Gawas and Prashil Arolkar, Advs. JUDGMENT *G. S. Kulkarni, J.* The judgment is divided into the following sections to facilitate analysis: (A) Prelude 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, by the petitioners, who are inter alia engaged in transportation of iron and coal into the State of Goa from the other States. (B) Challenge 2. The challenge of the petitioners is primarily mounted on the following counts : (i) that the Goa Cess Act imposes an unconstitutionalcess; (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 petitioners rights under article 14 of the Constitution of India, since the levy is on two classes of items, the Goan ore on which royalty is paid and the non-Goan ore on which royalty is not paid; and lastly (iv) that there is no power/competence to sustain the levy of cess since the State stands denuded of its power, under the Goa Cess Act, as such levy stands subsumed by the Goa Goods and Services Tax Act and the Central Goods and Service Tax Act 2017, (for short GST Act). 3. At the outset, it is required to be noted that a batch of petitions in the case of Sociedade De Fomento Industrial Pvt. Ltd., Goa v. State of Goa AIR Online 2018 Bom 1112 (of which the present proceedings were also a part) had assailed the Goa Cess Act. A Division Bench of this Court considered the challenge inter alia, to the constitutional validity of the Goa Cess Act and the Rules framed thereunder as also the Notification dated 8-10-2010, and the demand notices issued under the Goa Cess Act. The challenge as considered by the Division Bench was on two grounds; firstly, that the State not having the legislative competence to enact the Goa Cess Act; and secondly, on the issue as to whether the Goa Cess Act would have a retrospective application. Such challenge was repelled by the Division Bench, by its judgment dated 26-9-2018, thereby upholding the constitutional validity of the Goa Cess Act as also the Rules, as also the notifications issued by the State Government were upheld, however, keeping open the other grounds which were raised in the companion petitions, being the subject matter of adjudication in the present proceedings. In such context, the relevant observations as made by the Division Bench are required to be noted, which read thus:- 8. 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. Given this request by the Counsel, the other grounds of challenge than the two argued before us in this petition, are not be construed as foreclosed by this decision. 4. Accordingly, the grounds as raised by the petitioners in the present petitions have fallen for consideration of this Court, as according to the petitioners, they were not subject matter of adjudication in the case of Sociedade De Fomento Industrial Pvt. Ltd. (supra). 5. Writ Petition No.244 of 2009 (Sesa Goa Limited & Anr. v. State of Goa) is argued as the lead matter. The issues of law as raised in the connected proceedings are not different. Learned Counsel for the parties have also addressed the Court on such common issues of law. Hence, all these petitions are being disposed of by this common judgment. (C) Facts 6. For convenience the facts as pleaded in the lead writ petition can benoted hereunder: The petitioner company is stated to be engaged in the business of mining iron ore, extraction, processing, transportation, and export of iron ore from the State of Goa. It also carries on mining activity in the State of Karnataka and Orissa. It is contended that the mineral ore as also coal brought by the petitioner from the State of Karnataka, is required to be transported through the State of Goa, since Goa has a major port namely the Mormugao Port, from where the mineral ore is exported. That ore is imported by the petitioner which is also required for the petitioners activities in Goa. It is the petitioners case that the cess under the Goa Cess Act is levied both on the mineral ore as also on coal, which is being transported by the petitioner through the State of Goa. 7. The petitioner further contends that the petitioner is the grantee or concessionaire or holder in respect of leases of iron ore mines, in the State of Goa and Karnataka. It inter alia transports iron ore from its mines and/or purchased by the petitioner, from other sources, in the State of Karnataka, into the State of Goa, wherein it is used in its pig iron plant at Amona- Goa, and/or is exported overseas from the Mormugao Port. It is on such commercial activity of the petitioner the cess being levied under the Goa Cess Act, the petitioner feels itself aggrieved, so as to file the present petition. 8. The relevant dates in regard to the Goa Cess Act and the Rules can be noted :- (a) The Goa State Legislative Assembly passed the Goa Cess Act (Goa Rural Improvement and Welfare Cess Act, 2000), which received assent from the Governor of Goa on 28-9-2000. It was notified in the Goa Government Official Gazette on 16-10-2000. (b) On 12-1-2006, in exercise of powers conferred under sections 4, 5, and 8 of the impugned Act, the Government of Goa framed Rules called the Goa Rural Improvement and Welfare Cess Rules 2006. (c) In the exercise of powers conferred under section 1(3) of the said Act by a notification dated 23-1-2006, the Government of Goa notified the appointed date, for the Goa Cess Act to be brought in force, being 1-2-2006. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers 2024 TaxPub(GST) 310 (Bom-HC)

IN THE BOMBAY HIGH COURT

BHARAT P. DESHPANDE AND G.S. KULKARNI, JJ.

Sesa Sterlite Ltd. v. State of Goa

Writ Petition Nos. 244 of 2009 & oths., Civil Application No. 38 of 2014

10 January, 2024

Petitioner by: Venkatesh Dhond, Abhijit Gosavi, Ivo D'Costa, Amey Phadte, Guruprasad V. Naik, G. Kerkar, Y.V. Nadkarni, Sanket Kamat, Simran Khadilkar and Parikshit Sawant, Advs.

Respondent by: Ramchandra S. Apte, Harshal Nahata, Nikhil Vaze, Ms. Susan Linhares, Geetesh R. Shetye, Ms. Sapna Mordekar, Shubham Priolkar, Shivdutt P. Munj, Deep D. Shirodkar, Sulekha Kamat, Tukaram Gawas and Prashil Arolkar, Advs.

JUDGMENT

G. S. Kulkarni, J.

The judgment is divided into the following sections to facilitate analysis:

(A) Prelude

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, by the petitioners, who are inter alia engaged in transportation of iron and coal into the State of Goa from the other States.

(B) Challenge

2. The challenge of the petitioners is primarily mounted on the following counts : (i) that the Goa Cess Act imposes an unconstitutionalcess; (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 petitioners rights under article 14 of the Constitution of India, since the levy is on two classes of items, the Goan ore on which royalty is paid and the non-Goan ore on which royalty is not paid; and lastly (iv) that there is no power/competence to sustain the levy of cess since the State stands denuded of its power, under the Goa Cess Act, as such levy stands subsumed by the Goa Goods and Services Tax Act and the Central Goods and Service Tax Act 2017, (for short GST Act).

3. At the outset, it is required to be noted that a batch of petitions in the case of Sociedade De Fomento Industrial Pvt. Ltd., Goa v. State of Goa AIR Online 2018 Bom 1112 (of which the present proceedings were also a part) had assailed the Goa Cess Act. A Division Bench of this Court considered the challenge inter alia, to the constitutional validity of the Goa Cess Act and the Rules framed thereunder as also the Notification dated 8-10-2010, and the demand notices issued under the Goa Cess Act. The challenge as considered by the Division Bench was on two grounds; firstly, that the State not having the legislative competence to enact the Goa Cess Act; and secondly, on the issue as to whether the Goa Cess Act would have a retrospective application. Such challenge was repelled by the Division Bench, by its judgment dated 26-9-2018, thereby upholding the constitutional validity of the Goa Cess Act as also the Rules, as also the notifications issued by the State Government were upheld, however, keeping open the other grounds which were raised in the companion petitions, being the subject matter of adjudication in the present proceedings. In such context, the relevant observations as made by the Division Bench are required to be noted, which read thus:-

8. 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. Given this request by the Counsel, the other grounds of challenge than the two argued before us in this petition, are not be construed as foreclosed by this decision.

4. Accordingly, the grounds as raised by the petitioners in the present petitions have fallen for consideration of this Court, as according to the petitioners, they were not subject matter of adjudication in the case of Sociedade De Fomento Industrial Pvt. Ltd. (supra).

5. Writ Petition No.244 of 2009 (Sesa Goa Limited & Anr. v. State of Goa) is argued as the lead matter. The issues of law as raised in the connected proceedings are not different. Learned Counsel for the parties have also addressed the Court on such common issues of law. Hence, all these petitions are being disposed of by this common judgment.

(C) Facts

6. For convenience the facts as pleaded in the lead writ petition can benoted hereunder:

The petitioner company is stated to be engaged in the business of mining iron ore, extraction, processing, transportation, and export of iron ore from the State of Goa. It also carries on mining activity in the State of Karnataka and Orissa. It is contended that the mineral ore as also coal brought by the petitioner from the State of Karnataka, is required to be transported through the State of Goa, since Goa has a major port namely the Mormugao Port, from where the mineral ore is exported. That ore is imported by the petitioner which is also required for the petitioners activities in Goa. It is the petitioners case that the cess under the Goa Cess Act is levied both on the mineral ore as also on coal, which is being transported by the petitioner through the State of Goa.

7. The petitioner further contends that the petitioner is the grantee or concessionaire or holder in respect of leases of iron ore mines, in the State of Goa and Karnataka. It inter alia transports iron ore from its mines and/or purchased by the petitioner, from other sources, in the State of Karnataka, into the State of Goa, wherein it is used in its pig iron plant at Amona- Goa, and/or is exported overseas from the Mormugao Port. It is on such commercial activity of the petitioner the cess being levied under the Goa Cess Act, the petitioner feels itself aggrieved, so as to file the present petition.

8. The relevant dates in regard to the Goa Cess Act and the Rules can be noted :-

(a) The Goa State Legislative Assembly passed the Goa Cess Act (Goa Rural Improvement and Welfare Cess Act, 2000), which received assent from the Governor of Goa on 28-9-2000. It was notified in the Goa Government Official Gazette on 16-10-2000.

(b) On 12-1-2006, in exercise of powers conferred under sections 4, 5, and 8 of the impugned Act, the Government of Goa framed Rules called the Goa Rural Improvement and Welfare Cess Rules 2006.

(c) In the exercise of powers conferred under section 1(3) of the said Act by a notification dated 23-1-2006, the Government of Goa notified the appointed date, for the Goa Cess Act to be brought in force, being 1-2-2006.