KH.NOBIN SINGH, J. -
(1.) Heard Shri H.S. Paonam, learned Senior Advocate appearing for the petitioners and Shri H. Debendra, learned Government Advocate for the respondents.
(2.) The above writ petitions have arisen out of a similar set of facts and therefore, the same are being disposed of by this common judgment and order. WP(C ) No. 24 of 2018
(3.) By the instant writ petition, the petitioners have prayed for issuing a writ of certiorari or any other appropriate writ to quash and set-aside the Notification dt.29.10.2016 issued by the Addl. Chief Secretary (For. and Envt.), Government of Manipur classifying trees and other tree species with rates of royalties to be imposed thereon including Kwamana, Panamana, Betel leaves (Leaf), Piper betle as reflected in serial No. 58 thereof.
3.2. Facts and circumstances as narrated in the writ petition, are that the petitioners are agencies/ running shops for selling Kwamana, Panamana, Betel leaves (Leaf), Piper betle at different places in the State of Manipur for the last more than 10(ten) years.
3.3. The product of Kwamana, Panamana Betel Leaves (Leaf), Piper betle (hereinafter referred to as "the betel leaves") is basically a commodity in the State of Manipur as it is considered to be an essential component in every ritual and traditional functions of Manipur including marriage ceremony, shradha ceremony and all kind of religious ceremonies and the betel leaves are imported/ brought from the neighboring states like West Bengal, Assam etc. where they are abundantly planted and grown. The product of betel leaves is said to be a horticulture product and a perishable item which was not included in the list of forest produce for the last many years in the State of Manipur. Very recently and only when the forest authority started levying of royalty, it came to the notice of the petitioners that the said items are found to be included as forest produce as reflected in the impugned Notification dated 29.10.2017. The betel leaves brought from outside the State as such, cannot be treated as forest produce as they are not available and grown in the forest of the State of Manipur but are planted as horticulture or agriculture items by the interested farmers. Having regard to its availability and uses in the State of Manipur, the transportation of betel leaves in large scale by way of importing from the neighboring States like West Bengal and Assam is the usual norm and practice for the last many years. The plantation of betel leaves as horticulture items is seen in the State of Manipur and in particular, in the District of Kakching where Shri Mayang-lambam Ajad Singh, Kakching Lotnung is growing betel leaves in an area of more than 4 hectres on his own lands including the ones at Noney and Jiribam which will amply establish that the betel leaf is not a forest produce in the State of Manipur.
3.4. In other parts of the country and in particular, the neighboring States of Manipur, the betel leaves are included as agriculture products and the marketing and dealing in betel leaves, say, the issuance of licence, is regulated by the law enacted by them. In West Bengal, the issuance of license is regulated by the West Bengal Agricultural Produce Marketing (Regulation) Act, 1972 as amended from time to time and the rules made thereunder and under the provisions of said Act, the betel leaves and betel nuts are included as agricultural items and perishable agricultural products.
3.5. In the State of Manipur, as on date there is no any Marketing Regulation Act enacted by the State Legislature either under the Agriculture Department or the Horticulture Department or the Forest Department to regulate the issuance of license with respect to the business in their respective products and items under their respective jurisdiction which has resulted in the rampant misuse in allowing business transaction of different agricultural forest products.
3.6. In terms of the Notification dated 28.06.2017 issued by the Government of India, Ministry of Finance, certain goods of intra-state supplies are exempted from the purview of Section 9 of the Central Goods and Service Tax Act, 2017, of which the betel leaf is shown at serial No. 93 under tariff item 14049040. Therefore, any kind of goods and services tax cannot be levied on betel leaves, as it is one of the goods exempted from the Value Added Tax (VAT) which can be seen from Scheduled A providing list of goods exempted from the VAT under Section 17 of the Act. In the said Schedule, the betel leaf is found at serial No. 4 and therefore, the imposition and levying of VAT on betel leaves is an illegal tax collection.
3.7. The Imposition of levy as transit pass fee and VAT on transportation of betel leaves from outside the State of Manipur by the officials of the Forest Department at forest gates in the State of Manipur and the starting of strict enforcement on collection of royalty has become a serious concern to the agencies and the dealers of betel leaves in the State of Manipur. The petitioners made a request for providing license/or permit for dealing in the items, if so required, subject to payment of fees prescribed as is done in other States like Assam, West Bengal etc. but the officials flatly refused to give any satisfactory reply stating that in terms of the conditions mentioned in the Notification dated 29.10.2016, the agencies/ dealers/ individuals transporting betel leaves are required to give royalty at the rate specified therein. Even though the Notification dated 29.10.2016 clearly provides that VAT will be exempted in respect of items specifically exempted under the relevant law, the forest officials who are collecting and levying royalty, go on collecting VAT on the Trucks transporting and importing betel leaves and as on date, a huge amount has already been collected by way of royalty, GST and VAT.
3.8. Being aggrieved by such erroneous inclusion of betel leaves as forest produce for which the royalty is livable, the Self Help Group, Betel Leaves Sell Vendor, an association formed by individual and agencies dealing in betel leaves in the State of Manipur through its president, submitted a representation dated 03.07.2017 to the Additional Chief Secretary (Forest and Environment), Government of Manipur for consideration of revocation/ cancellation of the inclusion of betel leaves at serial No.58 of the Notification dated 29.10.2016, wherein it has been categorically pointed out that betel leaf which is a perishable product and a basic commodity in the State of Manipur because of its essentiality and uses in every ritual and tradition/ function of Manipur being an agriculture product, shall be removed from the inclusion as livable forest produce as it has highly marginalized demand and uses of betel leaves which are imported from other State. It has also been pointed out that betel leaf as such is an agricultural item/ product in other part of the country and therefore, its inclusion as forest produce would be a mistake deserving its exclusion from the impugned Notification. However, as on date, no positive response has been received from the concerned authority.
3.9. Shri L. Decemhing who desired to know whether the Betel Leaf is a forest produce or not, approached the SPIO/ Additional Chief Secretary (Forest and Environment), Government of Manipur by way of an application dated 02.08.2017 under the RTI seeking information on 5 (five) queries and in respect of information sought for under query (a), (b) and (c), no information was supplied but in response of the query No. d, the Assistant Conservator of Forest, Manipur furnished the information relating to the collection of royalty on betel leaves with details thereof and the area where the royalty is not yet collected like the District of Thoubal. As per the information furnished by the concerned authorities, a sum of Rs. 11,80,270/- (Rupees eleven lakh eighty thousand two hundred seventy) only has been collected.
3.10. Levy of royalty is being done by the Forest Department without having any law to regulate as to how the transaction and transportation of the betel leaves be made a business item; a license/ permit for dealing in the item can be issued; its eligibility criteria etc. thereby resulting in the arbitrary exercise of power at the whims and caprice of the Forest Department. The inclusion of betel leaves for levying royalty needs to be considered until and unless a regulation is framed, in this regard, be it treating as forest produce, agriculture item or horticulture item. Betel leaf is not available in forest areas of the State of Manipur and only wild betel leaves growing in the forest areas, are not consumable and therefore, betel leaves transported/ imported from other State like West Bengal where it is specified as agricultural product, cannot be converted into a forest produce in the State of Manipur for the purpose of levying tax or royalty. The agencies/ dealers in the State of Manipur dealing in betel leaves having procured the said items from the dealers in originating point paying the tax which are included in the sale and purchase transaction, are subjected to double taxation by the imposition of royalty which is against the basic tax law and therefore, the imposition of royalty on betel leaves imported from outside the States like West Bengal, Assam etc., warrants immediate interference by this Court. The imposition and collection of VAT as clearly seen from the challans enclosed hereinabove by the officials of the Forest Department at the forest gates in the State of Manipur being illegal collection of tax in view of the Government of India's Notification dated 28.06.2017 with specifying the exempted goods from the purview of VAT, are liable to be refunded to the petitioners and other dealers. The Notification levying the royalty on the item of betel leaves and collection of VAT thereon have highly infringed upon the fundamental rights as enjoined under Article 14,19 (1) (g) and 21 of the Constitution of India and also the rights conferred by Article 301 of the Constitution of India and therefore, the impugned Notification in respect of betel leaves found at serial No. 58 is liable to be quashed and set aside. The failure on the part of the concerned Department to provide information in response to the RTI application in respect of query (a) (b) and (c) has apparently fortified that the Forest Department has not applied its mind in ascertaining about betel leaves as forest produce or not in the State of Manipur. ;