R.C.Lahoti, J. - (1.) [On behalf of himself and V.N. Khare, CJl, B.N. Agrawal and AR. Lakshmanan, JJ.)-
(2.) THIS batch of matters, some appeals by special leave under Article 136 of the Constitution and some writ petitions filed in this Court, rajse a few questions of constitutional significance centering around Entries 52, 54 and 97 in List 1 and Entries 23, 49, 50 and 66 in List 11 of the Seventh Schedule to the Constitution of India as also the extent and purport of the residuary power of legislation vested in the Union of India. Cesses on coal bearing land, levied in exercise of the power conferred by State Legislation, have been struck down by a Division Bench of the Calcutta High Court. In exercise of the same power conferred by State Legislation whereunder cesses were levied on coal bearing land, cesses have also been levied on tea plantation land which are the subject- matter of writ petitions filed in this Court. The Bengal Brickfield Owners' Association have also come up to this Court by filing a writ petition under Article 32 of the Constitution, laying challenge to the same cesses levied on the removal of brick earth. These three sets of matters arise from West Bengal. The High Court of Allahabad has upheld the constitutional validity of cess levied in the State of U.P. on minor minerals which decisions are the subjectmatter of civil appeals filed under Article 136 of the Constitution. For the sake of convenience, we would call these matters, respectively as (A) 'Coal Matters', (B) 'Tea Matters', (C) Brick Earth Matters', and (D) 'Minor Mineral Matters'. Inasmuch as the basic constitutional questions arising for decision in all these matters are the same, all the matters have 'been heard analogously. 2.We would first set out the facts in brief and so far as relevant for appreciating the issues arising for decision and thereafter deal with the same. (A) Coal Matters A Division Bench of the Calcutta High Court has, vide its judgment dated 25.11.92 reported as Kesoram Industries Ltd. (Textiles Division) Vs. Coal India Ltd., AIR 1993 Calcutta 78, struck down certain levies by way of cess on coal as unconstitutional for want of legislative competence in the State Legislature. Feeling aggrieved, the State of West Bengal has come up in appeal by special leave. 3.The levies which are the subject matter of challenge are as under : The Cess Act, 1980 "S. 5 All immovable property to be liable to a road cess and public works cess. From and after the commencement of this Act in any district or part of a district, all immovable property situate therein except as otherwise in (Section 2) provided, shall be liable to the payment of a road cess and a public works cess." "S. 6 Cesses how to be assessed. The road cess and the public works cess [shall be assessed- (a) in respect of lands on the annual value thereof, (b) in respect of all mines and quarries, on the annual dispatches therefrom, and, (c) in respect of tramways, railways and other immovable property, on the annual net profit thereof, ascertained respectively as in this Act prescribed] and the rates at which such cesses respectively shall be levied for each year shall be determined for such year in the manner in this Act prescribed: Provided that- (1) the rates of such road cess and public works cess shall not exceed six paise and twenty-five paise respectively on each rupee of such annual value, (2) the rates of each of such road cess and public works cess shall not exceed- (i) fifty paise on each tonne of coal, minerals or sand of such annual dispatches, and (ii) six paise on each rupee of such annual net profits, Explanation. For the purposes of this proviso, one tonne of coke shall be counted as one and a quarter tonne of coal." West Bengal Primary Education Act, 1973 "78, Education cess.-(1) All immovable properties on which road and public works cesses are assessed, [or all such properties which are liable to such assessment] according to the provisions of the Cess Act, 1880, shall be liable to the payment of education cess. (2) The rate of the education cess shall be determined by the State Government by notification and shall not exceed- (a) [in respect of lands, other than a tea estate] ten paise on each rupee of the annual value thereof; (aa) (b) in respect of coal mines [five per centum of the value of coal] on the dispatches therefrom; (c) in respect of quarries and mines other than coal mines, [one rupee on each tonne of materials or minerals other than coal on the annual dispatches therefrom] Explanation.-For the purpose of clause (b) the expression 'value of coal' shall mean- (i) in the case of dispatches of coal as a result of sale thereof, the prices charged by the owner of a coal mine for such coal, but excluding any sum separately charged as tax, cess, duty, fee or royalty for payment of such sum to Government to a local body, or any other sum as may be prescribed or (ii) in the case of dispatches other than those referred to in Item (i), the prices chargeable by the owner of a coal mine for such coal if they were dispatched as a result of sale thereof, but excluding any sum separately chargeable as tax, cess, duty, fee or - royalty for payment of such sum to Government or a local body or any other sum as may be prescribed: Provided that if more than one price is chargeable for the same variety of coal, the maximum price chargeable for that variety of coal shall be taken as the basis of valuation for the purpose of this item." West Bengal Rural Employment and Production Act. 1976. "S. 4. Rural employment cess.-(1) On and from the commencement of this Act, all immovable properties on which road and public work cesses (are assessed or liable to be assessed] according to the provisions of the Cess Act, 1880, shall be liable to the payment of rural employment cess; Provided that on raiyat who is exempted from paying revenue in respect of his holding under clause (a) of sub-sec. (1) of S. 23B of the West Bengal Land Reforms Act, 1955 shall be liable to pay rural employment cess. (2} The rural employment cess shall be levied annually (a) fin respect of lands, other than a tea estate,] at the rate of six paise on each rupee of development value thereof; (aa) (b) in respect of coal mines, at the rate of [thirty-five paise per centum] on each tonne of coal on the xxx dispatches therefrom; (c) in respect of mines other than coal mines and quarries, [at the rate of fifty paise on each tonne of materials other than coal on the annual dispatches therefrom] Explanation.-For the purpose of clause (b} the expression 'value of coal' shall mean (i) In the case of dispatches of coal as a result of sale thereof, the prices charged by the owner of a coal mine for such coal but excluding any sum separately charged as tax, cess, duty, fee or royalty for payment of such sum to Government or a local body, or any other sum as may be prescribed, or (ii) in the case of dispatches, other than those referred to in item (i), the prices chargeable by the owner of a coal mine for such coal if they were dispatched as a result of sale thereof, but excluding any sum separately chargeable as tax, cess, duty, fee or royalty for payment of such sum to Government or a local body, or any other sum as may be prescribed: Provided that if more than one price is chargeable for the same variety of coal, the maximum price chargeable for that variety of coal shall be taken as the basis of valuation for the purpose of this item."
(3.) ALL the three legislations above-referred to are State enactments. The provisions of the West Bengal Primary Education Act, 1973 and the West Bengal Rural Employment and Production Act, 1976, which levied cess were amended by the West Bengal Taxation Laws (Amendment) Act, 1992 with effect from 1-4- 1992. The text of the said Amendment Act is as follows: "West Bengal Act II of 1992 THE WEST BENGAL TAXATION LAWS (AMENDMENT) ACT, 1992 [Passed by the West Bengal Legislature] [Assent of the Governor was first published in the Calcitta Gazette, Extraordinary, of the 27th March, 1992.] An Act to amend the West Bengal Primary Education Act, 1973 and the West Bengal Rural Employment and Production Act, 1976. WHEREAS it is expedient to amend the West Bengal Primary Education Act, 1973 and the West Bengal Rural Employment and Production Act, 1976, for the purposes and in the manner hereinafter appearing: It is hereby enacted in the Forty-third Year of the Republic of India, by the Legislature of West Bengal, as follows:- 1, (1) This Act may be called the West Bengal Taxation Laws (Amendment) Act, 1992. (2) It shall come into force on the 1st day of April, 1992. (Section 2.) 2. In the West Bengal Primary Education Act, 1973,- (1) in section 78 for sub-section (2), the following sub-section shall be substituted: '(2) The education cess shall be levied annually- (a) In respect of land, except when a cess Is leviable and payable under clause (b) or clause (c) of sub-section (2A), at the rate of ten palse on each rupee of annual value thereof as assessed under the Cess Act, 1880; (b) in respect of a coal-bearing land, at the rate of five per centum of the annual value of the coal-bearing land as defined in clause (1) of Section 2 of the West Bengal Rural Employment and Production Act, 1976; (c) in respect of a mineral-bearing land (other than coal-bearing land) or quarry, at the rate of one rupee on each tonne of minerals (other than coal) or materials despatched within the meaning of clause (1b) of Section 2 of the West Bengal Rural Employment and Production Act, 1976, from such mineral bearing land or quarry; Provided that when in the coal-bearing land referred to in clause (b) there is no production of coal for more than two consecutive years, such land shall be liable for levy of cess in respect of any year immediately succeeding the said two consecutive years in accordance with clause (a): Provided further that where no despatch of minerals or materials is made during a period of more than two consecutive years from the mineral - bearing land or quarry as referred to in clause (c), such land or quarry shall be liable for levy of cess in respect of any year immediately succeeding the said two consecutive years in accordance with clause (a). Explanation.-For the purposes of this chapter, 'coal-bearing land' shall have the same meaning as in clause (la) of Section 2 of the West Bengal Rural Employment and Production Act, 1976,' (2) in section 78A,- (a) for clause (a), the following clause shall be substituted:- "(a) the education cess payable for a year under sub-section (1) of section 78 in respect of coal-bearing land referred to in clause (b) of sub-section (2) of that section shall be paid by the owner of such coal-bearing land in such manner, at such intervals and by such dates as may be prescribed;" ; (b) for clause (b), the following clause shall be substituted:- "(b) every owner of a coal-bearing land shall furnish a declaration relating to a year showing the amount of education cess payable by him under clause (a) in such form and by such date as may be prescribed and to such authority as may be notified by the State Government in this behalf in the Official Gazette (hereinafter referred to as the notified authority);" ; (c) in clause (c),- 0) for the words "coal mine", wherever they occur, the words "coalbearing land" shall be substituted; (ii) for the word "return", wherever it occurs, the word "declaration" shall be substituted; (iii) for the word "period", wherever it occurs, the word "year" shall be substituted; (d) for clause (d), the following clause shall be substituted:- "(d) the education cess under clause (b) of sub-section (2) of section 78 shall be assessed by the notified authority in the manner prescribed, and if the declaration under clause (b) is not accepted, the owner of the coalbearing land shall be given a reasonable opportunity of being heard before making such assessment;" ; (e) in clause (g), for the words "coal mine" in the two places where they occur, the words "coal-bearing land" shall be substituted; (f) for clause (ga), the following clause shall be substituted :- "(ga) where an owner of a coal-bearing land furnishes a declaration referred to in clause (b) in respect of any year by the prescribed date or thereafter, but fails to make full payment of education cess payable in respect of such period by such date, as may be prescribed under clause (a), he shall pay a simple interest at the rate of two per centum for each English calendar month of default in payment under clause (a) from the first day of such month next following the prescribed date up to the month preceding the month of full payment of such cess or up to the month prior to the month of assessment under clause (d) in respect of such period, whichever is earlier, upon so much of the amount of education cess payable by him according to clause (a) as remains unpaid at the end of each such month of default;" (g) for clause (go), the following clause shall be substituted:- "(gb) where an owner of a coal-bear- land fails to furnish a declaration referred to in clause (b) in respect of any year ; the prescribed date or thereafter before the assessment under clause (d) in respect of such year and, on such assessment, full amount of education cess payable for such year is found it to have been paid in the manner and by the date prescribed under clause (a), he shall pay a simple interest at the rate of two per centum for each English calendar month of default In payment under clause (a) from the first day of the month next following the prescribed date for such payment up to the month preceding the month of full payment of education cess under clause (a) or up to the month prior to the month of such assessment under clause (d), whichever is earlier, upon so much of the amount of education cess payable by him according to clause (a) as remains unpaid at the end of each such month of default: Provided that where the education cess payable under clause (a) is not paid in the manner prescribed under that clause by the owner of a coal- bearing land, the notified authority shall, while making the assessment under clause (d) in respect of a year, apportion on the basis of such assessment the education cess payable in accordance with clause (a);" ; (h) in clause (gc), for the words "coal mine", the words "coal-bearing land" shall be substituted; (i) in clause (ge), for the words "coal mine", the words "coal-bearing land" shall be substituted; (ii) for clause (gf), the following clause shall be substituted:- "(gf) interest under clause (ga) or clause (gb) shall be payable in respect of payment of education cess which falls due on any day after the 30th day of April, 1992, and interest under clause (gc) shall be payable in respect of assessment for which notices of demand of education cess under clause (d) are issued on or after the date of commencement of the West Bengal Taxation Laws (Amendment) Act, 1992: Provided that interest under clause (ga) or clause (gb) in respect of any period ended on or before the 31st day of March, 1992, or interest under clause (gc) in respect of assessment, for which notices of demand of education cess under clause (d) are issued before the date of commencement of the West Bengal Taxation Laws (Amendment) Act, 1992, shall continue to be payable in accordance with the provisions of this Act as they stood immediately before the coming into force of the aforesaid Act as if the aforesaid Act had not come into force;" ; (k) in clause (gh), for the words "coal mine", the words "coal-bearing land" shall be substituted; (1) in clause (gi), for the words "coal mine", the words "coal-bearing land" shall be substituted; (m) in clause (gj), for the words "coal mine", the words "coal-bearing land" shall be substituted; "3. In the West Bengal Rural Employment and Production Act, 1976,- (1) in Section 2- (a) for clause (1), the following clauses shall be substituted- (1) "annual value of coal-bearing land", in relation to a financial year, means one- half of the value of coal, produced from such coal-bearing land during the two years immediately preceding that financial year, the value of coal being that as could have been fetched by the entire production of coal during the said two immediately preceding years, had the owner of such coal-bearing land sold such coal at the price or prices excluding the amount of tax, cess, fee, duty, royalty, crushing charge, washing charge, transport charge or any other amount as may be prescribed, that prevailed on the date immediately preceding the first day of that financial year. Explanation.- Where different prices are prevailing on the date immediately preceding the first date of that financial year for different grades or qualities of coal, the value of coal of each grade or quality produced during the two years immediately preceding that financial year shall be determined accordingly; (1a) "coal-bearing land" means holding or holdings of land having one or more seams of coal comprising the area of a coal mine; (1b) 'despatched ', for a financial year, shall, in relation to a mineral-bearing land (other than coal-bearing land) or a quarry, mean one-half the quantity of minerals, or minerals, despatched during two years immediately preceding that financial year from such mineral-bearing land or quarry; (1c) 'development value' means a sum equivalent to five times the annual value of land as assessed under the Cess Act, 1880;" (b) after clause (3), the following clause shall be added and shall be deemed always to have been added :- '(4) 'year' means a financial year as defined in clause (15) of Section 3 of the Bengal General Clauses Act, 1899;"; (2) in section 4, for sub-section (2), the following sub-section shall be substituted;- "(2) The rural employment cess shall be levied annually- (a) In respect of land, except when a cess is leviable and payable under clause (b) or clause (c) or sub-section (2A), at the rate of six paise on each rupee of development value thereof; (b) in respect of a coal-bearing land, at the rate of thirty-five per centum of the annual value of coal-bearing land as defined in clause (1) of Section 2; (c) in respect of a mineral-bearing land (other than coal-bearing land) or quarry, at the rate of fifty paise on each tonne of minerals (other than coal) or materials despatched therefrom: (g) for clause (gb), the following clause shall be substituted :- "(gb) where an owner of a coal-bearing land fails to furnish a declaration referred to in clause (b) in respect of any year by the prescribed date or thereafter before the assessment under clause (d) in respect of such year and, on such assessment, full amount of rural employment cess payable for such year is found not to have been paid- in the manner and by the date prescribed under clause (a), he shall pay a simple Interest at the rate of two per centum for each English calendar month of default in payment under clause (a) from the first day of the month next following the prescribed date for such payment up to the month preceding the month of full payment of rural employment cess under clause (a) or up to the month prior to the month of such assessment under clause (d), whichever is earlier, upon so much of the amount of rural employment cess payable by him according to clause (a) as remains unpaid at the end of each such month of default: Provided that where the rural employment cess payable under clause (a) is not paid in the manner prescribed under that clause by the owner of a coal-bearing land, the notified authority shall, while - making the assessment under clause (d) in respect of a year, apportion on the basis of such assessment the rural employment cess payable in accordance with clause (a);"; (h) in clause (gc), for the words "coal mine", the words "coal-bearing land" shall be substituted; (i) in clause (ge), for the words "coal mine", the words "coal-bearing land" shall be substituted; (ii) for clause (gf), the following clause shall be substituted:- "(gf) interest under clause (ga) or clause (gb) shall be payable in respect of payment of rural employment cess which falls due on any day after the 30th day of April, 1992, and interest under clause (gc) shall be payable in respect of assessments for which notices of demand of rural employment cess under clause (d) are issued on or after the date of commencement of the West Bengal Taxation Laws (Amendment) Act, 1992: Provided that interest under clause (ga) or clause (gb) in respect of any period ended on or before the 31st day of March, 1992, or interest under clause (gc) in respect of assessments for which notices of demand of rural employment cess under clause (d) are issued before the date of commencement of the West Bengal Taxation Laws (Amendment) Act, 1992, shall continue to be payable in accordance with the provisions of this Act as they stood before the coming into force of the said Act as if the said Act had not come into force;" ; (k) in clause (gh), for the words "coal mine", the words "coal-bearing land" shall be substituted; (l) in clause (gi), for the words "coal mine", the words "coal-bearing land" shall be substituted; (m) in clause (gj), for the words "coal mine", the words "coal-bearing land" shall be substituted; By order of the Governor R. BHATTACHARYYA, Secy, to the Govt. of West Bengal." It is the constitutional validity of the amendment in the two legislations, given effect to from 1.4.92, which was successfully impugned in the High Court and is sought to be restored in these appeals.;