PANAJI
Jindal South West (JSW) the industrial behemoth that has challenged the notice issued to it demanding the payment of Rs 168 crore in the form of ‘Rural Development Cess’ by the state government, has claimed before the court that the state government has no powers to levy cess on goods transported by rail since that is the domain of the Central government.
The Bombay High Court at Goa which had back in October dismissed the State government’s preliminary objections to the maintainability of the petition and held that the petition was maintainable before the Court, is now scheduled to hear the petition on Thursday (November 26).
In its petition, JSW has challenged the constitutional validity of the Goa Rural Improvement and Welfare Cess Act, 2000, and the Rules questioning the levy of cess on inter-State transportation of goods by rail from the Port in Goa to other States, such as Karnataka.
Appearing for JSW, Adv Mukul Rohatgi had argued that how the Goa authorities intend to apply the law to JSW, “it falls foul of the constitutional scheme as to distributing powers in the federal set up.”
Rohatgi submitted that since JSW imports the coal to the port at Goa and then transports exclusively by train to other parts of the country.
“Unless the transportation is through the inland roads of the State, this statute will have no application. Much depends on the interpretation of the provisions, which are generic as to the nature of transportation,” he said.
“If the Goa government interprets the term ‘transport’ in the Act to include the railways as well, then the Act becomes constitutionally susceptible. Therefore, even a show cause notice, according to the petitioners, could not be sustained because the authority that issues lacks the power,” he argued.
The Goa government had argued that since only a notice was issued, JSW could simply respond to the notice with their claims instead of directly approaching the court with a writ petition.
However, the court ruled that the petition was maintainable.
“Here, it is for the respondents to come up with the defence and establish that the statutory vires need not be gone into. And, then, that may enable this Court to comprehend the contentions and decide whether the vires should be gone into. Therefore, prima facie, we reckon that the petitioners’ plea before us calls into question the show-cause notice as void”that is, emanating from an authority exercising his powers under an enactment that is legislatively suspect. As a result, we hold that the petition is maintainable. The respondents may come up with their defence in the course of time,” the bench of Justice Dama Seshadri Naidu and M S Jawalkar said.
