PANJIM: The Bombay High Court at Goa has upheld the Goa Cess on Products and Substances Causing Pollution (Green Cess) Act, 2013, and dismissed pleas of five companies handling coal and other hazardous chemicals and petroleum products, against the law.
The petitioners – South Port Ltd, M/s BMM Ispat Limited, M/s Vedanta Limited, M/s Goa Carbon Limited and Zuari Agro Chemicals Limited in separate writ petitions had challenged the constitutional validity of impugned Green Cess Act implemented by the State government in 2013.
The petitioners had argued that the State government had no power to levy green cess when such powers vested with the Government of India.
Appearing on behalf of one of the petitioners, senior advocate Darius Khambata submitted that the field of “environment” fall within the residuary entry, i.e. Entry 97 of List I of the Seventh Schedule to the Constitution and that the State government had no legislative competence to enact the impugned Act, which was consequently ultra vires, unconstitutional, null and void.
Senior advocate S D Lotlikar submitted that the impugned Act was beyond the legislative competence of the State and the levy of tax was without the authority of the law.
Adv A A Agni challenged the 2014 Rules framed under the impugned Act as being violative of Articles 14 and 304 (a) of the Constitution of India, which prohibits discrimination between goods imported and the goods manufactured in a State.
Advocate General Devidas Pangam opposed the grant of any reliefs in the petitions by submitting that the impugned Act was within the legislative competence of the State, and even otherwise not ultra vires Articles 14 and 301 to 304 of the Constitution.
He submitted that the impugned Act and the levy thereunder were to promote steps to reduce carbon footprint, but the same did not relate to the regulation and control of pollution. He told the Court that the impugned Act provides for levies and collection of cess on the handling, consumption, utilisation, combustion, movement or transportation of products and substances which, upon its handling was causing pollution of the lithosphere, atmosphere, biosphere, hydrosphere and other environmental resources of the State of Goa, under the concept of “polluter pays principle”, and matters connected therewith or incidental thereto.
AG Pangam further said that the impugned fee was inter alia to augment the State revenue for incurring expenditure and taking measures to reduce the carbon footprint caused by the petitioners.
The Division Bench comprising Justice Mahesh Sonak and Justice B P Deshpande concluded that the levy imposed by the impugned Act is a fee and that the State had sufficient legislative competence to enact the impugned Act. The argument that the cess is a “tax” and not a “fee” cannot be accepted and there was sufficient material to hold that the cess was nothing but a fee relatable to Entry 66 List II Seventh Schedule.
The Court also declined to extend the interim relief granted in April 2016 stating that no assessment had started or any demand notices had been issued under the impugned Act.
