Jharkhand High Court Quashes "Composition User Fee" as Unconstitutional
Levy on Mineral-Carrying Vehicles Violates Indian Tolls Act, 1851 and Constitution, Court Rules
In a significant verdict, the Jharkhand High Court has struck down the "Composition User Fee" levied on mechanical vehicles carrying minerals, deeming it unconstitutional. The Division Bench, comprising Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar, ruled that the imposition of this fee under the Jharkhand Highways Fee (Determination of Rates & Collection) Amendment Rules, 2021 and subsequent amendments, violates the Indian Tolls Act, 1851, as well as Articles 14 and 265 of the Indian Constitution.
The court found that the fee lacked the compensatory nature essential for a toll and failed to provide a quid pro quo, which is a fundamental requirement under the Act of 1851. Moreover, the classification of vehicles carrying minerals over nine tonnes was deemed arbitrary and without a reasonable nexus to the objectives intended, thus violating the principle of equality under Article 14.
The bench emphasized that the levy was imposed without legal authority, contravening Article 265. The judgment pointed out that the toll could not be used as a source of revenue for the state but should serve as compensation for the use of state roads and bridges. The court also highlighted the absence of a clear identification of roads where such a toll should apply, rendering the levy unjustifiable.
In response to the petitions filed by Triveni Engicons Private Limited and others, the High Court instructed the state to adjust any fees already paid by the petitioners against future liabilities. The ruling leaves open several other issues raised by the petitioners for future consideration.
This judgment reiterates the court's stance on maintaining the constitutional boundaries of state-imposed levies and ensures that any toll or fee must align with statutory and constitutional mandates.
Bottom Line:
The imposition of "Composition User Fee" under the Jharkhand Highways Fee (Determination of Rates & Collection) Amendment Rules, 2021 and subsequent amendments, for mechanical vehicles carrying minerals, is unconstitutional as it violates Section 2 of the Indian Tolls Act, 1851 and lacks the essential element of quid pro quo.
Statutory provision(s): Indian Tolls Act, 1851, Section 2; Constitution of India, Articles 14, 265; Jharkhand Highways Fee (Determination of Rates & Collection) Amendment Rules, 2021; Mines Act, 1954; Mines and Minerals (Development and Regulation) Act, 1957; Jharkhand Mineral (Prevention of Illegal Mining, Transportation and Storage) Rules, 2017.
