“GALFAR ENGINEER AND CONTRACTING Pvt. Ltd. Vs.

STATE OF
UTTARAKHAND

This case was decided on 18 August,2015

The petitioners in this were involved in the business of mines and minerals

The case is related to “transit fee” being charged by the state government

In 2012 Uttarakhand framed it’s own rules known as “Uttarakhand transit of Timber and Forest
Produce rules and rule 5 of this provided for “transit fee”on each lorry of timber and other
forest produce and it was made to be Rs.50/- per tonne.

It is an admitted fact that prior to 2012 , the prevailing rules prescribed transit fee was Rs.5/- per
tonne. After 2012 it was increased to Rs.50/- per tonne by the state government. It is also an
admitted fact that this increase was being done after a period of thirty four years.

In the supreme court the advocates appearing for the petitioners have argued that although transit
fee can be imposed under rule 5 of the rules but transit fee should not be excessive and while
imposing the transit fee the state government must keep in mind that transit fee should be levied
in order to meet out real expenses for the purpose of regulating the transportation of forest
produce. He further contended that it is not appropriate for the state government to generate
revenue in the name of transit fee so collected. He further contends that if transit fee @rs.50 per
ton is allowed to be recovered, then the Forest department would earn approximately about Rs.
100crore per annum while the actual expenses incurred to transport forest produce cannot be
calculated more than rs 22 crore per annum, therefore, enhanced transit fee is excessive,
irrational and unjustified

Whereas on the other hand the counsel for the state of Uttarakhand argued that ; to maintain the
ecological balance the state government is required to protect the forest, forest produce and wild
life; since about 65% of the total area of state of Uttarakhand is covered by the forest therefore,
heavy expenses are being incurred by the state government to protect, maintain and develop the
forests. He also cited the case of Vam Organic chemicals Ltd. V. State of U.P. has held that in
the case of regulatory fee existence of quid pro quo is not necessary, however, fee imposed must
not be, in the circumstances of the case, excessive and thus The transit fee in presemt case being
regulatory, it is not necessary to establish the factum of rendering of service. Thus there is no
question of a levy of transit fee being invalidated on the ground that quid pro quo has not been
established as questioned by the petitioner’s councel.

And thus court held that since regulatory fee has no nexus with quid pro quo therefore, the state
government is not required to demonstrate every expenses justifying rate of regulatory fee i.e.
transit fee. And finally the cort held that enhanced transit fee @Rs.50 per ton, after 34 years,
from Rs. 5 per ton cannot be said to be excessive, arbitrary and unjustified. "
Consequently all the writ petitions were dismissed.

So final crux or we can say the important points in tbhis case are that where there is increase of
any type of fees levied by the state government and the fees is regulatory in nature that means
any and all fees and charges imposed by the regulatory authority in connection with the
development, manufacture, packaging, labeling, storage, import, export, marketing etc. of any
product in question then that fees doesn’t have to be linked with quid pro quo.

The state government concerned doesn’t necessarily have to render services equivalent to the
fees levied. However the fees should not be in excess and unjustified. In this case the learned
judge under section 57 took judicial notice of the fact that the increase in transit fee was made
after 34 years. And this transit fees includes not only the expense of transportation of forest
produce but also the salaries of the officers in charge of forest and various other expenditure
done by the state government to protect and take care of the forest as well as wild animals there.

Ans mam I also agrees with the learned judge’s view. Though the sudden increase in fee was
made by the state government but this fact cannot be disregarded that this increase was done
after 34 years. Hence the government is fully justified in increasing the fees through this big
margin as a prudent person cannot deny the fact that 34 years is a long time to increase the fees;
in these years the salaries of the officers would have been increased, the salaries of the staff
would have been increased and various other expenses can also be said to incearse.i agree with
the judgememt given in thus present case.