Andhra Pradesh High Court - Amravati
Sri Rahul Minerals vs State Of Andhra Pradesh, on 2 March, 2021
Author: D.Ramesh
Bench: D.Ramesh
THE HONOURABLE SRI JUSTICE D.RAMESH
WRIT PETITION Nos.15798, 18434,19532,19526,19529, 20599,
22642, 19327, 19509,22662 of 2020
COMMON ORDER:
All these batch of the writ petitions, involving common issue, filed challenging the respective demand notices issued by the 4th respondent, who is the Additional Director of Mines and Geology, Nellore District, hence, they are being heard together and disposed of by this Common Order.
W.P. No.15798 of 2020
2. This writ petition is filed assailing the order of the 4th respondent passed in Demand Notice No.1334/MDL/2020-25 dated 20.08.2020 and to quash the same.
W.P. No.19526 of 2020
3. This writ petition is filed assailing the order of the 4th respondent passed in Demand Notice No.1334/MDL/2020-84 dated 20.08.2020 and to quash the same.
W.P. No.18434 of 2020
4. This writ petition is filed assailing the order of the 4th respondent passed in Demand Notice No.1334/MDL/2020-62 dated 20.08.2020 and to quash the same.
W.P. No.19532 of 2020
5. This writ petition is filed assailing the order of the 4th respondent passed in Demand Notice No.1334/MDL/2020-67 dated 20.08.2020 and to quash the same.
2W.P. No.19529 of 2020
6. This writ petition is filed assailing the order of the 4th respondent passed in Demand Notice No.1334/MDL/2020-26 dated 20.08.2020 and to quash the same.
W.P. No.20599 of 2020
7. This writ petition is filed assailing the order of the 4th respondent passed in Demand Notice No.1334/MDL/2020-44 dated 18.08.2020 and to quash the same.
W.P. No.22642 of 2020
8. This writ petition is filed assailing the order of the 4th respondent passed in Demand Notice No.1334/MDL/2020-101 dated 20.08.2020 and to set aside the same.
W.P. No.19327 of 2020
9. This writ petition is filed assailing the order of the 4th respondent passed in Demand Notice No.1334/MDL/2020-8 dated 20.08.2020 and to set aside the same.
W.P. No.19509 of 2020
10. This writ petition is filed assailing the order of the 4th respondent passed in Demand Notice No.1334/MDL/2020-82 dated 20.08.2020 and to set aside the same.
W.P. No.22662 of 2020
11. This writ petition is filed assailing the order of the 4th respondent passed in Demand Notice No.1334/MDL/2020-46 dated 18.08.2020 and to set aside the same.
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12. Heard Sri O.Manohar Reddy and Ms. G.N.Uma Rani, learned counsel appearing for the petitioners, as well as learned Government Pleader for Mines and Geology appearing for the respondents.
13. As per the license granted by the Deputy Director of Mines and Geology, all the petitioners are doing business for processing, selling, trading of silica sand in their respective premises. Subsequent to the grant of license, the petitioners are doing business without contravening any of the conditions of license. Surprisingly, the 4th respondent herein has issued notices to the petitioners, on the following ground:
"In this connection, you are hereby requested to produce the documentary evidence for the above stocks available at the unit within 10days from the date of receipt of this notice, failing which it will be constructed that no evidence is available within the firm and further action will be initiated as per rules in force.
Please acknowledge receipt of the Notice."
14. Replying to the said notices, all the petitioners have submitted detailed explanations, stating that the silica sand was produced/purchased by the petitioner by paying royalty and obtaining royalty paid transit bills/pass and is being accounted against out MDL Account on online which is covered under royalty and to substance the stock of silica sand, the online screen shots was enclosed, as such the quantity does not require any further evidence of having paid royalty and the stock of silica sand available at MDL site is stated in their respective notices. But the royalty paid quantity is more than the estimated quantity stock of silica sand at licensed premises. The stock of raw silica sand is in irregular shaped heaps which cannot be assessed within a fixed formula and any assessment made will give approximate figure and which has to be rectified by allowing + or - 4 10% margin on the estimated quantity as per rules. Otherwise, the stock of silica sand may be re-estimated in the presence of the petitioners in scientific and systematic acceptable manner. By duly taking the measures in a proper manner then only further action may be taken as per rules.
15. Without considering the explanations submitted by the petitioners, basing on the G.O.Ms.No.35 issued by the Industries and Commerce (Mines) III Department, dated 01.07.2020, the authorities issued impugned orders stating that on inspection, the quantity in MDL portal, is differs the actual quantity available at licensed premises, hence, as per Rule26(3) (ii) of the Andhra Pradesh Mines and Mineral Concessional Rules [for short APMMC rules, 1966] amended in G.O.Ms.No.35, dated 01.07.2020, they have imposed penalty on the petitioners.
16. The contention of counsel appearing for the petitioners is that once the licensee has paid the mineral revenue for the stocks available at stockyard, in fact paid in excess of quantity, the 4th respondent cannot direct the petitioners to pay again the mineral revenue for the differential quantity with a penalty of five times, and the power to direct for payment of mineral revenue would arise only in respect of quantities for which, no mineral revenue is paid. Hence, the 4th respondent has no power to issue demand notice, for payment of royalty once again with the penalty.
17. In view of the above, learned counsel prayed that the demand notices issued by the 4th respondent, for payment of mineral revenue which was already paid for the stocks available in the licensed premises, are liable to set aside.
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18. Denying the allegations, the 4th respondent has filed counter, so also on behalf of the other respondents.
19. Apart from the regular duties, the 4th respondent along with other technical staff of his office has inspected all the Mineral Dealer Licensee Units for silica sand in respect of SPSR Nellore District. In this behalf, the Mineral Dealer License Area of the petitioners was inspected by the technical staff of the 4threspondent, on the respective dates i.e., 14.05.2020, 15.05.2020, 16.05.2020, 17.05.2020 and taken the measurements of the available silica sand stock in the presence of representatives of the unit holders. At that time, the representatives of the unit holders were unable to show the bills for the assessed quantity. In this connection, the 4th respondent has issued notices to the respective dealers and directed the dealers to submit the documentary evidence for the assessed quantity of the stock, within ten (10) days.
20. In this connection, all the petitioners have submitted their replies, stating that the differential quantity, is in meager permissible limit of 10%, in fact the raw silica sand is irregular shaped heaps, which cannot be assessed within in fixed formulae and it may reduce the loss by means of wind action. After considering the explanations submitted by the petitioners, the 4th respondent has issued demand notices on 18.08.2020 and 20.08.2020 to the petitioners respectively, for the difference of silica sand for a quantity dispatched, as per Sub Rule (3) (ii) of Rules 26 of APMMMC Rules,1966.
21. In fact, even as per the contention of the petitioners that they have paid mineral revenue for the quantity more than the quantity available at the unit premises. Thus, it is clear that the petitioners had paid mineral revenue for a quantity more than the estimated quantity 6 by the inspection authority. It clearly discloses that the petitioners have dispatched the difference quantity, from their Mineral Dealer License Unit without e-Transit passes issued by the Mines and Geology Department.
22. In fact as per the sub rule(1) of the Rule 34 no minor minerals shall be dispatched from any of the leased areas or area granted under a mineral concession without a valid e-transit permit issued by the Assistant Director of Mines and /Geology concerned, or any officer authorized in this behalf by the Director of Mines and Geology.
23. In view of the above said Rule, it is clear that the petitioners have dispatched the difference quantity of silica sand from their stockyards without e-transit passes, issued by the concerned authorities as per Rules.
24. Further submitted that as per Rule 3(b) of the Andhra Pradesh Mineral Dealers' Rules, 2017 [for short APMD Rules, 2017], no person shall be transported or cause to be transported any mineral either in raw form or in otherwise, without having valid e-Transit Pass. Further the license granted under Mineral Dealer License holder in Form B, through online is subject to the conditions, which reads as follows:-
(a) The Licensee shall maintain correct and intelligible accounts of the minerals procured either in raw and / or after carrying out beneficiation, separation, crushing, pulverization, calcinations and cutting and polishing activities as the case may be in e-return in Form D.
(b) The licensee shall obtain electronically generated e-Transit passes in Form C for dispatch of mineral, either in raw/and or subjected to beneficiation, separation, crushing, pulverization, calcinations and cutting and polishing activities, as the case may be, from Licensed area and submit e-returns for the production and sales of the minerals in Form F & G. 7
25. In view of the above, as the petitioners have violated the said conditions, penalty was imposed as per Rule 26(3) (ii) of AMMMC Rules. Hence, the impugned demand notices are in accordance with the APMMC Rules, 1966, thereby prayed to dismiss the writ petitions by vacating the interim orders granted.
26. For better appreciations of the facts, the Rules and Provisions, relied by both the counsel, are extracted below:
APMMC Rules 1966 Rule 26 :Penalty for unauthorized quarrying:-
(3)(ii) If no documentary proof is produced in token of having paid the mineral revenue due to the Government by any person who used or consumed or in possession of any mineral including the processed mineral, he shall notwithstanding anything contained in sub-rule (1) be liable to pay five times of the normal seigniorage fee as penalty in addition to normal seigniorage fee leviable under the rules."
Rule 34:-Dispatch permit:-
(1) No minor mineral shall be dispatched from any of the leased areas without a valid permit issued by the Assistant Director of Mines and Geology concerned or an officer authorized in this behalf by the Director of Mines and Geology:
Provided that any misuse of the transit forms without paying Seigniorage Fee and not accompanied by the transit forms used by the Assistant Director of Mines & Geology concerned or an officer authorized in this behalf by the Director of Mines & Geology and any other contravention, shall result in forfeiture of Security Deposit and levy of normal Seigniorage Fee along with "five times" penalty by the Assistant Director of Mines & Geology concerned or the Officer as authorized by the Director of Mines & Geology.
APMD Rules, 2017 Rule 3: Prohibitions:
(a) The persons / firms/companies, who deals with the minerals, either in raw form and / or subjected the minerals to beneficiation, 8 separation, crushing, pulverization, calcination and cutting & polishing activities shall register themselves as dealers, through online in Form-A, with the Department as per the procedure indicated in these Rules. Provided that no person / firm/company shall deal with the minerals unless and otherwise from a specified place of business. Provided further that no person / firm/company having a valid mining lease or quarry lease or permit shall be required to register as dealer, for the quantity covered by these leases/permits.
(b) No person shall transport or cause to be transported any mineral either in raw form and /or subject the minerals to beneficiation, separation, crushing, pulverization, calcinations and cutting and polishing activities ny any carrier from the place of raising or from the stock yard or from one place to another without having a valid e-Transit Pass".
Rule 6:Transit Pass:
(ii) The licensee shall dispatch the mineral either in raw form and/or subjected the minerals for beneficiation, separation, crushing, pulverization, calcination and cutting & polishing activities, as the case may be, by obtaining e-Transit Pass in Form-C duly entering all the particulars prescribed therein, from the licensed area.
(iii) e-Transit Passes will be generated without charging any fee except user charges for the quantities covered by payment of Royalty /Seigniorage fee under e-Transit Forms obtained by the dealer from the lease holder after considering the production losses suffered during beneficiation, separation, crushing, pulverization, calcination and cutting & polishing, as the case may be.
(iv) Any person who transports the mineral / minerals, either in raw form and / or subjected the minerals to beneficiation, separation, crushing, pulverization, calcination and cutting & polishing activities, as the case may be, from the licensed area shall carry the electronically generated e-Transit Pass issued by the Department along with the vehicle and shall produce the same on demand to the authorized officer during transit.' Rule 7: Conditions:
(a) The Licensee shall maintain correct and intelligible accounts of the minerals procured either in raw and / or after carrying out 9 beneficiation, separation, crushing, pulverization, calcination and cutting & polishing activities, as the case may be in e-returns in Form-D.
(d) The Licensee shall obtain electronically generated e-Transit Passes in Form-C for dispatch of mineral, either in raw and / or subjected to beneficiation, separation, crushing, pulverization, calcination and cutting & polishing activities, as the case may be, from Licensed area and submit e-returns for the production and sales of the minerals in Form-F & G. Rule 8: Penalties:
The Licensee who contravenes the provisions of these rules deals with storing, stocking and transportation of minerals, either in raw form and / or subjected the mineral/s to beneficiation, separation, crushing, pulverization, calcination and cutting & polishing activities, as the case may be, shall be penalized with a penalty as per the provisions laid down under rule 26(3)(ii) of Andhra Pradesh Minor Mineral Concession Rules, 1966 in case of Minor Minerals and in case of Major Minerals, action shall be taken in accordance with the provisions laid down under Section 21 of Mines and Minerals (Development & Regulation) Act, 1957 for the storage of quantity of minerals not covered with payment of Royalty/Seigniorage fee, as assessed by the Authorized Officer.
(iv) Any Person / Firm/ Company who buys or sells minerals either in raw form and / or subjected the mineral/s to beneficiation, separation, crushing, pulverization, calcination and cutting & polishing activities, as the case may be, except under and in accordance with the license granted under these rules shall be penalized with a penalty as per the provisions laid down under rule 26(3)(ii) of Andhra Pradesh Minor Mineral Concession Rules, 1966 in case of Minor Minerals and in case of Major Minerals action shall be taken in accordance with the provisions laid down under Section 21 of Mines and Minerals (Development & Regulation) Act, 1957 for the storage of quantity of minerals not covered with payment of Royalty/Seigniorage fee, as assessed by the Authorized Officer.
27. Learned counsel Sri O.Manohar Reddy appearing for the petitioners has contended that invocation of Rule 26(3) (ii) of APMMC Rules, 1966 is not at all applicable to the present facts of the cases. 10 Whereas Sub Rule 3 (ii) of Rule 26 of APMMC Rules, 1966 applies only if no documentary proof is produced in token of having paid the mineral revenue, due to the Government by any person, who uses or consumes or in possession of any mineral including the processed mineral. But in the instant case, all the petitioners have submitted screen shot of pay slips along with reply.
28. Reading of the above rule, it discloses that power is conferred on the 4th respondent to invoke the said Rule only in the case where a person is unable to produce the proof of having paid mineral revenue available with him. But in the present case, it is not in dispute that the petitioners have paid mineral revenue for a quantity more than the stock available at the premises of the petitioner, so that it clearly shows that the petitioner has paid mineral revenue, which is available in his premises. Hence, the Rule, which is relied by the respondents is not at all applicable to the petitioner.
29. Further it is submitted by the counsel for the petitioners that once the petitioners have paid the mineral revenue to the 4th respondent for the available quantity, the 4th respondent is not at all entitled to impose the penalty of five times for the stock, for which the mineral revenue has been paid. No such power is conferred on the 4th respondent. In fact, the 4th respondent issued the notices directing the petitioners to produce evidence with regard to the payment of mineral revenue to the stock available at the stock yard at the time of inspection. When the petitioners have submitted their explanations and the documents showing that the payment of mineral revenue to the available stock, 4th respondent instead of dropping the charges, has issued the present impugned orders by invoking the sub 11 rule 3 (ii) of Rule 26 of APMMC Rules, 1966, is baseless and the same is contrary to the Rules.
30. He further contended that though the petitioners submitted explanation and requested the authorities for re-estimation of quantities in a systematic and acceptable manner, the same was also not considered by the respondents while issuing the present impugned demand notices.
31. Learned counsel Sri O.Manohar Reddy contended that a conjoint reading of Rules 3 and 6 of AP Mines Dealers Rules 2017, makes it clear that the licensee, shall dispatch the mineral, either in raw form and /or furnished form, duly entering all the particulars prescribed therein from the area, and e-transit passes will be generated without any fee, except user charges, for the quantities covered by the payment of royalty. In view of the said rules, for transportation of stock from the leased area they have to take e-transit passes and said e-transit passes will be generated free of charges. Hence, there is no payment of charges, or penalties imposed for not taking e-transit passes. Further learned counsel has heavily relied on Rule 8(i) of APMD, Rules 2017.
32. Learned counsel strongly contended that Rule 8(i) (iv) of APMD, Rules 2017 are not applicable to the instant cases. Said rules are applicable only for storage of quantity of minerals not covered with payment of royalty /seniorage fee. If any quantities are stored/stocked either at the leased area or licensed premises, the authorities are entitled to invoke penal provisions i.e., Rule 26 (3) (ii) of APMMC Rules, 1966. Here the petitioners are only dealers. After payment of seniorage fee only, the authorities will grant e-transit forms then only it will be transferred to the petitioners licensed 12 premises/areas. Hence, whatever stock available at the licensed area of the petitioners is the royalty/seniorage fee paid stock. Hence, the said rule is not applicable to the petitioners.
33. Apart from that the actual stock is less than the MDL Portal of the petitioners. Whatever stock indicated in the portal, is the stock purchased by the dealers after obtaining e-passes, then only the same will reflect in the MDL Portal. In the instant cases, the allegation of the respondents is that the actual stock available is less than the quantity for which seniorage fee is paid. Hence, it cannot be said that there is a violation of Rule 8(i) (iv) of APMD, Rules 2017.
34. Learned counsel further contended that even the difference between the MDL portal of the petitioners and the actually stock is very marginal and less than 10%. Form 'L', paragraph 6, clearly says that the department has right to claim amounts by way of difference of seniorage fee based on the scrutiny of the sale documents and the check measurements, provided the excess quantity is not beyond 10% of the quantity mentioned in the documents. The excess quantity beyond 10% is liable for penalization under Rule 34(1). In view of the same, as per Form L, the difference in all these cases is less than 10%, admittedly it is less than 1 to 2%. Hence, the authorities cannot issue demand notice under section 34 (1) of the Rules.
35. Learned Counsel Ms.Uma Rani appearing for the Petitioners has adopted the arguments advanced by the learned counsel Sri O.Manohar Reddy. In addition to that she has also submitted that in the identical matters, the department has considered and dropped the proceedings against some of the persons, where the differential quantity, is less than 10%. Along with the writ petitions, she has also 13 filed some of the proceedings issued by the Deputy Director of Mines and Geology, and also the correspondence made by the Director of Miners and Geology to drop the proceedings, dated 07.05.2016, in case that the marginal difference of stock is less than 10%. In view of the same, in all these writ petitions the differential quantity is very marginal, hence, requested to set aside the impugned orders/demand notices, as per the para 6 of the Form L.
36. Refuting the above contentions of the counsel for the petitioners, learned Government Pleader has submitted that as per the conditions of the license, the licensee has to maintain correct and intelligible accounts of the minerals procured either in the raw form or finished may be in e-returns in Form-D, and further stated that the licensee shall obtain electronically generated e-Transit passes in Form-C, for dispatch of mineral either in raw and/or finished production in From F and G.
37. In the present cases, it is not in dispute that even though the petitioners have paid the royalties, it is an admitted fact that without obtaining e-Transit passes, the petitioners have transported the mineral from the licensed premises, hence, they have violated the conditions of the license, they are liable for penalization as per 26(3)
(ii) of APMMC Rules, 1966.
38. Considering the rival submissions, and on perusal of the provisions of the statue, it is made clear that the penalty imposed under Rule 8 of APMD Rules 2017 can be invoked as per 26(3)(ii) of APMMC Rules, 1966 only for the storage of quantities of minerals not covered the payment of royalty /senoriage fee, and also there is a clear embargo stipulated in para 6 of From L, once the differential 14 quantity is less than 10% no penalty is imposed as per Section 34(1) of the said Rules.
39. It is not in dispute that in the identical matters, the authorities have considered and dropped the proceedings, where the differential quantities is less than 10% as per From L, as above said.
40. Having heard and on consideration of the material on record, I am of the considered opinion that invoking of Rule 8 (i) (iv) of APMD Rules, 2017 are not applicable to the instant cases, accordingly all the impugned Demand Notices, vide Nos.1334/MDL/2020-25 dated 20.08.2020, 1334/MDL/2020-84 dated 20.08.2020, No.1334/MDL/2020-62 dated 20.08.2020, 1334/MDL/2020-67 dated 20.08.2020, 1334/MDL/2020-26 dated 20.08.2020, 1334/MDL/2020-44 dated 18.08.2020, 1334/MDL/2020-101 dated 20.08.2020, 1334/MDL/2020-8 dated 20.08.2020, 1334/MDL/2020-82 dated 20.08.2020, 1334/MDL/2020-46 dated 18.08.2020 are hereby set aside and all these writ petitions are disposed of accordingly. There shall be no order as to costs.
As a sequel thereto, the miscellaneous petitions, if any, pending in this Writ Petition shall stand closed.
___________________ JUSTICE D. RAMESH Date: 02.03.2021 Pnr 15 THE HONOURABLE SRI JUSTICED.RAMESH WRIT PETITION Nos.
15798, 18434,19532,19526,19529, 20599, 22642, 19327, 19509,22662 of 2020 Dated 02.03.2021 Pnr