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This judgment shall also dispose of the connected batch of 112 writ petitions as mentioned in Annexure-A hereto since they raise, amongst others, important common questions of law, based on some what identical facts, relating to challenge to the validity of (i) The Punjab Infrastructure Development Ordinance 1998 (Punjab Ordinance No.7 of 1998)/The Punjab Infrastructure Development Act 1998 (Punjab Act No.1 of 1999) and The Punjab Infrastructure Development Cess (Collection) Rules, 1998 framed thereunder; (ii ) The Punjab Infrastructure (Development & Regulation) Act, 2002 (inclusive of Schedule I, II and III);

(i) that the levy of cess under The Punjab Infrastructure Development Ordinance/The Punjab Infrastructure Development Act 1998 (for short `the 1998 Act') and The Punjab Infrastructure Development Cess (Collection) Rules 1998 (for short `the Cess (Collection) Rules)' and fee under the Punjab Infrastructure (Development & Collection) Act 2002 (for short `the 2002 Act') is discriminatory being violative of Articles 14 & 286 (3) of the Constitution of India, as they were levied at the rate of 1% and 3% (extendable upto 6%) respectively only on the items mentioned in Schedule III to the Acts, and collected in the manner prescribed in the Acts which is not sustainable in law;

In reply to the writ petition, the State of Punjab has questioned the locus-standi of the petitioner-corporation to invoke the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India, which can be invoked only in exceptional and rare circumstances where private or public wrongs are inextricably mixed up and where it is required to prevent some public injury necessary for the vindication of justice. Thus, it is invoked only in cases with patent injustice. This is also mentioned in the reply that the Punjab Infrastructure Development Board (the PIDB), respondent No.2 has been authorised by the legislature to impose the impugned cess vide the 1998 Ordinance/Act (No.1 of 1999) for the development of infrastructure in Punjab and the Assessing Authority under the PGST Act, has been authorised to collect the cess through its own agency only in public interest. The cess amount after collection is transferred to the account of PIDB and the State Government is not entitled to retain the impost amount even though collected under the PGST Act. The Government of Punjab (Department of Finance) which issued the Cess (Collection) Rules vide the notification dated 11.11.1998 (Annexure P-3), and also a clarificatory notification dated 8.4.1999 (Annexure P-4) regarding levy of cess on sale and purchase, both, under Section 4 of the 1998 Act, has not been made a party. The respondent-State has been given the duty to collect the infrastructure cess on behalf of the PIDB also vide the Punjab Infrastructure Development (General) Rules (for short `the PID(G) Rules'), notified vide No.G.S.R.80/P.O.7/98/S.3/98 dated 10.11.1998. This is emphatically averred that the impugned levy of cess does not amount to the incidence of double taxation in the garb of cess which is being collected under the PGST Act in public interest under the sanction of the 1998 Act duly enacted by the State legislature within the pale of its competence. The cess in question is not a tax also for the fact that it is only confined to a local and specific area and is levied for a particular purpose. The word `tax' is to be construed in generic sense under Articles 265 and 266 which also includes cess. Further, the expression `tax' as used in Article 265 of the Constitution of India, also includes duties, cess or fee etc. As regards the sales tax, it is collected for the general welfare of State and not for a specific purpose and time. It discharges a common burden and its sole object is to raise general public revenue. Besides, the State legislature is competent to pass two different types of Acts to tax the same person and objects more than once. Under the 1998 Act, the cess was levied with a purpose to accelerate the development of infrastructure in Punjab, and it was not a new tax imposed under the PGST Act, simply, because the Authorities working under the PGST Act has been given powers to assess, re-assess, collect and enforce the payment of cess on all articles and goods specified in the schedule. The cess amount so collected is to be deposited in the Punjab Infrastructure Development Fund ( for short the PID Fund) within a week from the date of collection, and is not to be used as sales tax revenue. The levy of cess under the 1998 Act is, thus, not hit by Articles 254 and 286 of the Constitution of India or sections 14 & 15 of the CST Act, 1956 read with Section 5 (3) of the PGST Act. Besides, this has also been clarified that the rate of sales tax on wheat, paddy and other agricultural produces, except fruits, vegetables and pulses has not increased from the rider of 4% as this being a separate levy under a separate enactment cannot be plugged in the sales tax. Moreover, if the petitioners have been paying the market fee and other taxes on the goods in question, then they should not have raised any objection to the payment of cess under the 1998 Act also, and this would not amount to the incidence of double taxation. For the development and maintenance of infrastructure sectors in Punjab, roughly an amount of Rs.5000 crores per annum is required which cannot be met with the budgetary resources which are not adequate enough to fulfill the demand. Besides, the sales tax on declared goods is charged only @ 4% which is perfectly in consonance with the provisions of Articles 286 and 254 of the Constitution of India read with Sections 14 & 15 of the Central Sales Tax Act and Section 5 (3) of the PGST Act. The Finance Secretary, Government of Punjab, while notifying the Cess (Collection) Rules, and issuing the clarificatory notification dated 8.4.1999 has not entered into the realm of State Legislature inasmuch as the word `purchase' was inadvertently omitted in the 1998 Ordinance and the relevant Rules made thereunder. Hence, a clarification was needed to bring the word 'purchase' in the Rules so as to levy the cess on the first purchase of the agricultural produces in question namely wheat, paddy and rice etc., which is also the stage of imposition of tax under the PGST Act. This has also been clarified in the reply that wheat and paddy being the agricultural produces are exempted vide Entry No.39 of Schedule B of the CST Act, at the stage when it is sold by the farmers, but it is not exempted at the hands of purchasers. A tax is squarely covered by Entry No.54 of List II of the Seventh Schedule of Constitution. Further, Sales Tax on declared goods is being charged @ 4%, whereas, the cess is collected only @1%. Thus, the collection of cess under the impugned enactments, is in consonance with Articles 286 and 254 of the Constitution read with Sections 14 & 15 of the CST Act and Section 5 (3) of the PGST Act.

The sole purpose of enacting the 2002 Act is to accelerate the infrastructure development in the State through partnership of private sector and public sector. Punjab Infrastructure Development Board is the apex body for overall planning for development of infrastructure sectors and infrastructure projects. The Board acts as a model agency to coordinate all efforts of the State Government regarding the development of infrastructure sectors involving private participation and funding from sources other than those provided by the State Budget. There is no such attempt on the part of the State to impose a tax under the garb of fee. The levy of fee by the State of Punjab has been done in pursuance of notification No.6349 dated 11.7.2002 issued under Section 25 of the Act. Section 25 of the 2002 Act empowers the State Government to levy fee for the development of infrastructure in the State of Punjab at a rate not exceeding Rs.6 for every hundred rupees of the value of goods as the State Government may by notification direct. Thus, fee @ Re.1(now Rs.3) for every Rs.100/- is being charged on the sale and purchase of all agricultural produces (except fruits, vegetables and pulses) and @ Rs.1/- per liter on the sale and purchase of petrol and deasel.