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PETITIONER: STATE OF TRIPURA & ORS.

       Vs.

RESPONDENT: SUDHIR RANJAN NATH

DATE OF JUDGMENT:       13/02/1997

BENCH: B.P. JEEVAN REDDY, SUJATA V. MANOHAR

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T      B.P. JEEVAN REDDY, J.      Leave granted. Heard the counsel for the parties.      The Gauhati  High Court  has declared  Rule  3  of  the Transit Rules  framed by  the Government  of  Tripura  under Section 41  and 42 of the Indian Forest Act, 1927 as illegal and ultravires the Constitution. The correctness of the said decision is challenged by the State of Tripura.      The Indian  Forest Act,  1927 [the  Act] was enacted to consolidate the  law relating  to forests,  the  transit  of forest-produce and  the duty  leviable on  timber and  other forest-produce. The  Act was  extended  to  the  then  Union Territory of  Tripura by  the Union  Territories [Laws] Act, 1950 [Act  30 of 1950]. It continues to be applicable to the State of  Tripura. The  Indian Forest  Act is  thus a  post- constitutional enactment,  so far  as Tripura  is concerned, vide Mithan  Lal v.  The State  of Delhi & Anr. [1959 S.C.R. 45] and  New Delhi  Municipal Committee  v. State  of Punjab etc.etc. [1997 (1) J.T. (S.C.) 40].      Chapter II of the Act deals with reserved forests while Chapter III  deals with  village forests.  Chapter IV  deals with protected  forests  and  while  Chapter  V  with  State government control  over forests  and lands  not  being  the property of  the government. Chapter VI provides for levy of duty  on   timber  and  other  forest-produce.  Chapter  VII provides for  control on  timber and other forest-produce in transit. Chapter  VIII deals with drift timber. Chapters IX, XI and  XIII contain  machinery provisions. A perusal of the provisions of  the Act  shows that  the Act  is designed  to protect and  increase  the  forest  wealth  and  its  proper utilisation for  the purposes  of the  State and the people. For the  purpose of the present case, it is not necessary to notice the  provisions of  the several  chapters of  the Act except Chapters  VI, VII  and XII.  Section 39 in Chapter VI confers upon  the Central  Government the power to levy duty on timber  and other  forest-produce. Section  39  reads  as follows:      "39. Power to impose duty on timber      and other  forest-produce--(1)  The      Central Government  may levy a duty

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    in such  manner, at such places and      at such  rates as it may declare by      notification   in    the   Official      Gazette  on  all  timber  or  other      forest-produce--      (a)  which   is  produced   in  the      territories  to   which  this   Act      extends, and  in respect  of  which      the Government has any right;      (b) which is brought from any place      outside the  territories  to  which      this Act extends.      (2) In  every case  in  which  such      duty is  directed to  be levied  as      valorem the  Central Government may      fix by  like notification the value      on  which   such  duty   shall   be      assessed.      (3) All  duties on  timber or other      forest-produce which,  at the  time      when this  Act comes  into force in      any territory,  are levied  therein      under the  authority of  the  State      Government, shall  be deemed  to be      and to  have been duly levied under      the provisions of this Act.      (4)  Notwithstanding   anything  in      this section,  the State Government      may,   until   provision   to   the      contrary  is  made  by  Parliament,      continue to  levy any duty which it      was  lawfully  levying  before  the      commencement of  the  Constitution,      under  this   section  as  then  in      force;      Provided that  nothing in this sub-      section authorises  the lev  of any      duty which  as  between  timber  or      other forest-produce  of the  State      and similar produce of the locality      outside the State, discriminates in      favour of  the former, or which, in      the case of timber or other forest-      produce of  localities outside  the      State, discriminates between timber      or  other   forest-produce  of  one      locality  and   similar  timber  or      other  forest-produce   of  another      locality."      Sub-section (1)  thus confers  the power  to levy  duty only upon  the Central  Government and  not upon  the  State governments. Sub-section (3), however, says that if any duty levied under the authority of the State government on timber or other  forest-produce is in force in any territory on the date of coming into force of the said Act, the same shall be deemed to be and to have been levied under the said section. Sub-section (4)  says that  until a provision is made to the contrary by  Parliament, the  State government may "continue to levy  any duty  which it  was lawfully levying before the commencement of the Constitution, under this section as then in force". These sub-sections are referred to for the reason that an  argument is built upon them by the appellant-State, which we shall refer to at a later stage.      Section 41 vests in the State government control of all rivers and  their banks as regards the floating of timber as

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well as  the control  of all timber and other forest-produce in transit  by land  or water.  It also  empowers the  State government to  make rules  "to regulate  the transit  of all timber and other forest-produce". Sub-section (2) elucidates several matters  in respect of which rules can be framed. It would be appropriate to set out Section 41 in its entirety:      "41.  Power   to  make   rules   to      regulate transit of forest produce.      -- (1)  The control  of all  rivers      and  their  banks  as  regards  the      floating of  timber, as well as the      control of  all  timber  and  other      forest-produce in  transit by  land      or water,  is vested  in the  State      Government, and  it may  make rules      to  regulate  the  transit  of  all      timber and other forest-produce.      (2)  In   particular  and   without      prejudice to  the generality of the      foregoing power such rules may--      (a) prescribe  the routes  by which      alone  timber   or  other   forest-      produce may  be imported,  exported      or moved  into, from  or within the      State;      (b) prohibit  the import  or export      or moving  of such  timber or other      produce  without  a  pass  from  an      officer duly  authorised  to  issue      the  same,  or  otherwise  than  in      accordance with  the conditions  of      such pass;      (c)   provide    for   the   issue,      production  and   return  of   such      passes and  for the payment of fees      therefor;      (d)  provide   for  the   stoppage,      reporting, examination  and marking      of timber  or  other forest-produce      in transit,  in  respect  of  which      there is reason to believe that any      money is  payable to the Government      on account of the price thereof, or      on  account   of  any   duty,  fee,      royalty or  charge due thereon, or,      to which  it is  desirable for  the      purposes of  this Act  to  affix  a      mark;      (e) provide  for the  establishment      and regulation  of depots  to which      such timber  or other produce shall      be taken  by those  in charge of it      for examination, or for the payment      of such  money, or  in  order  that      such marks  may be  affixed to  it,      and the conditions under which such      timber or  other produce  shall  be      brought to,  stored at  and removed      from such depots;      (f)  prohibit  the  closing  up  or      obstructing of the channel or banks      of any  river used  for the transit      of timber  or other forest-produce,      and   the    throwing   of   grass,      brushwood, branches  or leaves into

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    any such river or any act which may      cause such  river to  be closed  or      obstructed;      (g) provide  for the  prevention or      removal of  any obstruction  of the      channel or banks of any such river,      and for recovering the cost of such      prevention  or   removal  from  the      person  whose  acts  or  negligence      necessitated the same;      (h) prohibit  absolutely or subject      to  conditions,   within  specified      local limits,  the establishment of      sawpits, the  converting,  cutting,      burning, concealing  or  making  of      timber, the altering or effacing of      any  marks  on  the  same,  or  the      possession or  carrying of  marking      hammers or  other  implements  used      for making timber;      (i) regulate  the use  of  property      marks   for    timber,   and    the      registration   of    such    marks;      prescribe the  time for  which such      registration shall hold good; limit      the number  of such  marks that may      be registered  by any  one  person,      and provide  for the  levy of  fees      for such registration.      (3) The State Government may direct      that  any   rule  made  under  this      section  shall  not  apply  to  any      specified class  of timber or other      forest-produce or  to any specified      local area."      Chapter XII  confers an additional power upon the State government to  make rules.  Sections 76, 77 and 78 occurring therein read as follows:      "76.  Additional   powers  to  make      rules. --  The State Government may      make rules --      (a)  to  prescribe  and  limit  the      powers and  duties of  any  Forest-      officer under this Act;      (b) to  regulate the  rewards to be      paid to  officers and informers out      of  the   proceeds  of   fines  and      confiscation under this Act;      (c)    for     the    preservation,      reproduction and  disposal of trees      and timber belonging to Government,      but grown  on lands belonging to or      in  the   occupation   of   private      persons; and      (d) generally,  to  carry  out  the      provisions of this Act.      77. Penalties  for breach of rules.      -- Any person contravening any rule      under    this    Act,    for    the      contravention of  which no  special      penalty  is   provided,  shall   be      punishable with  imprisonment for a      term which may extend to one month,      or fine  which may  extend to  five      hundred rupees, or both.

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    78. Rules  when to  have  force  of      law. -- All rules made by the State      Government under  this Act shall be      published in  the Official Gazette,      and shall thereupon, so far as they      are consistent  with this Act, have      effect as if enacted therein."      A reading  of Sections 41 and 74 discloses that besides vesting total  control over  the forest-produce in the State government and  empowering it to regulate the transit of all timber or other forest-product, the State government is also empowered  to  make  rules  "generally,  to  carry  out  the provisions of  this Act".  Thus, any  rule made by the State government which  purports to  give effect  to  any  of  its provision would be within the four corners of the Act.      In exercise of the powers conferred upon it by the Act, the State  government has  framed the Transit Rules. Rule 3, with which alone we are concerned, reads thus:      3(1).   Any    person    importing,      exporting or  moving into,  from or      within,  or   who   has   imported,      exported  or  moved  into  from  or      within the  State  of  Tripura  any      forest product, shall present it to      the Forest Officer in Charge of the      place of  origin or  entry  of  the      forest produce,  or to  the  Forest      Officer  in   Charge  of  the  area      nearest to  the place  of origin or      entry of  the same through which it      is transported, for examination and      check, and shall pay the amount, if      any, due thereon & obtain a transit      pass in  Form C  of the Appendix to      these rules.      (2) No person shall remove or cause      to be  removed from  the State  for      the purpose  of trade  or otherwise      any  timber  and  firewood  to  any      other place  outside the  state and      no trading depot shall be set up or      established in  the  State  at  any      place  without   licence  for  such      purpose from  the Divisional forest      Officer  having   the  jurisdiction      over the  area subject  to approval      of Conservator  of Forests  of  the      circle.      (3) Every  application for grant of      licence under  the  aforesaid  rule      shall be  made  to  the  Divisional      Forest    Officer     having    the      jurisdiction over  the area  in the      Form appended  to this Rules and on      payment      of      non-refundable      application   fee    amounting   to      Rs.1,000/-.      (4)   Every   order   granting   or      refusing  a   licence  under  these      Rules shall  be in  writing and  in      case of  refusal, shall contain the      reasons therefor.  The licence  fee      of Rs.2,000/-  shall  be  paid  and      deposited       in       Government      Treasury/sub-Treasury  by   challan

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    and  the   receipted  copy  of  the      challan must accompany the licence.      (5) A licensee shall be required to      pay the  export duty  for export of      timber and firewood from this State      to other  States  which  shall  not      exceed 100%  of the market value of      such  timber/firewood  as  will  be      assessed by  the Divisional  forest      Officer.      (6) The  conditions of the licence,      the route  or routes  through which      the  timbers/firewoods  are  to  be      transported to  a place outside the      State and the period of validity of      the licence shall be such as may be      notified by the state Government in      the Official Gazette.      Provided further  that such  period      of  validity  shall  not  exceed  6      (six) months.      (7)  Every  licence  granted  under      this  Rules   may  be  renewed.  An      application for  renewal of licence      shall be  made in  form-E within 30      (thirty) days  before the expiry of      the licence.  the Divisional forest      Officer  having   the  jurisdiction      over the  area shall  on receipt of      application for renewal of licence,      make such  inquiry as  he may think      fit  and  within  a  period  of  60      (sixty)  days   from  the  date  of      receipt of such application, either      grant or refuse to grant renewal of      the licence;      Provided that no renewal of licence      shall   be   granted   unless   the      Divisional   forest    Officer   is      satisfied   about   the   location,      availability of  the raw materials,      financial capacity, past records in      business and relevant antecedent of      such person. Whether the Divisional      Forest  Officer  refuses  to  grant      such renewal  of licence,  he shall      record  the  reasons  therefor  and      such reasons  shall be communicated      to the  person in  writing. For the      purpose  of   inquiry  under   this      rules,   the    Divisional   Forest      officer may  enter into or upon any      land,  survey   and  demarcate  the      same,  make   a  map   thereof   or      authorises any Officer to do so and      also call  for such documents as he      deems  necessary  for  ascertaining      the merit of the application.      Provided    further     that     no      application for  renewal of licence      shall be rejected unless the holder      of such  licence has  been given an      opportunity of  presenting his case      and unless  the  Divisional  Forest      Officer  is   satisfied  that   the

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    application for  such  renewal  has      been   made    after   the   period      specified therefor or any statement      made  by  the  person  making  such      application for grant of renewal of      the  licence   was   incorrect   or      materially false or such person has      contravened any  of the  terms  and      conditions of  the licence  or  any      provision of  the Indian Forest Act      or the  Rules  made  thereunder  or      such person  does  not  fulfil  the      terms  and   conditions   of   such      licence.      (8)  The  quantity  of  timber  and      firewood which  will be permissible      for export  by  a  export  licensee      shall be determined on the basis of      availability  of   forest   produce      after catering  to the needs of the      local people of the State and those      of the  Forest trade licence holder      for  trading   in  forest  produces      within  the   State   meeting   the      requirement of  the people  of  the      State.      [Sub-rules (2) to (8) were added by      Notification dated May 7, 1990.]      Rule 3(1)  obligates any person importing, exporting or transporting any  forest-produce into,  from or  within, the State of  Tripura to  present the  same to  the  appropriate officer for  examination and  check  and  also  to  pay  the amount, if  any, due thereon. He is also obligated to obtain a transit  pass in Form-C prescribed by the Rules for any of the above  purposes. Sub-rule  (2) provides  that no  person shall remove  or transport  any  timber  and  firewood  from within the State to any place outside the State except under a licence  granted  by  the  appropriate  Divisional  Forest Officer. The sub-rule also prohibits setting up of any depot in the  State without such a licence. Sub-rule (3) says that an  application  for  licence  shall  be  submitted  in  the prescribed form and shall be accompanied by a non-refundable application fee  of Rs.1,000/-. Sub-rule (4) provides that a licence, if  granted, shall  be issued on payment of licence fee of  Rs.2,000/-. [These amounts are fixed irrespective of the value  of the  forest-produce  involved.]  Sub-rule  (5) provides that  on export of timber from the State of Tripura to other States, an export fee not exceeding hundred percent of the  market value  of the timber/firewood concerned would be leviable.  Sub-rule (6) empowers the government to notify the route  or routes along which the forest-produce shall be transported to a place outside the State. Sub-rule (7) deals with  renewal  of  licences,  Sub-rule  (8)  says  that  the quantity of  timber and  firewood to  be exported  from  the State shall  be determined  on the  basis of availability of forest-produce after  catering to  the needs  of  the  local people of  the State  and the  requirements of the people of the State.      The  High   Court  has   declared  that   the  levy  of application fee of Rupees one thousand and of licence fee of Rupees two  thousand amounts to levy of tax and is bad. This is on  the ground  that the  State has  not established  the service rendered  in lieu  of the  said fees. The High court has also  held that sub-rule 5), which levies export duty on export of  timber from  the State  is beyond the rule-making

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power conferred  upon the State government by Section 41. It has also  found fault  with sub-rule 98). The High Court has been of the further opinion that rule 3 violates Article 301 of the  Constitution and  since the proviso to clause (b) of Article 304  has not  been complied with, the rule is liable to be declared unconstitutional.      The correctness  of the  judgment is challenged in this appeal by Sri S.S. Javali, learned counsel appearing for the State of  Tripura. we  have also  heard Sri  Har Dev  Singh, learned  counsel   for  the  respondent  who  supported  the reasoning  and   conclusion  of   the  High   Court  besides submitting that  the power  to regulate conferred by section 41 of  the Act  does not  empower the  State  government  to prohibit the  export of forest-produce from within the State to a  place outside the State as provided by sub-rule (8) of rule 3.  Counsel submitted  that the  power to regulate does not include the power to prohibit.      We shall  first deal  with the validity of sub-rule (5) of rule 3 which empowers the State government to levy export duty extending  upto hundred  percent of the market value of timber/firewood concerned. We agree with the High Court that there is  nothing in  Section 41  which empowers  the  State government to  levy export  duty. The  power to levy duty is conferred only upon the Central Government by Section 39 and that power  is neither delegated to the State government nor is the State government empowered to make rules with respect to the  said levy.  Neither the  powers conferred  upon  the State government  by Section  41 nor  the power conferred by Section 76  comprehend the levy of export duty. The power to levy duty  is conferred only upon one named authority, viz., the Central  Government. it  must accordingly  be held  that sub-rule (5) has been rightly declared bad.      We next take up the validity of the levy of application fee and  licence fee  of rupees  one thousand and Rupees two thousand respectively.  In our  opinion, the  High Court was not right in holding that the said fee amounts to tax on the ground that  it has  not been  proved to  be compensatory in nature. In  our opinion the fee imposed by sub-rules (3) and (4) is a fee within the meaning of clause (c) of sub-section (2) of section 41. It is regulatory fee and not compensatory fee. The distinction between compensatory fee and regulatory fee is  well established by several decisions of this Court. Reference may  be made  to the  decision of the Constitution Bench in Corporation of Calcutta v. Liberty Cinema [1965 (2) S.C.R.477]. It  has been  held in the said decision that the expression "licence  fee" does not necessarily mean a fee in lieu of services and that in the case of regulatory fees, no quid pro quo need be established. The following observations may usefully be quoted;      This contention  is not really open      to the  respondent for  s.548  does      not use the word ‘fee’; it uses the      words ‘licence fee’ and those words      do not  necessarily mean  a fee  in      return for services. In fact in our      Constitution fee  for  licence  and      fee  for   services  rendered   are      contemplated as  different kinds of      levy. The former is not intended to      be a  fee  for  services  rendered.      This    is    apparent    from    a      consideration  of   Art.110(2)  and      Art.199(2)    where     both    the      expressions  are   used  indicating      thereby that they are not the same.

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    In Shannon  v.Lower Mainland  Dairy      Products Board,  1938 A.C.708: (AIR      1939 PC  36)  it  was  observed  at      pp.721-722 (of AC): (at pp.38-39 of      AIR):      ‘if  licences   are   granted,   it      appears to  be  no  objection  that      fees should  be  charged  in  order      either  to   defray  the  costs  of      administering the  local regulation      or to increase the general funds of      the   Province    or    for    both      purposes.....It  cannot,  as  their      Lordships think, be an objection to      a licence  plus a  fee that  it  is      directed both  to the regulation of      trade  and   to  the  provision  of      revenue.’      It would,  therefore, appear that a      provision for  the imposition  of a      licence fee  does  not  necessarily      lead to the conclusion that the fee      must be only for services rendered.      This decision  has been  followed in several decisions, including the  recent decisions  of this Court n Vam Organic Chemical Industries  v. Collector  of Central Excise, Bombay [1997 (1)  J.T. (S.C.)  641) and  Bihar Distillery & Anr. v. Union of  India [1997  (2) J.T.  (S.C>) 20].  The High Court was, therefore,  not right  in proceeding  on the assumption that every fee must necessarily satisfy the test of quid pro quo and  in declaring  the fees  levied by sub-rules (3) and (4) of  rule 3  as bad on that basis. Since we hold that the fees levied  by the  said sub-rules is regulatory in nature, the said levy must be held to be  valid and competent, being fully warranted by Section 41.      So far as sub-rule (20 is concerned, it merely provides for a  licence for removal of timber or firewood from within the State  to any  place outside  the  State  and  also  for setting up or establishing a trading depot within the State. This sub-rule  is equally within the four corners of Section 41. Indeed,  clause (d)  of Section  76 which  empowers that State government  to make  rules generally  to carry out the provisions of  this Act  also serves as an authority for the said sub-rule.      Objection  is   next  taken  to  sub-rule  (8).  It  is submitted that  the power  to regulate  conferred  upon  the State government by Section 41 does not take in the power to prohibit whereas  sub-rule (8) empowers the State government to prohibit  the export  of timber  and firewood  if such  a course is  necessary to  cater to  the needs  of  the  local people or  for meeting the requirements of the people of the State. This in turn raises the question, what is the meaning and ambit  of the  expression "regulate" in Section 41(1) of the Act?  [Section 41(1)  empowers the  State government "to regulate  the  transit  of  all  timber  and  other  forest- produce".] The  expression is  not defined either in the Act or in  the rules  made by  the State  of Tripura.  We  must, therefore, go  by its  normal meaning  having regard  to the context in  which, and  the purpose  to achieve  which,  the expression is  used. As held by this Court in Jiyajee Cotton Mills Ltd. & Anr. v. Madhya Pradesh Electricity Board & Anr. [1989 Suppl.  (2) S.C.C.52],  the expression "regulate" ‘has different shades  of meaning  and must  take its colour from the context in which it is used having regard to the purpose and object  of the  relevant provisions,  and  as  has  been

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repeatedly  observed,   the  court  while  interpreting  the expression must  necessarily keep  in view  the object to be achieved and  the mischief  sought to  be remedied" [at Page 79].  Having  regard  to  the  context  and  other  relevant circumstances, it  has been  held in  some  cases  that  the expression  "regulation"   does  not  include  "prohibition" whereas in certain other contexts, it has been understood as taking within  its fold  "prohibition" as  well. it has been held in K.Ramanathan v. State of Tamil Nadu & Anr. [1985 (2) S.C.C.116] that:      The word  ‘regulation’ cannot  have      any rigid  or inflexible meaning as      to exclude  ‘prohibition’. The word      ‘regulate’ is  difficult to  define      as having  any precise  meaning. it      is a word of broad import, having a      broad   meaning,    and   is   very      comprehensive in  scope.....It  has      often been  said that  the power to      regulate   does   not   necessarily      include the  power to prohibit, and      ordinarily the  word ‘regulate’  is      not  synonymous   with   the   word      ‘prohibit’.  This   is  true  in  a      general sense and in the sense that      mere regulation  is not the same as      absolute prohibition.  At the  same      time, the power to regulate carries      with it  full power  over the thing      subject  to   regulation   and   in      absence of  restrictive words,  the      power must  be regarded  as plenary      over the entire subject. it implies      the  power   to  rule,  direct  and      control, and  involves the adoption      of a  rule or  guiding principle to      be followed,  or the  making  of  a      rule with respect to the subject to      be regulated. The power to regulate      implies the  power to check and may      imply the  power to  prohibit under      certain circumstances, as where the      best or only efficacious regulation      consists of  suppression. It  would      therefore  appear   that  the  word      ‘regulation’   cannot    have   any      inflexible meaning  as  to  exclude      ‘prohibition’.  It   has  different      shades of meaning and must take its      colour from the context in which it      is  used   having  regard   to  the      purpose   and    object   of    the      legislation,  and  the  court  must      necessarily  keep   in   view   the      mischief  which   the   Legislation      seeks to remedy.      To the  same effect  is the  decision of  this Court in State of  Tamil nadu  v. M/s.  Hind stone  & Ors.  [1981 (2) S.C.C.205]. Dealing  with the  contention that Section 15 of the Mines  and minerals  [Regulation and  Development]  Act, 1957 authorises  the making of rules regulating the grant of mining leases  and that  the power does not take in power to prohibit the grant of leases, this court held:      We do  not think  that ‘regulation’      has that  rigidity  of  meaning  as

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    never  to  take  in  ‘prohibition’.      Much  depends  on  the  context  in      which the expression is used in the      Statute and the object sought to be      achieved   by    the   contemplated      regulation.  it   was  observed  by      Mathew, J. in G.K.Krishnan v. State      of Tamil nadu [1975 (1) S.C.C.375]:      ‘The word ‘regulation’ has no fixed      connotation.  Its  meaning  differs      according  to  the  nature  of  the      thing to  which it  is applied’. In      modern statutes  concerned as  they      are  with   economic   and   social      activities, ‘regulation’  must,  of      necessity,  receive   so  wide   an      interpretation  that   in   certain      situations,   it    must    exclude      competition to  the  public  sector      from the private sector. More so in      a welfare State. It was pointed out      by    the    Privy    Council    in      commonwealth of  Australia v.  Bank      of New  South Wales [1950 A.C.235 =      (1949) 2 ALL.E.R.755 (PC)] - and we      agree with  what was stated therein      -  that   the  problem  whether  an      enactment   was    regulatory    or      something   more   or   whether   a      restriction  was   direct  or  only      remote or only incidental involved,      not so  much  legal  as  political,      social  or  economic  consideration      and that  it could not be laid down      that in  no circumstances could the      exclusion of  competition so  as to      create  a  monopoly,  either  in  a      State or  commonwealth  agency,  be      justified. Each  case, it was said,      must be judged on its own facts and      in its  own  setting  of  time  and      circumstances and  it might be that      in   regard    to   some   economic      activities and  at  some  stage  of      social   development,   prohibition      with a  view to  State monopoly was      the only  practical and  reasonable      manner of  regulation. The  statute      with which  we are  concerned,  the      Mines and Minerals [Development and      Regulation] Act,  is aimed,  as  we      have already  said more  than once,      at the conservation and the prudent      and discriminating  exploitation of      minerals. Surely,  in the case of a      scarce    mineral,     to    permit      exploitation by  the State  or  its      agency and to prohibit exploitation      by private  agencies is  that  most      effective  method  of  conservation      and prudent  exploitation.  if  you      want to  conserve for  the  future,      you must  prohibit in  the present.      We   have   no   doubt   that   the      prohibiting of  leases  in  certain

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    cases is  part  of  the  regulation      contemplated by  Section 15  of the      Act.      We do  not think  that it  is necessary to multiply the decisions except   to point out that in a different context, the power  to regulate  is held  not to include the power to prohibit [see  State of Uttar Pradesh v. Hindustan Aluminium Corporation (1979 (3) S.C.C.229 at 243)].      Sri Har  Dev Singh, learned counsel for the respondent, however,  brought   to  our   notice  a   decision  of   the constitution Bench  of this  Court in  State of Mysore v. H. Sanjeeviah [1967  (2) S.C.R.361].  Section 37  of the Mysore Forest Act  is in  pari-materia with  Section 41(1)  of  the Indian Forest  Act. Similarly, clause (b) of sub-section (2) of Section  37 of  the Mysore  Act is  in pari-materia  with clause (b)  of sub-section  (2) of  Section 41 of the Indian Forest Act.  By virtue  of the  rules made  under the Mysore Forest Act,  the Government of Mysore totally prohibited the transport of  forest-produce between 10.00 P.M. and sunrise. It also  placed certain  restrictions on the movement of the forest-produce between  sunset and  10.00 P.M. as well. This court held  that the  power to regulate conferred by Section 37(1) read  with Section 37(2)(b) does not empower the State government to  prohibit the  movement/transport  of  forest- produce altogether,  observing: "prima  facie a  rule  which totally prohibits  the movement of forest-produce during the period  between   sunset  and   sunrise  is  prohibitory  or restrictive of the right to transport forest-produce. A rule regulating  transport  in  its  essence  permits  transport, subject to  certain conditions devised to promote transport; such a rule aims at making transport orderly so that it does not harm  or endanger  other  persons  following  a  similar vocation or the public and enables transport to function for the public  good". The said decision is, however, of no help to the  respondent inasmuch as Rule 3 framed by the State of Tripura is  not only  relatable to  Section 41  but also  to clause (d)  of Section  76. Clause  (d) of Section 76, which has  been   extracted  hereinbefore,   empowers  the   State government  to   make  rules  generally  to  carry  out  the provisions of  the Act,  which means  the carrying  out  the object and  purposes of  the Act. The object f the Act is to preserve and protect the forest wealth of the country and to regulate the  cutting, removal,  transport and possession of the forest-produce  in the  interest of the States and their people. It  is for  achieving the above purpose that the Act provides for  declaration of  reserve forests,  formation of village forests  and declaration of protected forests. It is for achieving  the very  purpose that  the Act vests, in the government, control  over forest  and lands  not  being  the property of  the government controls even the collection and movement of  drift and  stranded timber.  It is not a taxing enactment but an enactment designed to preserve, protect and promote the forest wealth in the interests of the nation. It must necessarily  take within its fold catering to the needs to the  people of  the State  and that  is what sub-rule (8) provides. In  our opinion, therefore, sub-rule (8) of Rule 3 is perfectly valid.      We shall  now consider  the attack  based upon  Article 301. In  our opinion,  the reason  for which Rule 3 has been held  to   be  in   contravention  of  Article  301  of  the Constitution are  unsustainable in  law. The impugned Rule 3 is made  by the  State as  the delegate of the Parliament to carry out  the purposes  of the Act. It is not a law made by the legislature  of the  State of  Tripura nor  is it a rule made by  the Government  of Tripura  in its  capacity as the

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Government of Tripura. This is the basic distinction between the present case and the decision in H. Sanjeeviah where the enactment concerned  was a law made by the State legislature and had,  therefore, to  comply with  clause (b)  of Article 304. We  have also  pointed out  hereinabove that the Indian Forest Act  is a post-constitutional Parliamentary enactment insofar as  Tripura is  concerned for the reason that it has been extended  to Tripura [which was then a Union Territory] by the  Union Territories  [Laws] Act, 1950. Sections 41 and 76 are, therefore, laws within the meaning of Article 302 of the Constitution  which empowers  the Parliament  to  impose such restrictions  on the  freedom of  trade,  commerce  and intercourse between one State and another or within any part of the  territory of India, as may be required in the public interest. If  Sections 41  and 76  are saved by Article 302, any rule  made  to  carry  out  the  purposes  of  the  said provisions or  to elucidate  the meaning  and purport of the said provisions must equally be protected by Article 302, as held by  this Court  in M/s.  Krishan Lal  Praveen Kumar  v. State of Rajasthan [1981 (4) S.C.C. 550].      It is  relevant to  notice that  Article 302  uses  the expression "restrictions".  In other  words, it empowers the Parliament to  impose such  restrictions on  the freedom  of trade, commerce and intercourse between one State or another or within  any part  of the  territory of  India, as  may be required in  the  public  interest.  Though  the  expression "restrictions" in  this article is not qualified by the word "reasonable", we  shall proceed  on the  assumption, for the purposes of  this case,  that such  restrictions ought to be reasonable. Even  so, it would be evident that the provision in Article  302 has a close parallel with clauses (2) to (6) of Article  19. Under  clauses (2)  to (6) of Article 19, it has been  held by  this  Court  that  the  power  to  impose reasonable restrictions  takes in the power to prohibit also in appropriate  situations [see  Narendra Kumar  v. Union of India (1960  (2) S.C.R. 361)]. It may also be mentioned that the prime example of the exercise of power under Article 302 is the  Essential Commodities  Act,  1955,  which  not  only empowers  the  making  of  the  rules  for  the  purpose  of regulating  the   production,  supply  and  distribution  of essential  commodities   but  also   for   prohibiting   the production, supply and distribution of essential commodities and trade  and commerce  therein. For  the above reasons, we are of  the opinion that Rule 3 of the Tripura Transit Rules cannot be  said to  be violative  of Article  301 nor  is it required to  comply with  the requirement  of the proviso to clause (b) of Article 304 of the Constitution.      The levy  of duty  is sought  to be  sustained  by  the learned counsel  for the  State of Tripura with reference to sub-section (3)  and/or sub-section (4) of Section 39. It is submitted that the Princely State of Tripura has imposed the said duty  and that  the same  is being  continued after the commencement  of   the  Constitution.  Article  305  of  the Constitution is  also invoked  in this behalf. We are unable to appreciate  the submission. No order or proceeding of the Princely State  of Tripura has been produced before the High Court or this Court levying the duty. We also do not know at what rate  and on  what basis,  if any,  the duty  was being levied. We  are also not sure whether the said plea can fall within the  four corners  of either  sub-section (3) or sub- section (4).  Sri Javali  requested for grant of sometime to enable the  State to  produce the  proceedings. We  are  not inclined to  accede to this plea either. Having not produced the proceedings/orders  either  before  the  High  Court  or before  this   Court  all  these  years,  the  State  cannot

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reasonably ask  for more  time to  produce the same when the matter has come up for final hearing.      For the  above reasons,  the appeal is allowed in part. Rule 3  of the  Tripura Transit  Rules, except  sub-rule (5) thereof, is  declared to  be perfectly  valid and effective. The judgment  of the  High Court  is set  aside to the above extent.      No costs.