JUDGMENT R.K. Agrawal, J.
1. In this batch of writ petitions filed by various dealers of coal the petitioners have challenged the circular dated 26.9.2002 issued by the Commissioner of Trade Tax. U.P., Lucknow insofar as it relates to fixation of cash security at Rs. 150/- per metric ton for the issue of declaration form for import, i.e., Form No. 31 for the import of coal.
2. Since all the writ petitions raise similar question, they have been heard together and are being decided by a common judgment.
3. Civil Misc. Writ Petition No. 3024 of 2002 is being treated as the leading petition and, therefore, its facts are being given below.
4. According to the petitioner, M/s Lakhi Chand Ram Kumar is a proprietorship concern of Krishan Lal Khetan. It is registered under the provisions of the U.P. Trade Tax Act, 1948 (hereinafter referred to as "the Act") and the Central Sales Tax Act, 1956. It acts as a coal agent and imports coal from the State of Bihar and Madhya Pradesh on behalf of various persons and supply them on the purchase rate 'plus commission. The petitioner charges freight separately, which is paid to the transporters. According to the petitioner, for import of coal from outside the State of U.P., it requires form of declaration for import commonly known as Form 31. The declaration form is issued by the Assessing Authority, namely the Trade Tax Officer. Siddharth Nagar, respondent No. 3. it is required to file monthly return under Rule 41 of the U.P. Trade Tax Rules, 1948 (hereinafter referred to as "the Rules")'.disclosing its turnover and its liability to tax, which the petitioner Us filing regularly. Coal is a declared commodity under Section 14 of the Central Sales Tax Act, 1956 and in view of the restrictions; imposed under Section 15 of the said Act, trade tax at the rate of not more than 4% is leviable under the Act. The liability of tax in Uttar Pradesh has been notified @ 4% at the point of manufacture or importer.
5. According to the petitioner, it is purchasing coal @ Rs. 1000/- per metric ton and the amount of freight comes to Rs. 650/- per metric ton and after taking commission, the supply rate of coal exclusive of freight charges comes to Rs. 1,100- per metric ton and Rs. 1,750/- per metric ton inclusive of freight. The amount of trade tax exclusive of freight, comes to about Rs. 44/- per metric ton and the amount inclusive of freight comes to Rs. 70/- per metric ton. The Commissioner of Trade Tax, U.P., Lucknow, respondent No. 2, has issued a circular dated 26.9,2002 in purported exercise of his power under Section 8C(3-A) of the Act whereby the coal dealers are required to deposit cash security of Rs. 150/- per metric ton for issuance of declaration form for import, namely. Form 31. The said circular is under challenge insofar as it relates to deposit of cash security of Rs. 150/- per metric ton of coal on the ground that it is arbitrary and has been issued in colourable exercise of powers. It is also otherwise confiscatory as the amount of tax payable on such import is only Rs. 70/- per metric ton whereas the petitioner is required to deposit Rs 150/-, that is an extra amount Rs. 80/- per metric ton of coal resulting in blocking of the entire capital.
6. In the counter affidavit filed by Ishwar Dutt Prasad Yadav, Assistant Commissioner, Trade Tax, Siddharth Nagar. on behalf of the respondents, it has been stated that prior to the circular/order dated 26.9.2002 wherein the cash security has been enhanced to Rs. 150/- per metric ton, under the circular dated 8.3.2001 issued by the Commissioner of Trade Tax, a dealer was required to deposit cash security of Rs. 125/- per metric ton which all the petitioners, were voluntarily depositing without any protest. The increase of Rs. 25/- per metric ton towards cash security is in order to cover the escalation in the price of coal and to safeguard the interest of the Revenue.
7. We have heard Sri Kunwar Saxena, Sri N.C. Gupta and Sri Kshitiz Shailendra, learned counsel on behalf of the petitioners, and Sri, S.P. Kesarwani, learned Standing Counsel appearing for the respondents. ; Sri Saxena. learned counsel for the petitioner, who advanced the leading arguments, submitted that the circular dated 26.9.2002, issued by the Commissioner of Trade Tax, is arbitrary and has been issued in colourable exercise of powers conferred under Section 8C(3-A) of the Act. it is also beyond the scope of the aforesaid provisions. According to him the petitioner is required to deposit a sum of Rs. 150 per metric ton of coal to be imported as cash security for issuing the declaration form for import. The aforesaid amount is to cover the tax liability, if any. on the imported coal which is to be sold within the State of U.P. The maximum tax liability comes to about Rs. 70/- or Rs. 80/- per metric ton whereas the deposit, is to be made @ Rs. 150/- which is highly excessive and exorbitant. Relying upon a Division Bench decision of this Court in the case of Giriraj, Stone Crusher Pvt. Ltd., Agra v. Commissioner of Trade Tax, 2003 UPTC 241, he submitted that the cash security which the Commissioner can fix, cannot exceed the tax payable and should have a reasonable nexus. Further, it would be inappropriate and arbitrary to demand cash security only on the basis of highest grade or the quality of the commodity.
8. Sri N.C. Gupta while adopting the arguments' advanced by Sri Saxena. submitted that the circular dated 26.9.2002 issued by the Commissioner of Trade Tax cannot be treated as a general order and, therefore, there is no liability for deposit of cash security @ Rs. 150/- per metric ton for issue of declaration form for importing coal and insistence of the authority on the deposit of cash security of Rs. 156/- is wholly illegal and without jurisdiction.
9. Sri Kshitiz Shailendra, learned counsel submitted that the aforesaid circular is wholly arbitrary and results in a hostile discrimination inasmuch it has fixed the same amount as cash security whether the coal is imported by road transport or by railways, where-the amount of freight materially differs.
10. Sri S.P. Kesarwani, learned Standing Counsel, submitted that prior to the circular dated 26.9.2002 issued by the Commissioner of Trade Tax, all the petitioners were depositing cash security @ Rs. 125/- per metric ton under the circular/order dated 8.3.2001. The increase is only Rs. 25/- which comes to 20% and cannot be said to be arbitrary, unreasonable, excessive or exorbitantly high when the escalation in price and freight is taken into consideration. He submitted that in the year 1988, vide order dated 22.8.1988, the Commissioner had fixed Rs. 600/- as cash security to be deposited for issuance of each Form 31 for 10 metric ton, which comes to Rs. 60/- per metric ton and after 15 cars it has been increased by Rs. 90/- per metric ton. He submitted that under Section 8C(3-A) of the Act, the Commissioner has been empowered to issue general order for deposit of cash security for issuance of blank declaration form and, therefore, the order/circular dated 26.9.2002 cannot be said to be arbitrary and without jurisdiction. According to him, no prescribed form for issuing an order has been given under the Act or the Rules framed thereunder and. therefore, the general order dated 26.9.2002, even if it is termed as circular, cannot be questioned, So far as the question of arbitrary classification is concerned, he submitted that there is not much difference between the amount of freight charged by the Railways and the private truck operators/transporter and, therefore, it does not result in any hostile discrimination. The decision relied upon by learned counsel for the petitioner, namely, Giriraj Stone Crusher Pvt. Ltd., is sought to be distinguished on the ground that it has not considered the earlier Division Bench's decision of this Court and further it turned out on the peculiar (acts of that case. He, thus, submitted that no benefit can be taken by the petitioner from the aforesaid decision. According to him. Sub-section (3-A) of Section 8C of the Act starts with non obstante clause and therefore, it has an overriding effect. He further submitted that taking into consideration the increase in the price of diesel oil as well as loading and unloading charges as also me total value of the coal as per information given by the Deputy Commissioner, S.I.B., Trade Tax, Varanasi Zone, Varanasi, vide letter dated 28.8.2002, regarding the rate of coal obtained from Bharat Coking Coal Ltd., Dhanbad which specifies the rate of coal between Rs. 2,300/- to Rs. 2,375/- per metric ton in respect of steam coal slack coal and other coal where the content of ash is less than 15% and where the content of ash is, between 15% to 18%, the rate of coal being Rs. 1,900/- to Rs. 2,050 the cash security was worked out at Rs. 150/- per metric ton treating the cost of coal at Rs. 3,735/- per metric ton inclusive of profit of 10%, estimated transport | and freight charges, loading, unloading, etc. In support of his aforesaid submissions, he has relied upon the following decisions;-
1. West Coal Handing Agent and Ors. v. Commissioner of Sales Tax, 1989 UPTC 1402;
2. Vijeta Coal Traders, Varanasi and Anr. v. State of U.P. and Ors., 1990 UPTC 330;
3. Saurabh and Brothers, Siddharthnagar v. State of U.P. and Ors., 1993 UPTC 833;
4. Shyam Coal Suppliers, Varanasi v. State of U.P. and Ors., 1994 UPTC 917;
5. Maheshwari Construction, Kanpur v. State of U.P. and Ors., 1995 UPTC 195; ;
6. Raj Coal Agency v. State of U.P. and Ors., 1998 (35) ATJ 497;
7. Jai Bhawani Coke Industry (Pvt.) Ltd. v. Commissioner of Trade Tax, U.P. and Ors., 1998 (35) ATJ 513; and
8. Iridium India Telecom Ltd. v. Motorola Inc., JT 2005(1) SC 50.
11. Having given our anxious consideration to the various pleas raised by learned counsel for the parties we find that under Section 8C of the Act security in the interest of the Revenue can be asked for However, under sub-section (3-A) of Section 8C of the Act which starts with a non obstante clause, the Commissioner has been empowered to ask for deposit of cash security for issuing any of the form prescribed under the Act. The only requirement is that the goods should be notified by the Government, the demand of cash security should be directed by a general order in writing and the amount should be specified. For ready reference, the provision of sub-Section (3-A) of Section SC of the Ad. is reproduced below:-
"(3-A) Not with standing anything contained in sub-section (2) or sub-section (3), the Commissioner may, in respect of any goods notified by the Government in this behalf, by a general order in writing, direct that a cash security, of such amount as may be specified in such order shall be required to be furnished by a dealer or person requiring any of the forms prescribed under this Act."
12. From a reading of the aforesaid provision, it is absolutely clear that this sub-section operates where the Commissioner has issued a general order in writing directing for deposit of cash security for issuance of any declaration form prescribed under the Act. The declaration form for import is one such form prescribed under Rule 83(4)(a) of the Rules. It is a statutory declaration form. The order/circular dated 26,9.2002 prescribing cash security of Rs. 150/- per metric ton for issuance of declaration form for import of coal is, thus, referable to sub-section (3-A) of Section 8C of the Act as it is not in dispute that coal is one of the goods notified by the State Government.
13. In the case of West Coal Handling Agent (supra), this |Court has declined to interfere with the exercise to be undertaken by the Court on the issue if the amount of security determined by the Commissioner is arbitrary as it pertains to the domain of the authority entrusted with such responsibility who are expected to work it out °n expert's advice. The only power of the Court is to examine if while exercising power the authority did not adhere to the norms and acted in the manner which renders the entire exercise arbitrary. It had taken note of the fact that there is variation in the price in different; types of coal and while determining the security, the Commissioner could not have been guided by the price of any particular type of coal and if instead of taking lowest price or working out average price, the security was determined on the price of the best quality of coal, it, cannot be characterised as arbitrary and even assuming that in some cases it may work out at lesser figure as has been found by some authority in appeal or revision, it would not render the determination invalid or arbitrary as the surplus is liable to be refunded. The Court had upheld the fixation of cash security of Rs. 600/- for issuance of each declaration Form 31 in the year 1988 to be deposited by the coal dealers. While upholding the circular dated 22.8.1988 issued by the Commissioner of Sales Tax fixing Rs. 600/- for issuance of each Form 31. has given certain directions which are as follows:-
1. The Assessing Authority shall refund surplus deposited on account of deposit of security, within six weeks from the date the assessment order is passed. In case of default on part of the department, the dealer shall be entitled to interest of 18% P.A. from the date of the assessment orders.
2. In view of amendment in Motor Vehicles Act fixing ; maximum carrying capacity of a truck the Commissioner may redetermine security to be demanded from July, 1989.
3. Till the determination the dealers shall be liable to deposit Rs. 400/- in future for each Form XXXI. And furnish security other than cash or bank guarantee for the balance, subject to the determination! of security, by the Commissioner, afresh within six weeks from today.
4. For the period prior to enforcement of Motor Vehicles Act the dealers shall deposit balance of Rs. 600/- if it has not already been deposited within one month unless assessment orders have already been passed and the tax determined is less than Rs. 600/-."
14. The aforesaid decision has been followed subsequently by this Court in the case of Vijeta Coal Traders (supra).
15. In the case of Saurabh and Brothers (supra) this Court has upheld the validity of sub-section (3-A) of Section 8C of the Act. It has held as follows:
"3. We do not think merely demanding cash security under sub-section (3-A) of Section 8-C makes the provision ultra vires. Security demanded could be in any shape. Security means securing now for some happenings in future Which if not recoverable could be recovered out of security taken earlier. This security could be in any shape, may be even in the form of cash. Thus, if legislature provided this cash security in certain situation under sub-section (3-A) could not be said to be ultra vires. Secondly, such security remains blocked up for several years leading the provisions as unreasonable is also misconceived. No provision of an enactment would be ultra vires only on account of any hardship to a particular dealer. Further under sub-section (8), on an application by a dealer or the person concerned, the authority could order the return of the surety bond or refund of any amount or part there of deposited as security if it is not required for the purposes of this Act. Apart from this even if an adverse order is passed both first and second appeal lies against that order. Thus, we do not find any merit in this contention also."
16. It has further held that -
"5. The contention is that the Commissioner can only issue order pertaining to a dealer 'who is evading tax not to all dealers generally. This contention is also misconceived. The preceding word of the same Section 8-C(3-A) qualifies two pre-conditions, first that the Commissioner of Sales Tax will issue the order in respect of a notified goods and secondly, it should be a general order in writing for a specified cash security. This cash security is spoken to be furnished by a dealer. In fact, the general order under the aforesaid sub-section speaks for itself for issue of general order pertaining to goods which the Commissioner feels on the basis of material before him and being satisfied to issue circular. A dealer referred therein only pertains to furnishing such security, which he has to pay as per the order of the Commissioner in this regard. We thus hold, this contention also is not sustainable."
17. In the case of Shyam Coal Suppliers (supra) this Court has upheld the validity of the circular dated 31.8.1989 issued by the; Commissioner of Trade Tax under Section 8C(3-A) of the Act. While holding so, it has followed its earlier decision in the case of Surya Coal Company and Ors. v. Commissioner, Sales Tax, and Ors., in Civil Misc. Writ Petition Nos. 844 and 868 of 1989, decided on 4.8.1989.
18. In the case of Maheshwari Construction (supra) this Court has upheld the validity of the circular dated 27.3.1991 issued by the Commissioner of Sales Tax under Section 8C(3-A)of the Act wherein enhancement of the amount of security for import of ballast and grit has been followed for explicable reason, that is inflationary tendency. If has held as follows:-
"26. What is the value of the goods carried by each truck, is a question of fact. Similarly, what is the freight paid by the petitioner per truck, is also a question of fact. The respondents have denied the allegation that the value of the one track load including freight charges, never exceeds Rs. 1,000/-. This Court has no material to judge this question in writ jurisdiction. Even otherwise, it appears ludicrous to say that simply, because in the past the value of the goods including freight charges was less than Rs. l000/- per truck, this will not increase even with the passage of time although the inflation has increased manifold. This is a fact of which a judicial notice can be taken.
27. The petitioner does not dispute that under Section 28-A(1) of the U.P, Sales Tax Act, Sales Tax Commissioner has power to fix the amount of security to be charged at the stage of issuance of Form 31. The petitioner and others willingly paid the amount when this amount of security sought to be recovered was Rs. 90 per truck. If this is the position, then the order will not become ultra vires simply because the amount of security has been enhanced for : explicable reasons and those reasons are perfectly valid1 with the passage of time i.e. inflationary tendency is visible in the market, the price of the goods and also freight rates have gone up. Therefore after taking these two factors into consideration, the Circular dated 27.3.91 (Annexure - 4 to the petition) was issued. So, it cannot be said that there is no nexus between the object to be achieved and the provision enhancing the amount of cash security. So. even testing it on the principles of delegated legislation, this Circular cannot be adjudged to be void."
19. In the case of Raj Coal Agency (supra) this Court has held the validity of the circulars dated 21.4,1986, 24.9.1992. 13,4.1993. 30.11.1994 and 28.8.1995 issued by the Commissioner of Sales Tax requiring deposit of the security amount at the time of issuance of declaration Form 31 or at the check post, to be inoperative and ineffective in those cases where in the application Under Section 4-A of the Act the eligibility certificates are issued to the new industrial unit. Similar view has been taken by this Court in the case of Jai Bhawani Coke Industry (Pvt.) Ltd. (supra) wherein it has held that the demand of bank guarantee or security to prevent misuse in each case is not proper and justifiable. Accordingly, it had directed the Commissioner of Trade Tax to reconsider the conditions imposed in the circular dated 23.5,1997 issued under Section 8C(3-A) of the Act requiring the holder of eligibility certificate under Section 4-A of the Act for furnishing bank guarantee @ Rs. 100/- per metric ton on the average three months import of coal.
20. In the case of Giriraj Stone Crusher Pvt Ltd. (supra) which is the sheet anchor of the case set up by the petitioners, this court has held that although the Commissioner has power under Section 8C(3-A) of the Act to direct that cash security should be given for issuing Form 31, yet the Commissioner cannot fix the cash security at an arbitrary amount and it must have reasonable nexus, to the tax which must be payable on sale. Taking note of the words mentioned in Section 8C(3) of the Act that the amount of such security or additional security shall also, in no case, exceed the tax payable in accordance with law estimated by the Assessing Authority, the Court has held that even though it is not expressly mentioned in sub-section (3-A) the cash security which the Commissioner can fix, should not exceed the tax payable. This (Joint had directed for excluding the amount of freight, if separately charged, while fixing cash security. It has held as follows:-
"21. In our opinion the appropriate course of action therefore, would be for the Commissioner to issue circulars under Section 8C(3-A) of the U.P. Trade Tax Act on rational and reasonable principles For example, the Commissioner can in his circular grade the various varieties of stone ballast which are known in the market in various grades e.g. Grade - I for the best quality. Grade -II for the next best, Grade - II: for the next. etc. according to the price of these various grades in the market, and the cash security for Form 31 should be demanded accordingly. It. is inappropriate and arbitrary to demand cash security ,only on the basis of the highest grade or quality of stone ballast, as has been done in the present case.
22. We make it clear that we are not directing the Commissioner to issue his circular in a particular manner. This Court is not an expert in such matters and hence such matters should be left to the Commissioner to decide after consulting experts. The Commissioner while issuing the circular under Section 8C(3-A) can adopt any reasonable and rational method so that the cash security is demanded of an amount which is reasonable having nexus to the amount of tax which would be payable. In this way the interest of the State and that of the dealers would be balanced."
21. In the case of Indium India Telecom Ltd. (supra), the Apex Court, in the context of non obstante clause, has observed as follows:-
"33. After noticing the observation made in Aswini Kumar Ghosh (supra) and Dominion of India v. Shrinbai A. Irani (1955 (1) SCR 206). this Court in Chundavarkar Sita Katna Rao v. Ashalata S. Gaurum (JT 1986 SC 619) observed thus, in the contest of construction of a non obstante clause:
"67. a clause beginning with the expression "notwithstanding anything contained in the Act or in some particular provision in the Act or in some particular Act or in any law for the time being in force, or in any contract" is more often than not appended to a section in the beginning with a view to give the enacting part of the section in case of conflict an overriding effect over the provision of the Act or the contract mentioned in the non obstante clause. It is equivalent to saying that in spite of the provision of the Act or any other Act mentioned in the non obstante clause or any contract or document mentioned in the enactment following it will have its full operation or that the provisions embraced in the non obstante clause would not be an impediment for an operation of the enactment. See in this connection, the observations of this Court in South India Corporation (P) Ltd. v. Secretary, Board of Revenue, Trivandrum [(1964) 4 SCR 280].
68. It is well settled that the expression 'notwithstanding is in contradistinction to the phrase 'subject to', the latter conveying the idea of a provision yielding place to another provision or. other provisions to which it is made subject. This will be clarified in the instant case by comparison of sub-section (1) of Section 15 with sub-section (1) of Section 15-A. We are therefore unable to accept with respect the view impressed by the Full Bench of the Bombay High Court as relied on by the learned single judge in the judgment under appeal."
34. Again in Parayankandiyal Eravath Kanapravan Kalliani Amma (Smt.) and Ors. v. K. Devi and Ors. (JT 1996 (4) SC 656 this Court observed:
"77. Non obstante clause is sometimes appended to a section in the beginning with a view to give the enacting pan of the section, in case of conflict, an overriding effect over the provision or Act mentioned in that clause, iris equivalent to saving that in spite of the provisions or Act mentioned in the non obstante clause, the enactment following it will have its full operation or that the provision indicated in the non obstante clause will not be an impediment for the operation of the enactment. (See Union of India v. G.M. Kokil [1984 Supp. SCC 196] ; Chandavarkar Sita Ratna Rao v. Ashalata S. Guram (supra); G.P. Singh's Principles of Statutory Interpretation.)"
22. It is not being disputed that under Section 8C(3-A) of the Act the Commissioner has the power to director deposit of cash security for issuance of declaration form in respect of particular goods which power' has been upheld by this Court in several cases. Moreover, it starts with a non obstante clause and, thus, gives an overriding power to the Commissioner to direct for deposit of cash security.
23. Applying the principles laid down in the aforesaid cases to the facts of the present case, we find that in the present case the Commissioner of Trade Tax had earlier fixed Rs. 125/- as cash security per metric ton of coal to be deposited for issuance of declaration fora for import vide order dated 8.3.2001. Vide Order Dated 26.9.2002, i.e., after about one and half years, the amount of cash security has been enhanced by 2090. The enhancement has been justified and has righily so by the State respondent on the basis of quotations' of rate of different varieties of coal obtained from Bharat Coking Coal Limited, Dhanbad. Thus, the amount of Rs. 150/- fixed as cash security cannot be said to be arbitrary or unreasonable or without any nexus with the rate, it is common knowledge that during the period of one and a half year, particularly in the year 2001 and 2002, there had been ,a steep rise in the price of all commodities including coal and fuel and there was an upward trend in overall inflation. As already held by this Court in the year 1989 in the case of West Coal Handling Agent (supra) this Court should be reluctant to interfere in exercise of the power fixing the amount of security. The only consideration should be whether the authorities had adhered to the norms and acted in a manner which renders the entire exercise arbitrary. In subsequent decisions also this Court has followed the same principle and has upheld the validity of the circulars/orders issued by the Commissioner enhancing the amount of cash security in respect of import of coal against declaration from time to time, On the materials produced before us, we are of the considered opinion that fixation of Rs. 150/- permetric ton for issue of declaration Form 31 cannot be said to be either arbitrary or unreasonable. Even in the case of Giriraj Stone Crusher Pvt. Ltd. (supra) this Court has upheld the power of the Commissioner of Trade Tax to adopt any reasonable and rationale method for demand my cash security under Section 8C(3-A) of the Act which should have nexus to the amount of tax which would be payable. The plea that it is not a general order, is devoid of any substance inasmuch as no particular form of issuing an order has been prescribed under the Act or the Rules framed thereunder, Likewise, the plea of hostile discrimination also does not hold the field as the petitioners have not been able to establish the plea of discrimination pleaded by them. Moreover, a slight difference in freight charges; by railways and by private transport operator would hot make any material difference in the demand of cash security which is to protect the interest of the Revenue and any surplus which remains after the assessment, is to be refunded.
24. In view of the foregoing discussions, we do not find any merit in these petitions. They are dismissed with costs which we assess at Rs. 5,000/- payable by each of the petitioners individually.