The Supreme Court struck down the levy of additional toll tax on dryfruit like almonds, walnuts and walnut kernels by the Jammu and Kashmir government. Earlier, the J&K High Court had upheld the levy at the rate of 60 paise per kg.
The apex court clarified that its judgment would have only prospective operation. Any amount collected as toll or additional toll tax under the notification need not be refunded.
Opposing the levy, dry-fruit traders argued that they bought raw fruits from growers and after a long manufacturing process exported them to other states and foreign countries.
The traders contended that since they manufactured the final products, they were entitled to exemption from the toll according to a government notification. Moreover, the additional toll had no justification because the government did not provide any special facilities to the traders for processing, transport or other functions.
The high court had dismissed their petitions and upheld the tax as violative of the right to trade. It had held the toll had not been levied in respect of any particular service. The consideration for the toll is to be found in the general amenities and advantages, which the state provided to the trade, according to the high court, which emphasised that the toll was in the nature of a tax and not a fee.
Overruling this view, the Supreme Court Bench comprising Justice D P Mohapatra and Justice Doraiswamy Raju held that the Levy of Tolls Act, 1995, did not grant power on the government to levy such toll. It said the provisions of a fiscal statute must be read strictly so as to give any benefit of doubt to the litigant. On such reading it was clear that the imposition of the additional toll tax was beyond the purview of the Act.
