Team Goemkarponn
PANAJI: In a major relief to South West Port Limited (SWPL) and JSW Infrastructure Limited, the High Court of Bombay at Goa has quashed show-cause notices issued by the State Tax Officer of the Commercial Tax Department under the Goa Green Cess Act, 2013, calling them arbitrary and unsustainable.
The Division Bench comprising Justice Bharati Dangre and Justice Nivedita Mehta ruled that the notices suffered from “the vice of arbitrariness,” holding that the petitioners, being service providers, cannot be held responsible for polluting materials brought into the State.
“It is evidently clear to us that the Green Cess, 2013, prescribes the transactions liable to cess and the maximum rate at which it may be collected, leaving the assessment procedure to the executive. In the absence of specific provisions, recourse may be taken to the Act and Rules,” the Bench observed in its order.
SWPL had approached the High Court challenging the show-cause notices dated February 13 and May 23, 2025, issued by the tax authorities to initiate reassessment proceedings under the Green Cess Act.
The Court noted that the notices were flawed on two primary counts — firstly, that the petitioners do not fall within the purview of Section 4 of the Green Cess Act, 2013, read with Rule 3 of the 2014 Rules, as they are only service providers and not entities that bring or cause the entry of polluting substances into the State. Secondly, the reassessment proceedings lacked a valid basis of “reason to believe,” a mandatory precondition for reopening completed assessments.
“The reassessment power cannot be exercised merely on an officer’s opinion,” the Court observed, adding that “the belief must be that of an honest and reasonable person, based on tangible material and not subjective satisfaction or pretence.”
The Bench rejected the Department’s contention that the reassessment was justified because earlier proceedings had been stayed by the Court, preventing cess collection. The Court said this reasoning failed to establish a legitimate basis for reopening assessments.
Accordingly, the High Court quashed and set aside the show-cause notices. However, it dismissed the petitioners’ challenge to Rule 3 of the Goa Cess on Products and Substances Causing Pollution (Green Cess) Rules, 2014, holding that the rule was not ultra vires the parent Act.
