‘Dealers too required to obtain licenses’
Upholds DCs’ powers to seize vehicles
Mohinder Verma
JAMMU, Nov 6: In a significant judgment, the High Court of Jammu & Kashmir and Ladakh has upheld the powers of Deputy Commissioners (DCs) to seize vehicles transporting unlicensed bricks and ruled that dealers and not just manufacturers are required to obtain licenses under the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010 and Rules of 2017 as unregulated import of bricks from outside the Union Territory (UT) would have severe economic and administrative repercussions.
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The bench of Justice Wasim Sadiq Nargal, while dismissing a writ petition filed by several brick dealers from Jammu, Samba and Kathua districts, observed that the licensing regime was constitutionally valid, non-discriminatory and essential to maintaining environmental, fiscal and market discipline.
The petitioners had approached the High Court challenging orders issued by the District Magistrates of Kathua and Samba directing the seizure of vehicles transporting bricks imported from outside the Union Territory and imposing penalties under the Brick Kiln Act and Rules.
The petitioners, represented by Senior Advocate Vikram Sharma, contended that they were merely dealers, not manufacturers, and therefore were not covered by the licensing provisions applicable to brick kiln owners. They argued that the authorities had exceeded their jurisdiction by seizing consignments of finished bricks imported lawfully from other States and that such restrictions violated their fundamental right to trade and commerce under Article 19(1)(g) of the Constitution.
Appearing for the Union Territory, Senior Additional Advocate General Monika Kohli argued that the Act’s definition of “dealer” under Section 2(e) expressly covered those engaged in selling bricks and thus required them to obtain a valid license. She emphasized that the law empowered Licensing Authorities including Deputy Commissioners to stop, inspect and seize vehicles carrying bricks without authorization under Section 12(iii) and (iv) of the Act.
The Government maintained that the impugned orders were part of a regulatory exercise aimed at preventing illegal trade, hoarding and black marketing, while also safeguarding the interests of local kiln operators who function under strict environmental and fiscal obligations.
Delivering the judgment, Justice Wasim Sadiq Nargal upheld every major contention of the Government and logically dismissed all arguments advanced by the petitioners. The High Court held that Rule 3 of the J&K Brick Kiln (Regulation) Rules, 2017 which states that “no manufacturer or dealer shall manufacture, sell or store bricks without holding a valid license” clearly brings dealers within the regulatory framework.
“The express inclusion of both manufacturers and dealers in Rule 3 leaves no scope for doubt that the licensing requirement applies equally to both”, the High Court said, adding “excluding dealers from the ambit of regulation would defeat the very object of the statute, encouraging unregulated trade and undermining environmental and economic safeguards”.
Rejecting the petitioners’ claim that District Magistrates lacked authority, the High Court clarified that Deputy Commissioners have been duly notified as Licensing Authorities under Section 5 of the Act and Rule 4 of the 2017 Rules.
“Therefore, their directions to seize unlicensed vehicles and restrict trade were legally valid and within jurisdiction. The orders were regulatory in nature and not arbitrary as they sought to ensure compliance with the licensing regime”, Justice Nargal said.
The High Court also dismissed the contention that GST registration was sufficient for conducting business, noting that tax compliance cannot substitute sector-specific regulation. “A trader’s GST registration merely signifies registration for tax purposes and does not authorize engagement in any particular trade without fulfilling regulatory obligations”, the Judge said, adding “fiscal and regulatory statutes operate in distinct spheres–one governing tax collection and the other ensuring lawful, safe and transparent trade”.
The High Court found the writ petition not maintainable, observing that the petitioners had failed to exhaust statutory remedies. Under Section 20 of the Brick Kiln Act, an aggrieved person can file an appeal before the Appellate Authority within 30 days against any decision of the Licensing Authority.
“The petitioners neither applied for a license nor availed the available statutory remedy. Having bypassed the procedure, the petition is premature”, the High Court held and rejected the plea of violation of the right to trade holding that the restrictions imposed were reasonable and constitutionally valid under Article 19(6).
Citing Supreme Court precedents including “Modern Dental College Vs State of Madhya Pradesh”, Justice Nargal observed that the licensing system serves legitimate public interest by ensuring environmental safety, consumer protection and fair competition. He also referred to Article 303 of the Constitution, ruling that the J&K licensing law does not discriminate between local and out-of-State traders, as it applies uniformly to all.
Concluding the judgment, the High Court observed, “unregulated import of bricks without proper licensing would inevitably lead to hoarding, black marketing and deliberate shortage thereby disturbing market equilibrium and causing loss to the local economy”, adding “such unchecked inflow would not only undermine the local brick manufacturing sector but would also defeat the regulatory objectives of the Act by promoting clandestine trade”.
“The enforcement of licensing requirements upon dealers thus serves an important economic and administrative purpose in maintaining market stability, ensuring fiscal discipline and safeguarding legitimate local enterprises”, the High Court added.
Accordingly, the writ petition was dismissed with the High Court directing that regulatory framework must be strictly implemented across the Union Territory.
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