The High Court of Jammu & Kashmir & Ladakh (Jammu Bench) ruled that the licensing requirement under Rule 3 of the Kashmir Brick Kiln (Regulation) Rules, 2017, read with Section 2(e) of the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010, is a reasonable regulatory condition and does not violate Article 19(1)(g) of the Constitution. Rather, it is a legitimate exercise of state power in the interest of public order, environmental balance and fiscal responsibility, fully protected by Article 19(6) of the Constitution.
The Court therefore clarified that the unregulated import of bricks from outside the Union Territory without proper licensing and monitoring would inevitably lead to hoarding, black marketing, and deliberate shortage, thereby disturbing the market equilibrium and causing loss to the local revenue and adverse repercussions on the State economy.
The Court observed that 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 Court underscored that the Deputy Commissioners of Kathua and Samba have been duly notified as the Licensing Authorities under Section 5 of the 2010 Act and have acted within the scope of their statutory powers in issuing the impugned orders. The seizures and enforcement measures complained of are regulatory in nature and justified by the statutory mandate. As a necessary corollary, the orders impugned are upheld.
A Single Judge Bench of Justice Wasim Sadiq Nargal observed that the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010 and the Rules framed thereunder in 2017 constitute a comprehensive regulatory framework intended to control not only the establishment and operation of brick kilns but also the trade, sale, storage, and distribution of bricks within the Union Territory.
Thus, the Single Judge explained that the inclusion of the term dealer under Section 2(e) of the 2010 Act and the express language of Rule 3 clearly manifest the legislative intent to bring both the manufacturers as well as dealers within the fold of the regulation. The Single Judge negated the contention that the 2010 Act applies only to manufacturers, observing that the preamble of the 2010 Act itself contemplates the regulation of matters incidental thereto, which necessarily includes the sale and storage of bricks.
Any interpretation excluding dealers would frustrate the very object of the Act, rendering it ineffective and encouraging unregulated brick trading operations that evade quality checks, environmental standards, and lawful taxation, added the Bench while rejecting the contention of the petitioners that the registration under the Goods and Services Tax Act, 2017, exempts them from the requirement of obtaining a license under the Brick Kiln Act.
The Bench clarified that the two enactments operate in distinct spheres. While GST registration pertains to fiscal compliance and tax collection, the Brick Kiln Act is a regulatory statute aimed at environmental protection and land use control. Compliance in conformity with one statute does not dispense with the mandatory requirements of another statute operating in a different field.
Briefly, the petitioners, who are dealers and not manufacturers of bricks, contended that the Jammu and Kashmir Brick Kiln (Regulation) Act, 2010, and the Jammu and Kashmir Brick Kiln (Regulation) Rules, 2017, apply only to brick kiln owners engaged in manufacturing within the Union Territory, and not to dealers dealing in finished bricks imported from other States. They allege that the orders issued by the District Magistrates of Kathua and Samba directing the seizure of vehicles transporting bricks imported from outside the Union Territory of Jammu and Kashmir and imposing penalties are arbitrary and violative of their fundamental right to trade and commerce under Article 19(1)(g) of the Constitution.
The respondents, however, justified the action, contending that the regulatory framework under the 2010 Act covers the entire brick trade, including sale, storage, and transportation, and that the impugned orders were passed to curb illegal and unlicensed trade activities in accordance with law.
Appearances:
Senior Advocate Vikram Sharma, along with Advocates Sachin Dev Singh and Sanpreet Singh, for the Petitioner
Senior AAG Monika Kohli, GA Adarsh Bhagat, and GA Dewakar Sharma, for the Respondent
