Dealers also Covered by Licensing Mandate u/r 3 of Brick Kiln Act: J&K HC Validates Seizure Orders Against Brick Dealers [Read Order]
The Court found the licensing mandate to be a reasonable restriction on the constitutional right to trade under Article 19(1)(g).
The Jammu & Kashmir High Court, in a recent case, has upheld the validity of licensing requirements under Rule 3 of the Jammu & Kashmir Brick Kiln (Regulation) Rules, 2017, holding that both dealers and manufacturers fall within its ambit.
The decision came in writ petitions filed by Kehar Singh and other traders, who challenged orders of seizure and penalties imposed by the District Magistrates of Kathua and Samba on vehicles transporting bricks imported from outside the Union Territory.
The petitioners argued that the Brick Kiln Act was intended only to regulate manufacturers operating brick kilns within Jammu and Kashmir, and not dealers engaged in trading finished bricks procured from other States.
To support their case, they pointed to Forms A and B appended to the Rules, which they claimed were specific to kiln establishment and operation. They also relied on Section 15 of the Act, which restricts sale price but does not prescribe licensing for dealers, to argue that Rule 3 was inconsistent with the parent statute
Counsel for the petitioners further submitted that their trade was already regulated under the Goods and Services Tax (GST)regime, and that imposing an additional licensing requirement amounted to double regulation and violated their fundamental right to carry on business under Article 19(1)(g) of the Constitution.
The respondents, represented by the Senior Additional Advocate General, defended the seizure orders by pointing to Section 2(e) of the Act, which expressly defines a “dealer” as a person engaged in the business of selling bricks.
They argued that the inclusion of dealers within the statutory definition reflected the legislative intent to regulate the entire brick trade, not just kiln operators. Rule 3, they submitted, was consistent with this intent and empowered licensing authorities to oversee the manufacture, sale, and storage of bricks to prevent illegal trade and ensure quality standards.
The State further contended that GST registration did not exempt dealers from compliance with sector‑specific legislation, and that licensing under the Brick Kiln Act constituted a reasonable restriction in the public interest.
Justice Wasim Sadiq Nargal, after examining the statutory scheme, upheld the respondents’ position.
The Court noted that Section 15 of the Act imposes restrictions on both manufacturers and dealers regarding pricing, thereby confirming that dealers are within the regulatory framework.
The Court also relied on interpretative principles laid down by the Supreme Court in J. Jayalalitha v. Union of India and Ishwar Singh Bindra v. State of U.P., noting that conjunctions “and” and “or” may be read interchangeably to give effect to legislative intent.
Applying this principle, the Court held that the inclusion of “dealer” in Rule 3 was deliberate and necessary to regulate the entire brick trade chain. The alleged inconsistency between Rule 3 and Section 15 was described as “illusory,” since both provisions impose obligations on dealers alongside manufacturers.
Reading Section 15 together with Rule 3, the Court held that the licensing mandate applies equally to dealers and manufacturers. The argument that Rule 3 was inconsistent with the parent Act was rejected as misconceived.
Further, the Court observed that Form B appended to the Rules relates to licences for “manufacture, sale, and supply of bricks,” which necessarily encompasses dealers. Thus, the licensing system was designed to cover both kiln owners and traders, ensuring uniform regulation of manufacture, sale, and storage.
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The Court concluded that the regulatory framework operates as a substantive instrument to safeguard public interest, maintain quality standards, and prevent unauthorised trade, rather than a mere procedural formality.
On the constitutional issue, the Court spotlighted that Article 19(1)(g) guarantees the right to trade. The Court concluded that the requirement did not amount to an unconstitutional infringement of the petitioners’ rights, but rather a permissible regulatory control.
Accordingly, the High Court validated the seizure orders issued by the Deputy Commissioners and dismissed the petitions.
