section 1347 6081 132 143 3405 16 342Q 22 3423 25 of 1980 806 18 of 198142519500 05 9511 13 9514 of 1981 21 2337 43 45 56 63 91 1 l l 166 67 174 181 192 of 1980 407 11 of 1979 412 415 416 18 of 1979 193 220 237 48 825 36 7 1 722 of 1982 723 39 3 19 30969 78 2171 73 of 1982 and 3864 69 of 19801227 33 of 19815520 22 of 1980 1001 07 of 1981 1109 30 13841453 62 1469 of 1981 805 24866 972 1453 62 1498 4667 68 975 83 854 984 1469 78 787 1319 24 1400 02 1504 05 1608 11 1621 25 1934 63 2172 77 2228 31 2251 53 2374 75 2327 61 2556 65 2612 13 2625 27 2624 3070 88 3178 95 985 4158 65 4527 32 5113 19 9196 98 of 1982 5727 8397 9583 9719 22 of 1982 8262 67 of 1981 10039 10223 of 1982 2682 84 of 1983 3885 86 of 1983 66 67 68 69 1139 2759 of 1983 2379 of 1982 2703 1119 of 1983 7993 of 1982 1172 of 1983 6498 of 1982 Under Article 32 of the Constitution of India 971 FOR THE APPEARING PARTIES Shanti Bhushan R K Garg P R Mridul R K Jain Pradeep Kumar Jain B R Kapoor section R Srivastava
P H Parekh Miss Nisha Srivastava Hemant Sharma Miss Indu Sharma
K R Mohan and Geetanjali Moham
O P Rana D D Thakur E C Agarawala Raju Ramachandran R Sathish V K Pandita and R Rana Dr L M Singhvi L N Sinha Y section Chitale and G N Dikshit
Miss Shobha Dikshit Pradeep Mishra section K Kulshrestha and A M Singhvi Advocates Ravindra Bana Sarva Mittra Rajiv Datta B Tawakley R B Mebrotra Pramod Swarup R N Poddar  N N Sharma
The following Judgments were delivered VARADARAJAN J Writ Petitions 1347 to 1360 of 1981 and Writ Petition 174 of 1982 are by manufacturers of Khandsari sugar in the open pan process and sellers thereof in Uttar Pradesh
Writ Petitions 21 to 23 of 1982 Writ Petitions 3178 to 3195 of 1982 Writ k Petitions 3178 to 3195 of 1982 Writ Petitions 4527 to 4532 of 1982 and Writ Petition 3890 of 1983 are by traders in that product in U P The pleadings in W Ps 1347 to 1360 of 1981 were referred to by the learned counsel for the parties when common arguments were advanced in all the writ petitions
Therefore the pleadings in those writ petitions alone are referred to in this judgment
These W Ps 1347 to 1360 of 1981 under Article 32 of the Constitution are for declaring the provisions of the U P Krishi Utpadan Mandi Adhiniyam 1964 as ultra vires the Constitution and for restraining the respondents from realising market fee and licence fee from the petitioners under the provisions of that Adhiniyam hereinafter referred to as the Adhiniyam 
The case of the petitionersfirms which manufacture Khandsari sugar by the open pan process in the State of Uttar Pradesh and sell the same in that State is this
972 In the process of manufacture of Khandsari sugar there is not only a physical change of the sugarcane used but also a chemical change and the white crystalline sugar of 90 per cent sucros purity is obtained after drying grading and vagging by eliminating all the ingredients of sugarcane except sucros
But in the case of desi khandsari gur jaggery rab and shakkar which are all manufactured from raw sugarcane juice pectins live saps motals minerals nitrogenous compounds wages and salts are not removed and there is no chemical change in the manufacturing process
The Adhiniyam was enacted to reduce multiple trade charges and provide amenities to the producers and sellers of agricultural produce for certification of accurate weights and scales and for the establishment of market committees to ensure that the agricultural producer has a say in the matter of utilisation of the market funds
The Adhiniyam applies to agricultural products which according to section 2 a are such items of produce of agriculture horticulture viticulture sericulture pisciculture animal husbandary or forest as are specified in the schedule and include and mixture of two or more such items and also include any such item in processed form and further include gur rab shakkar Khandsari and jaggery 
The Adhiniyam does not define khandsari sugar but it is defined in clause 2 of the U P Khandsari Sugar Levy Order 1975 as whole crystalline sugar containing more than 90 per cent and manufactured at a sulphitation unit by open pan process including a bel
The khandsari sugar produced by the petitioners who hold licence for operating hydraulic power crushers is not khandsari but crystalline sugar as produced by sugar mills
The sugar produced by the petitioners is physically and chemically different from sugarcane which is one of the items specified in the schedule to the Adhiniyam and also from gur rab jaggery and khandsari and cannot be treated as a processed form of sugarcane therefore the Adhiniyam cannot apply to the product manufactured by the petitioners which is plantation white sugar
The petitionersfirms which are producers of sugar are not liable to pay market fee under the Adhiniyam section 17 iii b whereof provides that the market committee shall have power to levy and collect market fee which shall be payable on transactions of sale of specified agricultural produce in the market area at seh rates being not less than one per cent and not more than one and a half per cent of the price of the agricultural produce so sold as the State Government may specify by notification
Section 17 iii is ultra vires the Constitution as it permits excessive delegation of legislative power and does not lay down any 973 guideline for the State Government fixing the market fees and only A market committees rendering services can determine the quantum of market fees
The illegal levy of market fees on the petitioners is violative of Articles 19 1 f and 301 of the Constitution
The action of the respondents in seeking to apply the provisions of the Adhiniyam to the petitioners leaving out other manufacturers similarly situate is violative of article 14 of the Constitution
Section 8 of the Adhiniyam is violative of article 14 as it does not provide any guideline regarding the basis on which the State Government can include or exclude any agricultural produce from the list of notified commodities under section 6
The market fees and licence fees are in the nature of payments for services rendered
But the market committees render no service at all to the petitioners and therefore the levies are really in the nature of tax
The levies deprive the petitioners of their right to property without any authority of law and are therefore violative of Articles 265 31 and 19 1 f and g of the Constitution
It is in these circumstances that the petitioners have prayed for declaration of the provisions of the Adhiniyam as being ultra vires the Constitution and for the issue of a writ of mandamus restraining the respondents from realising market fee and licence fee from the petitioners under the Adhiniyam
The contentions of the Mandi Samitirespondents who oppose the petitions are these The petitioners who are manufacturers of khandsarikhandsari sugar are fully covered by the Adhiniyam in view of the definition of agricultural produce  in section 2 a
Khandsari is mentioned in schedule Kha  to the notification No 584XII 8 104176 dated 1141978
Khandsari sugar is not sugar as is evident from the definition of sugar in section 2 f of the Sugar Regulation of Production Act
1961 according to which sugar means any form of sugar whether wholly or partially manufactured but does not include khandsari sugar that is to say sugar in the manufacture of which neither a vacuum pan process nor a vacuum operator is employed or palmyra sugar that is to say sugar manufactured from jaggery obtained by boiling the juice of palmyra palm Khandsari  is the short form of Khandsari sugar  in the Adhiniyam and the notification and there is nothing like khandsari different from khandsari sugar in any of the concerned laws or in common parlance
There as only one khandsari and it is called khandsari sugar and it is manufactured 974 by mechanical power process The word sugar  has been used everywhere for the sugar manufactured by the vacuum pan process by mills and factories and the words khandsari sugar  have been used for the material produced by open pan process In the Sugarcane Control Order 1966 by clause 2 d khandsari sugar is defined as sugar produced by the open pan process Khandsari sugar is defined in clause 2 f of the U r Khandsari Sugar Manufacturing Order 1967 as sugar containing more than 90 per cent sucros and manufactured by the open pan process including bels
There is no chemical change in the process adopted by the petitioners in the manufacture of Khandsari sugar and there is nothing like desi Khandsari sugar
What the petitioners call desi khandsari is shakkar produced by manual efforts
It is true that khandsari sugar manufactured by the petitioners contains more than 90 per cent sucros but it is denied that the sugar manufactured by the petitioners is not khandsari or that it is crystalline sugar as produced by sugar mills or that the khandsari sugar produced by the petitioners is not physically and chemically different from the sugar produced by mills
The produce manufactured by the petitioners is processed form of sugarcane namely sugarcane from which the chaff has been removed and the sweet material has been retained for human consumption Gur rab jaggery and khandsari sugar are all manufactured by the open pan process while sugar produced by mills is manufactured by the vacuum pan process
The producers of khandsari sugar by open pan process and the producers of sugar by vacuum pan process have to take out licences under different order namely U P Khandsari Sugar Manufacturing Order 1967 and U P Vacuum Pan Sugar Factories Licensing Order 1969 Thus khandsari sugar produced by the petitioners is different from sugar produced by sugar mills and it is fully covered by section 2 a of the Adhiniyam
Market fee is not claimed from the petitioners in any manner different from the one stipulated in section 17 iii b of the Adhiniyam Section 17 iii b is not ultra vires the Constitution and does not suffer from any excessive delegation of legislative power
The levy of market fee and licence fee is not violative of any constitutional provision
article 19 1 f does not exist any longer and article 301 does not confer any fundamental right on the petitioners There is no discrimination against the petitioners and section 8 of the Adhiniyam is not violative of article 14 The market fee and licence fee are fees 975 and not taxes
A major portion of the funds of the market committees is applied for development of the market area
The Rajya Krishi Utpadan Mandi Parishad hereinafter referred to as the Parishad  impleaded as respondent in the petitions has filed separate counter affidavit raising similar contentions as the market committees
The additional contentions raised by that Board which also opposes the petitions are these The original definition of agricultural produce in section 2 a of the Adhiniyam did not contain the words and further includes gur rab shakkar khandsari and jaggery
These words were added in the definition by the U P Amendment Act 10 of 1970 in order to remove anomalies in the words processed agricultural produce
The Government issued the said notification No 584X11 8 10 176 dated 11
4 1978 after considering all the objections raised specifically mentioning Khandsari along with gur rab shakkar and jaggery in the list of 115 commodities liable for the levy of market fees
The sale of khandsari is free without any Government control and it is effected in the market areas by commission agents by mutual negotiation or open auction while a large part of the sugar produced by the vacuum pan process is controlled by the Central Government
Sugar and khandsari are distinct and different from each other
The sugar produced in vacuum pan process is standardized as per India Sugar Standards and graded into A30 B30 C30 D30 E30 A29 B29 C29 D29 and E29 whereas khandsari sugar produced by the open pan process is called khandsari khandsari sugar rab and sugar in the market
There is no levy on khandsari and it is sold in the open market whereas 65 per cent of the sugar produced in the mills by the vacuum pan process is taken by the Central Government for feeding the public distribution system by levy and the remaining 35 per cent along is left with the factories for free sale through wholesale dealers approved under the control orders
The producers of khandsari sugar are not liable to pay the impugned market fee
they are liable to pay it only if they also hold licences as commission agents or wholesale dealers and sell the product
Mr Shanti Bhushan learned counsel for the petitioners advanced arguments in these petitions under three main heads namely i whether khandsari sugar manufactured by the petitioners in their mills by the open pan process is an agricultural produce covered by the Adhiniyam as amended by the U P Ace 10 of 1970 ii whether khandsari sugar manufactured by the petitioners in their 976 industrial units employing a large number of workmen to whom the Industrial Disputes Act Employees Provident Fund Act Factories Act and Minimum Wages Act apply and which is subject to levy of excise duty under the is subject to the levy of market fee under the Adhiniyam and iii whether on account of the interpretation of the Adhiniyam khandsari sugar manufactured by the petitioners could be said to be subject to the levy of market fee under the Adhiniyam there is any difference between khandsari sugar produced by the petitioners in the open pan process and the plantation white sugar produced by the other mills in the vacuum pan process and there is no discrimination between khandsari sugar sought to be subjected to the levy of market fee under the Adhiniyam and the plantation white sugar produced by the vacuum pan process which is not subject to the levy under the Adhiniyam
He clubbed his arguments on points i and ii and submitted that khandsari sugar produced by the petitioners in their mills by the open pan process is not an agricultural produce contemplated to be covered by the provisions of the Adhiniyam for the purpose of levy of the market fee as it is not produced by the agricultural producer but produced in mills employing modern methods though under the open pan process
On the third point he submitted that there is no difference between the khandsari sugar produced by the petitioners in their mills by the open pan process and the plantation white sugar produced by the other mills by the vacuum pan process except that khandsari sugar is produced by the open pan process while the plantation white sugar is produced by the vacuum pan process and the difference in the composition of the two products is only as regards CAO filterability and conductivity and consequently there is discrimination hit by article 14 of the Constitution in leaving plantation white sugar out of the levy and seeking to subject the khandsari sugar produced by the petitioners mills alone to the levy of market fee under the Adhiniyam
On the other hand Mr L N Sinha learned counsel for the Parishad submitted that the original object of the Adhiniyam was protection of agricultural produce as originally defined in the Adhiniyam and that the position has changed now and it has become a marketing legislation covered by entry 28 of List II Market of the Seventh Schedule to the Constitution
He further submitted that if the Adhiniyam has become a marketing legislation as contended by him industrial produce also can be included in the schedule of produce appended to the Adhiniyam and khandsari is genus and 977 khandsari sugar is a specie and it is liable to be subjected to the A levy of market fee under the Adhiniyam
As regards discrimination Mr Sinha submitted that similarity is one thing and identity is another and that article 14 will be attracted only in the case of identity and there is difference between Khandsari sugar and plantation white sugar and therefore there is no question of discrimination
Mr D D Thakur learned counsel for the Market Committees submitted that it is not the only object of the Adhiniyam to benefit the agricultural producer but 2 number of other objects are noticeable in the Adhiniyam and that if the object is to protect the agricultural producer alone the levy of market fee would have been confined to the first sale alone
He further submitted that the Adhiniyam covers sales by producers to traders and sales by traders to other traders subject to the requirement that what is sold is an agricultural produce and no market fee is livable on retail sales etc
having regard to the proviso to section 17 of the Adhiniyam
He submitted that the levy is not on khandsari producers but on khandsari traders and that what is contained in the preamble to the Adhiniyam is slightly different from the scheme of the Adhiniyam and section 2 a of the Adhiniyam has to be looked into independently of the preamble which in turn can be looked into only in case of ambiguity
He too submitted that khandsari is a genus and khandsari sugar is a specie
He however
admitted that agriculturists producing khandsari without the use of power need not obtain licence for its remanufacture while producers of khandsari sugar by the open pan process in the khandsari industry are bound to obtain licence
He contended that what is produced by the petitioners would fall within the ambit of section 2 a of the Adhiniyam
On the question of discrimination he submitted that plantation white sugar manufactured by the vacuum pan process does not require regulation unlike khandsari sugar produced by the open pan process and that if that is so there is no question of discrimination in not subjecting the plantation white sugar to the levy of market fee under the Adhiniyam
Dr Y S Chitale learned counsel for the Parishad Samiti and Mandi the respondents in W Ps
1348 to 1360 of 1981 submitted that section 2 a of the Adhiniyam deals also with traders as held in Laxmi Khandsari Etc
vs State of U P and Others1 and that what the petitioners produce is khandsari though it may 1  978 be more refined than khandsari produced by the agriculturists with out the aid of power
On the question of discrimination he submitted that whatever was considered necessary to be regulated was included in the schedule to the Adhiniyam and that there is no discrimination in not subjecting plantation white sugar produced by the vacuum pan process to the levy of market fee under the Adhiniyam I he prefatory note to the Adhiniyam as extracted from the Statement of Objects and Reasons may be noted
It reads The present chaotic state of affairs as obtaining in agricultural produce markets is an acknowledged fact
There are innumerable charges levies and exactions which the agricultural producer is required to pay without having any say in the proper utilisation of the amount so paid by him
In matters of dispute between the seller and the buyer the former is generally put at a disadvantage by being given arbitrary awards
The producer is also denied a large part of his produce by manipulation and defective use of weights and scales in the market The Government of India and the various committees and commissions appointed to study the condition of agricultural markets in the country have also been inviting the attention of the State Government from time to lime towards improving the conditions of these markets
The proposal to enact a marketing legislation was first taken up in 1938 but it could not go through as the then Ministry went out of office soon
after its inception 
The Planning Commission stressed long ago that legislation in respect c f regulation of markets should be enacted and enforced by 1955 56
Most of the other States have already passed legislation in this respect
The proposed measure to regulate the markets in this State has been designed with a view to achieving the following direction i to reduce the multiple trade charges levies and exactions charged at present from the producer sellers ii to provide for the verification of accurate weights and scales and see that the producer seller is not denied his legitimate due 979 iii to establish market committees in which the A agricultural producer will have his due representation iv to ensure that the agricultural producer has his say in the utilisation of market funds for the improvement of the market as a whole v to provide for fair settlement of disputes relating to the sale of agricultural produce vi to provide amenities to the producer seller in the market vii to arrange for better storage facilities vii to stop inequitable and unauthorised charges and levies from the Producer seller and ix to make adequate arrangements for market intelligence with a view to posting the agricultural producer with the latest position in respect of the markets dealing with his produce
emphasis supplied The prefatory note shows that the object of the Adhiniyam is to save the agricultural producer from innumerable charges levies and exactions and to enable him to have a say in the proper utilisation of the amounts paid by him to reduce the multiple charges levies exactions charged from producer sellers and generally to help the agricultural producer to sell his produce to his best advantage
The objects set out in the prefatory note are reflected in a concised form in the preamble to the Adhiniyam which says that it is An Act to provide for the regulation of sale and purchase of agricultural produce and for the establishment superintendence and control of markets therefore in Uttar Pradesh
The preamble also speaks of the necessity to provide for the regulation of sale and purchase of agricultural produce and the establishment superintendence and control of markets therefore in Uttar Pradesh Thus the object of the Adhiniyam as seen from the prefatory note and preamble is to protect the agricultural producer from exploitation
Protection of any industrial producer is not the object of the Adhiniyam
Section 2p of the Adhiniyam defines a producer as meaning a person who whether by himself or through hired 980 labour produces rears or catches any agricultural produce not being a producer who also works as a trader broker or dalal commission agent or arhatiya or who is otherwise ordinarily engaged m the business of storage of agricultural produce
agricultural produce is defined in section 2a of the Adhiniyam as meaning such items of produce of agriculture horticulture viticulture agriculture siriculture pisciculture animal husbandry or forest as are specified in the schedule and includes admixture of two or more of such items and also includes any such item in processed form and further includes gur rab shakkar khandsari and jaggery
The words and further includes gur rab shakkar khandsari and jaggery have been introduced into section 2a of the Adhiniyam by the UP Amendment Act 10 of 1970
Trader is defined in section 2y of the Adhiniyam as meaning a person who is engaged in buying or selling agricultural produce as a principal or as a duly authorised agent of one or more principals and includes a person engaged in producing agricultural produce
Thus it is seen from the definition of producer and trader in the Adhiniyam that emphasis is on the product produced reared or caught by agriculturists whether by their own or through hired labour and that such producer does not include a producer who also works as a trader broker dalal commission agent or arhatiya or who is otherwise ordinarily engaged in the business of storage of agricultural produce
Therefore it is not possible to hold that manufacturer producing khandsari sugar by the modern method in the open pan process is a producer within the meaning of section 2p of the Adhiniyam
The schedule to the Adhiniyam consists of 175 items including paddy honey silk eggs and ghee which were in the schedule from the inception
But as stated earlier Khandsari is one of the items introduced into the definition of agricultural produce in section 2a of the Adhiniyam by the Amendment Act 10 of 1970
It is seen from Annexure VIII to the counter affidavit of the respondent Parishad filed in W Ps
1347 1360 of 1981 that The technique of sugar manufactured through the indigenous process without the use of complicated machinery has been known in this country from time immemorial
The sugar thus produced is known as khandsari
In the counter affidavit of Shri Ram Sharan Deputy Director Marketing of the Parishad filed for the petitioners  additional affidavit it is admitted that farmers and sugarcane growers produce what he calls khandsari sugar with the help of small electric motors diesel engines or their own tractors
Mr Shanti Bhushan submitted that khandsari introduced in section 2a of the Andhiniyam by the Amendment Act 10 of 1970 is khandsari produced 981 by agriculturists and sugarcane growers in the old and primitive method and not khandsari sugar produced in khandsari mills in the modern sulphitation open pan process
Annexure Vl to the counter affidavit filed by the Parishad in W Ps 1347 1360 of 1981 is the report of the Director of National Sugar Institute Government of India Kanpur regarding the approximate composition of khandsari sugar produced by the modern sulphitation process and that of plantation white sugar produced by the vacuum pan sugar factories
It is extracted for ready reference Particulars Vacuam pan sugar Khandsari sugar Pol 998 to 9995 994 to 999 Reducing sugars 004 to 025 010 to 040 CAO Mgl00 gm 10 to 35 45 to 80 SO2 ppm 225 525 Viscosity CP 2030 2030 Conductivity x 106 3 to 15 50 to 200 Turbidity  10 to 30 40 to 70 Filterability FK 03 to 25 50 to 400 Shape of crystals Monoclinic Flattened or a cubd Moisture 004 to 015 0015 to 0S0 Water insoluble by wt
 Colour OD 400 OD 500 002 to 005 004 to 0015 It is seen from this report that the difference between plantation white sugar produced by the vacuum pan process and khandsari sugar produced by the open pan process in their composition is marked only as regards CAO filterability and conductivity and that the other items are more or less the same
In the aforesaid counter affidavit of Shri Ram Sharan it is stated that khandsari produced by non sulphur units and khandsari produced by non sulphur units is similar in process raw materials and sucros contents
There may be slight difference in colour and crystalline nature of the substance which is attributable to the better clarification method and better equipment adopted by sulphur units which are all improvements and which create no difference in the nature of the product ie khandsari
982 In the counter affidavit of Shri Zorawar Singh Secretary Krishi Utpadan Mandi Samiti Moradabad filed in WP1359 of 1981 it is admitted that the juice of sugarcane boiled in the open pan by the producers and the khandsari sugar manufactured by them contains more than 90 per cent sucros
In Annexure VIII to the counter affidavit filed in WP 1347 1360 of 1981 it is stated that the improved process of khandsari manufacture as evolved by the Gur and Khandsari Research Scheme of the National Sugar Institute Kanpur is a simplified form of the single sulphitation process as employed in the vacuum pan factories and that as a result of the improvements it is now possible to get a recovery of 75 to 80 per cent of sugar on cane of average quality and the first sugar produced is quite comparable to ordinary grade crystal sugar produced by the vacuum pan process
That process which has been set out in that Annexure though brief is quite elaborate and not far different from the one adopted in the manufacture of plantation white sugar by the vacuum pan process
On an inspection of the samples of khandsari sugar and plantation white sugar produced in the Court during the arguments in these writ petitions it was noticed that both khandsari sugar and plantation white sugar are white in colour and crystalline in form though the plantation white sugar is a little more lustrous than khandsari sugar
But khandsari produced by the agriculturists or sugarcane growers in the indigenous method is powdery in form and yellowish in colour
In these circumstances I am of the opinion that khandsari sugar produced by the petitioners in their mills with the aid of power in the open pan process by employing large number of employees to whom the Industrial Disputes Act Minimum Wages Act Factories Act Employees Provident Fund Act and similar enactments apply is an industrial product which is very different from khandsari produced by agriculturists of sugarcane growers in the old indigenous method
According to section 2d of the Sugarcane Control Order 1966 khandsari sugar means sugar produced by the open pan process
According to section 2f of the UP Khandsari Sugar Manufacturers Licensing Order 1967 khandsari means sugar containing more than 90 per cent sucros and manufactured by the open pan process
Section 3 of that Order makes it obligatory to obtain a licence for the manufacture of khandsari sugar
Section 34 a of that Order regulates the khandsari sugar manufacturing industry in the best interest of that industry
As mentioned above it is admitted that no licence is necessary for the manufacture of khandsari by the agriculturists or producers of sugarcane in the indigenous method without the use of power
It is not disputed that khandsari sugar produced by the petitioners is subject to excise duty under the Sugar Special 983 Duty Act 1959
Clause ii of section 2c of that Act illustrates one of the sugars not subjected to the duty namely palmyra sugar that is to say sugar manufactured from jaggery obtained by boiling the juice of palmyra palm
The word sugar  has been too broadly employed in the Sugar Special Duty Act 1959
But it is significant to note that in the Sugarcane Control Order 1966 and the UP Khandsari Sugar Manufacturers Licensing Order 1967 what is covered is khandsari sugar whereas what has been introduced into s 2a of the Act by the Amendment Act 10 of 1970 is khandsari
Thus it would appear that what is sought to be subjected to the levy of market fee under the Adhiniyam is khandsari produced by the agriculturist or producer of sugarcane in the old indigenous method and not khandsari sugar produced by persons like the petitioners in their modern mills by the open pan process
Mr Lal Narain Sinha appearing for the Parishad and Mr Thakur appearing for the Market Committees have in my view conceded by their submission that khandsari is genus and khandsari sugar is a speci that what the petitioners produce in their mills by the open pan process is  khandsari sugar and not khandsari
Dr Chitale appearing for the respondents in W Ps
13 8 60 of 1981 has also done so but in a slightly different way by saying that what the petitioners produce is khandsari whether it is more or less refined than khandsari as such
Mr Sinha conceded in the course of his arguments that protection of the agricultural producer was the object when the original idea of the Adhiniyam started and he submitted that the object has now become widened and it is now not a legislation for protecting the interests of only agricultural producers and that it has become a marketing legislation under entry 28 of List II in the Seventh Schedule to the Constitution and industrial products also can be included in the schedule
There is a further implied submission in this argument of Mr Sinha that khandsari sugar is an industrial product as it undoubtedly is
If the original idea as indicated in the prefatory note and preamble of the Adhiniyam was to protect the interests of agricultural producers in disposing of his products such as paddy rice silk eggs honey fish and the like and the Adhiniyam was enacted with that object in my view
it cannot be converted into a general marketing legislation by the mere inclusion of industrial products not possible of production by agricultural producers either in the schedule or in the definition of agricultural produce in section 2 a of the Adhiniyam
Therefore it is not possible to accept the argument of Mr Sinha that the Adhiniyam originally intended to protect the interests of agricultural producers has become a marketing legislation under 984 entry 28 of List II in the Seventh Schedule by the mere fact of inclusion of one or more industrial products in the definition of agricultural produce in s 2 a of the Adhiniyam
Mr Thakur submitted that it is not the only purpose of the Adhiniyam to protect the interests of the agricultural producer that a number of other objects are sought to be achieved by the Adhiniyam and that if the object of the Adhiniyam was to protect the interests of agricultural producers alone the levy of market foe would have been confined to first sales of agricultural produce
Mr Thakur would thus say that the only object of the Adhiniyam is not protection of the interests of the agricultural producer in the disposal of his products to his best advantage
The question whether the levy of market fee under the Adhiniyam is at a single point or whether it is a multi point levy was not elaborated by Mr Thakur
Therefore it is not possible to draw any inference from his submission based on the point of levy of market fee under the Act though it was pointed out by him that under the scheme of the Adhiniyam sales by producers to traders and by traders to other traders but not retail sales to consumers are subject to the levy of market fee provided that the produce sold is agricultural produce
Mr Thakur submitted that the levy under the Adhiniyam is on the khandsari trader and not on khandsari producer
That would be 80 if the item with reference to which levy is made is one produced by an agricultural producer to protect whose interests the Adhiniyam has been enacted
Khandsari sugar produced by the petitioners in their mills by the open pan process is not an agricultural produce but an industrial produce
Mr Thakur is right in his submission that the preamble could be looked into only in the case of ambiguity
The prefatory note and the preamble can be looked into only in the present case as there is dispute between the parties on the question whether khandsari sugar produced by the petitioners which is not included in the schedule or definition of agricultural produce in the Adhiniyam while khandsari is mentioned in the definition of agricultural produce in section 2a thereof can be the subject matter of levy of market fee under the Adhiniyam
It is not possible to accept the submission of Dr Chitale that what the petitioners produce is an agricultural produce be it more or less refined than khandsari
What the petitioners produce in their modern mills by the open pan process is khandsari sugar an industrial produce and not an agricultural produce which is produced by agriculturists
It is admitted by Dr Chitale that the petitioners  factories are working under licences and that it is not obligatory on agricultural producers producing khandsari in the indigenous method to obtain licences for producing the same
985 Reference is made at page 3 in the judgment of my learned A brother Thakkar J in these Writ Petitions to the judgment of a Division Bench of the Allahabad High Court in Special Appeal No 175 of 1973 filed against the decision of a Single Judge of that court in W P No 4636 of 1969
It is Annexure II to the counter affidavit of the Parishad in WP 1350 etc
Of 1981
The reliefs claimed in that Writ Petition were a writ of certioraris quashing the UP Ordinance 8 of 1979 which was replaced by the Amendment Act 10 of 1970 and a writ of mandamus directing the respondents State of Uttar Pradesh and others not to enforce the Ordinance against the petitioners therein
The appellants in that case were commission agents carrying on business in the sale and purchase of gur shakkar and khandsari in the New Mandi Muzaffarnagar
The State Government issued a notification dated 8111968 under section 5 1 of the Adhiniyam declaring their intention to regulate the sale and purchase of specified agricultural produce in the areas including the New Mandi Muzaffarnagar
That notification included among other things gur rab shakkar and khandsari
After the issue of that notification the Mandi Samiti authorities required the writ petitioners in that case to obtain licences for carrying on their business in gur rab shakkar and khandsari
Thereupon a writ petition out of which Special Appeal No 49 of 1969 arose was filed by one Nanak Chand challenging the enforcement of the Adhiniyam against him
In that appeal decided on 1131969 a Division Bench of the High Court held that gur rab and jaggery are not agricultural produce within the meaning of section 2a
It was after that decision that Ordinance No 8 of 1970 was promulgated including gur rab shakkar khandsari and jaggery in section 2a of the Adhiniyam
The points raised in the aforesaid Special Appeal No 175 of 1973 were 1 The State Legislature was not competent to enlarge the definition of agricultural produce so as to include gur rab shakkar khandsari and jaggery within the term agricultural produce 2 The State Legislature had no legislative competence to enact the U P Amendment Act 10 of 1970 as that Act was with reference to subject of industries the control of which lay with the Union Government as declared by Parliament by law to be expedient in the public interest within the meaning of entry 52 of List I to the Seventh Schedule 3 The provisions of the Amendment Act 10 of 1970 are repugnant to the Industries Development and Regulation Act 1951 4 The provisions of the Amendment Act 10 of 1970 are discriminatory as vacuum pan sugar is not included in the definition of agricultural produce in section 2a and 5 The provisions of the Amendment Act 10 of 1970 infringe the fundamental right guaranteed by article 191 f and g of the Constitution
986 The High Court held in Special Appeal No 175 of 1973 relying upon this Court s decision in Paunakram vs State of Punjabl that in view of the extended definition of agricultural produce after the Amendment Act 10 of 1970 an enquiry whether gur rab shakkar and khandsari are agricultural produce or not is beyond the purview of the Court and that there is no discrimination as there is essential U difference between gur rab shakkar and khandsari under one head and vacuum pan sugar on the other as the former are manufactured by the open pan process and the latter is manufactured by the vacuum pan process and the vacuum pan process sugar industry is in existence since 1931 and involves big sugar factories whereas industries producing khandsari sugar by open pan process are of recent origin and those units carry on small scale business
In my view these may be good reasons for not subjecting khandsari sugar to the levy of market fee and subjecting plantation white sugar to the levy
It is not necessary to refer to the decision of the High Court on the other three points
It is sufficient to say that in my view that decision relates to the necessity to obtain a licence under the Adhiniyam for dealing in khandsari sugar and certain other commodities introduced into the definition of agricultural produce by the Ordinance which was replaced by the UP Amendment Act 10 of 1970 and it had nothing to do with the liability of khandsari sugar manufacturers sellers to pay market fee under the Adhiniyam
In these circumstances I hold that what the petitioners produce in their modern khandsari mills by the open pan process is khandsari sugar an industrial product like plantation white sugar and not khandsari which is produced by agricultural producers in the indigenous method and that the levy of market fee on sales of khandsari sugar under the Adhiniyam is unwarranted as the Adhiniyam is intended for the protection of agricultural producers in the disposal of their products and only khandsari produced by agricultural producers is included in the definition of agriculture produce in section 2a thereof and not khandsari sugar
On the question of discrimination Mr Shanti Bhushan submitted that plantation white sugar produced is by the vacuum pan process in the same manner as khandsari sugar is produced by the open pan process and that there is 110 major difference between the two industrial products and there is discrimination in so far as plantation white sugar is not sought to be subjected to the levy of market fee under the Adhiniyam where only khandsari sugar is 1 AIR 1995 SC 187
987 sought t 1 be subjected to the levy
He submitted that the difference A in the process of manufacture alone is not a distinguishing factor and that the difference in the process of manufacture cannot be a ground for holding that there is no discrimination if the levy could be made on khandsari sugar under the Adhiniyam leaving plantation white sugar out of its purview
He further submitted that plantation white sugar is produced in larger quantity than khandsari sugar and that traders in plantation white sugar also derive advantage by the use of the market area in the whole of the State of Uttar Pradesh which has been divided into 250 market areas and no part of that State is left uncovered by the Adhiniyam
In this connection Mr Shanti Bhushan invited the attention of this Court to the decision in Laksmi Khandsari etc
vs State of UP and Orsl where it is observed at page 94 that the restriction may be partial complete permanent or temporary but this must bear a close nexus with the object sought to be achieved
As stated earlier Mr Sinha submitted that the two products must be identical for attracting the bar of article 14 of the Constitution and that similarity alone will not do
But it must be remembered that the Adhiniyam is concerned with the levy of market fee on a variety of products namely agricultural produce and that if khandsari sugar produced by the petitioners in their mills by the open pan process out of sugarcane juice could be brought under the purview of the Adhiniyam it is difficult to understand how plantation white sugar for the production of which also sugarcane is the raw material could be exempted from the levy
The levy of market fee could not be said to depend upon the exact chemical composition of the commodity
Mr Thakur submitted that plantation white sugar produced by the vacuum pan process does not require regulation and therefore there is no discrimination in not subjecting it to the levy under Adhiniyam
Similarly Dr Chitale submitted that whatever was considered necessary to be regulated was brought under the Adhiniyam and that there is no discrimination
It is not possible to accept this submission of Mr Thakur and Dr Chitale
Plantation white sugar does not require less regulation than khandsari sugar
Reference was made to this Court s decision in Andhra Sugars Ltd and Anr
v State of Andhra Pradesh and Ors2 where it has been held that factories producing plantation white sugar by the vacuum pan 1  at 94
2  988 process and khandsari units producing sugar by the open pan process are distinct and separate units
That case related to imposition of tax on sugar and exemption of khandsari and jaggery from the levy
The principle underlying the levy of tax cannot be made applicable to the levy of market fee under the Adhiniyam
Both plantation white sugar and khandsari sugar are industrial products and there is clear discrimination in my view against khandsari sugar in seeking to subject it to the levy under the Adhiniyam leaving out plantation white sugar
For the reasons mentioned above I am of the opinion that the Writ Petitions deserve to succeed They are accordingly allowed but without any order as to costs
THAKKAR J
The petitioners in the Present group of fourteen Writ petitions under Art 32 of the Constitution of India are owners of Khandsari factories in Uttar Pradesh They seek appropriate relief on the premise that what they produce is Khandsari Sugar  and not Khandsari which is covered by the definition of Agricultural Produce  in section 2a of UP Krishi Utpadan Mandi Adhiniyam Act 1964 hereinafter referred to as the Act  which read as under agricultural produce means such items of produce of agriculture horticulture viticulture apiculture sericulture pisciculture animal husbandry or forest as are specified in the Schedule and includes admixture of two or more of such items and also includes any such item in processed form and further includes gur rab shakkar khandsari and jaggery Accordingly they contend that they are not liable to obtain a licence under Rule 67 of the Rules framed in exercise of powers under section 40 of the Act or to pay the licence fees Rs 100 per annum payable for such licence
So also they contend that the Market Committee Mandi Samiti constituted under section 12 of the Act cannot levy and collect market fee of I  of the value under section 17 iii of the Act on the transactions in respect of what they produce from the traders who purchase the product from them
Resistance to the regulation of the trade in Khandsari  and the collection of market fees thereon dates back to 1969
It was on November 5 1969 that an Ordinance UP Krishi UtPadan Mandi 989 Adhiniyam 1964 Amendment and validation Ordinance No 1969 A was passed where under the definition of agricultural produce  embodied in section 2a of the Act was amended by including gur rab shakkar khandsari and jaggery 
The said Ordinance was subsequently converted into UP Krishi Utpadan Mandi Amendment and Validation Act of 1970
Thus Khandsari  stood covered by the definition of section 2a of the Act SO amended
And this provided the starting point of resistance in the form of a Writ Petition on the part of a few Commission Agents carrying on the business of sale and purchase of Khandsari
They instituted a Writ Petition being Misc
Writ Petition No 4835 of 1969 in the High Court of Allahabad challenging the validity of the inclusion of Khandsari  in the definition of agricultural produce  contained in section 2a
The challenge was made on several grounds but no distinction was sought to be made between Khandsari produced indigenously on the one hand and Khandsari produced in the factories like the petitioners  factories on the other hands by calling the latter as Khandsari Sugar 
A learned single judge by his judgment and order dated February 18 1972 repelled the challenge and dismissed the Writ Petition
A Division Bench of the Allahabad High Court confirmed the decision in Special Appeal No 175 of 1973 on September 7 1977
The matter appears to have rested there till 1981
Market fees were being collected in respect of Khandsari  produced by the factories like the Petitioners  factories under the Act ever since 1969 70
So also the factory owners were obtaining the requisite licence under the Act since 1969 70 Eleven years later some of the factory owners petitioners herein have woken up to the problem and have renewed the challenge by way of the present petitions
The definition embodied in section 2a of the Act is an inclusive one
It in terms provides that Khandsari is included within the coverage of agricultural produce The Act however does not define the term Khandsari 
The owners of the Khandsari factories  petitioners herein therefore contend that what they produce is Khandsari Sugar and not Khandsari 
But then it is not Q sufficient for the petitioners to describe their product as Khandsari Sugar in order to successfully contend that it is not Khandsari 
It is further more necessary for them to show that they produce is popularly or commercially known as Khandsari Sugar and not as Khandsari 
And this they have failed to establish
It is not shown that Khandsari Sugar is the nomenclature employed in the 990 world of trade and commerce in respect of their product
Neither the traders nor the consumers are shown to have done so in their day to day dealings
It appears that the term Khandsari Sugar owes its origin to UP KHANDSARI SUGAR MANUFACTURING ORDER of 1977 issued under section 3 of the  1955
But then Khandsari Sugar was defined by clause 2f of the said order as meaning sugar containing more than 90 sucrose and manufactured by open pan process including bels
 It is a statutory definition enacted for the purpose  of the aforesaid Control Order issued under section 3 of the which Control Order uses the expression Khandsari Sugar 
It has nothing to do with the meaning and content of the term Khandsari as used by the trade in UP
Since the term Khandsari  has not been defined by the Act it must be construed in its popular sense
That is to say in the sense in which people conversant with the subject matter with which the statute is dealing would attribute to it
This principle of construction has been affirmed and reaffirmed by this Court in Commissioner of Income tax Andhra Pradesh vs Taj Mahal Hotel1 and Porrits  Spencer Asia Ltd vs State of HaryanaZ as also in numerous other decisions
It is unnecessary for the present purpose to cite all the decisions
Or to undertake a journey through the factual hinterland of each decision
Or to turn the headlights on the observations made in each of the decisions
For the principle though garbed in different apparel is simply this
In legislations pertaining to the world of business and commerce the dictionary to refer to is the dictionary of the inhabitants of that world
What they understand by the term Khandsari  is precisely what that term means in the statute designed to regulate their dealings and transactions The best test therefore is to ask the question what they themselves have understood by the term Khandsari  how they themselves have interpreted it and on what basis they themselves have moulded their own conduct for all these years
The factory owners similarly situated as petitioners as also the traders in general have understood the term Khandsari  as being applicable to the Khandsari produced by the factories by open pan process as also to Khandsari produced indigenously
They have been obtaining licence under the Act and paying market 1 at p 47
2  991 fee at 1 of the value since 1969 70 till 1981 without demur
even A though the coverage of Khandsari  by virtue of the definition of section 2a as amended in 1969 70 was challenged in 1969 it was not on this ground
As mentioned earlier the challenge initiated in 1969 ended in 1979 with the decision of the Division Bench of the Allahabad High Court rendered in Special Appeal No 175 of 197 3
A copy of this judgment has been placed on record of the present group of petitions at annexure II
t is not necessary to advert to the judgment in detail for the purposes of the discussion of the present point
Suffice it to say that the challenge was made on five grounds indicated in the judgment and that none of these grounds pertained to the aspect relating to the meaning and content of the term Khandsari 
Thus for more then ten years even the petitioners have not felt that Khandsari  means something other than what they produce
The petitioners have not established that their produce is marketed under a different name in the market
There is no material for holding that the petitioners sell their product under the name Khandsari Sugar to the traders
Or that the traders inter se in transacting their business refer to the same as Khandsari Sugar
Or that any consumer desirous of purchasing factory produced Khandsari would ask for Khandsari Sugar
I is not shown that either the petitioners or the traders or the consumers refer to the product as Khandsari Sugar
Nor is it shown that it is not marketed under the name Khandsari 
In other words it is not shown that in the popular or commercial sense the product is not known as Khandsari  but is known as Khandsari Sugar
In this context one significant fact needs to be stressed namely that the term Khandsari Sugar saw the light of day seven years after the Act was enacted in 1970 when UP Khandsari Sugar Order of 1977 was born and the artificial nomenclature was coined for the restricted purpose of the Order
There is no material even to show that this nomenclature was known to the petitioners or to the traders themselves there to before The contention that the article produced by the petitioners is not Khandsari must therefore be firmly and unhesitatingly negatived
The legislature it is also argued could not have intended  to cover the produce turned out by producers like the petitioners The principal object of the Act is to protect the producers from exploitation
Those who own or run Khandsari units like the petitioners engaged in large scale production with the aid of relatively modern plant and machinery worth lacs of rupees and employ a large number of workers need no such protection
Such is the 992 argument
In our opinion the argument is untenable
The legislature has in terms encompassed Khandsari  within the definition of section 2a of the Act
And the term khandsari  is sufficiently wide to cover all varieties of Khandsari including the article produced by the factories like those of the petitioners
Besides the basic premise assured by the petitioners that the object of the Act is merely to protect the producers from exploitation is fallacious
Of course one of the main objects of the Act is to protect the producers from being cheated by unscrupulous traders in the matter of price weight payment unlawful market charges etc
and to render them immune from exploitation as indicated by the prefatory note  and by the provisions contained in sections 16i ii iii iv viii etc
While this is one of the objects of the Act it is not the sole or only object of the Act
The Act has many more objects and a much wider perspective such as development of new market areas efficient collection of data and processing of arrivals in Mandis with a view to enable the World Bank to give substantial economic assistance to establish various markets in Uttar Pradesh as also protection of consumers and even traders from being exploited in the matter of quality weight and price This needs no elaboration in view of the pronouncements of this Court
For instance in Ramesh Chandra vs State of UP1 this Court has observed thus The long title of the Act in indicates that it is an Act to provide for the regulation of sale and purchase of agricultural produce and for the establishment superintendence and control of markets therefor in Uttar Pradesh From the Objects and Reasons of the enactment it would appear that this Act was passedfor the development of new market areas and for efficient data collection and processing of arrivals in the Mandis to enable the World Bank to give a substantial help for the establishment of  various markets in the state of Uttar Pradesh
In other States the Act is mainly meant to protect an agriculturist producer from being exploited when he comes to the Mandis for selling his agricultural produce
As pointed out by the High Court certain other transactions also have been roped in the levy of the fee in which both sides are traders and neither side is an agriculturist
This has been done for the effec 1  993 tive implementation of the scheme of establishment of markets mainly for the benefit of the producers  And in Ramesh Chandra Chandra Kaehardas Porwal  Ors vs State of Maharashtra  Ors
etc1 it has been stated that It is true that one of the principal objects sought to be achieved by the Act is the securing of a fair price to the agriculturist for his produce by the elimination of middle men and other detracting factors
But it would be wholly incorrect to say that the only object of the Act is to secure a fair price to the agriculturist
As the long title of the Act itself says the Act is intended to regulate the marketing of agricultural and certain other produce
The marketing of agricultural produce is not confined to the first transaction of sale by the producer to the trader but must necessarily include all subsequent transactions in the course of the movement of the commodity into the ultimate hands of the consumer 80 long of course as the commodity retains its original character as agricultural produce
While middlemen are sought to be eliminated it is wrong to view the Act as one aimed at legitimate and genuine traders
Far from it
The regulation and control order is as much for their benefit as it is tor the benefit of the producer and the ultimate consumer
The elimination of middlemen is as much in the interest of the trader as it is in the interest of the producer
Promotion of grading and standardisation of agricultural produce is as much to his benefit as to the benefit of the producer or consumer
So also proper weighment
The provision for settlement of disputes arising out of transactions connected with the marketing of agricultural produce and ancillary matters is also for the benefit of the trader
It is because of these and various other services performed by the Market Committee for the benefit of the trader that the trader is required to pay a fee
It is therefore clear that the regulation of marketing contemplated by the Act involves benefits too traders to in a large way
It is also clear to our mind that the regulation of marketing of agricultural produce if confined to the sales by producers within the market area to traders will very soon lead to its circum 1 11981 2 SCR 866 994 vention in the guise of sales by traders to traders or import of agricultural produce from outside the market area to within the market area
 In the face of these pronouncements it cannot be success fully urged that the object of the Act is merely to protect the producer from exploitation
As pointed out in the aforesaid decisions while the analogous Acts in other States had a limited perspective so far as Uttar Pradesh is concerned the Act has a much wider horizon and even transactions where both the sides are traders and neither side is an agriculturist are brought within the coverage of the Act
There is therefore no merit in this nuance of the challenge
The petitioners have next contended that having regard to the definition of Producer  contained in section 2p of the Act this Act could not have been intended to cover the article produced by them We do not see anything in the definition which would justify overriding the clear language of the statute read in the l light of the perspective of the Act and the history of the levy
While the term Khandsari  has not been defined it is obviously wide enough to cover Khandsari produced by any process regardless of its quality or variety As discussed earlier one of the objects of the Act inter alia is to protect the consumer as also the trader
We need not reiterate the reasoning articulated by us a moment ago in dealing with the first facet of this argument
The argument based on the supposed intendment of the Act
in our opinion is wholly misconceived
We have therefore no hesitation in repelling this contention Lastly section 2a of the Act has been challenged on the ground that it is discriminatory and violative of article 14 They have contended that section 2a of the Act in so far as it includes Khandsari in the definition of agricultural produce and thereby subjects the trade in the said product to regulation under the relevant provision of the Act is ultra vires Art 14 of the Constitution of India inasmuch as it introduces a hostile discrimination
According to the petitioners the article produced by them which they call Khandsari sugar is almost indistinguishable from the plantation sugar mills
Whether the article produced by the petitioners is very much similar to plantation sugar or not is a moot question
The other side has controverted this averment
The process of manufacture is different
The market price of Khandsari is lower depending on the quality
995 The most inferior variety would be more like the Khandsari A produced by the indigenous process yellowish in colour and powdery in form and would fetch a lesser price in the market
It would appear from the affidavit that the most superior variety might perhaps be approximate in appearance to the plantation sugar manufactured by the sugar mills but would all the same fetch a somewhat lesser price than the price fetched by plantation sugar It is a different commercial product known by a different name in the trade Be that as it may the argument that unless both are regulated under the Act article 14 would be offended is meritless
This Court has had several occasions to deal with a similar problem in the context of taxing statutes And this Court has consistently taken the view that is the matter of classification the Legislature has a wide discretion in selecting the persons or objects it will tax and that a statute is not open to attack on the ground that it taxes some persons or objects and not others
Everything or nothing argument is basically fallacious
For the Legislature may tax or regulate the trade in some objects and not in others Or may bring within its net some objects initially and may cast the net wider later on Or may tax or regulate the trade in only such objects which it considers expedient or worthwhile
The decision essentially a policy decision may depend on several factors
Factors such as the felt necessity for such an impost or regulation of a trade in a particular article likely impact of the decision on the trade industry or consumer viability of the same from the stand point of its own management resources Or from the angle of the net advantage to be secured in the balance sheet of pros and cons taking into account the anticipated administrative and management inputs required to be invested in the exercise
In substance it is a policy decision turning on numerous and complex factors
In East India Tobacco Co vs State of Andhra Pradesht this Court has quoted with approval the following passage from Willis on Constitutional Law2 A State does not have to tax everything in order to tax something
It is allowed to pick and choose districts objects persons methods and even rates for taxation if it does so reasonable 
The Supreme 1 1963 1 SCR 404 2 Willis on Constitutional Law p 857 996 Court has been practical and has permitted a very wide latitude In classification for taxation
 And this Curt has turned down the plea that in order to respect Art 14 both varieties of tobacco Virginia tobacco on the one hand and country tobacco on the other must be taxed or none
says the Court if a State can validly pick and choose one commodity for taxation and that is not open to attack under Article 14 the same result must follow when the State picks up one category of goods and subjects it to taxation
 In the matter of market regulation also Khandsari and Mill sugar are governed by different regulations As a matter of fact mill sugar is subject to control and regulation of no mean order under Sugar Control Order of 1966 where under the sugar mills are obliged to make available a significant quantity of sugar by way of levy at stipulated prices which are very much lower than prevailing open market prices Khandsari  produced by the petitioners was not subject to similar control for all these years
The producers of Khandsari like petitioners it is obvious have benefited thereby
It 15 true than for a short period Khandsari was also subjected to levy under Khandsari Sugar Levy Order of 1981 on a relatively small portion of its production That however makes little difference from the standpoint of challenge to section 2a of the Act on the ground that Mill sugar is not included in the definition of agricultural produce and not subjected to the provisions of the Act
So also the mere fact that both are sweetening agents will not justify condemnation of the classification which is based on a totality of the factors of differentiation There is therefore no substance in the challenge from the standpoint of article 14 of the Constitution of India
It is not for this Court to question why Khandsari produced by the petitioners is Included when sugar produced by the Mills Is not so included
It is not a question to which we can legitimately address ourselves for essentially it is a question of legislative wisdom and legislative policy dictated by countless and complex considerations
The Court cannot and will not substitute its own wisdom in place of the legislative wisdom in such matters
The 997 Court will not impose on itself this responsibility if not for any A other reason than for the reason that it is beyond its province The arguments advanced on this wavelength need not therefore detain us any a longer
The petitions accordingly fail
Rule issued in each of the petitions will stand discharged There will be no order regarding costs
Interim orders will stand vacated
In view of the majority decision all the writ petitions are dismissed
There will be no order regarding costs
Interim orders will stand vacated


Summary:
An Ordinance UP Krishi Utpadan Mandi Adhiniyam 1964 Amendment and Validation Ordnance No 1969 passed on November 5 1969 amended the definition of agricultural produce embodied in section 2a of the U P Krishi Utpadan Mandi Adhiniyam Act 1964 and gur rab shakkar khandsari and jaggery  were included in the amended definition
This Ordinance was subsequently converted into UP Krishi Utpadan Mandi Amendment and Validation Act 1970
Thus Khandsari  stood covered a by the definition of section 2 a of the Act so amended
The petitioners who are owners of Khandsari factories have alleged that what they produce is Khandsari Sugar and not Khandsari  which is covered by the definition of agricultural produce
It was contended 1 that they are not liable to obtain a licence under Rule 67 of the Rules framed under s 40 of the Act or to pay the licence fees Rs 100 per 967 annum payable for such licence 2 that the Market Committee Mandi A Samiti constituted under section 12 of the Act cannot levy and collect market fee of 1 of the value under section 17iii of the Act on the transactions in respect of what they produce from the traders who purchase the product from them and l that section 2 a of the Act is discriminatory and violative of Article 14 of the Constitution Dismissing the petitions  HELD Per Majority 1
The definition embodied in section 2a of the Act is an inclusive one
It in terms provides that Khandsari  is included within the coverage of agricultural produce
The Act however does not define the term Khandsari 
It is not sufficient to contend that what the petitioners produce is Khandsari Sugar and not Khandsari 
It has also to be shown by them that what they produce is popularly or commercially known as Khandsari Sugar and not as Khandsari
And thus they have failed to establish
It is not shown that Khandsari Sugar is the nomenclature employed in the world of trade and commerce in respect of their product
Neither the traders nor the consumers are shown to have done so in their day to day dealings
989F H 990A 1 2
The term Khandsari Sugar owes its origin to UP KHANDSARI SUGAR MANUFACTURING ORDER of 1977 issued under section 3 of the ESSENTlAL COMMODITIES ACT 1955
Khandsari Sugar was defined by cl 2f of the said Order as meaning sugar containing more than 90 sucrose and manufactured by open pan process including bels
 It is a statutory definition enacted for the purpose  of the aforesaid Control Order which uses the expression Khandsari Sugar
It has nothing to do with the moaning and content of the term Khandsari  as used by the trade in UP 990B C 2
i It is unnecessary for the present purpose to cite all the decisions
Or to undertake a journey through the factual hinterland of each decision
Or to turn the headlights on the observations made in each of p the decisions
For the principle though Barbed in different apparel is simply this
In legislations pertaining to the world of business and commerce the dictionary to refer to is the dictionary of the inhabitants of that world
What they understand by the term Khandsari  is precisely what that term means in the statute designed to regulate their dealings and transactions
The best test therefore is to ask the question what they themselves have understood by the term Khandsari bow they themselves have interpreted it and on what basis they themselves have moulded their own conduct for all these years
The factory owners similarly situated as petitioners as also the traders in general have understood the term Khandsari  as being applicable to the Khandsari produced by the factories by open pan process as also to Khandsari produced indigenously
990E G Commissioner of Income tax Andhra Pradesh v Taj Mahal Hotel at p 47 and Porrits  Spencer Asia Ltd vs State of Haryana 1979 I SCR 545 relied on
968 2
ii Inclusion of Khandsari in the definition of agricultural produced by virtue of amendment of section 2a was challenged by a few commission agents carrying on business of sale and Purchase of Khandsari in 1969 by instituting writ petitions in the High Court of Allahabad
ever none of the grounds of challenge pertained to the aspect relating to the meaning and content of the term Khandsari 
The petitions were dismissed by a Single Judge and that decision was confirmed by the Division Bench
989C D 2
iii Factory owners producing Khandsari have been obtaining licence under the Act and paying without demur market fee at 1 of the value since 1969 70 till 1981 when fresh challenge was made through the instant petitions
For more than ten years even the petitioners have not felt that Khandsari  means something other than what they produce
It is not shown that in the popular or commercial sense the product is not known as Khandsari  but is known as Khandsari Sugar
The term Khandsari Sugar saw the light of day seven years after the Act was enacted in 1970 when UP Khandsari Sugar Order of 1977 was born and the artificial nomenclature was coined for the restricted purpose of the order
There is no material even to show that this nomenclature was known to the petitioners or to the traders themselves there to before
990H 991C E F 3
The Legislature has in terms encompassed Khandsari  within the definition of section 2a of the Act
And the term Khandsari  is sufficiently wide to cover all varieties of Khandsari including the article produced by the factories like those of the petitioners
Besides the basic premise assumed by the petitioners that the object of the Act is merely to protect the producers from exploitation is fallacious
This is one of the objects and not the sole or only object of the Act
The Act has many more objects and a much wider horizon and oven transactions where both the sides are traders and neither side is agriculturist are brought within the coverage of the Act
992A D Ramesh Chandra vs State of UP  and Ramesh Chandra Kachardas Porwal  Ors
v State of Maharashtra  Ors
   relied on
There is nothing in the definition of Producer  contained in section 2p of the Act which would justify overriding the clear language of the statutes read in the light of the perspective of the Act and the history of the levy
While the term Khandsari  has not been defined it is obviously wide enough to cover Khandsari produced by any process regardless of its quality or variety 994D E 5
This Court has had several occasions to deal with a similar problem in the context of taxing statutes
And this Court has consistently taken the view that in the matter of classification the Legislature has a wide discretion in selecting the persons or objects it will tax and that a statute is not open to attack on the ground that it taxes some persons or objects and not others Everything or nothing  argument is basically fallacious
For the Legislature may tax or regulate the trade in some 969 Objects and not in others
Or may bring within its net some objects A initially and may cast the net wider later on
Or may tax or regulate the trade in only such objects which it considers expedient or worthwhile
The decision essentially a policy decision may depend on several factors
Factors such as the felt necessity for such an impost or regulation of a trade in a particular article likely impact of the decision on the trade industry or consumer viability of the same from the stand point of its own management resources
Or from the angle of the net advantage to be secured in the balance sheet of pros and cons taking into account the anticipated administrative and management inputs required to be invested in the exercise
In substance it is a policy decision turning on numerous and complex factors
99B E 5 i It is not for this court to question why Khandsari produced by the petitioners is included when sugar produced by the Mills is not so included
It is not a question to which we can legitimately address ourselves for essentially it is a question of legislative wisdom and legislative policy dictated by countless and complex considerations
The Court cannot and will not substitute its own wisdom in place of the legislative wisdom in such matters
The Court will not impose on itself this responsibility if not for any other reason than for the reason that it is beyond its province
Hence section 2a of the Act is not discriminatory and violative of Article 14
996G H 997Al East India Tobacco Co vs State of Andhra Pradesh 1963 I SC R 404 relied on
Willie on Constitutional Law p 857 referred to
Per A Varadarajan J Dissenting 1
What the petitioners produce in their modern Khandsari mills by the open pan process is Khandsari sugar an industrial product like plantation white sugar and not Khandsari which is produced by agricultural producers in the indigenous method and the levy of market fee on sales of khandsari sugar under the Adhiniyam is unwarranted as the Adhiniyam is intended for the protection of agricultural producers in the disposal of their products and only Khandsari produced by agricultural producers is included in the definition of agricultural produce in section 2a thereof and not Khandsari sugar
986P G 2
A manufacturer producing Khandsari Sugar by the modern method in the open pan process is not a producer within the meaning of section 2p of the Adhiniyam
980E 3
The object of the Adhiniyam as seen from the prefatory note and preamble is to protect the agricultural producer from exploitation
Protection of any industrial producer is not the object of the Adhiniyam
979G 4
The Khandsari sugar produced by the petitioners in their mills with the aid of power in the open pan process by employing large number of employees to whom the Industrial Disputes Act Minimum Wages Act Factories Act
Employees Provident Fund Act and similar enactments apply 970 is an industrial product which is very different from Khandsari produced by agricultural or sugarcane growers in the old indigenous method
982E F 5
The Adhiniyam originally intended to protect the interests of agricultural producers has not become a marketing legislation under entry 28 of List II in the Seventh Schedule by the mere fact of inclusion of one or more industrial products in the definition of agricultural produce in section 2a of the Adhiniyam
983H 984A 6
The prefatory note and the preamble can be looked into in the present case as there is dispute between the parties on the question whether Khandsari sugar produced by the petitioners which is not included in the schedule or definition of agricultural produce in the Adhiniyam while Khandsari is mentioned in the definition of agricultural produce in section 2a thereof can be the subject matter of levy of market fee under the Adhiniyam
984F G 7
The principle underlying the levy of tax cannot be made applicable to the levy of market fee under the Adhiniyam
Both Plantation While Sugar and Khandsari Sugar are industrial products and there is discrimination against Khandsari Sugar in seeking to subject it to the levy under the Adhiniyam leaving out plantation White Sugar 988B Laxmi Khandsari Etc
vs State of UP  others  Paunakram vs State of Punjab AIR 1975 SC 187 and Andhra Sugars ltd Anr etc
vs State of Andhra Pradesh  Ors 1968 I SCR 705 referred to