99 991e 1 4 4 VP No9019 of2005 1 lN THE HIGH COURT OF PAB HARYANA AT I er CHANDIGARH 7 S 1 1 4114 CWPNo9019 of2005 Date MlsIndianSucroseLtd eeePetitioner Versus StateofPunjabandothers eee 1 CORAM HONBLE MR JUSTICEMM KUMAR r HONBLE MR JUSTICE JASW SINGH Present Mrshok Sr Advocatewith U Mr MRShama Advocatefor thepctitioner Mr ICLGoyal Sr Advocatewith Mr SandeepGoyalAdvocate Mr Vivek Bhandari Mre GlZSethiAdvocatefor the Z forthe 1To be referredto theReporter or not 2 Y C thejudgemeshouldbc in theDigest274 MMlUMAR J C8 Thisis a bunchof 52 petitions filedunderArticle226 of oflaw The prayermadein all theConstitutionraising a common Z thepetitionsforquashing thcnotificationdated275988 imposing a tax lS W C 50P for 100 Kgs on the of sugarcanc by or Oll behalfof the cane mill like the The have also for of declarationto the effect that no tax on of couldbe levied and collected from the petitioncrunder the sugarcane provislonsof the General SalesTax Act 1948 or brevity the PGSTAct1948 in the faceof lcvyand collectionof such like tax under Section17 of the Sugarcane of Purchaseand Supply Actlwhichis claimedto be a special Act Act 1953 4forbrevilytle 1953 all aspects supplyand levyof purchasc tax on the Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document av 400 1 1 4 r 10 CWP No 9019of 2005 2 In that regardprimary relianceof the petitioner has been on the of Honble the Supreme Court in the case of Govind SugarMill r 1 V Stateof Bihar 19999 SCC 76ikewise on the same analogya prayer has also beenmade for declaring Section 19 Item 40f ScheduleH of the PunjabValue Added Tax Act 2005 or brevitythe 2005 Actl as unconstitutional as the same would not be applicable111 respectof 1 01 and purchase tax thusnot leviableunder the saidAct The petitioners are in the manufactureof sugar U molassespress mudsand They sugarcane which is the main raw materialfrom the ers to producesugaror molassesBoth the aforesaidproducts are sold under theGovemment ControlOrders The rate Z of raw material 1 sugarcanebeing produce to be Qf paidto farmers and sellingsugarcanel is also fixed by the I Govemmentof India from time to time It can also be modified and c8 increasedbytheStateGovemment under the 1953Act The tax 1S collectedbythe Stateof Punjabunderthe of PGST Act 1948 Z 0a The claim of the is thatin pursuanceof power underEntry54 of List II of 7 Scheduleof the Constitution the State of Punjabhas also enacted a specialAct which is refeiTed as 1953 Act It has been claimed that 1953 Act deals with all aspectsof supplyand levyof tax on thesugarcane suppliedto sugarfactorybycane growers A speciflcreferencehas been madeto Section 17 of the 1953 Act which of purchase tax The case of the petitioners is that PGST Act 1948imosestax on sale or of all goodsinluding sugarcane generally2lthoughthat Act has also been enactedin pursuance of exercise of power under Entry54 of List II of 7 Schedule of the Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 401 1 1 r r 1 V CWPNo9019 of2005 3 ConstitutionAccording to the ofthe PGST Act 1948 a tax is imposedwith referenceto taxable retum of dealer and it its own for taxationandcollectionoftax The case of the as in the p6titionand duringthe course of is that while considering similar legislationwith parimatena provlSlOns the sale and of sugar cane in the State of m 0 Bihar Honble the Court has held that levyunder the specialAct 0 alone would survive and reliance has been placedon the judgement of t4 HonbletheSupreme Court in Govind SugarMillss case lpral tD to theavermentsmadein the petitionthepetitioner mill has been treatedas a reservedarea underclause60f the SugarCane Z Control Order 1966 which has been issued by the Central Govemment Q1 undertheEssentialCommoditiesAct 1955 or brevitythe 1955A As a of thenotiflcation thesugarcane growerin a area c8 as a reservedarea are directedto supply75010of the sugar cane 1 7 by them to the mill The mill is also bound to take Z delivery of the same A is on the sugar cane growers from exportingtheir produce outsidethe reserved areaand like wise the mill is also Som sugar cane outsidethe reservedarea Any violation of the Control Order and the notiftcations issuedthereunderwould attract crirninal underSection70f the EssentialCommodities Act 1955 The case ofthe petitioners is that neither thefarmersare al owed to sell theirproduce outsidethe reserved area nor themill is permittdto sugarcanefrom outsidethe reserved area Therefore the prohibition between the canegrowers and the mill the characterof of propertybecausethereis no element of free Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 402 CWPNo 9019of2005 4 consentwhich is an of a valid agreementIt is also that thereis no scopefor principle ofdemandandsupplyto operate and the sugar mills like the are boundto pay the statutory priceto the cane growersas fixedbytheCentralGovernment In the writtenstatementfiled bythe the broadfacts have not beendisputedIt hashoweverbeenpointed out that thepetitioner 1 mills have beenpayingtax on of sugarcaneunderthe PGST Act 1948 I0They are also liableto pay the tax in accordancewith the 4 PrOVlSlOnSof 2005 Act The State hasassertedthat 1953Act was enforced111orderto controlthe supplyof sugar cane and tax on the I Cr basisof the rate of the sugarcanewas levied As perthe notiflcationdated Z 2751998 issuedunderSection ofthe 1953 Act 50 paisafor 100Kgs r of sugarcane becomespayable on the of sugarcanefrom the farmersIt hasbeenclaritled thatunder the 1953Act tax is payable on the c8 02 basis of weightwhen the sugarcaneis from the farmerswhereas underthe 2005 Act thetax is on the basis of rate The argument Z thatthereis no connectionbetweenthetax paidunderthe1953 Act or under the 2005 Act as the incidence of tax in both the cases is differentIt has thus been assertd that two taxes under two different do not tantamount to doubletaxation It is also claimedthat in anycase thereis no bar undertheConstitutionto impose two Uixes under two different enactments on the same goodswhich mightbe basedon the same like Entr 54ofList II of7 ScheduleThereforethe petitioner is undera legalobligation to pay Tax undersection19 ofthe 2005 Act or underPGST Act 1948 even if a nominal tax is claimed under the 1953 Act The pnm iry relianceby the State of Punjabin their replyhas Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 1 403 1 0 17 CWP No 9019of2005 5 been on the of Honble the Supreme Court in thecase of Jagatiit SugarMillsv Stateof Puniab and another 1995 SCC 67 where the levy of tax under the PGST ct 1948 has beenupheldIt is claimed that the aforesaidjudgement has nOt been consideIed in the laterjudgement in the case of Govind SugarMillssupra9In JagatiitSugarMillss 6supra case lt has been held that tax is payable to the StateGovernmentif not under m Section4 B thenunderSection41 of the PGST Act1948 The sugar mills U in the tate ofPunjabhavebeenassessedto tax aAerthedecisionofthe Full Bench in the case of Morinda CooperativeSugarMills Ltd v Assessing Authoritvandothers 1995 991STC 468 When the mattecame up for considerationbefore this Court Z for motion an interim orderwas passed the 2 1f e fromresorting to coercivestepsfor recoveryofthe tax demanded S Mr Ashok AggarwalMr ICLGoyalMr GRSethi and Mr Vivek Bhandari leamedcounselhaveaddressedargumentson behalfofthe 1 petitionersTheir submissionis inspiredby Z the of Honble the Govind SugarMillss case supralTheyhave arguedthat 1953Act beinga specialenactmentfor levyof purchase tax on sugarcane also dealswith of productionsupplyand distribution of sugar cane According to the leamed counsel it would override the provisions of PGST Act 1948or even the 2005Act It hasbeen submitted that boththe PGST Act 1948and 2005 Act are generalActs which provides for collection of cofnmercialtaXes on sale and purchaseof all goods whereas1953 Act d3als onlywith the of sugar Placing cane relianceon variousphrasof thejudgement renderedin the case of Govind SugarMillss case s lpral it has been submitted that both the Acts have Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 464 4 9 rr 4 J Ce CWP No9019 of2005 6 beenframedin exerciseof legislative powersderived from Entry54 ofList II of 7 Scheduleand thereforethe 1953Act would govem the levyof purchase tax as it is a specialAct Theyhave also referredto the statement of objectsand reasons wliich deals specifitally with the purchase of sugar cane to protectthe interestof thecane growers Referring to thereasoning bya Division Bench of thePatnaHighCourt in New India Sugar j 0 Mills Ltd and another v Stateof Bihar and others199801091 STC 394 l4 which has been reversed111Govind SugarMillss case supral leamed I Counselhavepointedout thatno doubletaxation could bejustifledon the same or person byIevying thesame underdifferentenactments withoutrepealing theother The Division Benchofthe PatnaHighCourt in Z New IndiaSugarMillss case supralhastakentheview thattwo taxationOn 2 C the same or personcould be imposedbydifferentenactments I c8 which has been reversed to the leamed counsel it cannot be justi8edbykeeping in view thedifferentobjects ofboth thestatutes Z It hasbeen Airther submittedthat of Honble the a Court in Jagatiit Sugar Mills case 0supraalthough has been renderedbya 3JudgeBench and in Govind SugarMillscase supralhas been renderedby a 2TudgeBench yet the which appearsto laydown thelaw more andaccurately andthereforeit hasto be followed for theview takenbytheHonble Supreme Court in Govind SuRarMillst case supralMr Sethi has submittedthat earlier renUered 111JagatiitSugarMillscase supra has failedto take into account thtlproVlSlOnsof the specialenactment as 1953Act In supportof his submissionlearnedcounsel hasplacedreliance on two Full Bench jL of this Court rendered in the cases of Mls Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 405 r jll J CWP No 9019of2005 7 Indo Swiss Time Ltd Ve Umrao and others 1981 PLR 335 and Mls KulbhushanKumar and Co v StateofPuniabandanother1983PLR 768 Per contra Mr PlCJain and Mr Amol Rattan leamed Additional Advocate Generals Punjabhaile arguedthat the matter is no longer as the questionhad fallen for considerationof Honble theSupreme Court in the case of JagatiitSugarMills lpra9According to 1 theIearnedcounsel the sugarcanesold bythe cane growersthemselvesto 1 0 U the petitionermill or the sugar manufacturesmay not be to purchase tax underSection4 B but would be so excigable under Section 4 lI 11 readwith Section 6 The aforesaidVlew has been consideredby a e JudgeBench of this Court in the case of Morinda CooperativeSumrMills Z dv AssessingAuthoritvand others 1995999 STC 468 Followingthe Of view taken by the Honble Court in JagatiitSugar Mills case c8 supraltheFull Bench held thatthepurchaser of sugar cane 1S liableto pay tax The learnedStateCounselhave also argued that even at the time when the in Jagatiit SugarMills case and Morinda Z 0a CooperativeSugarMillscase supral was deliveredthe sugar mills have beenpaying tax on the of sugar cane from the cane growersunderthe1953Act Thus theargumentis thatmerely becauseafter theBihar FinanceAct Bihar SugarCane of Supply andPurchase9Act 1981hascome would not leadto the questionwhich has beensettled Another submissionmadeby the leamed State Counel is that there is nothing 111Article 265 of the Constitution which thattherecould be no double taxation In that regardreliance ha been placedon the judgementof Honble the Supreme Court in the c4se ofArvinder Singhv StateofPuniab AIR 1979 Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 406 ed 11 1 01 1 CWP Noe9019of2005 8 SC 321 It has been arguedthat even if on the same subjectmatter the choosesto levytak twice thereis no inherentinvalidityin the flscal adventuresave whereother exist The aforesaidview has alsobeenfoIlowedby Honble theSupreme Court in the case ofRadhakisan Rat v Addl Collector Dr and others AIR 1995 SC 1540 Replying to the otherargumentslearnedStatecounsel have 1 0 pointedout in JagatiitSlar Mills case was renderedbya 3m U JudgeBench whereas 111Govind SugarMills case has 4 beenrenderedby a Bench It hasbeen submittedthat Full Bench ofthis Court in thecases ofKulbhushanKumar and Indo Swiss X 41 Udsupra9do not advancethe case of thepetitionerin as much as both Z the Full Benches refer to conflict of coeequalBenchesof superiorCourt According to theleamedcounsel the of the Full 1 X Bench would iipplyif the coequalBenchesof the superiorCourt have r2S delivered the contlicting whereas in the present case the Z coveringthe issuehasbeen deliveredby a 3JudgeBench and t thefore it is not open to this Court to concludethat purchase tax under Section4KlIofthe PGST Act 1948or 2005Act are not payable The 6rst questionwliich would anse for determination 1S whether Bench of theHonble Supreme Court rendered lIl the case of JagatiitSugarMills supr is binding on the partiesIn the and in namelywhethertlie sugarmill was liable to pay purchase tax on the sugarcane by it from the growers of the sugarcane In a categorical answer to he aforesaidquestionit has been held that Section 4 1 of the PGST Act 1948 levyof purchase tax on all sales Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 407 V 4 CWP No 9019of2005 9 and Once the aforesaid 111the categorical terms lays down that purchase tax iS leviable under Section 4619then it is well nigh impossible for us to say that sucll a tax cannot be leviedon the groundthat PGST Act 1948 is a statute of generalcharacterwhich dealswith sale or purchase tax in respectof all goodswhereasthe 1953 Act 1S a specialAct which dealswith all aspectsincludinglevy of purchasetax on sugar cane The petitionerhas convassed for the contraryView on the basis of the 0 0 renderedby 2 JudgeBenchofthe Honble Court in the case of Govind SugarMills supralThe aforesaid has been tD rendered by Bihar Finance Act 1981 and Bihar I cr Regulation of Supplyand Purchase Act 1981 byholdingthat both the Z Acts would operatein the same fleld The principle foIlowedby e2 r 1 the Honble Court is that the Act being a specialAct r25 pertaining to all aSPectsof control of the sugarcaneas well as levyof purchase tax has to be over the FinanceAct which empower the Z Stateto levyall commercial taxes whereasthe sugarcaneAct m empoweredthe levyof purchase tax only on sugarcaneSuch a course would not be availableto us as thespeciflcAct which is applicable to the petitionernamelyPGST Act 1948hasbeen bya 3 JudgeBench 111the case of JagatiitSugarMills case supra Furthermorewe would preferthe bythe Honble Court for PGST Act1948 which lS in questionbeforell The of Govind Sugar Mills case upralhas emerged out of different statute Jt is needless to that the by the Honble SupremeCourt is a law declared lll respectof the fIeld occupiedby it which is binding on all Courtswithin the territoryofIndia including theHighCourts In that regard Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 408 1 CWP No 9019of2005 10 reliancemay beplaced on the observationsmadebya Constitution Bench of the Honble Supreme Court in the case of Behram Khurshid Pesikack Ve StateofBombav AIR 1955 SC 123 Even otherwise the decision of3 Judge Bench in Jagatiit Suzar Mills case lpra9has to be followed becausethat decision is by a largerBench than the one decidingthe Govind Sugar Millss case supra9The 3 JudgeBench decision is also under m tX thePGST Act 1948which is to the Therefore in our Vlew thereis no possibility whatsoeverto reopen the questionbyopining 0 thatthe of Section 4 of the PGST Act1948 would not apply and thoseof 1953 Act alone would applyOn the basis of the aforesaid premisethe writ petitions are liableto bedismissed Z On account of the bindingprecedent available in the form of 2 r of JagatiitSugarMills case supralwe are not dealing with any ofthe contentionsraisedbythe which could havebeenotherwise c8 examinedin thelightofthe observationsmadein Govind SugarMills case supra Z Ll As a sequelto the abovediscussion all the writ petitions fail andthesame are dismissed A copy ofthis orderbelolaced on thefile of connectedcases 7 9 6MMCumarl Judge 1 2Oel2010 Judge okg aeeese4e161eeeee6eeeee4eeeeeeeeeeeeeee4e41eeeeeeeeeee4eeeeene6eeeeee44eeeeeeeeeaeena W CWPNo20300 of2005 Mls The Batala CoopSugarMiUs Ltd v State ofPunjaband others CWP No998 of2006 PicadilySugarand Allied Industries V Stateof Punjaband others Radhika 2014.01.14 15: 26 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:57 I attest to the accuracy and integrity of this document 409 QWPNo 9019of2005 12 and others CWP NoA198of2003 SugarMills V andothers CWP No16892of2001 SugarMills V StateofPunjab andothers CWPNo 16893of2001 SugarMills Ve StateofPunjab andothers CWPNo 16894 of2001 SugarMills V StateofPunjab and others CWPNo 16895of2001 SugarMills V StateofPunjab atldothers 1 CWP No 16896of 2001 SugarMills V StateofPunjab andothers CWP No16897of2001 SugarMills Ve Stateof Punjab andothers U CWP No16898of2001 SugarMills V StateofPunjab I andothers t CWP No16899of2001 SugarMills Ve StateofPunjab andothers CWP 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