1 73 1e Iv 1 C r CWPNo9019 of2005 1 1V INTHE HIGHCO OF PUNJAB AND HA1A AT 11 CHANDIGAR t 7 4e0n CWPNoI 9019 of2005 Dateofdecisio412010 MlsIndianSucroseLtd eeePetitioner Versus StateofPunjaband others 1 CORAM HONBLEMRJUSTICEMMKUMAR r HONBLEMR JUSTICE JASWANT SINGH e Present MrAshok Sr Advocatewith U Mr IvRSharma Advocatefor the I Mr KLGoyalSr Advocatewith Mr SandeepGoyalAdvocate Mr Vivek Bhandari I Mr G1Sethi Advocatefor the 4r Mr Amol Rattan SinghandMr PCJain Addl AGs Punjab Z for the r 1 o bereferredto theReporter or not 2 Y 2Whether the shouldbe in theDigest2744 Cr Z MMKUMAR J c8 This is a bunchof 52 petitions filed underArticle 226 of 1 e theConstitutionraising a common oflarThe prayermadein all Z thepetitions is for quashing the notificationdated275988 imposing a tax L3m c 50P for 100Kgs on the of sugarcane byor Oll behalf of the cane rnill like the The have also prayed for lssuancc of declarationto the effect that no uix on of couldbe levied and collected from the under the sugarcane of the PunjabGeneral Sales Tax Act 1948 or brevitythe PGST 9in the face of lcvyand collection of such like tax under 11 Section17 of the Sugarcane of Purchaseand Supplyl Act 1953 for brevitytke1953 Act9which is claimedto be a specialAct governtng a11aspectsof purchasesupplyand levyof purchasc taX On thC Uma 2014.01.15 11: 13 Scanned True Copy of Original PHHC,Chandigarh JOYTI RANI 2016.03.29 14:44 I attest to the accuracy and integrity of this document m 74 1 4CV CWP No9019 of2005 2 1 In thatregardprimary relianceof the hasbeen on the of Honble the Supreme Court in the case ofGovind SugarMill r v Stateof Bihar 199979SCC 76 Likewise on the same analogy a prayer 1 i hasalso beenmadefor declaring Section 19 Item40f ScheduleH of the PunjabValue Added Tax Act 2005 or brevitythe 2005 A as unconstitutional as the same would not be in respectof 1 and tax thusnot leviableunder the saidAct The petitioners are in the manufactureof sugar 0 molassespress mudsand They which is the D main raw materialfrom the ers to produce sugar or molassesBoth the aforesaidproducts are sold under the Govemment Control Orders The rate Z of raw materialpurchased i sugarcanebeing produce to be paidto 8wmers and selling 1S also fixed by the I Govemmentof India from time to time It can also be modified and c8 increasedbythe StateGovemmentunderthe 1953Act The tax is 1 1 collectedbythe Stateof Punjabunder the provisionsof PGST Act 1948 Z 0m The claim of the is thatin pursuanceof power underEntry54 of List II of 7 Scheduleof the Constitution the State of Punjabhas also enacteda specialAct which is refetred as 1953Ac It has beenclaimed that 1953 Act deals with all aspectsof purchasesupplyand levy of tax on the sugar cane suppliedto sugar factoryby cane growers A specificreferencehasbeen made to Section 17 of the 1953 Act which of purchase tax The case of the petitioners is that PGST Act 1948 imoses tax on sale or purchase of all goodsincluding sugarcane gcnerally although that Act has also been enactedin pursuance of exercise of powet under Entry54 of List II of 7 Schedule of the Uma 2014.01.15 11: 13 Scanned True Copy of Original PHHC,Chandigarh JOYTI RANI 2016.03.29 14:44 I attest to the accuracy and integrity of this document r 75 r7 P f l 1 C CWP No9019 of2005 3 7 Constitution tp the of the PGST Act 1948 a tax 1S with reference to taxable retum of dealer and it its own for taxation and collection of tax The case of the petitioners as projectedin the p6titionand duringthe courseof is that while similar with parimatena goveming the sale and of sugarcane in the State of m Bihar Honble the Court hasheld thatlevyunderthe specialAct alone would survive and reliance has been placedon the of 4 Honble theSupreme Court in Govind SugarMillss case lpra9 According to the averments madein thepetitionthe mill hasbeentreatedas a reservedarea underclause60f the SugarCane Z Control Order 1966 which has been issued by the Central Govemment 01 4c undertheEssentialCommoditiesAct 1955 forbrevitythe 1955Ac As a I of thenotification the sugarcane growerin a particular area c25 as a reservedarea are directedto supply750Ioof the sugarcane 1 AV2 by them to the mill The mill is also bound to take Z t3m delivery of the sameA is on the sugar cane growers from exportingtheir produceoutside the reservedarea and like wise the mill is also Oom sugar cane outside the reservedarea Any violation of the Control Order and the notications issued thereunderwould attract criminalprosecution under Section 7 ofthe Essential Commodities Act 1955 The case ofthe petitioners is that neither the fannersare al owed to sell their produce outside the reserved area nor themill is to sugar cane from outsidethereservedarea Therefore the prolibition between the cane growers and the mill the characterof acquisitionof propertybecausethere is no element of free Uma 2014.01.15 11: 13 Scanned True Copy of Original PHHC,Chandigarh JOYTI RANI 2016.03.29 14:44 I attest to the accuracy and integrity of this document 76 1 11 r r C CWP No 9019of2005 4 consentwhich is an essentihl of a valid It is a1s0 i assertedthatthereis no scopefor principle of demandand supply to operate and the sugar mills like the are bound to pay the statutoiy priceto the cane growersas flxedbythe CentralGovemment In thewrittenstatementfiled bythe thebroadfacts have not beendisputedIt has howeverbeen pointed out that the m Q mills have been payingtax On of sugarcaneunder the PGST Act 1948 10 Theyare also liableto pay the tax in accordancewith the 0 of 2005Act The State hasassertedthat 1953Act was enforcedin orderto controlthe supplyof sugar cane and tax on the e basisof the rate of the sugarcanewas levied As per the notificationdated Z 275998 issuedunderSection1711ofthe 1953Act 50 paisafor 100Kgs 2 r of sugarcanebecomespayable on the of sugarcanefrom the I farmers It has been clarifledthat underthe 1953Act tax is payable on the C8 basis when the sugarcaneis from the fannerswhereas underthe 2005 Act the tax 1S on the basis of rate The argument Z thatthereis no connectionbetweenthetax paidunderthe1953 m Act or under the 2005 Act as the incidenceof tax in both the cases is differentIt has thus been assert6dthat two taxes under two different do not tantamount to doubletaxation It is also claimedthat in anycase there is no bar under the Constitution to imposetwo taxes under two differentenactments on the same goods which mightbe basedon the same Entrylike Entrl 54 ofList II of 7 ScheduleTherefore the petitioner is undera legalobligation to pay Tax undersection 19 ofthe 2005 Act or under PGST Act 1948 even if a nominal tax is claimed under the 1953 Act The primiiryreliance by the State of Punjabin their replyhas Uma 2014.01.15 11: 13 Scanned True Copy of Original PHHC,Chandigarh JOYTI RANI 2016.03.29 14:44 I attest to the accuracy and integrity of this document 77 6 1 1 e CWPNo 9019of2005 5 P 1 beenon the of Honble the Court in the case of Jagatiit Sugar Mills v Stateof Putiiabandanother199511 SCC 67 wherethe levy of tax underthe PGST Act 1948 has beenupheldIt is claimedthat the aforesaid has nOt been considetedin the later in the caseof Govind SugarMill6 supralIn Jaatiit SugarMillss case supralit has been held that tax is to the State Govemment if not under m C4 Section4 B thenunderSection l11 ofthe PGST Act1948 The sugar mills 3 0 in theStateofPunjabhave been assessedto tax aRerthe decisionofthe Full 1 Benchin the case of Morinda CooperativeSugarMills Ltd v Assessing Authoritvandothers 1995 999STC 468 4 When thematter came up for considerationbefore this Court Z for motion hearing an interim order was the 2 r fromresorting to coercivestepsfor recoveryofthe tax demandede 4 Mr Ashok AggarwalMr KLGoyal Mr RSethi and Mr c25 Vivek Bhandari leamedcounselhaveaddressedarguments on behalfof the Their submissionis inspiredby the of Honble the Z SugarMillss case supra9Theyhave argued that 1953Act beinga specialenactment for levy tax exclusively on sugar canealso dealswith of supplyanddistribution of sugar cane Accordingto the learnedcounsel it would overide the of PGST Act 1948or even the 2005 Ac It hasbeensubmitted thatboththe PGST Act 1948and 2005Act are generalActs which provides for collection of taxes on sale and of all goods whereas1953 Act deals onlywith the of sugarcane Placing relianceon various of thejudgement rendered in the case of Govind SugarMillss case lpra9 it has been submittedthat both the Acts have Uma 2014.01.15 11: 13 Scanned True Copy of Original PHHC,Chandigarh JOYTI RANI 2016.03.29 14:44 I attest to the accuracy and integrity of this document 78 1 r6 J 4 1 1 L1 V 11 CWP No019 of2005 6 beenframedin exercise of powersderived from Entry54 ofList II of 7 Scheduleand the 1953 Act would govem the levyof purchase tax as it is a speCialAct Theyhavealso referredto the statement of objects and reasons which deals with the purchase of sugar cane to protectthe interest of the cane growerSeReferring to thereasoning by a Division Bench of thePatnaHighCourt in New India Sugar 1lZ Mills Ltd and anotherv Stateof Bihar and others1998 1091STC 394 l which has been reversed 111Covind SugarMillss case supra leamed I Counselhavepointedout that no doubletaxationcould bejustifiedon the same or person byIevying the same underdifferentenactments withoutrepealing theother The Division Benchof thePatnaHighCoun in Z 5r New IndiaSugarMillss case supralhastakentheview thattwo taxation on 2 C the same or person could be imposedby differentenactments 5 which has been reversed to the leamedcounsel it cannot be justifledbykeeping in view thedifferentobjects ofboththestatutes Z It has been Airther submittedthat of Honble the Court in JagatiitSugarMills case supral has been renderedbya Bench and in Govind SugarMillscase SUPralhas been renderedby a Bench yet the which appearsto laydown thelaw more and and thereforeit hasto be followed for theview takenbytheHonble Supreme Court in Govind SukarMillsI case supra9Mr Sethi has submittedthat earlier in JagatiitSugarMillscase ipralhasfailed to Uike into account th provisionsof the specialenactment as 1953 Act In supportof his submissionlearnedcounsel has placedreliance on two Full Bench of this Court rendered 111the cases of Mls Uma 2014.01.15 11: 13 Scanned True Copy of Original PHHC,Chandigarh JOYTI RANI 2016.03.29 14:44 I attest to the accuracy and integrity of this document 79 1 r1M 0 CWP Noe9019of2005 7 P 1 Indo Swiss Time Ltd Umrao and others 1981 Ve PLR 335 and Mls KulbhushanKumarandCo v StateofPuniaband another 1983PLR 768 Per contra Mr PlCJain and Mr Amol Rattan learned AdditionalAdvocateGenerals Punjabhai7earguedthat the matter lS no longer as the questionhad fallen for considerationof Honble the Court in the case ofJagatiitSugarMills lpra 1 According to r theleamedcounsel the sugarcanesold bythe cane growers themselves to t the petitionermill or the sugar manufacturesmay not be excigableto purchasetax underSection4 B but would be so under Section4 11 read with Section 6 The aforesaidView has been consideredby a 5 JudgeBench of this Court in thecase of Morinda Sugar Z Mills 2 Ltd v AssessingAuthorityand others 1995991 STC 468 Following the lX Vlew taken by the Honble Court JagatiitSugarMills 111 case supralthe S canelS liable to pay purchase tax The leamedStateCounselhavealso arguedthat even at the Z time when the 111Jagatiit SugarMills case and Morinda 5 C CooperativeSugarMillscase supra9 WaS deliveredthe sugar mills have been paylngpurchasetax Oll the purchase of sugar cane from the cane growersunderthe 1953Act the Bihar and Purchasel Act 1981 lead to reopening the questionwhich haslreadybeen settled Anothersubmission made by the IearnedStateCounhel1S that there 1S nothingin Article 265 of the Constitutionwhich may indicatethattherecould be no doubletaxation that regardreiiance has been placedon the judgementof Honble the Supreme Court in the c2se of Arvinder Singh v Stateof Puniab AIR 1979 eee4reaeeeem Uma 2014.01.15 11: 13 Scanned True Copy of Original PHHC,Chandigarh JOYTI RANI 2016.03.29 14:44 I attest to the accuracy and integrity of this document 80 P P4 1 1 CWP No 9019of2005 8 1 1 SC 321 It has been arguedthat even if on the same subjectrnatterthe legislature choosesto levytax twice there is no in the flscal adventuresave whereother exist The aforesaidview has alsobeenfolIowedbyHonb1etheSupreme Court in the case ofRadhakisan R v Addl Collector DruRand others AIR 1995 SC 1540 Replying to the otherarguments learnedState counsel have m Q2 pointedout in JagatiitSugarMills case was renderedbya 3 0 JudgeBench whereasjudgement in Govind Suaar Mills case supra9has beenrenderedby a 2TudgeBench It hasbeen submittedthat Full Bench ofthis Court in thecases ofKulbhushanKumar and Indo Swiss Ltdsupraldo not advancethecase of the 111asmuch as both Z the Full Benches specificallyrefer to conflict of Benches of 2 r superiorCourt According to theleamedcounsel the of the Full Bench would applyif the Benchesof the superiorCourt have d5 delivered the conflicting whereas lll the presentcase the Z coveringthe issuehasbeen deliveredby a 3JudgeBench and Llm thefore it is n0t open to this Court to concludethat purchase tax under SectioniK19ofthe PGST Act 1948 or 2005Act are not payable The tlrst questionwliich would arise for determinationlS whether Bench of the Honble Supreme Court rendered lll the case of JagatiitSugarMills supralis binding on the partiesIn the aforesaidcasethequestionof law was posedin para 40f the and in whetherte sugarmill was liable to pay purchase tax on the sugarcane 1by it from the growers of the sugarcane In a categoricalanswer to he aforesaidquestionit has been held that Section 4 11 of the PGST Act 1948 levyof purchase tax on alI sales Uma 2014.01.15 11: 13 Scanned True Copy of Original PHHC,Chandigarh JOYTI RANI 2016.03.29 14:44 I attest to the accuracy and integrity of this document 81 1 CWP No9019 of2005 9 and Once the aforesaid in the terms lays down that tax 1S leviableunder Section41 then it 1S well ngh for us to say that sucll a tax cannot be levied on thegroundthat PGST Act1948 is a statute of generalcharacterwhich deals with sale or purchase tax in respectof all goodswhereas the 1953 Act is a specialAct which dealswith all aspectsincludinglevyof tax on sugarcane 1 t The petitionerhas convassed for the contraryview on the basis of the 0 rendered by2 JudgeBench ofthe Honble Court in the U I case of Govind Sugar Mills lpral The aforesaidjudgement has been renderedby Bihar Finance Act 1981 and Bihar I Regulation of Supplyand Purchase9Act 1981byholdingthat both the Z Acts would operatein the same field The principle followedby r theHonble Court is that the Act beinga specialAct to all aspectsof control of the sugarcaneas well as levyof 5 tax has to be over the FinanceAct which empower the Stateto levyall commercial taxes whereasthe sugarcaneAct Z lm the levyof tax onlyon sugarcane Such a course would not be availableto us as thespecitlc Act which is to the petitionernamelyPGST Act 1948 hasbeen bya 3 JudgeBench 111the case of Jagatiit Sugar Mills case supra9Furthermore we would preferthe adoptedby the Honble Supreme Court for PGST Act1948 which 1S ln questionbeforeUS The judgement of Govind Sugar Mills case 6supral has emerged out of different statute It is needless to that the by the Honble Supreme Court is a law declared in respectof the Oeld occupiedby it which is bindingon all Courts within the territory of India including theHighCourts In that regard Uma 2014.01.15 11: 13 Scanned True Copy of Original PHHC,Chandigarh JOYTI RANI 2016.03.29 14:44 I attest to the accuracy and integrity of this document 82 l CWP No9019 of2005 10 reliancemay beplacedon the observationsmadebya Constitution Bench of theHonble Supreme Court in the case of Behram Khurshid Pesikack V StateofBombavAIR 1955 SC 123 Even otherwise the decision of3 Judge Benchin Jagatiit SugarMills case lpralhas to be followed becausethat decision is by a largerBench than the one decidingthe Govind Sugar Mils case supra9The 3 JudgeBench decision is also under m thePGST Act 1948which is to the Therefore in our View thereis no possibility whatsoeverto reopen the questionbyopining U thatthe of Section 19of thePGST Act1948 would not apply 1 1 and those of 1953 Act alone would applyOn the basis of the aforesaid I premise the writ petitions are liableto bedismissed Z r On account of the bindingprecedent availablein the form of 2 of JagatiitSugarMills case Jpra9 we are not dealingwith any I ofthe contentionsraised bythe which couldhave beenotherwise c8 examinedin thelightofthe observationsmade in Govind SugarMills case supra Z Llm As a sequelto the abovediscussion all the writ petitions fail andthesame are dismissed A copy ofthis orderbeplaced on the file ofconnectedcases 4 MMKumaro Judge 20 12010 Judge okg 8 CWPNo0300 of2005 MJs The Batala CoopSugarMiUs Ltd VeState v Stateof Punjabandothers Uma 2014.01.15 11: 13 Scanned True Copy of Original PHHC,Chandigarh JOYTI RANI 2016.03.29 14:44 I attest to the accuracy and integrity of this document 83 7 CVPNoOl9of2005 11 CWP No1641of2006 Mls Wahid SandharSugars Ltd v Stateof Punjab and others CWP No20303of2005 MlsThe NakodarCoopSugarMills Ltd V StateofPunjabandothers CWPNol0312 of2005 Mls The BudhewalCoopSugarMills Ltd V StateofPunjaband others CWP No0332of2005 Mls The Ajnalacoop SugarMills Ltd v State ofPunjab and others CWPNo20335 of2005 Mls The NawanaCoopSugarMills Ltd V StateofPunjaband others CWP No0338 of2005 Mls The Faridkotcoop SugarMills Ltd V m Stateof Punjab and others C CWP No20339 of2005 MJs The SugarMills Ltd Stateof Punjaband olhers V CWP No 20345of2005 Mls The Faziilka SugarMills Ltd U Ve StateofPunjaband others CWPNo20355 of2005 Nlls The Morinda SugarMills Ltd V StateofPunjaband others CWPNo89 of2006 MlsRana Sugars Ltd v StateofPunjaband others CWPNo 1613of2007 Al3ugars Ltd V others Z CWPN0205ll of2005 Ms Tllll TARnN7798N CA1V others CWPNo024 of2005 Mls JndianSurcroseLtd v StateofPunjaband C2 others CWP No 1l l 00 of 2005 SugarMills v StateofPunjab I andothers c5 CWP No526 of2005 AB Sugars Ltd v StateofPunjabandothers 02 CWPN1117 of2005 SugarMlllsv StateofPunjab 1 and others CWPNo11134 of2005 SugarMills V Stateof Punjab Z andothers CWP Nol0341 of2005 Mls The Bhogpur SugarMills Ltd Clm V StateofPunjaband others CWPNo11442 of2007 Cosinos Inds Ltd V StateofPunjaband others CWPNo11463 of2007 Cosmos Inds Ltd V StateofPunjab and others CWP No1900f2003 SugarMills v StateofPunjab and others CWPNo 4191 of2003 SugarMllls V StateofPunjab and others CWPNoA192 of2003 SugarMills V Stateof Punjab andothers CWPNc4193Of2003 V StateofPunjab and others CWP N 4194 of2003 BhagwanpuraSugarMills V StateofPunjab andothers NoA 195of 2003 SugarMills V StateofPuniab others CWPNo196 of2003 SugarMills Ve StateofPunjab and others CWPNo197 of2003 SugarMills V StateofPunjab Uma 2014.01.15 11: 13 Scanned True Copy of Original PHHC,Chandigarh JOYTI RANI 2016.03.29 14:44 I attest to the accuracy and integrity of this document 84 1 r 9019of2005 12 and others CWP No 198 of 2003 SugarMills V Stateof Punjab andothers CWPNo16892 of2001 SugarMills V StateofPunjab and others CWPNo 16893of2001 SugarMills Ve StateofPunjab and others CWPNo 16894 of2001 SugarMills V StateofPunjab and others CWP No 16895 of2001 SugarMills V StateofPunjab andothers 1 CWPNo 16896 of2001 SugarMills V StateofPunjab 01 andothers CWPNo16897 of 2001 SugarMills V Stateof Punjab 0 and others U CWP No 16898of2001 SugarMills Ve StateofPunjab I andothers 9 CWP No 16899of2001 SugarMills V StateofPunjab andothers CWP No16900of2001 SugarMills Ve Stateof Punjab and others Z CWPNo12917of2001 SugarMills Ve StateofPunjab and others 2 CWPNo129180f2001 SugarMills V StateofPunjab C4 and others CWP No12919of2001 SugarMills V I andothers c8 CWP No 1683 of2004 SugarMlls V StateofPunjab rL1 andothers CWPNo 9612 of2008 Mls ABSugarsLtd v StateofPunjaband others Z CWPNo641 of2008 Mls Indian SurcroseLtd v StateofPunjab and others CWPNo684 of2008 Mls Indian SucroseLtd V StateofPunjaband others CWPNo17878 of2008 Mls A3ugars Ltd v StateofPunjabandothers CWPNo17945 of2008 Mls IndianSucroseLtd v StateofPunjaband others CWPNo1578 of2003 Mls Nakodar SugarMills Ltd Ve StateofPunjaband others CWPNo15324 of2003 Mls Wahid SandharSugarMills v Stateof Punjaband others ml r Cl Uma 2014.01.15 11: 13 Scanned True Copy of Original PHHC,Chandigarh JOYTI RANI 2016.03.29 14:44 I attest to the accuracy and integrity of this document