1 31 r 1 9019of2005 1 1P42 INTHE IIIGH COURT OF IAB AND HARYANA AT i CHANDIGARH 1 4 I 9 1 CWP Nol 9019 of 2005 Dateofdecisiolo2010 Mls IndianSucroseLtd eeePetitioner Versus StateofPunjaband others eee 1 CORAM HONBLE MR JUSTICEMM KUMAR t2t1 HONBLEMR JUStICE JASWANT SINGH 0 Present1 MrAshokAggarwaSr Advocate with 0 Mr NIRSharmaAdvocatefor thepetitioner Mre ICLGoyalSr Advocate with 0 Mr GoyalAdvocate Mr Vivek Bhandari Mr GSethi Advocate for the petitioner Mr Amol RattanSinghand Mr PlCJain Addl AGs Punjab Z for thei 2 11o be referredto theReporter or not 2 Y 0f 2Whether the shouldbe reported in theDigest274 Cr M KUMAR J c8 This is a bunch of 52 petitions filed underArticle 226 of 1 4 theConstitution raising a common oflaur The prayer made in all Z thepetitionsis for quashing the notificationdated 275988 imposinga tax C 50P for 100 Kgs on the of sugar cane by or Oll behalf of the cane mill like the The have also prayedfor of declaration to the effect that no purchasc tax on of lssuancc could be levied and collected from the under the of the PunjabGeneral Sales Tax Act 1948 6forbrevity the PGST Act1948 9 in the ce of lcvy and collection of such like tax undcr Section17 of the PunjatSugarcane of Purchaseand Supplyl Act 1953 6forbrevitytle 1953Actowhich is claimedto be a special Act 1 all aspectsof supplyand levyof PurChaCtax on the governing Anita 2014.02.18 16: 09 True Scanned Copy Of The Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 32 4Cj 1 Ilv CWP No 9019 of2005 2 1 In that regardprimaryreliance of the petitioner has been on the 1 T 1 1 of Honble the Sdpreme Court in the case of Govind SugarMill v Stateof Bihar 199901SCC 76 Likewise on the same analogya prayer has also been made for decl2lringSection 9 Item 40f Schedule H of the 1 PunjabValue Added Tax Act 2005 6forbrevity the 2005 Actl as unconstitutional as the same would not be 10 respectof 1r and purchase tax thusnot leviable under the said Act 0 The petitioners are engagedin the manufacture of sugar 0 molassespress muds and bagasseeTheypurchase sugarcane which is the tD main raw material from the ers to producesugar or molasses Both the aforesaidproducts are sold under the Govemment Control Orders The rate Z of raw materiaourchased i sugarcanebeing produceto be paidto farmers and selling is also 8xed by the Governmentof India from time to time It can also be modifled and C8 increasedby the State Governmentunder the 1953 Act The purchase t 1S 1 collectedby the State of Punjabunder the provisions of PGST Act 1948 Z The claim of the petitioners is that in pursuanceof power under Entry54 of Ll List II of 7 Schedule of the Constitution the State of Punjabhas also enacted a specialAct which is refeired as 1953 Act It has been claimed that 1953 Act dealswith all aspectsof purchasesupplyand levy of purchase tax on the sugar cane suppliedto sugar factoryby cane growers A specific reference hasbeen made to Section 17 of the 1953 Act which llnposition of purchase tax The case of the petitioners is that PGST Act 1948imposes tax on sale or of all goodsincluding sugar cane generally thatAct has also been enactedin pursuance of exercise of power under Entry 54 of List II of 7 Schedule of the Anita 2014.02.18 16: 09 True Scanned Copy Of The Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document Irrwr 33 14jl i nn5 15 1 nn ie ie 11 11 11 1 CWPNo 9019of2005 3 0 to the provisions of the PGST Act 1948 a tax is rt4 Constitution r 4 1 with reference to taxableretum of dealer and it 1 its own mahineryfor taxation and collection of tax The case 1 1 of the petitionersas in the and duringthe course of is that while considering similar legislationwith pari matena the sale and of sugar cane in the State of prOVlSlOns 1 01 Bihar Honble the Court has held that levyunder the special Act 0 alone wouldsurvive and reliance has been placedon the judgement of t Honble the Supreme Court in Govind SugarMillss case 6supra 0 to the avennentsmade in the petitionthe petitioner 4 rnill has been as a reservedarea under clause60f the SugarCane Z Control Order1966 which has been issued by the Central Govemment L t under the EssentialCommoditiesAct 1955 6forbrevitythe 1955Act9 As a I 3 of the notification the sugar cane grower in a area S a reservedarea aredirectedto supply75010of the sugar cane as 1 W7 by them to the mill The petitionermill is also bound to take Z of the same A is on the sugar cane growers Om from their produce outsidethe reservedarea and like wise the mill is also Som sugar cane outsidethe reservedarea Anyviolation of the Control Order and the notiftcations issued would attract criminal under Section 70f the Essential Act 1955 The case ofthe petitioners is that neither thefarmers are al owedto sell their outsidethe reservedarea nOr themill is to purchase sugar cane fromoutsidethe reservedarea Thereforethe prolibition betweenthecane growersand the mill the of of property there is no element of free Anita 2014.02.18 16: 09 True Scanned Copy Of The Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 34 V CWPNo 9019of2005 4 which is an essentitllingredient of a valid It is also i asserted that there is no scopeforprinciple ofdemandand supplyto operate and thesugar mills like tle petitionerare boundto pay the statutory 3 1 1 sttement ftled by the the broadfacts 1 In the havenot been It h8s however beenpointed out that the 1 mills have been payingtax on of sugarcaneunderthe PGST Act D 0 1948 10 They are also liable to pay the tax in accordancewith the W of 2005 Act The Statehas assertedthat 1953 Act tD enforced 111orderto controlthe supplyof sugar cane andtax on the was 1r 4 basisof the rate of the sugarcanewas leviedAs per thenotiflcationdated Z Section17 ofthe 1953 Act 50 paisafor 100Kgs 275998 issued Ctl of sugarcanebecomespayable on th of sugarcanefrom the Ithas been clarified that underthe 1953 Act tax is payable on the farmers 5 basisofweightwhen the sugarcaneis from the farmerswhereas underthe 2005 Act the tax is on the basis of rate The argument Z there is no connectionbetween the paidunder the 1953 m Act or under the2005 Act as the incidenceof tax in both the cases is differenIt has thus been that two taxes under two different donot tantamountto doubletaxation It is also claimedthat in enactments anycase thereis no barunderthe Constitutionto imposetwo taxes under enactmentson the same goodswhich mightbe basedon the two same Entrylike 54of List II of 7 ScheduleTherefore thepetitioner under a legalobligation to pay Taxundersection 19 ofthe 2005 1S Act or under PGST Act even if a nominaltax is claimed under the 1953 Act The pnm ary reliance bythe State of Punjabin their replyhas Anita 2014.02.18 16: 09 True Scanned Copy Of The Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 1r 35 4 1 1 4 CWP No 9019of2005 5 r been on ofHonble the Supreme Court in the case of Jagatiit 1 t Sugar Mills v State and another199511SCC 67 where the levy 15 Ilb lr 1 of tax under the PGST 1t 1948 has been upheldIt is claimed that the 9 aforesaidjudgement has nOt been consideted in the later judgement in the Mill supra9 1 case of Govind Sugar In JagatiitSugarMillss case osupralit has been held that tax is to the State Government if not under 1 i tZ Section 4 B then underSection 419ofthe PGST Act1948 The sugar mills 5 0 W lll the StateofPunjabhavebeenassessedto tax aer the decisionofthe Full 1 Bench in thease of Morinda CooperativeSugarMills Ltd v Assessing 0 Authoritv and others 1995 999STC 4680 r 4 When the mattercame up for consideration beforethis Court Z for motion helringan interim order was passedrestraining the 2 r r frorn resorting to coercive stepsfor recoveryofthe tax demanded Mr Ashok AggarwalMr KLGoyal Mr GRSethi and Mr d5 Vivek Bhandaii learned counsel have addressedarguments on behalf of the Z petitionersTheir submissionis inspiredby the judgmentof Honble the Om Court in Govind SuaarMillss case lpral Theyhave arguedthat 1953 Act beinga specialenactmentforlevy tax exclusively on sugarcane also deals with of productionsupplyand distribution of sugar cane Accordingto the learned counsel it would overeride the provisionsof PGST Act 1948 or even the 2005 Act It has beensubmitted that both the PGST Act 1948and 2005 Act areneral Acts which provides for collection of coercial taxes on sale and purchaseof all goods whereas 1953 Act deals only with the purchaseof sugar cane Placing reliance on various paras of thejudgement rendered in the case of Govind SugarMillss case s lpra9it has been submitted that both the Acts have Anita 2014.02.18 16: 09 True Scanned Copy Of The Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document r 1 36 11 rX 1e 54r IX 1 CWP No 9019of2005 6 11ih 1 been framed in exercise of legislative powers derived from Entry54 of List 1 II of 7 Schedule and therefore the 1953 Act would govem the levyof h 14i p purchasetax as it ls a spe6ialAct Theyhave also referred to the statement of objectsand reasons wliich deals specifitally with the purchase of sugar cane to protectthe interest of the cane growers Referring to the reasoning adoptedby a Division Beochof the PatnaHighCourt in New India Sugar w C4 1 Mills Ltd and another v State of Bihar and others 1998 1091STC 394 0 0 which has been reversed tn Govind Sugar MiIlss case supra9leamed Counsel havepointedout that no doubletaxation could be justifiedon the 0 same commodity or person bylevyingthe same under differentenactments without repealing the other The Division Bench of the Patna HighCourt in Z New India SugarMillss case supralhastakentheview thattwo taxationon C the same or person could be imposed by differentenactments c8 which has been reversed According to the learnedcounsel it cannot be justifledbykeeping in view thedifferentobjectsofboth the statutes Z It has been further submittedthatjudgement of Honble the Qm Court in Jagatiit SugarMills case supra9although has been renderedby a 3JudgeBench and the in Govind SugarMillscase SUPralhas been rendered by a 2JudgeBench yet the judgement which appearsto laydown the law more and accurately and thereforeit has to be followed for theview taken bythe Honble Supreme Court in Govind Su2ar Mills case supral Mr Sethi has submitted that earlier judgement renderedin JagatiitSugarMillscase supra9has failed to take into account the provisionsof the specialenactment as 1953 Act In supportof his submissionlearned counsel has placedreliance on two Full Bench jtdgements of this Court rendered in the cases of Ms Anita 2014.02.18 16: 09 True Scanned Copy Of The Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 37 0 CWP No9019 of2005 7 11 Indo Swiss Time Ltd Ve and others 1981 PLR 335 and Mls 1 Kulbhushan Kumar and Co vIState ofPuniab and another 1983 PLR 768 Per contra Mr PlCJain and Mr Amol Rattan leamed Additional Advocate PunjabhaVearguedthat the matter lS no longer as the quetionhad fallen for consideration of Honble the Supreme Court in the case ofJagatiitSugarMills supra Accordingto 1 4X the learnedcounsel the sugartanesold by the cane growers themselvesto 0 0 the petitionermill or the sugar manufacturesmay not be excigableto purchase tax under Section4 B but would be so excigable under Section 4 tD 19 read with Section 6 The aforesaidView has been consideredby a 5 JudgeBench of this Court in the case of Morinda CooperativeSugarMills Z Uv Assessin Authority and others 1995 STC 468 Followingthe 2 Lr Vlew taken by the Honble Supreme Court in JagatiitSugar Mills case d5 supra9the FUll Bench held thatthe purchaser of sugar cane 1S liableto pay purchasetax The learnedStateCounsel havealso arguedthat even at the Z time when the in Jagatiit Sumr Mills case and Morinda e COerative SugarMillscase jpralwas deliveredthe sugar mills have beenpayingpurchasetax on the purchase of sugar cane from the cane growersunder the 1953 Act Thus the argumentis thatmerelybecauseafter the Bihar Finance Act Bihar SugarCane 2egulation of Supply and Purchase9Act 1981 has come would not necessarily lead to reoening the questionwhich has alreadybeensettled Another submissionmade by the learned State Counel is that there lS nothingin Article 265 of the Constitution which may indicate that therecould be no double taxation In that regardreliance has been placedon the judgementof HonbIe the Supreme Court in the c2se of Arvinder Singhv Stateof PuniabAlR 1979 Anita 2014.02.18 16: 09 True Scanned Copy Of The Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 38 4 CWP No019 of2005 8 SC 321 It has been arguedithat even if on the same subjectmatter the legislature chooses to levy tax twice there is no in the fiscal adventuresave where ofherprohibitions exist The aforesaidview has also been followed by Honbl the Supreme Court in the case of Radhakisan Rathi v Addl Collector Drund others AIR 1995 SC 1540 Replyingto the other argumentslearned State counsel have 1r pointedout thatjudgement in JagatiitSugarMills case was renderedbya 3 0 0 JudgeBench whereasjudgement 111Govind SugarMills case supra9has I been rendered by a 2JudgeBench It has been submitted that Full Bench tD ofthis Court in the cases ofKulbhushanKumar and Indo Swiss 1 1 Lsupral do not advance the case of the petitionerin as much as both Z 1 the Full Benches specifically refer to conflict 4 of Benches of r superiorCourt According to theleamed counsel the ofthe Full Bench would dpplyif the coequalBenches of the superiorCourt have c8 delivered the conflicting whereas in the present case the judgementcoveringthe issue has beendelivered by a 3TudgeBench and Z thefore it is not open to this Court to conclude that purchasetax under Section 41 ofthe PGST Act 1948 or 2005 Act are not payable The first questionwhich would arise for determination 1S whether 3JudgeBenchjudgement of the Honble Supreme Court rendered 111the case of J8gatiitSugarMills supra9is binding on the partiesIn the aforesaidcase thequestionof law was posedin para 40f thejudgement and 111 namelywhether tte sugarmill was liable to pay purchase tax on the sugarcane by it from the growers of the sugarcane In a categorical answerto he aforesaidquestionit has been held that Section 4 11 of the PGST Act 1948 levyof purchase tax on all sales Anita 2014.02.18 16: 09 True Scanned Copy Of The Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 0 1 39 CWP No019 of2005 9 and purchasesOnce the aforesaidjudgement 111the categoricalterms lavs down that purchasetax lS Ieviable under Section 4 then it is well nigh impossiblefor us to say that such a tax cannot be levied on the groundthat PGST Act 1948 1S a statute of generalcharacterwhich deals with sale or purchasetax in respectof all goodswhereasthe 1953 Act is a specialAct which deals with all aspectsincludinglevy of purchasetax on sugar cane 1 r The petitionerhas convassed for the contraryview on the basis of the 0 0 judgement renderedby 2 JudgeBench of the Honble SupremeCourt in the case of Govind Sugar Mills supralThe aforesaid judgement has been 0 rendered by Bihar Finance Act 1981 and Bihar Regulationof Supplyand Purchase OAct 1981 by holdingthat both the Z Acts would operatein the same fleld The underlying principlefollowed by C the Honble Supreme Court is that the Sugarcane Act being a specialAct I pertaining to all aspectsof control of the sugarcaneas well as levyof c8 rJ purchase tax has to be preferred over the Finance Act which empower the State to levyall commercial taxes generallywhereas the sugarcane Act Z t1 empoweredthe levyof purchase tax only on sugarcaneuch a course would not be available to us as the specificAct which is applicableto the petitionernamelyPGST Act 1948 hs been interpretedby a 3 JudgeBench 111the case of Jagatiit Sugar Mills case supra Furthermore we would preferthe adoptedby the Honble Supreme Court for PGST Act1948 which 1S 111questionbefore us The judgement of Govind Sugar Mills case 6supralhas out of dierent statute It is needless tO that the judgementby the Honble SupremeCourt is a law declared in respectof the Oeld occupiedby it which is bindingon all Courts within theterritoryof India includingthe HighCourts In that regard Anita 2014.02.18 16: 09 True Scanned Copy Of The Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document CWP No019 of2005 10 reliancemay be placedon the observationsmadeby a Constitution Bench of the Honble SupremeCourt in the case of Behram Khurshid Pesikack V StateofBombav AIR 1955 SC 123 Even otherwise the decision of3 Judge Bench in Jagatiit Sugar MillS case supralhas to be followed becausethat decision is by a largerBenth than the one decidingthe Govind Sugar Millss case upra9The 3 JudgeBench decision is also under 1 C4 the PGST Act 1948which is to thepetitionerTherefore ln our 0 View thereis no possibilitywhatsoever to reopen the questionby opining U that the provisionsof Section 411 of the PGST Act1948 would not apply 0 and those of 1953 Act alone would applyOn the basis of the aforesaid r premise the writ petitions are liable to be dismissed 1 Z On account of the bindingprecedent available in the form of 1 2 C4 of JagatiitSugarMills case 6supr we are not dealingwith any 1 1 ofthe contentionsraised bythepetitioners which couldhave been otherwise r26 examinedin the lightof the observationsI made in Govind SugarMills case 6supra Z As sequel to the abovediscussion all the writ petitionsfail Qm andthe same are dismissed A copy ofthis order be Iolaced on the flle ofconnectedcases 1 9 MlvflCumarl Jldge 1 o l2010 Judge okg 4ee440eve4eeoee40401009000090044600e0 4 CWP No20300of2005 Mls The Batala Coop SugarMiUs Ltd v State V Stateof Punjab and others Anita 2014.02.18 16: 09 True Scanned Copy Of The Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document