1 44 4 4 ln 1 64 V No 9019of2005 1 t IN THE HIGH COURT OF PUNJAB AND HARYANA AT Ii t CHANDIGAR Ir r CWP N019019 of2005 Dateofdecisiotl12010 A41sIndian SucroseLtd Petitioner Versus StateofPunjaband others CORAM HONBLE MR JUSTICEMM KUMAR HONBLEMR JUStICE JASWANT SINGH 0 Presentl MrAshok AggarwalSr Advocate with 0 Mr MSharma Advocatefor the petitioner I Mr ICLGoyal Sr Advocate with D Mr Sandeep GoyalAdvocate Mr Vivelc Bhandari X Mr Gl7Sethi Advocate for thepetitioner Mr Amol Rattan Singhand Mr PKJain Addl AGs Punjab Z for the 2 1 Fo be referredto theReporter or not 2 Y 1X Whether shouldbereported in theDigest2744 1Z MM KUMAR J c25 This is a bunchof 52 petitionsfiled underArticle 226 of the Constitution raisinga common questionoflaw The prayer made in all Z thepetitionsis for quashingthenotiOcationdated 2751988 imposing a lax C50P for 100 Kgs on the purchase of sugarcanc by or On behalf of the cane rnill like the petitionerThe petitioners have also prayedfor issuancc of declarationto the effect that no purchasc tax on purchase of could be Ievied and collectcd from the petitionerunder the of the PunjabGeneral Sales Tax Act 1948 or brevitythe PGST Act1948 0 in the Ifaceof lcvyand collection of such like tax undcr Section 17 of the Punjat of Purchase and Supply Act 1953 for brevityt le 1953 Ac which is claimed to be a specialAct governing all aspectsof purchasesupplyand lcvyof purchasc tax on the Uma 2014.02.21 16: 33 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 45 ll 9 CWP No9019 of2005 2 In that regardpriinaryreliance of the petitionerhas been on the of Honble the SpremeCourt in the case ofGovind SugarMill V State of Bihar 199979S 76 Likewise on the same analogy a prayer P has also been made for Section 9 Item 40f Schedule H of the Punjab Value Added Tax Act 2005 or brevity the 2005 Act9 as unconstitutional as the same would not be applicable111 respectof 1 r sugarcane and purchase tax thusnot leviableunder the said Act 0 The petitioners are engaged111 the manufacture of sugar 0 2 molasses press rnudsand bagasseeTheypurchase sugarcane which is the 0 rnain raw material from the farmersto producesugar or molasses Both the aforesaid productsare sold under the Govemment Control Orders The rate Z of raw materiallpurchased i sugarcanebeingagricultural produceto be paid to farmers oroducingand sellingsugarcane9 1S also fixed by the Government of India from time to time It can also be modified and c8 increasedbythe State Government under the 1953Act The purchase taX lS collected by the State of Punjabunder the provisions of PGST Act 1948 Z 2 The claim of the petitioners is that in pursuanceof power under Entry54 of r List II of 7 Schedule of the Constitution the State of Punjabhas also enacteda specialAct which is refeired as 1953Act It has been claimed that 1953 Act deals with all aspectsof purchasesupplyand levy of purchase tax on the sugar cane suppliedto by cane growers A specificreference has been made to Section 17 of the 1953 Actwhich of purchase tax The case of the petitionersis that PGST Act 1948 1111F OSCS tax on sale or purchase of all goodsincluding sugarcane gcnerally 2lthough that Act has also beenenactedin pursuance of exercise of power under Entry54 of List II of 7 Schedule of the Uma 2014.02.21 16: 33 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 46 r r G ll te CWP No 9019 of2005 3 ConstitutionAccordingto the provisionsof the PGST Act 1948 a tax is imposedwith reference to taxable retum of registereddealer and it its own for taxation and collection of tax The case 16 of the petitionersas projectedin the p6titionand duringthe course of arguments1S that while considering similar legislationwith parimatena provisionsgoverningthe sale and purchase of sugar cane in the State of 1 C4 Bihar Honble the Supreme Court hasheld that levy under the specialAct 0 alone would survive and reliance has been placedon the judgementof Honble the Supreme Court in Govind SugarMillss case supra9 0 According to the averments made in the petitionthe petitioner 2 mill has been treated as a reserved area under clause 60f the SugarCane Z Control Order 1966 which has been issuedby the Central Govemment c underthe EssentialCommoditiesAct 1955 or brevitythe 1955Act2 As a of the notiftcation thesugar cane growerin a particular area 1 c8 as a reserved area are directedto supply750Ioof the sugar cane produced 1 7 by them to the petitionermill The petitionermill is also bound to take Z t1 delivery of the same A prohibition is engrafted on the sugar cane growers from exportingtheir produceoutside the reserved area and like wise the mill is also Som sugar cane outside the reservedarea Ay violation of the Control Order and the notiflcations issued thereunderwould attract criminal under Section 70f the Essential Commodities Act 1955 The case ofthe petitionersis that neither the farmersare to sell theirproduceoutside the reserved area nor the mill is permitted to sugar cane from outside the reserved area Thereforethe proibition betweenthe cane growers and the mill parttakes thecharacter of acquisitionof propertybecausethere is no element of free Uma 2014.02.21 16: 33 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 47 1 11 41 CWPNo 90190f2005 4 consent which is an essentitllingredientof a valid agreementIt is also 1 assertedthat thereis no scopefor principleofdemand and supplyto operate and the sugar mills Iike the petitionerare bound to pay the statutory 1 4 1 rninimumpriceto the cane gowers as flxed bythe Central Govemment In the written st8tementfiled bythe the broad facts have not been disputedIt has however been pointedout that the petitioner 1Qf mills have been payingtax on purchase of sugarcaneunder the PGST Act 0 1948 C 1io Theyare also liable to pay the tax in accordance with the 0 proVlSlOnsof 2005 Act The Statehas assertedthat 1953 Act tD was enforced111order to controlthe supplyof sugar cane and tax on the 3 e basis of the rate of the sugarcane was levied As per the notiflcationdated Z 2751998 issued under Section 170 ofthe 1953 Act 50 paisafor 100 Kgs tCr of sugarcane becomespayable on the acquisitionof sugarcane from the farmersIt has been clarified that under the 1953 Act tax is payableon the 5 basisof weightwhen the sugarcaneis purchased from the farmerswhereas under the 2005 Act the tax is payable on the basisof rate The argument Z 5 Om be thatthereis no connection betweenthetax paidunder the 1953 Act or under the 2005 Act as the incidenceof tax 111both the cases 1S different It has thus been assert6dthat two taxes under two different enactmentsdo not tantamount to doubletaxation It is also claimed that 111 anycase there is no bar underthe Constitutionto imposetwo taxes under two differentenactments on the same goodswhich mightbe based on the same Entrylike Entrll54 of List II of 7 ScheduleThereforethe petitioner is under a legalobligationto pay purchaseTax under section 19 ofthe 2005 Act or under PGST Act 1948 even if a nominal tax is claimed under the 1953Act The primllryrelianceby the State of Punjabin their repiyhas Uma 2014.02.21 16: 33 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 48 1 1 l V j 1 CWP No 9019of2005 5 L been on the of Honblethe Supreme Court in the case of Jagatiit V SugarMills v Stateof Puliiab and another 199511SCC 67 where thelevy 1 4 of tax under the PGST Act 1948 has been upheldIt is claimed that the 1 i aforesaidjudgement has n6t been considetedin the later judgement in the caseof Gvind SugarMilllsupral In JagatiitSugarMillss case supralit has been held that tax is payableto the State Government if not under 1 tX Section 4 B then under Sectioni19 ofthe PGST Act1948 The sugar mills 23 0 in the StateofPunjabhave been assessedto tax aRer the decision ofthe Full l r Bench in the case of Morinda CooperativeSugarMills Ltd v Assessing 0 Authoritv and others 19956999STC 468 4C When the mattercame up for consideration beforethis Court Z for motion hearingan interim order was passedrestraining the Csf from resorting to coercive stepsfor recovery ofthe tax demanded 3 Mr Ashok AggarwalMr K1Goyal Mr GRSethi and Mr c2S Vivek Bhandati leamedcounsel haveaddressedargumentson behalf of the 1e a petitionersTheir submission is inspiredby the judgmentof Honble the Z 25 1e SugarMillss case Theyhave arguedthat 1953 Act beinga specialenactment for levy tax exclusively on sugarcane also deals with regulatioh ofproductionsupplyand distribution of sugar CaIle Accordingto the learned counsel it would override the provisions of PGST Act 1948 or even the 2005 Act It has been submitted that both the PGST Act 1948 and 2005 Act are generalActs which provides for collection of co nmercial taxes on sale and purchaseof all goods whereas 1953 Act deals onlywith the of sugar cane Placing relianceon various paras of the rendered111the case of Govind SugarMillss case S Jpralit has been submittedthat both the Acts have Uma 2014.02.21 16: 33 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 49 4 i e V Y1 1 11 CWP No 9019of2005 6 beenframed in exercise of legislative powers derived from Entry54 of List 1 II of 7 Schedule and tltrefore the 1953 Act would govem the levy of purchasetax as it is a specialAct Theyhave also referred to the statement of objectsand reasons which deals with the of sugar cane to protect the interest of the cane growers Referringto the reasoning adopted by a Division Bench of the Patna HighCourt in New India Sugar 1l Ivlills Ltd and another V Stateof Bihar and others 1998 1091STC 394 3 0 which has been reversed in Govind Sugar Millss case lpra9 leamed l 3 Counsel have pointedout that no doubletaxation could be justifiedon the D same commodity or person bylevyingthe same under different enactments T2 withoutrepealing the other The Division Bench of the Patna HighCourt in Z r New India SugarMillss case supralhastaken the view that two taxation on 4t the same or person could be imposed by different enactments which has been reversed According to the leamed counsel it cannot be c8 justifiedbykeepingin view thedifferent objects ofboth the statutes It has been further submitted that judgement of Honble the Z CJm Court in Jagatiit SugarMills case althoughhas been renderedby a Bench and the in Govind SugarMillscase supralhas been rendered by a 2JudgeBench yet the judgementwhich appears to laydown the law more elaborately and accurately and thereforeit hasto be followed for the view tan bythe Honble Supreme Court in Govind Suar Mills case supra9Mr Sethi has submitted that earlierjudgement in JagatiitSugarMillscase 6suprao has failed to take into account the of the specialenactment as 1953Act In supportof his submission learned counsel has placedreliance Oll two Full BenchjLdgements of this Court rendered in the cases of Mls Uma 2014.02.21 16: 33 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document SO 0 CWP No019 of2005 7 Indo Swiss Time Ltd v Umrao and others 1981 PLR 335 and Mls Kulbhushan Kumar and Co vState ofPuniab and another 1983 PLR 768 Per contra Mr PlCJain and Mr Amol Rattan learned Additional Advocate Glerals PunjabhaVe arguedthat the matter is no longerresntegra as the questionhad fallen for consideration of Honble the Court in the case of JagatiitSugarMills 6supralAccordingto m C4 the leamed counsel the sugarcanesold by the cane growers themselvesto 0 the petitionermill or the sugar manufactures rnaynot be excigableto purchase tax under Section 4 B but would be so under Section 4 0 1 read with Section 6 The aforesaidVlew hasbeen considered by a 5e JudgeBench of this Court in the case of Morinda CooperativeSwzarMills Z td v AssessingAuthoritv and others STC 468 Followingthe 7 r Vlew taken by the Honble SupremeCourt in Jagatiit Sugar Mills case 32 6suprathe Full Bench held that the purchaser of sugar canelS liableto pay S tax The learnedState Counselhave also argued that even at the time when the in Jagatiit Sugar Mills case and Morinda Z CooloerativeSugar Millscase ipralwas deliveredthe sugar mills have been payingpurchasetax on the purchaseof sugar cane from the cane growers under the 1953Act Thus theargumentis that merelybecause aer the Bihar Finance Act Bihar SugarCane Regulation of Supply and PurchaseI Act 1981 hascome wouldnot necessarilylead to rewopening the questionwhich hasalreadybeen settled Another submission made by the learned State Counsel 1S that there is nothingin Article 265 of the Constitutionwhich may indicatethat therecould be no doubletaxation ln that regardreliance has been placedon the judgementof Honble the Court in the c2se ofArvinder Singh v StateofPuniab AIR 1979 Uma 2014.02.21 16: 33 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 51 1 1 CWP A 9019of2005 8 SC 321 It has been arguedthat even if on the same subjectmatter the chooses to levy tax twice there is no inherent invalidityin the fiscaladventure save where other prohibitions exist The aforesaidview has also been followed by Honble theSupreme Court in the case ofRadhakisan Rat v4ddl Collector Drua and others AIR 1995 SC 1540 Replyingto the other argumentslearned State counsel have 1C4 pointedout in lJagatiitSugarMills case was renderedbya 3e 0 JudgeBench whereasjudgeolent in Govind SugarMillscase lpral has t43 0 beenrendered by a 2JudgeBench It has been submitted that Full Bench 4 tD of this Court in the cases of Kulbhushan Kunw and Indo S1iss 1 Ltd do not advancethe case of the petitionerin as much as both 1 Z 1 the Full Benches specifically refer to conflict of Benches of superior Court Accordingto the leamedcounsel the ofthe Full Bench would applyif the Benches of the superiorCourt have c8 delivered the contlicting whereas in the present case the judgement coveringthe 1SSue hasbeen delivered by a 3TudgeBench and Z thereforeit is not open to this Court to conclude that purchase tax under Section 419ofthe PGST Act 1948 or 2005Act are not payable The flrst questionwliich would arise for determination is whether 3JudgeBench judgementof the Honble SupremeCoun rendered 111the case of Jagatiit SugarMills is binding on the partiesIn the aforesaidcase thequestionof law was posedin para 40f thejudgement and lll whether t4esugarmill was liable to pay purchase tax on the purchasedby it from the growers of the sugarcane In a categorical answerto theaforesaid questionit has been held that Section 4 19 of the PGST Act levyof purchase tax on all sales Uma 2014.02.21 16: 33 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 52 f CWP No 9019of2005 9 and purchasesOnce the aforesaidjudgementin the categoricalterms lays down that purchasetax 1S leviable under Section 4KlI then it is well nigh impossiblefor us to say that sucll a tax cannot be levied on the groundthat PGST Act 1948 lS a statute of generalcharacterwhich deals with sale or purchasetax in respectof all goodswhereas the 1953 Act is a specialAct which deals with all aspectsincludinglevy of purchase tax on sugar cane 1 C41 The petitionerhas convassed for the contraryview on the basis of the 0 judgement rendered by2 JudgeBench of the Honble SupremeCourt in the 0 case of Govind Su7ar Mills supralThe aforesaid judgementhas been 0 rendered by Bihar Finance Act 1981 and Bihar Sugarcane I of Supplyand Purchase 9 Act 1981 byholdingthat both the Z Acts would operatein the same Oeld The underlying principlefollowed by 2 Csf et the Honble Supreme Court is that the Sugarcane Act beinga specialAct pertaining to all aspectsof control of the sugarcane as well as levv of c8 C purchasetax has to be over the Finance Act which empower the State to levyall commercial taxes generallywhereas the sugarcane Act Z CL the levy of purchasetax only on sugarcaneucha course would not be available to us as the speciOc Act which is appIicable to the petitionernamelyPGST Act 1948 hs beeninterpretedby a 3 JudgeBench lll the case of Jagatiit Sugar Mills case supral Furthermore we would preferthe interpretationadoptedby the Honble Supreme Court for PGST Act1948 which is in questionbefore US The judgement of Govind Sugar Mills case has emergedout of different statute It is needless to emphasisethat the judgementby the Honble SupremeCourt is a law declared ill respectof tlle lleld occupiedby lt which is bindingon all Courtswithin theterritoryofIndia includingtheHighCourts In that regard Uma 2014.02.21 16: 33 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 53 1 l CWP No 9019of2005 10 reIiancemay be placedon the observationsmadeby a Constitution Bench of the Honble SupremeCourt in the case of Behram Khurshid Pesikack V StateofBombav AIR 1955 SC123 Even otherwise the decision of3 Judge Bench in Jagatiit SugarMills case supralhas to be followed becausethat decision is by a largerBench than the one decidingthe Govind Sugar Millss case 6supralThe 3 JudgeBench judgement decision is also under m tr the PGST Act l948 which is applicable to the petitionerTherefore in our 0 Vlew there is no possibilitywhatsoever to reopen the questionby opining t43 that the provisions of Section 411of thePGST Act1948 would not apply tD and those of 1953 Act alone would applyOn the basis of the aforesaid I premisethe writ petitions are liable to be dismissed Z On account of the bindingprecedent available in the form of 1 1 0 of JagatiitSugarMills case lpra9we are not dealingwith any 1 of the contentionsraised bythepetitioners which could have been otherwise c8 examined in the lightof the observationsmade in Govind SugarMills case supra Z m As a sequelto the above discussion all the writ petitionsfail and the same are dismissed A copy ofthis order belolaced on the file ofconnectedcases 1 4 MMCumarI Judge 30 12010 Judge okg 00e00000046ee6d4S6e440000e4e6e6eeeeeneee14eee0ee0eeeaeaeeeee0eee0eneeee04e0eepapp0600 CWP N020300 of2005 Mls The Batala CoopSugarMiUs Ltd v State ofPunjaband others CWP N9998 of2006 PicadilySugarand Allied Industries V Stateof Punjabandothers Uma 2014.02.21 16: 33 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document 54 1tWPNo 9019of2005 11 CWP Nol 641 of2006 Mls Wahid SandharSugarsLtd v Stateof Punjaband others CWP No20303 of2005 M7sThe Nakodar Coop SugarMills Ltd V Stateof Punjaband others CWP No0312 of2005 Mls The Budhewal CoopSugarMills Ltd V StateofPunjaband others CWP No20332 of2005 Mls The Ajnalacoop SugarMills Ltd v State of Punjaband others CWP N020335 of2005 Mls The NawanaCoopSugarMills Ltd V StateofPunjaband others CWP No0338 of2005 Mls The aridkot coop SugarMills Ltd V m StateofPunjaband others cr CWP No20339 of2005 Mls The Gurdaspur SugarMills 0 Ltd vate ofPunjaband others CWP No 20345 of2005 Mls The Faziilka Cooperative SugarMillsLld 0 V Stateof Punjaband others CWP No0355 of2005 M7sThe MoriondaCooperative SugarMills Ltd lD Ve StateofPunjaband others CWP No89 of2006 Mls Rana Sugars Ltd v StateofPunjaband others CWP No 1613of2007 Al3SugarsLtd V others Z CWP N020511of2005 Mls THe 71111N171RANC6Pe11V otherS 2 CWP No024 of2005 Mls lndian SurcroseLtd V StateofPunjaband C4 others 141 C CWPN011100 of2005 SugarMillsV StateofPunjab and others 06 CWP No8526 of2005 AB SugarsLtdvStateofPunjaband others Cll CWP No 1107of2005 SugarMills v StateofPunjab and others CWP No 11134 of 2005 SugarMills V StateofPunjab Z and others Qm CWP No0341 of2005 Mls The Bhogpur SugarMills Ltd V Stateof Punjaband others CWP No11442 of2007 Cosmos hlds Ltd V StateofPuniaband others CWP No463 of2007 Cosinos Ind Ltd v StateofPunjaband others CWP No 41900f2003 Bhagwanpura SugarMills v StateofPunjab and others CWP No 4191 of2003 SugarMills V StateofPunjab and others CWP No192 of2003 SugarMills V StateofPunjab and others CWP Nc4193 Of2003 SugarMills V StateofPunjab and others CWPNo419 of2003 BhagwanpuraSugarMills V StateofPunjab and others NoA 195 of 2003 BllagwanpuraSugarMills V StateofPuniab others CWP No196 of2003 BhagwanpuraSugarMills V StateofPunjab and others CWP No4197 of2003 SugarMills Ve StateofPunjab Uma 2014.02.21 16: 33 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document tJ 1 tIIP No 9019of2005 12 and others CWP NoA198 of2003 Bhagwanpura SugarMills V StateofPunjab and others CWP No 16892 of 2001 Bhagwanpura SugarMills V StateofPunjab and others CWPNo 16893 of2001 SugarMills V StateofPunjab and others CWP No 16894 of2001 Bhagwanpura SugarMills V StateofPunjab and others CWP No 16895of2001 SugarMills Ve StateofPunjab and others 1 CWP No 16896 of2001 BhagwanpuraSugarMills V Stateof Punjab r and others 0 CWP No6897 of2001 V Stateof Punjab and others 0 CWP Nol6898 of2001 SugarMills Ve Stateof Punjab and others D CWP No16899 of2001 Bhagwanpura SugarMlls Ve StateofPunjab and others CWP No16900 of2001 SugarMills V StateofPunjab 4r and others Z CWP No 12917 of2001 Bhagwanpura SugarM1lls V Stateof Punjab and others CWP No29180f2001 SugarMills V StateofPunjab C and otllers cr CWP No919 of2001 Bhagwanloura SugarMills V StateofPunjab and others r15 CWP No 1683of2004 SugarMills Ve StateofPunjab 2 and others CWP No 9612 of2008 Mls ASugars Ltd V StateofPunjaband others Z CWP No964 1 of 2008 Mls Indian SurcroseLtd V Stateof Punjaband otllers r CWP No9684 of2008 Mls lndian SucroseLtd V StateofPunjaband others CWP No 17878 of 2008 Mls ABugars Ltd v Stateof Putuaband otheis CWPNo17945 of2008 Ms lndian SucroseLtd v StateofPunjab and others CWP No 1578of2003 Mls Nakodar SugarMills Ltd V StateofPunjaband others CWP Nol 5324 of2003 Mls Wahid SandharSugarMills Ve Stateof Punjaband others 6 e Uma 2014.02.21 16: 33 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:27 I attest to the accuracy and integrity of this document