1 1 eW J 1 1e L 4 4 CWPNo 9019of2005 1 Ie CHANDIGARHe r 414 CWPNo 9019 of2005 Date Petitioner MlsIndianSucroseLtd Versus StateofPunjabandothers ee 1 CORAM MR JUSTICE MMe KUA 01 MR JUSTICEJASWANT SINGH Present Mrshok Sr Advocatewith a Mr M12Shama Advocatefor thepctitioner Mr Sr AdvocateWith I Mr SandeepGoyalAdvocate Mr Vivek Bhandari Mr GRSethiAdvocatefor the Z for the 1Tobe referredto theReporter or not 7 Y 27 4 I M MKUlvlAR J This is a bunchof 52 petitions filed underArticle 226of theConstitutionraisinga common question oflawr The prayermadein all Z imposing a tax tL c 50P for 100 Kgs on the of sugarcanc by or on behalfof the canemill like the The have also prayedfor of declarationto the effect that no tax on of lssuancc could be and collected from the pctitionerunder the of the General SalesTax Act 1948 6forbrevitythe PGSTAct19480 in the of levyand collection of such like tax under Section17 of the Pun Sugarcane of Purchaseand Supplyl Act 1953 forbrevitytle 1953ActI which is claimedto l a special Act all aspectsof supplyand lcvyof purchasc tax on the SEEMA RAWAT 2015.10.16 13: 51 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:52 I attest to the accuracy and integrity of this document 72 1 1 CWPNo 9019of2005 2 In that regardprimaryreliance of the has been on the e of Honble the SupremeCourt in the case of Govind SugarMill e V Stateof Bihar 199979SCC 76 Likewise on the same analogya prayer has also beenmadefor declaringSection Item 40f ScheduleH of the Value Added Tax Act 2005 or brevitythe 2005 Act9 as as the same would not be in respectof 1 0 and tax thusnot leviableunderthe saidAct The petitioners are 111 the manufactureof sugar 4 I pressmuds and They sugarcanewhich is the lD main raw material from the fanners to produce sugar or molasses Both the I products are sold under the Govemment Control Orders The rate 1 Z of raw material 1 being produce to be 2 C paidto farmers and selling is also fixed by the 1 of India from time to time It can also be modifled and C8 increased bythe StateGovernment under the 1953 Act The purchase tax is 1m7 collected by the State of Punjabunder the of PGST Act 1948 Z Theclaim ofthe petitioners is that in pursuanceofpowerunderEntry54 of 0a List II of 7 Schedule of the Constitution the State of Punjabhas also enacted a specialAct which is referred as 1953Act It has beenclaimed that1953 Act deals with all aspectsof supplyand levy of tax on the sugar cane suppliedto sugar factoryby cane growers A speciftc reference has been made to Section 17 of the 1953 Act which of taXe The case of the is that PGST Act 1948 tax on saleor of all goodsincluding sugar cane gcnerally thatAct has also been enactedin pursuance of exercise of under Entry 54 of List II of 7 Schedule of the SEEMA RAWAT 2015.10.16 13: 51 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:52 I attest to the accuracy and integrity of this document e r 73 1 1 Iee CWPNo 9019of2005 3 1 to the of the PGST Act 1948 a tax is Constitution 11 with reference to taxable retum of dealer and it The case of the petitioners as in the p6titionand duringthe course of is that while considering similar with parimateria thesale and of sugar cane in the State of prOvlsionsgoveming 1 Of Honble the Supreme Court has held that levyunderthe special Act 0 alonewould survive and reliance has been placedon the of U Honble theSupreme Court in GovindSugarMillss case pral tD to the avermentsmade in the petitionthepetitioner millhas been treatedas a reservedarea under clause60f the SugarCane Z Control Order1966 which has been issuedby the Central Govemment r under the EssentialCommodities Act 1955 or brevitythe 1955Act As a X of the notiflcation the sugar cane growerin a panicular Mea c8 as a reservedarea are directedto supply75Ioof the sugar cane by them to the mill The mill is also bound to take Z of the same A is on the sugarcane growers Om from their produce outsidethe reservedarea and like wise the mill is also Oom sugar cane outsidethe reservedarea Anyviolation of the Control Order and the noti8cations issued w0u1dattract criminal under Section70f the Essential Act 1955 The case ofthe is that neither thefarmers are allowed to sell their produce outside the reservedarea nor themill is to sugar cane from outsidethe reservedarea Thereforethe the cane growersand the mill thecharacter of of propertybecausethereis no elementof free SEEMA RAWAT 2015.10.16 13: 51 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:52 I attest to the accuracy and integrity of this document 74 jl r 7 1 P 1 CWPNo 9019of2005 4 5 which is an essential of a valid It is also asserted that there is no scope forprinciple ofdemandandsuPPlY tO OPer and thesugar mills like the are bound to pay the statutory Inthe written statement filed by the the broadfacts havenot been It has however been pointed out that the 1l2 millshavebeenpayingtax on of sugarcaneunderthe PGST Act 0 1948 110IoTheyare also liable to pay the tax in accordancewith the la of 2005 Act The Statehas assertedthat 1953 Act tD order to controlthe supplyof sugarcane and tax on the was enforcedin 4 of the rate of the sugarcanewas levied As per the notificationdated Z issued underSection1711ofthe 1953Act 50 paisafor 100Kgs of sugarcanebecomespayableon the of sugarcanefrom the 4 Ithas been claritled that underthe 1953Act tax is payable on the farmers c8 basis of weightwhen the sugarcaneis from the famers whereas underthe 2005 Act the tax is on the basisof rate The Z thatthereis no connectionbetweenthe tax paidunder the 1953 0m Act or underthe 2005 Act as the incidenceof tax in both the cases is It has thus been assertedthat two taxes under two different enactments donot tantamount to doubletaxation It is also claimedthat in any case there is no bar under theConstitutionto imposetwo taxes under two enactments on the same goodswhich mightbe based on the same Entrylike Entry54 of List II of 7 ScheduleThereforethepetitioner is undera legal Taxundersection19ofthe 2005 Actor under PGST IAct 1948even if a nominaltax is claimedunderthe 1953 Act Theprimliry reliance by the State of Punjabin their replyhas SEEMA RAWAT 2015.10.16 13: 51 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:52 I attest to the accuracy and integrity of this document 75 T 44 Y CWP No 9019of2005 5 1 beenon thejudgement of Honble the SupremeCourt in the case of Jagatjit SugarMills v Stateof Puniaband another199511SCC 67 where thelevy of tax under the PGST Act 1948 has beenupheldIt is claimed that the aforesaidjudgement has not been consideted in the later judgement in the caseof Govind SugarMills supralIn JagatiitSugarMillss case 6supral it has been held that tax is payable to the StateGovernment if not under m Section 4 B then under Section 419of the PGST Act1948 The sugar mills 0 in the StateofPunjabhavebeenassessedto tax aRer the decision ofthe Full t Bench in the case of Morinda CooperativeSugarMills Ltd v Assessing 9 Authoritv andother9956 991STC 468 I 41 When the matter came up for considerationbeforethis Court Z t for motionhearing an interim order was passed the 2 0 e fromresorting to coercive stepsfor recoveryofthe tax demanded I Mr Ashok AggarwalMr KLGoyal Mr GRSethi and Mr c8 Vivek Bhandari leamed counselhaveaddressedarguments on behalfofthe j wa petitionersTheir submissionis inspiredby the judgmentof Honble the Z le Theyhave arguedthat 1953 Act beinga specialenactment for levy tax on sugarcane also dealswith of supplyand distribution of sugar cane Accordingto the leamed counsel it would overeride the provisions of PGST Act 1948 or even the 2005Act It hasbeensubmitted that both the PGST Act 1948 and 2005 Act are generalActs which provides for collection of commercial taxes on sale and of all goods whereas1953 Act tals onlywith the purchaseof sugarcane Placing reliance on various p1iras of thejudgement renderedin the case of Govind SugarMillss case it has been submitted that both the Acts have SEEMA RAWAT 2015.10.16 13: 51 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:52 I attest to the accuracy and integrity of this document 76 e1 44 V 1 1 6 CWP No 9019of2005 6 1 beenframed in exercise of legislativepowers derived from Entry54 of List II of 7 Scheduleand thereforethe 1953 Act would govem the levyof purchase tax as it is a specialAct Theyhave also referredto the statement 1 of objectsand reasons which deals specifallywith thepurchase of sugar cane to protectthe interest of the cane growers Refening to the reasoning adoptedby a Division Bench of the PatnaHighCourt in New India Sugar 1C Mills Ltd and another v Stateof Bihar and others1998 1091STC 394 0 0 which has been reversed in Govind Sugar Millsts case supral leamed m Counsel have pointedout that no doubletaxation could bejustifled on the 0 same commodity or person bylevyingthe same underdifferentenactments without repealing the other The Division Bench ofthe Patna HighCourt in Z New India SugarMillss case lsupralhastakenthe view thattwo taxation on C1 t the same or person could be imposedby differentenactments which has been reversed Accordingto the learnedcounsel it cannot be c8 justifiedbykeeping in view thedifferentobjects ofboth the statutes Z It has been 61rthersubmittedthat of Honble the 0 Court in Jagatiit SugarMills case supra9although has been renderedbya 3TudgeBench and the in Govind SugarMillscase has been renderedby a 2JudgeBench yet the which appearsto laydown the law more and and thereforeit has to be followed for theview taken by theHonble Court in Govind Sugar Mills case supra9Mr Sethi has submittedthat earlier renderedin JagatiitSugarMillsase hasfailed to take into account the provisionsof the specialenactment as 1953Act In supportbfhis submissionlearned counsel has placedreliance on two Full Bench of this Court rendered in the cases of Mls SEEMA RAWAT 2015.10.16 13: 51 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:52 I attest to the accuracy and integrity of this document 77 CWPNo9019 of2005 7 t IiidoSwiss Time Ltd v Umrao and others 1981 PLR 335 and Mls Kulbhushan Kumar and Col StateofPuniabandanother 1983PLR 768 Per contra Mr PlCJain and Mr Amol Rattan leamed AdditionalAdvocate Generals PunjabhaVe arguedthat the matter lS no longerresmintegra as the questionhad fallen for consideration of Honble theSupreme Court in the case of JagatiitSugarMills lpralAccording to 1 Q the learned counselthe sugarcanesold by the canegrowersthemselvesto 0 the petitionermill or the sugar manufacturesmay not be to U X tax under Section 4 B but would be so underSection4 tD 11 read with Section 6 The aforesaidview has been considered by a 5e JudgeBench of this Court in the case of Morinda CooperativeSugarMills Z Ltd v AssessingAuthoritvand others 1995999 STC 468 Following the 2 0 View taken by the Honble Supreme Court in Jagatiit SugarMills case I supraltheFull Bench held thatthe of sugarcane is liable to pay rS tax The leamedStateCounselhavealso argued that even at the time when the judgementin Jagatiit Sugar Mills case and Morinda Z CooperativeSugar Millscase supr was delivered the sugar mills have been payingpurchase tax on the of sugar cane from the cane growers underthe 1953 Act Thus theargument is thatmerely becauseafter the Bihar Finance Act Bihar SugarCane Regulation of Supply andPurchase9Act 1981 has come wouldnot lead to reopening the questionwhich has alreadybeen settled Another submission made by the learned State Counsel is that there is nothingin Article 265 of the Constitutionwhich maylindicate that therecould be no double taxation In that regardreliance ha6been placedon the judgementof Honble the Court in the c4seof Arvinder Singhv Stateof PuniabAIR 1979 SEEMA RAWAT 2015.10.16 13: 51 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:52 I attest to the accuracy and integrity of this document 78 44 CWP No 9019of2005 8 SC 321 It has been arguedthat even if on the same subjectmatter the legislature chooses to levytax twice there lS n0 inherentinvalidityin the fiscal adventuresave where other prohibitions exist The aforesaidview has also been followed byHonble the Court in thecase ofRadhakisan Rathi v Addl Collector Drug and others AIR 1995 SC 1540 Replying to the other arguments leamed State counselhave 1r pointedout in JagatiitSugarMills case was renderedbya 3e JudgeBench whereas in Govind SLar Mills case supralhas U 1 1 been rendered by a Bench It has beensubmittedthat Full Bench I of thisCourt in the cases of KulbhushanKumar and IndoSwiss 1 supra9 do not advance the case of the in as much as both Z the Full Benches refer to conflict of colual Benches of 2 C 1 superiorCourt According to thelearnedcounselthe ofthe Full X Bench would applyif the colual Benchesof the superiorCoun have a3 delivered the conflicting whereas lll the presentcase the Z judgementcoveringthe issue has beendeliveredby a 3JudgeBench and Ile thefore it is not open to this Court to concludethat purchase tax under Section l9ofthe PGST Act 1948or 2005Act are not payable The first questionwliich would arise for determinationis whether Bench of the Honble Supreme Coun rendered lIl the case of Jagatiit SugarMills lpra9is binding On thepartiesIn the aforesaidcase the question of law was posedin para40f the and ln namelywhetherthe sugar mill was liable to pay purchase tax on the sugarcane purchased 1by it from the growers of the sugarcane In a categorical answer to lheaforesaidquestionit has beenheld thatSection 4 l9 of the PGST Act 1948 levyof purchase tax on all sales SEEMA RAWAT 2015.10.16 13: 51 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:52 I attest to the accuracy and integrity of this document 79 1 0 1 CWPNo9019 of2005 9 and Once the aforesaid in the categorical terms lays down thatpurchase tax is leviable under Section 4619then it is well nigh for us to say thatsuch a tax cannot be Ieviedon the groundthat PGSTAct 1948 is a statute of generalcharacter which deals with sale or tax in respectof all goodswhereas the 1953 Act is a specialAct which deals with all aspectsincludinglevy of purchase tax on sugar cane m C The petitionerhas convassed for the contraryview on the basis of the O renderedby2 JudgeBench of theHonble Supreme Court in the 0 I case of Govind SugarMills supralThe aforesaid judgement has been lI rendered by Bihar Finance Act 1981 and Bihar I Regulation of Supplyand Purchase 1Act 1981 byholdingthat both the Z Acts would operatein the same Oeld The principlefollowed by 2 C2 the Honble Supreme Court is that the Act beinga specialAct to all aspectsof control of the sugarcaneas well as levyof c8 Oo tax has to be over the Finance Act which empower the Stateto levyall commercial taxes whereasthe sugarcaneAct Z the levy of purchasetax only on sugarcane Such a course would not be available to us as the speciOc Act which is to the petitionernamelyPGST Act 1948hasbeen by a 3 JudgeBench ln the case of Jagatiit SugarMills case Furthermore we would preferthe adoptedby the Honble Supreme Court for PGST Act1948 which is in questionbefore US The judgement of Govind Sugar Mills case supralhas emerged out of different statute It is needless to that the by the Honble SupremeCourt is a law declaredin respectof the field occupiedby it which is bindingon all Courtswithin the territoryof India includingthe HighCourts In thatregard SEEMA RAWAT 2015.10.16 13: 51 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:52 I attest to the accuracy and integrity of this document 80 t CWP No 9019of2005 10 1 the HonbleSupremeCourt in the case of Behram Khurshid Pesikack v State ofBombav AIR 1955 SC 123 Even otherwisethe decision of3 Judge Bench in JaatiitSugarMills case 6supral has to be followed becausethat decision is by a largerBench than the one decidingthe Govind Sugar Millss case supralThe 3 JudgeBench decision is also under 1r the PGST Act 1948 which is to the Therefore in our 0 viewthere is no possibility whatsoever to reopen the questionbyopining 0 X thatthe provisions of Section 41 of the PGST Act1948 would not apply J andthose of 1953 Act alone would applyOn the basis of the aforesaid I the writ petitions are liableto be dismissed Z On account of the binding availablein the form of 2 r of JagatiitSugarMills case ipralwe are not dealingwith any ofthecontentionsraisedbythe which could have beenotherwise r25 examinedin the lightof the observationsmade in Govind SugarMills case supra Z As a sequelto the above discussion all the writ petitionsfail andthe same are dismissed A copy ofthis orderbeplaced on the Sle ofconnectedcases 9 MlvKumar9 Judge 20 l2010 Judge okg 190014444040011111000001004060400091990090ee00000400e04644040001401ee00e0000940416a0 4 CWPN020300of2005Mls The Batala CoopSugarMiUs Ltd v State ofPunjabandothers CWPNo998 of2C06 PicadilySugarand Allied Industries v Stateof Punjab and others SEEMA RAWAT 2015.10.16 13: 51 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 10:52 I attest to the accuracy and integrity of this document