Judgment Case ID: 4086

Judgment:
Civil Appeal No. 712 of 1972. From the Judgment and Order dated 21 2 1972 of the Allahabad High Court in Civil ' Misc. Writ No. 5271/71. 772 Civil Appeal Nos. 962 964 of 1972 From the Judgments and Orders dated 14 2 1972/21 2 1972 of the Allahabad High Court in Civil Writ No. 335/71	 4778/71	 and 3334/71. Civil Appeal No. 1013 of 1972. From the Judgment and Order dated 14 2 1972 of the Allahabad High Court in Civil Misc. Writ No. 2791/71. Civil Appeal Nos. 1063 1065 of 1972. From the Judgment and Order dated 21/22 2 1972 of the Allahabad High Court in Civil Writ Nos. 572	 843 and 1169/72. Civil Appeal Nos. 1066 & 1067 of 1972. From the Judgment and Order dated 21/22nd Feb. 1972 of the Allahabad High Court in C.W. Nos. 5273/71 and 1170/72. Civil Appeal Nos. 1140 1142 of 1972. From the Judgment and order dated 29 3 1972/14 2 1972 and 21 2 1972 of the Allahabad High Court in Civil Misc. Writ Nos. 5064/71	 1801/71 and 5018/71. Civil Appeal No. 1160 of 1972. From the Judgment and order dated 18 4 1972 of the Allahabad High Court in Civil Misc. Writ No. 4223/71. Civil Appeal Nos. 1329 1330 of 1972. From the Judgment and order dated 18 4 1972 of the Allahabad High Court in Civil Misc. Writ Nos. 4587/71 and 4605/71. Civi] Appeal No. 1367 of 1972. From the Judgment and order dated 5 4 1972 of the Allahabad High Court in C.M.W. No. 2278/70. Civil Appeal No. 1405 of 1972. From the Judgment and order dated 14 2 1972 of the Allahabad High Court in Civil Misc. Writ No. 1803/71. Civil Appeal Nos. 1415 & 1598 of 1972. From the Judgment and order dated 14 2 1972 of the Allahabad High Court in Civil Misc. Writ No. 1802/71 & 3668/70. Shanti Bhushan (in C.A. 712) P.R. Mridul (in C.A. 962) P.N. Tiwari	 K.J. John and J.S. Sinha for the Appellants in CA 773 712	 962 963	 1063 1069	 1140 1142	 1160	 1329	 1330 and 1598/72. Shanti Bhushan (in C.A. 409)	 O.P. Malhotra (in C.A. 1415) R.K.P. Shankar Das (1013 and 1409) H. K. Puri and V.K. Bahl for the appellants in CA 1013 and 1409 and 1415/72. Yogeshwar Prasad	 Mrs. Rani Chhabra and Mrs. section Bagga for the Appellants in CA 1367/72. O. P. Rana and R. Ramachandran for the Respondents. The Judgment or the Court was delivered by KRISHNA IYER	 J. This phalanx of appeals	 over 200 strong	 has stagnated for eight years and slowed down other disposals	 which is unfortunate. We believe that the price of healthy justice from the highest Bench is eschewal of all but those cases which possess the twin attributes of (i) substantial question of law of general importance (ii) which needs to be decided by the Supreme Court itself	 whether the jurisdiction be under Article 133	 134 or 136. Such being the jurisdictional dynamic of the Supreme Court	 save in exceptional cases of appalling injustice	 we hope the Bar will share this concern and avoid a breakdown for	 truly	 the question today is: To be or not to be. All these appeals spring from a common demand for tax by the State of Uttar Pradesh from a number of sugar mills on the purchase of sugarcane at a rate related by weight	 not value	 a pragmatic novelty in the sales tax pattern which has provoked an argument about its validity. Legal ingenuity	 which rich mills	 making common cause	 could summon	 spun out several constitutional and other challenges to the levy in the High Court	 all of which became casualty when the Division Bench delivered judgment. Even so	 the memoranda of appeals have set forth an imposing array of grounds of varying merit	 all save three of which	 by the wise husbandry of counsel	 have been mercifully abandoned. The three survivors deserve no better fate but it behoves the court to state the triple challenges presented from various angles and ratiocinate at some length to reach the litigative terminus. One or two more minor matters	 which figure in the debate at the bar	 may	 however	 be noticed in the course of the stride. Far more facts and a fuller projection of the law may be in place here. We are concerned with a levy under the U.P. Sugarcane (Purchase Tax) Act	 1961	 (for short	 the Act). Sales tax	 item 54 in the State List	 was once described in the thirties by a far sighted Chief 774 Minister and nation builder	 Sri C. Rajagopalachariar	 as a Kamadhenu. True to his prescience	 every State	 today	 relies heavily on this levy for which the common man eventually pays heavily. Uttar Pradesh	 which grows sugarcane and runs sugar mills in the private sector	 hit upon a tax on the purchase of cane by millers who manufactured sugar and Khandasari at differential rates	 but it is a heritage from the thirties. A little legislative history	 mixed with tentative inferences	 illuminates the legal controversy since appellants ' counsel set much store by this as an auxiliary circumstance. A broad brush projection of the fiscal story and back ground economy may now be attempted	 although we regret that no authoritative material	 beyond what Can be culled from the High Court judgment	 is forthcoming. We will make to with it although litigants	 especially in the battle field of unconstitutionally	 must produce the socio economic bio data of challenged legislation	 explaining the 'how '	 the 'why ' and 'why not ' of each clause lest lay minds	 lost in legal tuning	 should miss meaningful sound and social sense which experts may explain. Law cannot go it alone nor lawyers. Many Stales in India grow sugarcane	 all of which	 save negligible quantities	 suffer crushing and its sucrose content is recovered as sugar	 khandasari and	 on a cottage industry basis	 as gur. Andhra Pradesh	 Bihar	 Gujarat	 Haryana	 Kerala	 Karnataka	 Maharashtra	 Madhya Pradesh	 Punjab	 Pondicherry	 Tamil Nadu and Uttar Pradesh not only grow sugarcane but enjoy purchase tax	 a majority of which levy By weight rather than on price. And we cannot lose sight of the All India impact when the law is laid down under Article 141. Judgments of this Court are decisional between litigants but declaratory for the nation. Sugar is an export item and	 of course	 is a daily necessary at home. Uttar Pradesh	 according to the Report of the Tariff Commission on the cost Structure of the Sugar Industry and the Fair Price for Sugar (1969) has the heaviest concentration of sugar mills in the country but several of them are uneconomic and some sick. Modernization is a message lost on U.P. sugar	 manufacture and the cane cultivator 's fortune hangs on the fluctuating prosperity of the marginal millers. The sugar and sugarcane economy is the victim of a variety of forces which add to the precariousness and poor efficiency of factories The area under cultivation recedes or expands with the decrease or increase of crushing by the factories and the misery of losses and instability of acreage under cane cultivation have played havoc with agriculturists. Dithering prices of sugar	 export promotion as a policy	 'Levy ' of sugar to feed the poor and a number of other intricate economic facts 775 have made the fiscal manoeuvring a matter of expertise and social justice. While	 on a pan Indian survey	 wide variations in quality of cane and efficiency of mills may be found	 within Uttar Pradesh	 broadly speaking	 the sucrose content differs but little and the percentage of recovery also is more or less the same or factories in the State save where the machinery effects efficiency. So much so	 the price of sugarcane	 usually decided by the Central Governments notification of minimum price	 depends on its weight and sucrose recovery and	 in practice	 within a region both gravitate towards a common point. Moreover	 the Uttar Pradesh sugar map reveals	 as pointed out	 by the High Court	 that 'the more you crush	 the more you produce; the more you produce	 the more you earn. So the quantity of sugarcane crushed by a factory is an index of its earnings '. The relevance of this relationship between consumption of quantity by the mills	 their sugar production and quantum of profits	 to the question of tax incidence	 its equity and equality will be taken up by us later on. Prima facie	 there is a cane sucrose correlation for the State. Apart from it	 the more the cane purchased	 the more the profits spun; and the justice of fixing the tax tag on the weight of cane purchased argues itself. And what makes for just impost of the tax burden is the antithesis of arbitrariness. When the majority of the sugarcane States have imposed purchase tax by weight	 net value	 a reinforcement of sorts is added to this inference. The High Court observes	 based on these data: "Prime facie	 purchase tax by weight would ensure more stable revenue over the years than the purchase tax by the price of sugarcane	 which rises and falls in a four years ' cycle". This statement has not been upset by any facts placed before the court and ipse dixits of counsel	 sans data	 are airy economics. Another market eccentricity must be noticed. Business cycles of boom and slump have been the bane of the sorry sugar and sugarcane story of that State	 and fiscal policy to stabilise a wobbling market G economy has been presumably evolved thoughtfully. The Report we have referred to bears testimony to this cyclical factor and the High Court has drawn inferences therefrom. Let us view the inequity of the impost had it been related to the price of cane. The High Court gives some facts : "The price of sugarcane is	 according to the Report of the Tariff Commission	 determined by the law of supply and 776 demand in a particular year. Accordingly it may vary disproportionately in various regions of the State. One factory may pay more for the same quantity of sugarcane than the other. Indeed	 the Basti Sugar Mills Company Limited has made that allegation. The Basti Sugar Mills Company Limited paid Rs. 7	00	000/ less than the Seksaria Sugar Mills Private Limited for the same quantity of sugarcane. If the quantity of sugar manufactured by them in that year is more or less the same	 their earnings will be the same. So tax b. price would be more oppressive on the Seksaria Sugar Mills Private Limited. On the other hand	 as tax is by weight	 both of them would have paid the same amount of tax in that year. Neither of them could complain of unfair or inequitable incidence of taxation. Of course	 stabilization or uniform fixation of cane prices is the annual endeavour of Central and State Governments and this reduces disparity among millers	 except the factor of efficiency. Variations in cane transport costs ale minimized and taken care of by zoning purchases statutorily	 and then weight price correlation becomes more stable and sober in practice that abstract arguments based on printed paper and flight of fancy may luridly suggest. The life of the law is real life	 not little logic and the High Court 's deductions	 though a lay exercise	 cannot be faulted as fallacious by lay advocacy. Regrettably	 we have no contrary statistics and the learned judges	 have stressed this weakness. We agree with those observations and accept them since nothing urged before us has furnished factual contradiction of these premises: "The petitioners have not supplied for any period figures of actual prices paid by them	 actual quantity of cane crushed by them	 actual quantity of juice derived	 actual quantity of sugar produced and their earnings. They have not tried to prove that the standard of price would be more just and equitable than the standard of weight for levy of purchase tax. From the meagre data gleaned from the Tariff Commission 's Report	 it is not possible to take the view that tax by weight is unfair and inequitable. And Article 14 ensures to the citizen the basic principle on which rests justice under the law. It assures to the citizen the ideal of fairness (Corpus Juris Secundum Vol. XVI A p. 296). The petitioners have failed to discharge the heavy burden of proof". 777 Abstract submissions flung from imagination do not each the point of forensic take off	 if we may add. Tentatively	 subject to further examination	 the conclusion of the High Court commends itself to us: "The incidence of purchase tax by weight appears to be more related to the earning capacity of the assessee than the incidence of tax by price of sugarcane". To clinch the issue	 as it were	 the High Court winds up: "The petitioners have not argued that the impugned provision is confiscatory in nature. I have already shown	 that tax by weight has got fairer relation to the production of sugar by an earning of a factory than tax by price. Consequently	 no one can fairly complain that the impugned provision treats unequals as equals. Equal crushing attracts equal tax. " We may comment by way of supplement that equal crushing means equal weight of cane. So cane quantity and tax liability roughly match and remove the fear of uneven imposts. Let us go back to pick up the threads	 leaving this pertinent detour for a while. Sugarcane agriculture and sugar industry have been the cynosure of legislative attention at Central and State levels for long. We may start a rapid survey from 1932 when the Sugar Industry Protection Act	 1932 was put on the statute book. Its object was to foster and develop the sugar industry by protective tariffs. Then came the which empowered the Provincial Government to fix a floor price for sugarcane sold to sugar factories. This was followed by the U.P. Sugar Factories Control Act 39 .8	 which replaced the earlier 1934 Act. Thus came into existence a statutory Sugarcane Control Board and a Cane Commissioner. Section 29(1) of this Act imposed a. sales tax on the sale of sugarcane. Sub section (3) provides for a cess on the entry or sugarcane into a local area. The necessity for the fostering legislative care of sugarcane cultivation and the imposition of a tax in this behalf is explained in the Statement of objects and Reasons to the Bill of. 1938: "The future of the sugar industry depends to a very large extent on a big drive for the improvement of cane cultivation and its planned production on a rational basis. To enable Government to carry out the necessary measures in this connection	 which will involve considerable expenditure	 and to take other steps conducive to the welfare of 778 the industry	 cane growers and agriculturists generally	 it is proposed to impose a tax upto a maximum limit of six pies a maund of the sale of sugarcane to a factory or a cess at the same rate on the entry of cane into a local area notified in this behalf for consumption	 use or sale therein. " It is significant that 40 years ago the tax for the benefit of cane growers was linked up with weight. It is not as if a freak flash flit past the legislative mind of linking up purchase tax with weight of cane in 1961 only. Apparently	 measure of tax by weight of stuff in the peculiar circumstances of sugarcane economy has been tested by time and metabolized into the consciousness of the affected Trade and the Administration. Be that as it may	 the development of sugarcane cultivation was taken up on a systematic basis as per the statutory mandate. Both the tax and the cess contemplated by the 1938 Act went by the maund and although the cess was to be levied from the seller he was allowed to recover it from the purchaser. The 1938 Act gave place to the U.P. Sugarcane (Regulations of Supply and Purchase) Act	 1953	 which created a scientific scheme	 created a Fund	 injected the concept of cane growers ' cooperatives and provided for levy of cess. The cess part of the Act was replaced by the U.P. Sugarcane Cess Act 1956. We must remember that by now the Government of India Act 1935 had ceased to exist and the Constitution of India had come vibrantly into being with the fundamental rights of Part III. The cess under the 1956 Act was attacked and fell victim to a constitutional challenge and this Court in Diamond Sugar Mills ' Case declared the Cess Act ultra vires. The consequence of this mortality was the incarnation of the U.P. Sugarcane Purchase Tax Act 1961 which is being impeached as ultra vires in these appeals. When cess failed	 the State would have been constrained to refund nearly half a hundred crores of rupees. Validation by parliamentary legislation in conformity with the Constitution was	 therefore	 done. Eventually	 the levy of a purchase tax was enacted into law by the U.P. Sugarcane (Purchase Tax) Act 1961 (referred to as the Act). In a fiscal sense	 the Purchase Tax Act is a reincarnation of the Cess Act but	 in a legislative sense	 it is an independent statute with a different source of power	 impact and structure. While the appellants have a case that this fiscal history substantiates their thesis that the present purchase tax is a disingenuous disguise	 the State contends that its power to impose a purchase tax is well within List II	 Entry 54. An appeal to history cannot impeach power. Plainly read	 the Act	 architectures 779 a	 typical tax scheme	 leviable at the purchase point with one difference	 but we have been invited by Shri Shanti Bhushan	 counsel for some of the appellants	 to lift the veil	 look at the true anatomy of the Act and discover the unseemly unconstitutionality in its bosom. Before we adventure into an assessment of the vulnerability of the provisions to the appellants ' artillery	 we must project a picture af the impugned Act in its essentials	 sufficient to appreciate the grievances and their constitutional merit	 remembering the judicial limitation that where economic diagnostics and administrative pragmatics blend to produce a legislative outfit	 restraint is prudence save where caprice compels. The saga of the Act having been chronicled	 we may proceed to a dissection of the Act from the Constitutional angle. It is worth mentioning that Central and State Governments have been deeply concerned with the economic pros and cons of sugarcane and sugar. The Tariff Commission in its report gives much of the material relied on by the High Court. Indeed	 when any legislation is assailed as arbitrary	 unreasonable or otherwise unconstitutional one expects both sides not to assume the Court to be omniscient but to furnish the surrounding materials	 statistical data and the compulsive factors which operated to provide the prescriptions in the legislation consistently with the imperatives of Part III. This statutory "intelligence" should be a necessary accompaniment to any litigative exercise where constitutionality depends on social facts. Orality unlimited and invitation into abstractions can hardly do duty for a methodical marshalling of meaningful facts. Anyway	 we will discuss the merits of the contentions on the available materials supplemented by warrantable guesses	 with a presumption in favour of constitutionality strengthened by the High Court 's affirmance since the principal attack is Article 14. Historically	 the tax in question is a successor to the cess which was struck down	 but jurisprudentially	 the levies are different in character and attributes and constitutionally	 the imposts derive from different legislative entries and have to be tested by different standards. In short	 the Purchase Tax Act has to be judged on its own merits in the light of submissions of counsel. The anatomy of the Act	 to the extent relevant	 may now be envisaged. Section 3 is the charging section and creates a Liability on the purchase of sugar cane payable by a factory owner or a unit owner. The rate is one rupee 25 Paise per quintal and 50 Paise per quintal for factories and unit respectively. The taxing event is the purchase transaction by the owner of a factory or a unit. An option is provided for in the case of owners 780 of units to pay tax on an assumed quantity prescribed by Government. This is obviously to simplify and to benefit owners of Units who are presumably tiny producers of khandsari sugar. By definition	 factories and units fall under different categories	 the former being geared to manufacture of sugar by power	 the latter being engaged in the production of Gur	 Rab or Khandsari sugar in crushers driven by mechanical power. A classification based on scale of operations	 product manufactured an other substantial differences bearing on production capacity	 profits of business and ability to pay tax	 is constitutionally valid and the feeble contention counsel put forward that there is discrimination between owners of factories and units must fail without much argument. Section 3A	 intended to guard against escape of tax	 ensures that the sugar produced out of the sugarcane transaction exigible to tax shall virtually stand security	 if we may crudely express ourselves that way. The sugar produced in the factory shall not be removed until the tax levied under Section 3 is paid. Other detailed provisions calculated to safeguard the tax are also contained in Section 3A Provision for revision of assessment is contained in Section 3B. While fines and punishments for contraventions find a place in Section 8	 remission of taxes is also provided for in Section 14 and comprehensive rule making power is vested in government under Section 15. Section 15(2) (F) (G) and (H)	 in particular	 chase the sugar manufactured from the taxable sugarcane and empower Government to make rules to secure the sugar bags from leaving the factory premises until the liability of the State is discharged. To sum up	 the scheme is simple and workable. Uttar Pradesh has a number of factories which manufacture sugar. There are quite a few units which	 with less mechanisation	 produce	 out of raw sugarcane	 less refined	 perhaps more nutritious	 end products like khandsari sugar gur or rab. These two classes are well established	 their operations	 economics and manufactures are different and the fiscal legislation in question classifies them as factories and units and imposes differential levies. The Act	 by Sec. 3	 imposes a rate of tax of 1 rupee 25 Paise per quintal of sugarcane purchased by a factory owner	 the corresponding	 rate for a 'unit ' being but 50 Paise. The charge is on the purchase transaction payable by the owner of the factory or 'unit 'on such date	 at such place and in such installments as may be prescribed ' (Sec. ) Interest and penalty	 appeal	 prosecution and other consequential provisions find a place as usual but the basic challenge is to the charge of tax on three grounds. The charge is had	 firstly	 because	 argues counsel	 it is	 in its true character	 781 a legislation in respect of a 'controlled industry ' and this power belongs exclusively to Parliament under Entry 53 of List I (VII Schedule). The next submission to shoot down the measure is that the Act	 masked as purchase tax	 in essence asks for an excise duty on sugar manufacture and is	 therefore	 invalid as colourable legislation	 seeking to achieve	 on the sly	 what it dare not do straight. Surely	 excise duty falls under Entry 54 of List I and the State Legislature cannot usurp that power. Even if the levy be a hybrid one	 as Sri Malhotra made it out to be	 it falls under Entry 97 of List I	 out of bounds for the State Legislature. The final shot fired to bring down the fiscal levy on the score of ultra vires is from the customary barrel of Article 14. A multiprolonged attack	 based on Article 14	 was launched. The levy cast equal burdens on unequals and so was invalid on the ground of discrimination. A tax	 by this canon	 must be linked to price of canon	 not its quantity	 lest the millers be made to pay unevenly for two consignments of equal weight but unequal price. A refinement of the same argument was developed on the basis of the sugar output from the cane crushed. The sucrose content of sugarcane varies from cane to cane and	 perhaps	 from mill to mill and to lump them together quantitatively for a uniform impost is to turn the Nelson 's eye on the inter se inequality. Procrustean cruelty is anathema for the law where unequals are equalised into arbitrary conformity. Counsel submit that sucrose is the touchstone and where that content varies but the levy is standardized on the weight of cane the exaction must he outlawed under Articles 14 and 13 and even 19 (unreasonable). We reject all the three contentions and hold that the Act can parachute to safety despite the ineffectual artillery. For	 as on Bubaivat	 we 'heard great argument about it and about but evermore came out by the same door as in we 'went '. Let us anyway scan	 the 'substantial points ' which have sojourned in this Court all these years awaiting a constitutional pronouncement. Incidentally	 most of these pleas have been negatived by this Court on earlier occasions but phantom arguments often survive after death. Is the legislation ultra vires because the State enters the forbidden ground by enacting on controlled industry? It is undisputed that sugar industry is a controlled industry	 within the meaning of Entry 52	 List I of Schedule and	 therefore	 the legislative power of Parliament covers enactments with respect to industries having regard to Article 246(1) of the Constitution If the impugned legislation invades Entry 52 it must be repulsed by this Court. But entry 54 in List II 782 of the Seventh Schedule empowers the State to legislate for taxes on purchase of goods and so if the Act under consideration is attracted	 in pith and substance	 by this Entry legislative incompetence cannot void the Act. The primary question	 which we have to pose to ourselves	 is as to whether this State Purchase Tax Act is bad because it is a legislation with respect to a controlled industry	 to wit	 the sugar industry. What matters is not the name of the Act but its real nature	 its pith and substance. The same problem demands our attention at a later stage in considering the contention that the levy under examination is	 in a sense	 an excise duty and not a purchase tax. We are somewhat surprised that the argument about the invalidity of the Act on the score that it is with respect to a 'controlled industry dies hard	 despite the lethal decision of this Court in Ch. Tika Ramji 's case. Enlightened litigative policy in the country must accept as final the pronouncements of this Court by a Constitution Bench Unless the subject be of such fundamental importance to national life or the reasoning is so plainly erroneous in the light of later thought that it is wiser to be ultimately right rather than to be consistently wrong. Stare decisis is not a ritual of convenience but a rule with limited exceptions. Pronouncements by Constitution Benches should not be treated so cavalierly as to be revised frequently. We cannot devalue the decisions of this Court to brief ephemerality which recalls the opinion expressed by Justice Roberts of the U.S. Supreme Court in Smith vs Allwright "that adjudications of the Court were rapidly 	 gravitating 'into the same class as a restricted railroad ticket	 good for this day and train only ' ". Let us examine the worth of the contention that the impugned legislation is one on a 'controlled industry ' and therefore out of bounds for the State legislature. Tika Ramji 's case (supra) deals with the identical question of 'controlled industry ' vis a vis a U.P. Legislation regulating sugarcane supply and purchase. Certain sugarcane growers of Uttar Pradesh assailed the vires of the U.P. Sugarcane (Regulations of Supply and Purchase) Act 1953. That statute reserved or assigned to sugar factories specified cane purchasing centres for the purpose. This regimentation of sugarcane growers and regulation of cane supplies to specified millers by a State enactment was attacked on the precise ground that sugar being	 a 'controlled industry ' any enactment effecting such industry including the regulation of supplies of raw materials 783 thereto was taboo. The plea was dismissed as specious	 and the appeals under our consideration are a fortiori case where the rejection of the contention can be more confidently made. N.H. Bhagwati	 J.	 speaking for the Court traced the legislative history bearing on sugar and sugarcane. Reference was made to the Industries (Development and Regulation) Act 1951 which brought in as Item 8 of the First Schedule to the Act the industry engaged in the manufacture or production of sugar. The impugned legislative measures occasioned by the need to streamline the supplies of cane to factories. The law was designed to provide for a rational distribution of sugarcane to factories for its development on organised scientific lines to protect the interests of the cane growers and of the industry. The submission made there was that even though the impugned Act purported to legislate in regard to sugarcane required for use in sugar factories	 it was	 in pith and substance and in its true nature and effect	 legislation in regard to sugar industry which had been declared by Act LXV of 1951 to be an industry under Entry 52 of List I. It was urged that the word 'industry ' was of wide import and included not merely manufacture but also the raw materials for the industry. The supply and Distribution of raw materials for the sugar industry were	 therefore matters having a clear impact on the production of sugar. In this view	 it was pleaded that sugarcane control vis a vis sugar factories was a colourable exercise of legislative power by the State trespassing upon ' the field of Entry 52 in List I. Tika Ramji 's case (supra) gave short shrift to the submission that all sugarcane legislation linked to sugar factories was sugar legislation. Bhagwati	 J. Observed: "What we are concerned with here is not the wise construction to be put on the term 'industry ' as such but whether the raw materials of an industry which form an integral part of the process are within the topic of 'industry ' for which forms the subject matter of Item 52 of List I as ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in that topic and whether the Central Legislature while legislating upon sugar industry could	 acting within the sphere of Entry 52 of List I	 as well legislate upon sugarcane." The learned Judge stripped the argument naked and presented it for examination: "It was suggested that Item 52 of List I comprised not only legislation in regard to sugar industry but also in regard 784 to sugarcane which was an essential ingredient of the industrial process of the manufacture or production of sugar and was	 therefore	 ancillary to it and was covered within the topic. If legislation with regard to sugarcane thus came within the exclusive province of the Central Legislature	 the Provincial Legislature was not entitled to legislate upon the same . The court was pressed to impart the widest amplitude to the topic 'industry ' and take within its wings ancillary matters lie raw materials of the industry . "It was	 therefore	 contended that the Legislation in regard to sugarcane should be considered as ancillary to the legislation in regard to sugar industry which is a controlled industry and comprised within Entry 52 of List I. ' The edifice of exclusive Parliamentary jurisdiction so built stood on shifting sands. The semantic sweep of Entry 52 did not come in the way of the State Legislature making laws on subjects within its sphere and not directly going to the heart of the industry itself. The key to the problem was furnished in Tika Ramji 's case (supra). After comparing the provisions of the U.P. Act there considered	 which related to the regulation of sugarcane to factories and securing its price to the grower from the occupier of the factory even by checking the accounts relating to The manufacture of sugar	 The Court clinched the issue thus: "This comparison goes to show that the impugned Act merely confined itself to the regulation of the supply and purchase of sugarcane required for use in sugar factories and did not concern itself at all with the controlling or licensing of the sugar factories	 with the production or manufacture of sugar or with the trade and commerce in	 and the production	 supply and distribution of sugar. If that was so	 there was no question whatever of its trenching upon the jurisdiction of the Centre in regard to sugar industry which was a controlled industry within Entry 52 of List I and the U.P. legislature had jurisdiction to enact the law with regard to sugarcane and had legislative competence to enact the impugned Act. " 785 Even the argument of repugnancy was repelled: "The pith and substance argument also cannot be imported here for the simple reason that	 when both the Centre as well as the State Legislatures were operating in the concur rent field	 there was no question of any trespass upon the exclusive jurisdiction vested in the Centre under Entry 52 of List I	 the only question which survived being whether	 putting both the pieces of legislation enacted by the Centre and the State Legislature together	 there was any repugnancy . This Court further quoted Sulaiman	 J. In Shyamakant Lal to lend strength to this latter limb of reasoning	 where the learned Judge had laid down the principle of construction in; situations of apparent conflict: "When the question is whether a Provincial legislation is repugnant to all existing Indian Law	 the onus of showing its repugnancy and the extent to which it is repugnant should be on the party attacking its validity. There ought to be a presumption in favour of its validity	 and every effort should be made to reconcile them and construe both so as to avoid their being repugnant to each other; and care should be taken to see whether the two do not really operate in different fields without encroachment. Further	 repugnancy must exist in fact	 and not depend merely on a possibility." Tika Ramji notwithstanding. the contention was advanced by Sri Shanti Bhushan that industry was a pervasive expression	 ambient enough to embrace raw materials used for the industry and so	 sugar industry	 as a topic of legislation	 vested in Parliament exclusive power to legislate on sugarcane supplies to sugar factories	 and	 pursuing this expansionist logic. any taxation on supplies of cane to mills would be legislation on sugar industry. Ergo the Purchase Tax Act was a usurpation by the U.P. Legislature breaching the dykes of article 26(1) read with entry 52 of List I. He expanded on the theme by urging that any legislation which affected the sugar industry by taxing its raw materials was one with respect to that industry. The Tika Ramji ratio is diametrically opposed to this reasoning and a ruling which has stood the field so long	 has been followed by another Constitution 786 Bench as late as 1973 in the Kannan Devan case	 and its force of logic has our deferential assent and cannot be brushed aside by a mere appeal for reconsideration. Shri Shanti Bhushan candidly conceded that if Tika Ramji were good law his submission was still born. We agree Industry as a legislative topic is of large and liberal import; true. But what peripherally affects cannot be confuse with what goes to the heart. An acquisition of land for sugar mills or of sugar mills may affect the industry but is not an action in the legislative field forbidden for the States. [See the Kannan Devan Hills Produce Company Ltd. case (supra) ]. Sales tax on raw materials going to a factory may affect the costing process or the manufacture but is not legislation on industrial process or allied matters. Indeed	 if the State Legislature cannot go anywhere near measures which may affect topics reserved for Parliament a situation of reduction ad absurdum may be reached. The further refinement made by counsel that here was legislation confined to factories and units only	 the other buyers of sugarcane being left out	 and that therefore the Act was in intent and effect one with respect to the sugar industry has no substance either. For one thing	 the bulk of the consumption of sugarcane was by factories and khandsari units only and the omission of trivial consumers did not mean that the legislation was not on sugarcane purchases generally. Secondly	 it was open to the Legislature to make an intelligent choice of the persons on whom the tax should be imposed. Here	 the bulk consumers were selected and the marginal buyers omitted. We discern nothing in this policy which legislates upon the sugar industry. Before we move on to the submission as to the nature of the levy being an excise duty	 we may dispose of the little contention on alleged discrimination between sugar factories and khandsari units by the imp post of differential rates of tax and more serious contention founded on the breach of Article 14 to the effect that when a purchase tax liability is computed by the weight of the case	 as distinguished from its monetary value	 there is an inevitable arbitrariness built into the texture of the Scheme. If either of these submissions has substance	 the tax in question must fall to the forces of Articles 14	 19 and 13	 especially article 14	 article 19 coming in only consequentially or where expropriation ensues. Article 14	 a great right by any canon	 by its promiscuous forensic misuse	 despite the Dalmia decision has given the impression of being 787 the last sanctuary of losing litigants. In present case	 the levy which is uniform on all sugarcane purchases	 is attacked as ultra vires	 on the score that the sucrose content of various consignments may vary from place to place	 the range of variation being of the order of 8 to 10 per cent and yet a uniform levy by weight on these unequals is sanctioned by the Act. Price of cane is commended as the only permissible criterion for purchase tax. The whole case is given away by the very circumstance that	 substantially	 the sucrose content is the same for sugarcane in the State	 the marginal difference being too inconsequential to build a case of discrimination or is blamable on the old machinery. Neither in intent nor in effect is there any discriminatory treatment discernible to the constitutional eye. Price is surely a safe guide but other methods are not necessarily vocational. It depends	 practical considerations of the Administration	 traditional practices in the Trade	 other economic pros and cons enter the verdict but	 after a judicial generosity is extended to the legislative wisdom	 if there is writ on the status perversity	 'madness ' in the method or gross disparity	 judicial credulity may snap and the measure may meet with its funeral. Even so	 taxing statutes have enjoyed more judicial indulgence This Court has uniformly held that classification for taxation and the application of Article 14	 in that context	 must be viewed liberally	 not meticulously. We must always remember that while the executive and legislative branches are subject to judicial restraint	 "the only check upon our exercise of power is our own sense of self restraint. " In the Murthy Match Works case	 this Court observed: "Certain principles which bear upon classification may be mentioned here. It is true that a Ste may classify persons and objects for the purpose of legislation and pass laws for the purpose of obtaining revenue or other objects. Every differentiation is not a discrimination. But classification can be sustained only if it is founded on pertinent and real differences as distinguished from irrelevant and artificial ones. The constitutional standard by which the sufficiency of the differentia which form a valid basis for classification may be measured	 has been repeatedly stated by the courts. If it rests on a difference which bears a fair and just relation to the object for which it is proposed it is constitutional. To put it differently	 the means must have nexus with the ends. Even so	 a large latitude is allowed to the State for classification upon: a reasonable basis and what is reasonable 788 is a question of practical details and a variety of factors which the court will be relucant and perhaps ill equipped to investigate. In this imperfect world perfection even in grouping is an ambition hardly even accomplished. In this context	 we have to remember the relationship between the legislative and judicial departments of government in the determination of the validity of classification. Of course	 in the last analysis courts possess the power to pronounce on the constitutionality of the acts of the other branches whether a classification is based upon substantial differences or is arbitrary	 fanciful and consequently illegal. At the same time	 the question of classification is primarily for legislative judgment and ordinarily does not become a judicial question. A power to classify being extremely broad and based on diverse considerations of executive pragmatism	 the judicature cannot rush in where even the legislature varily treads. " The further challenge must be clarified here. Counsel submitted that unequals were being treated equally by a uniform purchase tax where equality would have dictated classification and taxation based on sucrose recovery from the cane or its market price. Even here	 we may notice the observations in Murthy Match Works (supra). Another proposition which is equally settled is that merely because there is room for classification it does not follow that legislation without classification is always unconstitutional. The court cannot strike down a law because it has not made the classification which commends to the court as proper. How can the legislative power be said to have been unconstitutionally exercised because within the class a sub classification was reasonable but has not been made. It is well established that the modern State	 in exercising its sovereign powers of taxation	 has to deal with complex factors relating to the objects to be taxed	 the quantum to be levied	 the conditions subject to which the levy has to be made	 the social and economic policies which the tax is designed to subserve	 and what not. In the famous words of Holmes	 J. in Bain Peanut Co. vs Finson: 'We must remember that the machinery of Government would not work if it were not allowed a little play in its joints. " 789 It is well established that classification is primarily for the legislature and becomes a judicial issue only when the legislation bears on its bosom obvious condemnation by way of caprice or irrationality. We have discussed earlier the history of legislative control	 the imposition of tax or cess by weight of cane and the acceptance of that methodology all through the decades without demur by the Trade. Moreover	 this Court has negatived an identical argument in a case from Andhra Pradesh (where also a similar levy based on weight of sugarcane is extent) in Andhra Sugar Ltd. Anr. etc. vs State of Andhra Pradesh & ors.(l) The Court there observed: "Mr. Setalvad submitted that there can be no levy of a purchase tax with reference to the tonnage of the cane. We cannot accept this contention. Usually the purchase tax is levied with reference to the price of the goods. But the legislature is competent to levy the tax with reference to the weight of the goods purchased. The contention of Mr. Chatterjee that a purchase tax must be levied with reference to the turnover only is equally devoid of merit. Where the purchase tax is levied on a dealer	 the levy is usually with reference to his turnover	 which normally means the aggregate of the amounts of purchase prices. But the tax need not necessarily be levied on a dealer or by reference to his turnover. It may be levied on the occupier of a factory by reference to the weight of the goods purchased by him. " Maybe the discussion is brief but the conclusion is sound	 and we concur. Tax on sale or purchase must be on the occurrence of a taxing event of sale transaction. Beyond that is left to the free play of the legislature	 subject	 of course	 to the contra indications about capricious	 arbitrary or irrational features. It is a superstition	 cultivated by familiarity	 to consider that all sales tax must necessarily have nexus with the price of the commodity. Of course	 price as basis is not only usual but also safe to avoid uneven	 unequal burdens	 although it is conceivable that a legislature can regard prices which fluctuate frequently	 as too impractical to tailor the purchase tax. It may even be	 in rare cases	 iniquitous to link purchase tax with price	 if more sensible bases can be found. Supposing a legislature classifies sales tax on the basis of human categories and reduces the rate or exempts the tax in respect of abject destitutes	 or starving flood 790 victims or notoriously hazardous habitations	 with respect to necessity of life. Such differentiation cannot be castigated as discrimination out of hand. Of course	 it is common and commonsense that reliable standard is the price	 although in regard to customs duties there are still items levied on the nature of the goods rather than its value in money. For the present	 it is sufficient to state that the practice has been to impose purchase tax by weight of cane. Also	 in weight of cane its sucrose content and its price have a close nexus	 although	 theoretically	 they may appear unconnected. The High Court has stated that the quantity crushed	 the sugar produced and the profits earned	 have a substantial linkage. The quality of cane over the whole of Uttar Pradesh varies over a range of 8 to 10 per cent which	 if converted to purchase tax	 may inflict a trivial difference per quintal Moreover	 for many years past the bulk of the sugar has been absorbed by 'levy ' by the State and in the costing components the State	 as buyer of sugar	 has borne the burnt. We have no facts to hold that arbitrary or various burdens are cast because weight	 not price	 has been the yardstick for tax. Fine tuning to attain perfect equality may be a fiscal ideal but	 in the rough and tumble of work a day economics	 the practical is preferred to the ideal	 provided glaring caprice of gross disparity does not make the levy arbitrary or frolicsome. Article 14 is not intellectual chess unrelated to actual impact or the wear and tear of life but even handed justice with some play in the joints. Sri Mridul	 one of the advocates appearing for the appellants	 made a naive presentation that equality is inflexible as enshrined in Article 14 and so the differential in rate of tax as between sugar mills arid khandsari units is bad. The plea that infants and adults	 weeklings and strongmen	 paupers and princes should be put on a par lest legislative validity be imperilled has an elitist merit but sounds like an argumentum ad absurdum in the context of social justice. Unequals cannot be treated equally since mechanical uniformity may become unmitigated injustice. Khandsari units are cottage industries unlike sugar factories and need legislative succour for survival. Their economy justifies State action	 classifying them as apart from factories and we fail to appreciate the flaw in the scheme on this score. Reference to K. T. Moopil Nair 's case was made at the bar to persuade us that unequals cannot be tortured into equality a vice which stultifies the soul of Article 14 as Anatole France exposed in his sardom epigram that 'the law	 in its majestic equality	 forbids the 791 rich as well as the poor to sleep under bridges	 to beg in the streets	 and to steal bread '. We are sure that equality has two sides	 both important	 and Moopil Nair adverted to one of the facets. Nothing more can be squeezed out of that case. The inequality of situation	 in the total conspectus of socio economic facts and human condition	 must be striking and the unjust equality the rule forces down on unequals must be glaring. In taxation	 the many criteria of intrinsic intricacy and pragmatic plurality persuade the Court	 as a realist instrument and respecter of the other two branches	 to allow considerable free play although never any! play for caprice	 mala fides or cruel recklessness in intent and effect Sri Malhotra	 counsel for some appellants	 explored beyond Sri Shanti Bhushan	 the 'excise ' argument in detail	 read to us several sections and rules which enables the tax authorities to keep effective track of and control over the sugar in the factories to the extent needed for recovery of the tax. Nothing in these provisions regulates or controls the industry itself nor exacts any levy on the manufacture of sugar or its wide ramifications. Nothing more than prevention of escapement of purchase tax on cane is done and what is done is legitimately incidental to the taxing power. Peripheral similarity between purchase tax and excise levy does not spell essential sameness. Sugarcane tax operates in the neighbourhood of sugar excise but proximity is not identity. The tax is only on purchase of cane	 not its conversion into sugar. If the miller has his own cane farm and crushes it	 he his no purchase tax to pay but cannot escape excise duty	 if any. Again	 if cane is purchased by a miller and it is later robbed or destroyed before sugar is manufactured	 the State tax is exigible although excise on production is not. A perspicacious appreciation of the implications of purchase and production. dispels confusion on this issue. To buy raw produce is a step preliminary to manufacture but is not part of manufacture. Maybe	 in some cases tax on such purchase and duty on manufacture therewith are so close that thin 'partition do their bounds divide ' but how can we obliterate those bounds and telescope the two ? All the appeals deserve to be and are dismissed with costs	 one set.

Summary:
These appeals arise from a common demand for tax by the State from a number of Sugar Mills on the purchase of Sugarcane at a rate regulated by weight and not on value. The Cess under the U.P. Sugarcane Cess Act	 1956 was declared ultra vires which resulted in the enactment of Sugarcane Purchase Tax Act	 1961. In a fiscal sense	 the Purchase Tax Act	 is a reincarnation of the Cess Act	 but in a legislative sense	 it is an independent statute with a different source of power	 impact and structure. The tax in question is a successor to the Cess which was struck down but jurisprudentially	 the levies are different in character and attributes and constitutionally the imposts derive from different legislative entities and have to be tested by different standards. The Act by Section 3 imposes a rate of tax at the rate of Rs. 1.25 paise per quintal of sugarcane purchased by a factory owner	 the corresponding rate for a "unit" being paise 50. Under Section 3(2) of the Act	 the charge is on the purchase transaction payable by the owner of the factory or unit "on such date" at such place and in such instalment as may be prescribed. The appellant had challenged the charge of tax. The High Court dismissed the Writ Petition on the ground that the petitioners have not supplied for any period figures of actual prices paid by them	 actual quantity of cane crushed	 actual quantity of juice derived	 actual quantity of sugar produced and their earnings and	 therefore	 it was not possible to take the view that tax by weight was unfair and inequitable. The High Court further held that tax by weight had fairer relation to the production of sugar by earnings of a factory than tax by price and consequently no one could complain that the impugned provisions treated unequals as equals	 Equal crushing attracts equal tax. On appeal to this Court	 it was argued on behalf of the appellants that (i) the scheme and sections of the Act are ultra vires (ii) the charge of tax is bad because in its true character it is a legislation in respect of "Controlled Industry" and this power belongs exclusively to Parliament under Entry 52 of List I (Seventh Schedule) of the Constitution	 (iii) there is discrimination between sugar factories and khandsari units by the impost of differential rates of tax and liability is computed by the weight of the cane as distinguished from its monetary value	 there is an inevitable arbitrariness built into the texture of the scheme and (iv) the Act	 masked as Purchase Tax	 in essence asks for an Excise Duty on sugar manufacture and is	 therefore	 invalid as colourable legislation. 770 ^ HELD: (i) This Court cannot lose sight of the all India impact when the law is laid down under Article 141 of the Constitution and judgments of this Court are decisional between litigants but declaratory for the nation. The scheme of the Act is simple and workable. It is undisputed that sugar industry is a controlled industry within the meaning of Entry 52	 List I of Schedule and therefore	 the legislative power of Parliament covers enactments with regard to industries having regard to Article 246(1) of the Constitution. Entry 54 in List II of the Seventh Schedule	 empowers the State legislature to legislate for taxes on purchase of goods and so if the Act under consideration is attracted	 in pith and substance by this entry	 legislative incompetence cannot void the Act. [774 E F	 781 G H	 782 A] (ii) The contention that the charge of tax is bad because in its true character it is a legislation in respect of controlled industry and which power belongs exclusively to Parliament under Entry 52 of List I has no force. Tika Ram 's case deals with the identical question of "controlled industry ' vis a vis U.P. Legislation regulating Sugarcane supply and purchase under the U.P. Sugarcane (Regulation of Supply and Purchase) Act	 1953. That statute reserved or assigned to sugar factories specified cane purchasing centres for the purpose. This regimentation of sugarcane growers and regulation of cane supplies to specified millers by a State enactment was attached on the precise ground that sugar being a "controlled industry" any enactment affecting such industry including the regulation of supplies of raw materials thereto was taboo. The plea was dismissed as specious	 and the appeals under this Court 's consideration are a fortiori cases where the rejection of the contention can be more confidently made. [782 C	 F H	 783 A] "Industry" as a legislative topic has a large and liberal import	 true. But what peripherally affects cannot be confused with what goes to the heart. An acquisition of land for sugar mills or of sugar mills may affect the industry but is not an action in the legislative field forbidden for the States. Sales tax on raw materials going to a factory may affect the costing process of the manufacture but is not legislation on industrial process or allied matters. Indeed	 if the State Legislature cannot go anywhere near measures which may affect topics reserved for Parliament a situation of reductio ad absurdum may be reached. [780 B C] Ch. Tikka Ram 's case ; Shyamkant Lal 	 Kanan Devan Hills Produce Company Ltd. followed. (iii) The contention that there is discrimination between sugar factories and khandsari units by the impost of differential rates of tax and that when a purchase tax liability is computed by the weight of the cane as distinguished from its monetary value	 there is an inevitable arbitrariness built into the texture of the scheme	 has no force. Neither in intent nor in effect is there any discriminatory treatment discernible to the constitutional eye. Price is surely a safe guide but other methods are not necessarily vocational. It depends Practical considerations of the Administration. traditional. practices in the Trade. Other economic pros and cons enter the verdict but	 after a judicial generosity is extended to the legislative wisdom	 if there is writ on the statute perversity. 'madness ' in the method or gross disparity	 judicial credulity may snap and the measure may meet with its funeral. This Court has uniformly held that classi 771 fication for taxation and the application of Article 14	 in that context	 must be viewed liberally	 not meticulously. [786 F H	 787 B D] Murthy Match Works case; 	 	 applied. It is well established that classification is primarily for the legislature and becomes a judicial issue only when the legislation bears on its bosom obvious condemnation by way of caprice or irrationality. [789 A] (iv) The contention that the Act masked as Purchase tax	 in essence asks for an Excise Duty on sugar manufacture and is therefore invalid as colourable legislation has no force. Tax on sale of purchase must be on the occurrence of a taxing event of sale transaction. Beyond that is left to the free play of the legislature	 subject	 of course	 to the contra indication about capricious	 arbitrary or irrational features. It is a superstition	 cultivated by familiarity	 to consider that all sales tax must necessarily have nexus with the price of the commodity. Price as basis is not only usual but also safe to avoid uneven	 unequal burdens	 although it is conceivable that a legislature can regard prices which fluctuate frequently	 as too impractical to tailor the purchase tax. It may even be	 in rare cases	 iniquitous to link purchase tax with price	 if more sensible bases can be found. Supposing a legislature classifies sales tax on the basis of human categories and reduces the rate or exempts the tax in respect of abject desuetudes	 or starving flood victims or notoriously hazardous habitations	 with respect lo necessity of life. Such differentiation cannot be castigated as discrimination out of hand. It is common and commonsense that reliable stand is the price	 although in regard to customs duties there are still items levied on the nature of the goods rather than its value in money. For the present	 it is sufficient to state that the practice has been to impose purchase tax by weight of cane. Also	 in weight of cane	 its sucrose content and its price have a close nexus	 although	 theoretically	 they may appear unconnected. Unequals cannot be treated equally since mechanical uniformity may become unmitigated injustice. Khandsari units are cottage industries unlike sugar factories and need legislative succor for survival. Their economy justifies State action	 classifying them as apart from factories and we fail to appreciate the flaw in the scheme on this score. [789 F H. 790 A B. F G] Nothing more than prevention of escapement of purchase tax on cane is done and what is done is legitimately incidental to the taxing power. Peripheral similarity between purchase tax and excise levy does not spell essential sameness. Sugarcane tax operates in the neighborhood of sugar excise but proximity is not identity. The tax is only on purchase of cane	 not its conversion into sugar. If the miller has his own cane farm and crushes it	 he has no purchase tax to pay but cannot escape excise duty if any. Again if cane is purchased by a miller and it is later robbed or destroyed before sugar is manufactured	 the State tax is exigible although excise on production is not. A perspicacious appreciation of the implications of purchase and production dispels confusion on this issue. To buy new produce is a step preliminary to manufacture but is not part of manufacture. [791 D F]