Bombay High Court
Agasti Sahakari Sakhar Karkhana Ltd vs The State Of Maharashtra on 22 December, 2015
Author: S. C. Dharmadhikari
Bench: S. C. Dharmadhikari
WP.2060.1997+.Judgment.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 2060 OF 1997
Niphad Sahakari Sakhar }
Karkhana Ltd. }
Pimplas, Bhausahebnagar }
Tal. Niphad, distt. Nashik. } Petitioner
versus
1. State of Maharashtra }
through the Secretary, }
Department of Finance, }
Mantralaya, }
Mumbai - 400 032. ig }
}
2. Commissioner of Purchase }
Tax (Sugarcane), }
th
having his office at 8 floor, }
Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai 400 010. }
}
3. Purchase Tax Officer }
(Sugarcane) having his }
office at Dr. Gondkar }
Building, Panchvati, }
Nashik - 3. } Respondents
WITH
WRIT PETITION NO. 2364 OF 1999
1. The Ravalgaon Sugar }
Farm Limited, }
a Company incorporated }
under the provisions of }
the Indian Companies Act, }
1913, having its registered }
office at P. O. Ravalgaon - }
423 108, Taluka Malegaon, }
District - Nashik. }
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2. Shri. H. B. Doshi }
a shareholder and Director }
of Petitioner No. 1 }
abovenamed, carrying on }
business at P. O. Ravalgaon - }
423 108, Taluka Malegaon, }
Dist. Nashik. } Petitioners
versus
1. State of Maharashtra }
(service through }
Government Pleader, }
High Court, Mumbai) }
}
2. Commissioner of Purchase }
Tax (Sugarcane), having his }
office at 8 th floor, Vikrikar }
Bhavan, Nesbit Road, }
Mazgaon, Mumbai - 400 010. }
}
3. The Assistant }
Commissioner of Purchase }
Tax (Sugarcane), P-36, }
Nashik Division, Panchavati, }
Nashik 422 003. }
}
4. Purchase Tax Officer }
(Sugarcane), having his }
office at Dr. Gondkar }
Building, Panchavati, }
Nashik - 3. }
}
5. Sales Tax Officer (E-210) }
Enforcement Branch, }
th
R. No. 502, 5 floor, }
Old Building, Vikrikar }
Bhavan, Mazgaon, }
Mumbai - 400 010. } Respondents
WITH
WRIT PETITION NO. 3198 OF 2015
M/s. Shri. Chatrapati }
Sahakari Sakhar Karkhana }
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Ltd., At Post Bhavnnagar, }
Tq. Indapur, Dist. Pune, }
through its Managing }
Director, Ramakant }
S/o. Suryakant Naik, }
Age - 52 years, }
Occ. - Service (Managing }
Director) Karkhana, Ltd., }
Bhavani Nagar, Tq. Indapur, }
Dist. Pune. } Petitioner
versus
1. The State of Maharashtra}
through its Secretary, }
Finance Department, }
Mantralaya, Mumbai. ig}
(copy to be served upon }
Government Pleader Office) }
}
2. The Joint Commissioner }
of Purchase Tax }
(Sugarcane), Pune, }
Dist. Pune. }
}
3. The Deputy Commissioner }
of Sales Tax (Appeals), }
Pune, Dist. Pune. }
}
4. The Sugarcane Purchase }
Tax Officer, Pune, }
Dist. Pune. } Respondents
WITH
WRIT PETITION NO. 7543 OF 2015
WITH
CIVIL APPLICATION NO. 2197 OF 2015
M/s. Samartha Sahakari }
Sakhar Karkhana Ltd., }
A Co-operative Society }
registered under the }
provisions of Maharashtra }
Co-operative Societies }
Act, 1960, represented }
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through Shri. Pratapsinha }
R. Chavhan, Chief }
Accountant of the Petitioner, }
Indian inhabitant, }
aged 57 years, having office }
address at - Ankushnagar, }
Taluka - Ambad, }
District - Jalna. } Petitioner
versus
1. The State of Maharashtra }
through the Secretary, }
Department of Finance, }
Mantralaya, }
Mumbai - 400 032. }
ig }
2. The Commissioner of }
Purchase/Sales Tax, }
Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai - 400 032. }
}
3. The Joint Commissioner }
of Purchase/Sales Tax }
(Appeal), Vikrikar Bhavan, }
Near Railway Station, }
Aurangabad. }
}
4. The Additional }
Commissioner of Purchase/ }
Sales Tax, Mumbai having }
th
his office at 8 floor, }
Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai - 400 032. }
}
5. The Deputy Commissioner }
of Sales Tax, Aurangabad }
Division, having its office }
address at Vikrikar Bhavan, }
near Railway Station, }
Aurangabad. }
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6. Sugarcane Purchase }
Tax Officer, having his }
office address at Vikrikar }
Bhavan, near Railway }
Station, Jalna, }
District - Jalna. }
}
7. The Advocate General, }
Mumbai High Court, Bombay. } Respondents
WITH
WRIT PETITION NO. 12068 OF 2012
WITH
CIVIL APPLICATION NO. 1696 OF 2015
The Kopargaon Sahakari }
Sakhar Karkhana Limited ig }
at Gautamnagar, }
Post - Kolpewadi, }
Tq. Kopargaon, }
Dist. Ahmednagar }
(Maharashtra) } Petitioner
versus
1. State of Maharashtra }
(copy to be served on }
Govt. Pleader, High Court }
of Judicature at Bombay, }
Bench at Aurangabad). }
}
2. The Commissioner of }
Sales Tax and Sugarcane }
Purchase Tax, Vikrikar }
Bhawan, Mazgaon, }
Mumbai - 10. }
}
3. Sugarcane Purchase Tax }
Officer, Patel Building, }
Ahmednagar, }
Dist. Ahmednagar }
(Maharashtra) }
}
4. The Advocate General }
of Maharashtra }
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(copy to be served on Govt. }
Pleader, High Court of }
Judicature of Bombay, }
Bench at Aurangabad). } Respondents
WITH
WRIT PETITION NO. 12070 OF 2012
WITH
CIVIL APPLICATION NO. 2649 OF 2013
WITH
CIVIL APPLICATION NO. 2984 OF 2013
1. Padmashri Dr. Vithalrao }
Vikhe Patil Sahakari Sakhar}
Karkhana Ltd., P. O. }
Pravaranagar, }
Tq. Shrirampur, ig}
District Ahmednagar }
(Maharashtra) }
}
2. Sangamner Bhag Sahakari }
Sakhar Karkhana Ltd. }
Amrutnagar, Taluka }
Sangamner, }
Dist. Ahmednagar. }
}
3. Sanjivani Sahakari }
Sakhar Karkhana Ltd., }
Shahajanandnagar, }
P. O. Shinganapur, }
Tal. Kopargaon, }
District - Ahmednagar. }
}
4. Shree Ganesh Sahakari }
Sakhar Karkhana Ltd., }
Ganeshnagar, }
Taluka Kopargaon, }
District -Ahmednagar. }
}
5. Dnyaneshwar Sahakari }
Sakhar Karkhana Ltd., }
Bhende (Bk.) Taluka }
Newase, Dist. Ahmednagar. } Petitioners
versus
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1. The State of Maharashtra }
through the Secretary, }
Department of Finance, }
Mantralaya, }
Mumbai - 400 032. }
}
2. Commissioner of Purchase }
Tax (Sugarcane), }
th
having his office at 8 floor, }
Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai - 400 032. }
}
3. Additional Commissioner }
of Sales Tax,Mumbai Zone, }
Mumbai, having his office }
th
at 8 floor, Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai - 400 010. }
}
4. Sugarcane Purchase Tax }
Officer, Ahmednagar, }
having his office at Patel }
Building, Maliwada, }
Ahmednagar. } Respondents
WITH
WRIT PETITION NO. 12071 OF 2012
Parner Taluka Sahakari }
Sakhar Karkhana Ltd., }
Devi Bhoyre, At and Post }
Devi Bhoyre, Tq. Parner, }
Dist. Ahmednagar }
(Maharashtra) } Petitioner
versus
1. State of Maharashtra }
(copy to be served on }
Govt. Pleader, High Court }
of Judicature at Bombay, }
Bench at Aurangabad). }
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2. The Commissioner of }
Sales Tax and Sugarcane }
Purchase Tax, Vikrikar }
Bhawan, Mazgaon, }
Mumbai - 10. }
}
3. Sugarcane Purchase Tax }
Officer, Patel Building, }
Ahmednagar, }
Dist. Ahmednagar }
(Maharashtra) }
}
4. The Advocate General }
State of Maharashtra }
High Court of Bombay, }
Anex Building, Mumbai. } Respondents
ig WITH
WRIT PETITION NO. 12072 OF 2012
Mula Sahakari Sakhar }
Karkhana Limited, Sonai, }
Tq. Newasa, }
Dist. Ahmednagar. } Petitioner
versus
1. State of Maharashtra }
(copy to be served on }
Govt. Pleader, High Court }
of Judicature at Bombay, }
Bench at Aurangabad). }
}
2. The Commissioner of }
Sales Tax and Sugarcane }
Purchase Tax, Vikrikar }
Bhawan, Mazgaon, }
Mumbai - 400 010. }
}
3. Sugarcane Purchase Tax }
Officer, Patel Building, }
Ahmednagar, }
Dist. Ahmednagar }
(Maharashtra) }
}
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4. The Advocate General }
State of Maharashtra }
High Court of Bombay, }
Anex Building, Mumbai. } Respondents
WITH
WRIT PETITION NO. 12073 OF 2012
The Rahuri Sahakari Sakhar }
Karkhana Limited, }
at Shri-Shivaji-nagar, }
Tq. Rahuri, }
Dist. Ahmednagar }
(Maharashtra) } Petitioner
versus
1. State of Maharashtra
(copy to be served on
ig }
}
Govt. Pleader, High Court }
of Judicature at Bombay, }
Bench at Aurangabad). }
}
2. The Commissioner of }
Sales Tax and Sugarcane }
Purchase Tax, Vikrikar }
Bhawan, Mazgaon, }
Mumbai - 400 010. }
}
3. Sugarcane Purchase Tax }
Officer, Patel Building, }
Ahmednagar, }
Dist. Ahmednagar }
(Maharashtra) } Respondents
WITH
WRIT PETITION NO. 12074 OF 2012
Agasti Sahakari Sakhar }
Karkhana Ltd., Agastinagar, }
Tq. Akole, Dist. Ahmednagar, }
through its Managing }
Director. } Petitioner
versus
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1. State of Maharashtra }
(copy to be served on }
Govt. Pleader, High Court }
of Judicature at Bombay, }
Bench at Aurangabad). }
}
2. The Commissioner of }
Sales Tax and Sugarcane }
Purchase Tax, Vikrikar }
Bhawan, Mazgaon, }
Mumbai - 400 010. }
}
3. Sugarcane Purchase Tax }
Officer, Patel Building, }
Ahmednagar, }
Dist. Ahmednagar }
(Maharashtra) ig }
}
4. The Attorney General }
of Maharashtra }
(copy to be served on }
Govt. Pleader, High Court }
of Judicature of Bombay, }
Bench at Aurangabad) } Respondents
WITH
WRIT PETITION NO. 12075 OF 2012
Jai Jawan Jai Kisan }
Sahakari Sakhar Karkhana }
Limited, Lalbahadur Shastri }
Nagar, Nalegaon, Tq. Chakur, }
Dist. Latur, through its }
Managing Director. } Petitioner
versus
1. State of Maharashtra }
(Notice to be served on Govt. }
Pleader in his office at }
High Court of Judicature }
of Bombay, Bench at }
Aurangabad). }
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2. The Commissioner of }
Sales Tax and Sugarcane }
Purchase Tax, Vikrikar }
Bhawan, Mazgaon, }
Mumbai - 400 010. }
}
3. Sugarcane Purchase Tax }
Officer, Patel Building, }
Ahmednagar, }
Dist. Ahmednagar }
(Maharashtra) }
}
4. The Advocate General }
of Maharashtra, }
(copy to be served on Govt. }
Pleader, High Court of }
Judicature of Bombay, ig }
Bench at Aurangabad). } Respondents
WITH
WRIT PETITION NO. 12076 OF 2012
Kedareshwar Sahakari }
Sakhar Karkhana Ltd., }
Post Bodhegaon, Taluka }
Shegaon, District }
Ahmednagar, through its }
Managing Director }
Shri. Nivruttin Laxman }
Kalokhe, Age - 52 years. } Petitioner
versus
1. State of Maharashtra }
(copy to be served on }
Govt. Pleader, High Court }
Bench at Aurangabad). }
}
2. The Commissioner of }
Purchase Tax (Sugarcane) }
th
having his office at 8 floor, }
Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai. }
}
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3. The Additional }
Commissioner of Sales Tax, }
Mumbai Zone, Mumbai, }
having his office at 8 th floor, }
Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai. }
}
4. The Sugarcane Purchase }
Tax Officer, Ahmednagar, }
having his office at Sales }
Tax Office, at Ahmednagar. } Respondents
WITH
WRIT PETITION NO. 12077 OF 2012
The Shrigonda Sahakari ig }
Sakhar Karkhana Limited, }
at. Po. Shrigonda Factory, }
Tq. Shrigonda, }
Dist. Ahmednagar, }
through its Managing }
Director Shri. Vinayak }
Sahebrao Bhoyate, }
Age 53 years. } Petitioner
versus
1. State of Maharashtra }
(Notice to be served on Govt. }
Pleader in his office at }
High Court of Judicature }
of Bombay, Bench at }
Aurangabad). }
}
2. The Commissioner of }
Sales Tax and Sugarcane }
Purchase Tax, Vikrikar }
Bhawan, Mazgaon, }
Mumbai - 400 010. }
}
3. Sugarcane Purchase Tax }
Officer, Patel Building, }
Ahmednagar, }
Dist. Ahmednagar }
(Maharashtra) }
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4. The Advocate General }
of Maharashtra, }
(copy to be served on Govt. }
Pleader, High Court of }
Judicature of Bombay, }
Bench at Aurangabad). } Respondents
WITH
WRIT PETITION NO. 12078 OF 2012
Samarth Sahakari Sakhar }
Karkhana Ltd., }
Ankushnagar, }
Post Wadigodri, Tq. Ambad, }
District - Jalna, through its }
Managing Director. } Petitioner
versus
1. The State of Maharashtra }
through the Secretary, }
Department of Finance, }
Mantralaya, }
Mumbai - 400 032. }
}
2. The Commissioner of }
Purchase Tax (Sugarcane) }
th
having his office at 8 floor, }
Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai 400 010 }
}
3. The Additional }
Commissioner of Sales Tax, }
Mumbai Zone, Mumbai, }
th
having his office at 8 floor, }
Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai 400 010 }
}
4. The Sugarcane Purchase }
Tax Officer, Jalna, }
having his office at Sales }
Tax Building, near Railway }
Station, Jalna, }
Tq. And Dist. Jalna. } Respondents
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WITH
WRIT PETITION NO. 12079 OF 2012
Samarth Sahakari Sakhar }
Karkhana Ltd. Ankushnagar, }
Post Wadigodri, Tq. Ambad, }
District Jalna, through }
its Managing Director. } Petitioner
versus
1. The State of Maharashtra }
through the Secretary, }
Department of Finance, }
Mantralaya, }
Mumbai - 400 032. }
ig }
2. The Commissioner of }
Purchase Tax (Sugarcane) }
th
having his office at 8 floor, }
Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai 400 010 }
}
3. The Additional }
Commissioner of Sales Tax, }
Mumbai Zone, Mumbai, }
th
having his office at 8 floor, }
Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai 400 010 }
}
4. The Sugarcane Purchase }
Tax Officer, Jalna, }
having his office at Sales }
Tax Building, near Railway }
Station, Jalna, }
Tq. and Dist. Jalna. } Respondents
WITH
WRIT PETITION NO. 1441 OF 2014
Kukadi Sahakari Sakhar }
Karkhana Ltd., }
A Co-operative Society }
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deemed to be registered }
under Maharashtra }
Co-operative Societies Act, }
1960, At and Post- }
Pimpalgaon Pisa, }
Taluka - Shrigonda, }
District - Ahmednagar, }
Ahmednagar - 413 703. } Petitioner
versus
1. The State of Maharashtra }
through the Secretary, }
Department of Finance, }
Mantralaya, }
Mumbai - 400 032. }
ig }
2. The Commissioner of }
Sales Tax (Sugarcane), }
th
8 floor, Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai - 400 032. }
}
3. The Deputy Commissioner }
of Sales Tax, (Mumbai Zone), }
8 th floor, Vikrikar Bhavan, }
Nesbit Road, Mazgaon, }
Mumbai - 400 032. }
}
4. The Asst. Commissioner }
of Sales Tax, Vikrikar }
Bhavan, near State Bank }
of India, Ahmednagar. }
}
5. Advocate General, }
Mumbai, High Court Mumbai } Respondents
Mr. Sudam Kale for the Petitioner in
WP/3198/2015.
Mr. P. C. Joshi with Mr. Piyush Shah for
the Petitioner in WP/2060/1997 and
WP/12070/2012.
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Mr. P. C. Joshi with Mr. Ms. Nandini Joshi
i/b. M/s. Harish and Co. for the Petitioners
in WP/2364/1999.
Mr. S. P. Surte with Mr. Niranjan Shimpi
for the Petitioner in WP/12068/2012.
Mr. Vinod Sangvikar for the Petitioner in
WP/12071/2012.
Mr. Gopal Ozalwar i/b. Mr. Bhushan
Mahadik for the Petitioner in
WP/1441/2014 and WP/7543/2015.
Mr. V. A. Sonpal - Special Counsel with
Ms. M. S. Bane - AGP 'B' Panel for
Respondent State in all Petitions.
CORAM :- S. C. DHARMADHIKARI &
B. P. COLABAWALLA, JJ.
Reserved on :- 6 th October, 2015
Pronounced on:- 22 nd December, 2015
JUDGMENT :- (Per S. C. Dharmadhikari, J.) In all these Petitions, the Petitioners have challenged the constitutional validity of some of the provisions of the Maharashtra Purchase Tax on Sugarcane Act, 1962 (for short "the Act of 1962"). Since common questions of fact and law are involved, all these Petitions are disposed of by this common judgment.
2) We grant Rule in some of the Petitions which have been listed for admission and along with others which are ready for hearing. Even these Petitions would be disposed of finally by Page 16 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc this judgment. In other words, since all parties agreed and are present before the Court, with their consent, the Petitions are disposed of finally by this judgment.
3) The leading argument canvassed is in Writ Petition No. 2060 of 1997. We would refer to the facts in this Writ Petition.
4) The Petitioner is a Co-operative Society registered under the Maharashtra Co-operative Societies Act, 1960. It is a Co-operative Sugar Factory situate at Nashik District of Maharashtra. The Respondents to the Petition are the State, Commissioner of Purchase Tax (Sugarcane), Purchase Tax Officer (Sugarcane). The Petitioner also holds licence under the Act of 1962. It is stated that the Petitioner, at its factory, manufactures sugar and allied products out of sugarcane received from respective members, majority of whom are cultivators of sugarcane having their own land under cultivation. Apart from challenging the constitutional validity of sections 2, 3 and 6 of the Act of 1962 as amended from 1st October, 1995, the Petitioner also challenges the legality and validity of the letters dated 19 th October, 1996, 20th November, 1996 and 6th January, 1997, issued to the Petitioner by Respondent No. 3. The Maharashtra Act IX of 1962 was enacted on 18 th April, 1962. It is an Act to Page 17 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc provide for levy and collection of a tax on the purchase of sugarcane for use in manufacture or production of sugar including Khandsari Sugar. The words commencing from "the manufacture or production of sugar including Khandsari Sugar"
were substituted for the words "the manufacture of sugar" by Maharashtra Act 60 of 1974. Section 1 provides that this Act will extend to the whole Maharashtra. Section 2 contains definitions and we are concerned with the definition of the terms "factory", "licence", "occupier", "prescribed" and "unit". These definitions read as under:-
"2(b) "Factory" means any premises (including the precincts thereof), wherein twenty or more workers are working and in which, or in any part of which any manufacturing process connected with the production of sugar by means of vacuum pans is being carried on, or ordinarily carried on, with the aid of power.
2(c) "licence" means a licence granted or renewed under this Act.
2(d) "occupier" of a factory or of a unit means the person who has ultimate control over the affairs of the factory or the unit and where the said affairs are entrusted to a managing agent, such agent shall be deemed to be the occupier of the factory or of the unit, as the case may be; and the term includes also any person appointed by the occupier to act as a purchasing agent.
2(f) "prescribed" means prescribed by rules made under this Act.
2(h) "unit" means a unit engaged or ordinarily engaged in the manufacture or production of Khandsari sugar and which is capable of handling or processing sugarcane juice produced with the aid of a crusher driven by power."Page 18 of 76
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5) Therefore, unless the context otherwise requires, the definitions will have to be read and understood as enacted above.
By section 3, it is stated that there shall be levied and collected a tax on the purchase of sugarcane being purchased for use in the manufacture or production of sugar in a factory or a unit. By section 3A, which was inserted by Maharashtra Act 15 of 2011, certain provisions of the Maharashtra Value Added Tax Act, 2002 and Rules made thereunder are made applicable so far as they relate to the electronic filing of returns and electronic payment of tax, or any amount payable under this Act of 1962.
6) The Act of 1962 has been amended on several occasions. By section 4, taxing and licensing authorities are set out and that is how the State Government can appoint an officer to be called the Commissioner of Purchase Tax (Sugarcane) and may appoint one or more officers to assist such Commissioner for the purpose of functions under this Act and give them such designations as may be prescribed. By section 5, there is a provision made for issuance of a licence for purchasing sugarcane for use in the manufacture or production of sugar. By section 6, every occupier liable to pay tax under the Act of 1962 shall, within thirty days after the end of every month to which the return relates, submit a monthly return in the prescribed form to Page 19 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc the Commissioner. By section 6A, special provisions for transitional accounting year have been made. By section 7, provisions are made for assessment and collection of tax. By section 7A, penalty is imposed for failure to submit the return.
By section 7B, there is a liability to pay interest if the occupier fails to submit the return. By section 7C, interest on amount of refund is provided for, whereas, by section 7D, interest on delayed refund is dealt with. By section 7E, refund of excess payment of tax is contemplated, whereas, by sections 8 and 9, there is a provision for Appeal and Revision to a person aggrieved. By section 10, Court fees on appeal and applications are provided for and by section 11, it is clarified that in computing the period laid down in sections 8 and 9, provisions of section 4 and 12 of the Indian Limitation Act, 1963 shall, so far as may be, apply. By section 12, finality is given to an assessment, imposition of penalty or interest or charging of interest and by section 12A, special mode of recovery is set out. By section 12B, there is a power of remission and exemption and by sections 13, 14, 15 and 15A, service of notice, power to inspect and take copies of records and documents, information acquired to be treated as confidential, publication and disclosure of information respecting occupiers of factories and units and other persons of public interest are the matters dealt with. By section 16, the Page 20 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc offences and penalties are set out. By section 17, the compounding of offence is permitted. By section 18, there is a power conferred in the State Government to make Rules and generally to carry out the purpose of the Act and such Rules made includes Rules for levy of fees for any of the purposes of the Act.
Certain purchases are not liable to tax and which are falling within section 19 of the Act and by section 20, the Maharashtra Purchase Tax on Sugarcane Ordinance, 1961 is repealed.
7) This sums up the provisions of the Act, but the individual section, the changes and amendments thereto and the impact of the same would be considered while dealing with the rival contentions.
8) The Petitioners state that they have submitted their periodical returns and paid the tax under the Act. However, the State, by enacting the Maharashtra Tax Laws (Levy and Amendment) Act, 1995, amended several enactments and which included the provisions of the Act of 1962. It is the case of the Petitioners that by the amending Act XVI of 1995, the Act of 1962 was radically changed so as to provide for levy of tax on the purchases of sugarcane based on the purchase price instead of the quantity purchased. The Petitioners therefore challenge the validity of the said amendments carried out by this Amendment Page 21 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc Act. It is the case of the Petitioners that by the amendments, the definitions of "purchase price, "turnover purchases", which were not in the original Act, were introduced for the first time. The definition of the term "purchase" was also inserted for the first time to mean purchase of sugarcane made within the State of Maharashtra for a valuable consideration and includes the supply by a shareholder to a Co-operative society for cash, deferred payment or other valuable consideration. The Petitioners, therefore, submit that these sweeping changes in the Act of 1962 adversely affected the sugar units like the Petitioners. The earlier system was to allow the units to make payments of purchase tax by two installments, 50% payable during the season while the balance 50% was allowed to be paid in five equal installments during off season. The amended position in law, in nutshell, made departure from earlier system of levying tax on quantity basis coupled with the deductions that were provided under the unamended section 3(3). After the amendment, the tax is provided to be levied not only on the consideration that a buyer would pay to the seller, but two more additions were required to be made to the said consideration before arriving at the purchase price for the purpose of the Act, on which tax is sought to be levied. The direct result of such amendment is that the amounts which may have been charged by the cultivator for Page 22 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc transporting the sugarcane to the factory gate or the expenses incurred for harvesting the sugarcane in the farm, would also be added to the consideration as forming part of the purchase price.
The Petitioner is a member of the Federation, namely, Maharashtra State Co-operative Sakhar Karkhana Sangh Limited. Through that Federation, representations were made to the State Government requesting to clarify the impact of the amendment carried out to the Act. Accordingly, the Deputy Commissioner of Sales Tax (Headquarters), by his letter dated 5 th September, 1996, clarified that it was necessary to include the expenses incurred for sugarcane transport in the purchase price before paying tax. Similarly, it was clarified that the expenses incurred by the cultivator for cutting the sugarcane being incidental expenses would also be covered under the definition of the term 'purchase price' as amended. According to the said clarification, the purchase tax was payable on the consideration as also on the expenses incurred for transporting the sugarcane to the factory gate and cutting charges. The above referred facility of making payment of tax in two installments was also withdrawn. Annexure 'A' is copy of this letter. This clarification was in addition to the earlier clarification by the Deputy Commissioner of Sales Tax (Headquarters) dated 27 th June, 1996 Annexure 'B'. Since the interpretation placed by Respondent Page 23 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc No.2 through its subordinate was erroneous and arbitrary, the Petitioners sought legal advice and they were informed that the Respondents were not justified in holding that the expenditure incurred for transportation of sugarcane, even though paid to some third party, amounted to the sum charged by the cultivator.
This, according to the Petitioner, tantamounts to ignoring the meaning of the phrase "the amount charged". The Petitioners complain that if provisions are read in the context in which they appear, it is apparent that wherever the cultivator charges separately to the occupier the amount for transporting the sugarcane severed from the farm to the factory gate, such amount would form part of purchase price. There can be no dispute about such an addition, but according to the interpretation placed by the Respondents, any expenditure incurred by the factory or the Petitioners, distinct separate and independent of the purchase of sugarcane in question, would also have to be included or added to the consideration paid to the cultivator. This interpretation, according to the Petitioners, runs counter to the provisions of the Sale of Goods Act, 1930 as also the principles which determine the transfer of title to the goods from the buyer to the seller.
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9) The Petitioner then refers to several other Acts enacted by the Parliament and particularly the Essential Commodities Act, 1955, the control orders pertaining to sugarcane thereunder. They also refer to the provisions of Sale of Goods Act and all this is referred and relied upon to explain the procedure followed by the Petitioners throughout the year. The procedure commences from supplying the seeds to the cultivator to the point when the sugarcane so grown and severed from the land as per the programme formulated much in advance is explained. The emphasis is that sugar industry is a seasonal industry. The sugar season normally commences from October-
November and culminates by April-May of the following year.
However, the exact duration of the season entirely depends on the growth of sugarcane, which in turn entirely depends on the rainfall during rainy season. Sugarcane is the main raw material for the sugar industry and therefore, each sugar manufacturer would ensure adequate supply of raw materials. With that view in end, the Petitioner Societies have established a separate Cane Development Department. In paras 30, 31, 32 and 33, this is what is urged by the Petitioners:-
"30. Whenever a particular cultivator desires or plans to have the crop planning, the cultivator concerned would first approach the sugar factory in his area for procuring sugarcane seeds. The crop planning would be finalized after considering the availability of water in the area concerned.Page 25 of 76
J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc The Petitioner in question would thereafter supply the sugarcane seed to the cultivator from its own nursery and in case the required seeds are not available in the nursery, the cultivator in question would be permitted to procure the sugarcane seed from the market and its cost would be reimbursed by the Petitioner in question. The cost of seed supply at this initial stage is treated as interest-free loan by the sugar factories to the cultivator which is to be adjusted against the purchase price, i.e., the consideration to be paid to the cultivator for supply of sugarcane which he would be cultivating in his farm. Thus, right from the moment of sowing the seed for sugarcane, there is an agreement between the cultivator concerned and the factory in question that the entire crop that may be grown in his land out of the seeds so supplied, would be sold by the cultivator to the sugar factory in question.
31. In order to ensure the execution of proper planning of sugar crushing, the cultivator concerned is required to submit the information of sugarcane plantation in a prescribed form to the Agricultural Department of the factory in question. After receiving the information about sugarcane plantation, the same is counter-checked by the staff employed by the factory owner as the field Mukadam, who would verify the area of plantation, the quality of the sugarcane in question, the date of plantation etc. After receiving such a scrutiny report from the field Mukadam, the Agricultural Department records the finding in a separate register mentioning therein the name of the cultivator, the date of plantation etc. After the cultivator satisfies the correctness of the information as confirmed by the report of the field Mukadam, the factory in question would issue a certificate on the basis of which the cultivator, if he so desires, can obtain the finance from the bank which is known as crop loan so that he can meet the expenses of cultivation including the cost of fertilizers, pesticides, wages to workers etc. As per the system and the procedure adopted in the State of Maharashtra, the crop loan so granted to the individual cultivator, may be by a bank or the co-operative credit society, is again required to be adjusted against the sale proceeds of the sugarcane purchased from the cultivator in question.
32. Each factory would prepare its own harvesting programme on the basis of the entries in their register referred to hereinabove. In the interim period, the sugar factory would depute one of its officers known as Cultivator Officer or Cane Development Officer to the farm so as to ensure the proper growth of sugarcane planted by Page 26 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc sugarcane grower. He would also guide the farmer about the proper quantity of fertilizers to be utilized depending on the analysis he may obtain of the contents of the soil in question.
33. Before the sugarcane is severed, or before the commencement of the crushing season as is generally known, the sugar factory in question would arrange to test the maturity of the cane by selecting at random the samples of sugarcane grown in the field. After successful testing is done at the laboratory, and if found fit, the sugar factory would give a notice to the cultivator concerned to stop watering the cane for a period of 15 days so that proper harvesting of the cane could be done. Accordingly, a timetable is prepared as to which field is to be visited for the purpose of harvesting the sugarcane from a particular period. With the help of the workers employed by the sugar factory, the sugarcane grown in a particular field is severed and stacked on the border of the farm in question. The Petitioner herein has maintained Crop Collecting Centres in all remote places. As and when the crops are brought to the Collecting Centre, the representative of the sugar factory would accept the delivery of the sugarcane and issue a receipt on behalf of the sugar factory concerned. The sugar factory, thereafter, i.e., after the completion of the event of its purchase from the cultivator, arrange for the transportation of the sugarcane through its own agency by its own truck or by the trucks arranged for the purpose from outside agencies. However, in all such cases, three copies of the receipt issued by the representative of the sugar factory at the Collecting Centre accompany the truck driver to the factory where the sugarcane so brought are weighed at the weigh bridge. The weighment is recorded on all the three copies of the receipts, one such receipt is returned to the truck driver while another copy is delivered to the cultivator for his information, and the third copy is transmitted to the Accounts Department for payment process. In nutshell, the ownership of the sugarcane always vests with the sugar factory in question, though in the eyes of law, the sugarcane can be said to have been purchased only when the sugarcane is severed from the firm in question. After its severance, the cultivator transfers the physical property or the title to the goods by delivering the severed sugarcane to the agent of the buyer-sugar factory. Therefore, the point of time when the transaction of sale by the cultivator and the purchase by the sugar factory, can be said to have been fructified, is the time when the delivery of the sugarcane is given by the cultivator to the representative of the sugar factory in question. That Page 27 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc necessarily would mean that the seller cultivator would not be responsible for any damage or loss to the sugarcane in question after he delivers the sugarcane to the representative of the sugar factory in question. It would not be his concern as to how and by which mode the sugarcane so collected is transported by the buyer/sugar factory to his factory, whether such transport is through a bullock cart, camel cart or by a motor truck or whether such a vehicle is owned by the buyer himself or not. As far as the cultivator is concerned his responsibility would cease when he delivers the severed sugarcane at the Collecting Centre and obtains the receipt acknowledging the delivery thereof, from the representative of the sugar factory. The general property over the goods therefore would pass from the cultivator to the sugar factory at the moment of delivery of the sugarcane in question by the cultivator to the Collecting Centre in question. The passing of the property to the sugar factory at the Collecting centre would not be affected by the fact that the crops in question are to be weighed at the factory gate with the help of weigh bridge and therefore the title to the goods, viz., sugarcane, would be deemed to have been passed from the cultivator to the sugar factory when the sugarcane severed from the farm are delivered by the cultivator to the representative of the buyer-factory owner at the Collecting Centre in question. It is by now well established that the delivery to the agent or the servant of the buyer-factory owner would be sufficient to establish the transfer of title to the goods from the seller to the buyer."
10) Then, reliance is placed on certain definitions under the Sale of Goods Act and it is submitted that the concept of delivery is understood as the point of time when there is a change of the possession of the goods in question from the seller to the buyer. Then, relying upon the definition of the term "goods"
appearing in section 2(7) of the Sale of Goods Act, it is submitted that the Petitioners having agreed to buy and the cultivator agreed to sell the sugarcane crop, much before its harvest, at a time when the seeds were supplied, the agreement would be an Page 28 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc agreement of sale and therefore, governed by the Sale of Goods Act. In para 36, Entry 54 of List II of the VII th Schedule to the Constitution of India is referred and it is submitted that even though Article 366(29A) is introduced in the Constitution of India, none of the six categories set out therein would cover the transaction accomplished by the Petitioner. The term "purchase of sugarcane" will have to be interpreted in the same manner as is done in the Sale of Goods Act. Throughout the Petition, reliance is placed on the Sale of Goods Act to urge that the Petitioners effect purchase of sugarcane at the moment when there is a transfer of property from the cultivator to them and that would be only when the sugarcane severed is delivered to the Collecting Centre or to the representative of the factory owner/Petitioners.
It is at that time the sale by the cultivator and the purchase by the factory owner would be complete. The culmination of that transaction does not depend on the later weighment at the weigh bridge, which is to be done only for the purpose of proper accounting and quantification of the amount payable to the concerned cultivator. The reference is then made to the procedure adopted by sugar factories in the State of Maharashtra and it is complained that for the reason best known to the Commissioner (Respondent No. 2), there is a misinterpretation of the provisions of the Act. That is how uncalled for and Page 29 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc unwarranted additions are made to the consideration agreed to be paid to the cultivator. The Petitioners have been submitting their returns, but the complaint is that though there is a provision of assessment in the Act, there is no assessment made for the period covered by the amendment with effect from 1 st October, 1995. Though there was no such assessment, Respondent No. 3, by his letter dated 19 th October, 1996, called upon the Petitioners to provide the information sought therein.
He called upon the Petitioner to furnish details and asserted that the sugarcane cost should include the cane harvesting expenses as also the expenses incurred for transporting the same. He therefore calls upon the Petitioners to furnish the details of amount spent on cane harvesting and the expenses incurred for transportation in the season 1995-96 so that he can ascertain the amount of cane purchase tax payable by the Petitioners. He also directed that information be provided about purchase tax payable during the month of May, 1996, June, 1996 and July, 1996.
Annexure 'D' is a copy of this letter.
11) Following the letter at Annexure 'D', there is another letter dated 5th November, 1996, under which, Respondent No. 3 informed the Petitioner that certain amount of purchase tax was due in the month of May and June, 1996 in respect of 1995-96 Page 30 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc season and the purchase tax on harvesting and transport expenses also was required to be paid. The Petitioners were also called upon to submit the Treasury Challan, failing which, the third Respondent threatened coercive action. The original letters in Marathi and their English translation are referred. It is stated that the letter of 5th November, 1996 was followed by similar letters in January, 1997, copies of which are at Annexures 'E' and 'E1'.
12) Since Respondent No. 1 had threatened to take coercive measures on the basis of interpretation of the provisions of the Act of 1962 that the Petitioners are constrained to challenge the vires of the Act and the legality and validity of the aforementioned letters. It is on this footing and by raising several grounds in para 41 that this Writ Petition has been filed.
13) On this Writ Petition, an order of admission was made on 24th June, 1997. The Respondents were given time to file affidavit and an affidavit in reply has been filed by the Joint Commissioner of Sales Tax (Profession Tax), Pune Zone, Pune.
14) It is stated in this affidavit that prior to the amendment made in the Act of 1962, the scheme of the Act was to levy tax on the basis of weight of the sugarcane. There were Page 31 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc disparities in prices of sugarcane paid by Sakhar Karkhanas to the cultivator in different areas. Though the prices were above the support price and therefore in any area where the prices were paid less to the cultivator, the Karkhana had to bear the same burden of tax as compared to the Karkhanas which pay higher prices for sugarcane. In order to remove disparity and ensure social justice, the amendments were carried out from 1 st October, 1995 to change the structure of taxation. Though it is stated that the Petitioner has not challenged the legality and validity of the amended provisions, it is apparent that after the affidavit was filed, one opposing admission on 20th June, 1997 and the other on 13th April, 2010, the amendments have been made to the Writ Petition. Thus, the validity of the amended provisions has also been challenged. The Commissioner asserts that the field of legislation in respect of the levy of tax on sale or purchase of goods is set out in Entry 54 of List II of the 7 th Schedule to the Constitution of India. The Bombay Sales Tax Act, 1959 is enacted by the legislature for levy of Sales Tax on goods. Entry 44 of Schedule 'A' of the Bombay Sales Tax Act, 1959 gives exemption to the levy of tax on sale and purchase of sugarcane. The tax on purchase of the sugarcane is under the Act of 1962. It is therefore within the field of legislation provided by Item No. 54 of the List II of the VIIth Schedule to the Constitution of India.
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15) The Commissioner explains that the amounts spent for transport charges will also form a part of the purchase price which is very clear from the language of the definition. It is submitted that the argument and challenge that if transport charges are paid by the factory, the same shall not form part of the purchase price is no longer available in view of the clear language of the definition. It is urged that there is no substance in the challenge to clause (iii) of section 2(f-b) of the Act of 1962. It is urged that the Petitioner is creating an unnecessary controversy. The argument is that amount of harvesting charges spent by the factory for harvesting the standing crop on the field of the farmers should not form part of purchase price, since the same has not been charged. However, by the amended definition the word "charge" has been substituted by word "spent" in clause
(iii) of section 2(f-b). Even when it is not charged separately by any farmer since amendment is effective from 1st October, 1995 though amount has been paid by the Karkhana, it will form part of the purchase price. The argument that the expenses incurred have been brought in and the tax is not on purchase of sugarcane but expenditure incurred is dealt with in the subsequent paragraphs of this affidavit. It is submitted that question of jurisdiction to determine any amount of tax cannot be raised inasmuch as the power conferred on the officers under sections 3 Page 33 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc and 4 of the Act of 1962 to levy and collect the purchase tax is within the constitutional field. Therefore, the impugned notices are legal and valid. Further, on the basis of these notices, assessment orders are also passed on 30 th March, 2007.
Thereafter, the Petitioner preferred Appeals against these orders and the Appeals were also decided on 5th February, 2008 by the appellate authority. It is in these circumstances that the information was sought by the letters addressed in November, 1996 and January, 1997. Once the tax has been levied legally and validly, then, the amount thereof can be demanded by the officers and if that demand is not satisfied, they are justified in recovering the tax by coercive means. For these reasons and when the levy is constitutional and valid, the impugned communications and letters cannot be questioned and set aside.
16) It is explained that the expenses incurred are treated as a purchase price and the tool of calculation of purchase price cannot be said to be tax on expenses. In these circumstances, there is no merit in the Petitions and it should be dismissed.
17) Then, and upon the amendment to the Writ Petitions,, an affidavit has also been filed in Writ Petition No. 2364 of 1999 filed by the Ravalgaon Sugar Farm Limited. Independently, this Writ Petition is raising an identical challenge. The reply, Page 34 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc therefore, is in identical terms. The same principles are relied upon to support the levy. Hence, we need not refer to the facts in the other Petitions in detail. Similarly, in other Petitions, which were heard along with Writ Petition No. 2060 of 1997, the challenge being identical, the pleadings are identical. Some of the Petitions have been called from the Benches of this Court at Aurangabad.
18) Mr. P. C. Joshi, learned Counsel led the arguments on behalf of the Petitioners. His arguments were adopted by others and they only made some factual additions thereto. It would be advantageous to refer to the arguments of Mr. Joshi.
19) Mr. Joshi contends that if the Act originally enacted and later on amended is perused, it would be evident that the same seeks to include the amounts spent or the expenditure incurred. Once the amount spent by the cultivator is sought to be made the basis of the levy, then, that necessarily means the expenditure incurred by the cultivator before delivery would be forming part of the purchase price. In other words, criticizing the definitions in section 2(f-a) (f-b)(ii), Mr. Joshi would submit that if these definitions and the sub-clauses therein are read together, it would mean that the aggregate of the amounts of purchase price paid as provided by section 2(g-a) is not the determinative Page 35 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc or conclusive test. The attempt is to include other sums or amounts incurred or spent. That is not contemplated by law. He would submit that section 2(f-b)(ii) is not applicable to the factory. The sugar factory cannot be said to be spending the amount towards transport of sugarcane. The Revenue's interpretation that this forms part of the purchase price necessarily is therefore erroneous. After referring to sections 6, 7(1) and the impugned communications, Mr. Joshi would submit that the letters and communications are without authority of law.
There cannot be any demand and recovery of tax prior to the assessment. The demand should be crystallized and ascertained.
That would be only on adjudication. Once the adjudication is not done, then, no coercive recovery can be effected. Mr. Joshi was at pains to invite our attention to pages 66-A, namely the Ordinance VI of 1998. He would also refer to the compilation Volume - I of which relevant documents form part to submit that each and every amount cannot be taken into consideration. The amount taxed is on expenditure and therefore beyond the competence of the State legislature. Mr. Joshi emphasises Entry 54 of List II of VIIth Schedule to the Constitution of India, the language of section 2(1), section 18 and other provisions of the Sale of Goods Act to submit that the severance, harvesting or cutting expenses cannot be included in the definition of the term "purchase price". The Page 36 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc Petitioners are not concerned with the delivery of the crop because their factories are set up to manufacture or produce sugar from sugarcane crop supplied to it. If this is understood, then, in pith and substance, the subject tax is on expenditure.
That is how the word "spent" has been used.
20) Mr. Joshi then submits that the Ordinance has no saving clause. The impugned letters cannot be saved by the amendments. Mr. Joshi has referred to the full text of Maharashtra Act XX of 2002. He would submit that section 1(2)
(a) of this Maharashtra Tax Laws (Levy and Amendment) Act, 2002, Maharashtra Act XX of 2002 refers to the amendments to the Act of 1962. He would submit that these amendments do not restore the earlier position.
21(A) Mr. Joshi's contentions can be summarised as under:-
The aforesaid Act was amended on more than one occasion but in the Petition, the amendment by the Maharashtra Tax Laws (Levy and Amendment) Act, 1995 with effect from 1 st October, 1995 and the subsequent amendments by the Maharashtra Ordinance VI of 1998 read with Maharashtra Act 20 of 2002 and the Exemption Notification under section 12B of the said Act dated 29th March, 2003 read with Circular No. 12T of 2003 dated 31st March, 2003 coupled with the amendment by the Page 37 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc Maharashtra Act 8 of 2003 dated 29th March, 2003 are questioned. The Petition also challenges the validity and correctness of the latest circular issued by the commissioner of Sales Tax dated 23rd November, 2009 being Trade Circular No. 31T of 2009 on various grounds set out in the Petition as amended.
21(B) Under the provisions of the Central Act No. 10 of 1955 i.e. the Essential Commodities Act, 1955 the term "food crops" is defined to include the "sugarcane crop" also. As contemplated under the said Act, the Central Government issued the Sugarcane (Control) Order, 1966 from time to time fixing the price for sugarcane payable by the sugar factory to the sugarcane grower. Accordingly, the Sugar Control Order was issued on 22 nd November, 1996 for the relevant period. In addition to the price fixed by the Central Government under the provisions of the Essential Commodities Act, 1955, the impact of Sale of Goods Act will also have to be considered for determining the legality of the amendments impugned before this Court.
21(C) The procedure adopted by the sugar factories during the relevant period has been succinctly mentioned in paras 28 to
33. In a nutshell, it can be mentioned that the Petitioner had established various crop growing centres in the vicinity of the Page 38 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc field of the grower concerned so as to have quick delivery of the sugarcane at such centres.
21(D) The levy of purchase tax on the purchase price of sugarcane is covered by Entry 54 of List II to Schedule VII of the Constitution of India. However, the field mentioned therein over which the State legislature can provide for levy of tax on sale or purchase of goods, do not cover the tax on expenses, that may or may not have been incurred by the sugar factory after the event of purchase was completed at the crop growing centres where the property over the sugarcane severed from the farm was intended to be transferred to the Petitioner by the cultivator upon delivering the crop to the Petitioner's agent at the respective crop growing centres. The general property over the sugarcane severed from the farm was thus affected by respective cultivator, did not depend on the later weighment of the crops so purchased at the factory gate, solely for the purpose of effecting the payment to the cultivator concerned.
21(E) As per the then existing law, the Petitioner submitted the returns periodically and paid the purchase tax on the purchase price. However, disregarding the submissions of the Petitioners, the orders of assessment were passed under section 7 of the Act. Since the stand of the Respondent was unsupported by Page 39 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc any law, the present Petition was submitted challenging those orders of assessment alongwith the legality of amendments and the circulars mentioned herein above.
21(F) Much before the orders of assessment that were passed, the Petitioner was being continuously pressurised with directions by the Respondent to make the payment of purchase tax on sugarcane purchase also on the expenses incurred for transportation of the sugarcane from the crop growing centre to its factory by adding harvesting and transport expenses to the actual consideration paid by the Petitioner to the cultivators as purchase price from time to time.
21(G) After amendment through the Maharashtra Act XVI of 1995, with effect from 1 st October, 1995, the Governor of Maharashtra issued an Ordinance bearing No. VI of 1998 on 1 st May, 1998 whereby the purchase amount "charged" wherever it appeared in the entire enactment, was deemed to be substituted from 1st October, 1995 by the word "spent". That also has been challenged through the amendment to the Petition under the permission granted by this Court on 23 rd April, 2010. According to the Petitioner, the Ordinance in question was issued solely with the purpose of frustrating the present Petition by disturbing the provisions brought in the enactment from 1 st October, 1995 by Page 40 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc the Maharashtra Tax Laws (Levy and Amendment) Act, 1995.
(Act XV1 of 1995). The said Ordinance VI of 1998 did not contain any validating and saving clause, therefore the impugned three letters being Exhibits 'D', 'E' and 'E1' be declared as without jurisdiction.
21(H) In addition thereto, the State Government having realised the position of law regarding its competency to charge purchase tax on the expenses incurred by the Petitioner in respect of transportation and other expenses; by including such expenses to be part of the purchase price; by the Maharashtra Tax Law (Levy and Amendment) Act, 2002 the definition of "purchase price" so amended with effect from 1 st October, 1995 was deleted with effect from 1st May, 2002 by deleting the definitions under clause (f-a), (f-b) and (g-a). The procedure of levying purchase tax that was adopted prior to 1 st October, 1995 was resorted to by the said Levy and Amendment Act, 2002.
That amendment also have been inserted and referred to in the petition by the additional clause No. (h-a).
21(I) It is shocking to note that overlooking the Civil Application No. 530 of 2010 submitted on 4th February, 2010, by the Petitioner seeking permission to amend the Petition, the Respondent, by its additional affidavit in reply dated 13 th April, Page 41 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc 2010, referred only to the amendment by Ordinance No. VI of 1998 dated 1st May, 1998 conveniently ignoring the later developments of deleting the relevant definitions and restoring the earlier method of levying tax.
21(J) It is worthwhile to note that in the Statement of Objects and Reasons appended to the Maharashtra Tax Law (Levy and Amendment) Act, 2002, nothing is mentioned as to why the definition clauses inserted from 1 st October, 1995 were deleted by the said Amendment Act.
21(K) The Petitioner would like to mention herein that sections 10 to 12 of the said Maharashtra (Levy and Amendment) Act, 2002 were relevant for the purpose of the present Petition. The amendments related to the deletion of the definition clauses (f-a), (f-b) and (g-a), substitution of section 3 and amendment of section 6 by the said Amendment Act deleting, substituting and amending certain provisions. The amendment was brought into force with effect from 1 st May, 2002 by virtue of the provisions of section 2(a) of the said Maharashtra Act 20 of 2002. In the memorandum of delegated legislation, appended to the said Amendment Act 20 of 2002, it has been expressly mentioned that the Act of 1962 was being amended to replace the ad-volarem duty on purchase of sugarcane by a specific duty.
Page 42 of 76J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc 21(L) In their additional affidavit of reply, the Respondents have also overlooked the later amendment by the Maharashtra Act 8 of 2003 and subsequent Notification dated 29 th March, 2003. Under the powers conferred by the amended section 12B, the said Notification expressly exempted the purchase of sugarcane effected by the occupier of a factory from whole of tax if the sugar factory had exported the sugar manufactured by it during nine months from 1st January, 2002 to 30th September, 2002. While in case of other sugarcane purchases made during the period from 1st May, 2002 to 30the September, 2002, tax on cost of cutting and transport charges purported to be forming part of the purchase price of sugarcane; was exempted without any condition; in case of purchases from 1 st October, 2002 to 31st March, 2003, the same were completely exempted under Entry 3 of the said Notification dated 29th March, 2003.
21(M) The said development was clarified by the Commissioner of Sales Tax under Circular 12T of 2003. In addition thereto, the said circular also confirmed the fact that the amendment through sections 10, 11 and 12 of the Maharashtra Act 20 of 2002 were brought into force with effect from 1 st May, 2002. The said circular, however, misinterpreted the amendments by the Maharashtra Act 8 of 2003. The amendment Page 43 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc to section 2 of the Amendment Act 20 of 2002 was construed to mean that such an amendment automatically amended the duly amended provisions of sections of the main Act by sections 10, 11 and 12 of the Amendment Act, which already became part of the main enactment with effect from 1st May, 2002.
21(N) Such an erroneous version by the Respondent was again repeated by another Trade Circular 31T of 2009 dated 23 rd November, 2009. Under the said Circular, the Respondents have gone a step further by mentioning that the deleted provisions of the Act 20 of 2002 stood restored by the later Amendment Act 8 of 2003 with retrospective effect from 1 st May, 2002, without appreciating the true and correct legal position that the amended sections of the main Act, which were already brought into force and thus formed part of the main enactment, cannot be deemed to have been restored automatically by the later Amendment Act 8 of 2003. Under the circumstances, the Petitioner submits that the provisions deleted, amended and substituted with effect from 1st May, 2002 by the Maharashtra Act 20 of 2002 continued on the statute book unaffected by Act 8 of 2003 and therefore no tax can be levied on the expenses from the amounts spent by the Petitioner. Accordingly, Rule be made absolute with due relief in terms of prayers (a), (b), (b1), (b2), (c) and (d) of the Petition.
Page 44 of 76J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc 21(O) Mr. Joshi has relied upon the following judgments:-
(i) Govind Saran Ganga Saran vs. Commissioner of Sales Tax, (1985) 60 STC 2.
(ii) Hindustan Sugar Mills Ltd. vs. State of Rajasthan and Ors. and J. K. Synthetics Ltd. vs. Commercial Tax Officer, Kota, (1979) 43 STC 13 (SC).
(iii) State of Rajasthan and Anr. vs. Rajasthan Chemists Association, (2006) 147 STC 542 (SC).
(iv) The State of Tamil Nadu vs. The Madurantakam Co-
operative Sugar Mills, (1976) 36 STC 238 (Mad.).
(v) Ugar Sugar Works Ltd. vs. Dy. Commissioner of Commercial Taxes, (2006) 139 STC 413 (Kar.).
(vi) P. S. N. S. ambalavana Chettiar and Co. Ltd. and Anr. vs. Express Newspapers Ltd., AIR 1968 SC 741.
(vii) The State of Orissa vs. Utkal Distributors (P) Ltd., (1966) 17 STC 320 (SC).
(viii) Thiru Arooran Sugars Ltd. vs. Deputy Commercial Tax Officer, (1988) 71 STC 444 (Mad.).
(ix) State of Tamil Nadu and Ors. vs. Kothari Sugars and Chemicals Ltd., (1996) 101 STC 197 SC.
(x) Chief Commissioner vs. T. N. T. India Pvt. Ltd. (2010) 31 VST 92 (Kar.).
22(A) On the other hand, Mr. V. A. Sonpal, learned Special Counsel appearing for the State and the Respondents submitted that there is no substance in all the contentions of Mr. Joshi and other Counsel. Mr. Sonpal would submit that essentially amendments made in 1995 related to addition of definition of "purchase price" in section 2 (f-a), (f-b) and (f-c) so as to include Page 45 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc transportation expenses and other expenses spent by the dealer (there is no ambiguity as to spent by who since tax is on the sugar factory, spent word relates to the sugar factory and not grower).
The hitherto amendment in 1995 was leviable on weight basis and from 1995, basis of levy of tax is changed to ad-volarem.
Though there is no challenge to ad-volarem levy of purchase tax, real grievance is of adding the amount spent on transportation and money spent for any thing done before delivery of the sugarcane to the dealer. The challenge is only on the basis of measure for the purpose of calculating the percentage of purchase price. In other words, the challenge is the method of calculating the sale price to include amount spent as stated above in purchase price.
22(B) The answer to the challenge is no more res-integra. In "Goodrick Group's case" followed by case of "Bombay Tyre International" of the Hon'ble Supreme Court the ratio of which is applied in the judgment in case of Baramati Grapes Ltd. It is clearly held that the measure of tax and incidence of tax are different. If the levy is relatable to field of legislation, in present case, Entry 54 of 7th Schedule to the Constitution of India the State or Center has full, unbriddled power to fix the measure of tax that is to what will be basis of calculating tax.
Page 46 of 76J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc 22(C) In several cases as per compilation given separately, in case of sugarcane, the State has power to include harvesting and transportation charges to the agreed or disbursed price is upheld. Sugarcane is a controlled commodity and as per Sugarcane Order each year published by the Central Government fair and reasonable price for sugarcane is declared. As per Sugarcane Control Order, 1966 and more particularby clause 3A proviso (iv) as amended from time, to time it is permissible for the sugar factory to deduct the expenses for transportation and harvesting from the fair price. The fair price that is declared is agreed customarily by the grower in his agreement with sugar factory, in writing, that supply will as per the price declared by the Central Government and deductions for the harvesting expenses and transportation expenses are agreed to be deducted from fair price. Hence, going by the principles that disbursement or adjustment does not affect the purchase price at which tax is to be levied. It is therefore submitted that there is no extraneous or alien or irrelevant or unreasonable consideration for inclusion of expenses prior to delivery and transportation expenses to be included in the purchase price.
22(D) So far as vires of the amendments are concerned, suffice it to say that none of the grounds propounded by the Page 47 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc Petitioner merit consideration.
22(E) The field of legislation under Entry 54 for State includes making provisions for every incidental thing including enforcement and recovery, levy of penalty etc. Besides, it is well settled that when a power is conferred in the legislature to levy tax, that power itself must be widely construed. It must include the power to impose a tax and select the articles or commodities for the exercise of such power. It must likewise include the power to fix the rate and prescribe the machinery for the recovery of the tax. This power also gives jurisdiction to the legislature to make such provisions as, in its opinion, would be necessary to prevent the evasion of the tax. In imposing taxes, the legislature can also appoint authorities for collecting taxes and may prescribe the procedure for determining the amount of taxes payable by any individual, all the provisions are subsidiary to the main power to levy a tax and, therefore, once it is shown that the tax in question has been levied on goods carried, it would be open to the legislature to prescribe the machinery for recovering the said tax.
22(F) If the impugned legislation invades Entry 52, it must be repelled by this Court. But, Entry 54 in List II of the 7 th Schedule empowers the State to legislate for taxes on purchase of goods and if that is attracted, in pith and substance by the Entry, Page 48 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc legislative incompetence cannot void the Act. What matters is not the name of the Act but its real nature, its pith and substance.
Tax on sale or purchase must be on the occurrence of a taxing event of a 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 situation, 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. 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.
22(G) Simply because the method for quantifying the tax is by reference and determinable to the expenses of the transportation and other expenses before delivery, it is not a tax on expenses.
Page 49 of 76J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc 22(H) The bottom line of the said doctrine is to look at the legislation as a whole and if it has a substantial connection with the entry, the matter may be taken to be legislation on the topic.
22(I) The nomenclature of a levy is not conclusive for deciding its true character and nature. For deciding the true character and nature of a particular levy, with reference to the legislative competence, the Court has to look into the pith and substance of the legislation.
22(J) The statute enacted by Parliament or a State legislature cannot be declared unconstitutional lightly. The Court must be able to hold beyond any iota of doubt that the violation of the constitutional provisions was so glaring that the legislative provision under challenge cannot stand. Sans a flagrant violation of the constitutional provisions, the law made by Parliament or a State legislature is not declared bad.
22(K) Ordinary laws have to answer two tests for their validity: (1) the law must be within the legislative competence of the legislature as defined and specified in Chapter I, part XI of the Constitution, and (2) it must not offend against the provisions of Articles 19, 13(1) and (2) of the Constitution.
Page 50 of 76J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc 22(L) When a law is impugned on the ground that it is ultra vires the powers of the legislature which enacted it, what has to be ascertained is the true character of the legislation. To do that one must have regard to the enactment as a whole, to its objects and to the scope and effect of its provisions. If on such examination it is found that the legislation is in substance one on a matter assigned to the legislature, then, it must be held to be valid in its entirety, even though it might incidentally trench on matters which are beyond its competence. It would be quite an erroneous approach to the question to view such a statute not as an organic whole, but as a mere collection of sections, then, disintegrate it into parts, examine under what heads of legislation those parts would severally fall, and by that process determine what portions thereof are intra vires and what are not.
22(M) Mr. Sonpal has relied upon the following judgments:-
(i) Baramati Grape Industries Ltd. and Ors. vs. The State of Maharashtra and Ors., 1997(3) Bom. C. R.190.
(ii) Black Diamond Beverages and Anr. vs. Commercial Tax Officer, Central Section, Assessment Wing, Calcutta and Ors., (1998) 1 SCC 458.
(iii) Chengalvarayan Co-operative Sugar Mills Ltd.
vs.State of Tamil Nadu, (1997) 105 STC 497.
(iv) Hindustan Sugar Mills vs. State of Rajasthan and Ors. (1978) 4 SCC 271.
Page 51 of 76J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc
(v) E. I. D. Parry (I) Ltd. vs. Asstt. Commissioner of Commercial Taxes and Anr. and connected cases, (2000) 2 SCC 321.
(vi) Jiwajirao Sugar Company Limited and Anr. vs. State of Madhya Pradesh and Anr. (1995) 96 STC 13 (MP).
(vii) Ponni Sugars (Erode) Ltd. vs. Deputy Commercial Tax Officer (2005) 142 STC 543.
(viii) Union of India and Ors. vs. Bombay Tyre International Ltd. and Ors., AIR 1984 SC 420.
(ix) Maharashtra Chamber of Housing Industry and Ors.
vs. State of Maharashtra and Ors., (2012) 51 VST 168 (Bom.).
(x) Commissioner of Wealth-Tax, Kanpur vs. J. K. Cotton Manufacturers Ltd., (1984) 146 ITR 552.
(xi) Goodricke Group Ltd. and Ors. vs. State of West Bengal and Ors., Writ Petition (Civil) No. 951 of 1989 (Supreme Court) decided on 25th November, 1994.
(xii) Karnataka Bank Ltd. vs. State of A. P. and Ors., Appeal (Civil) 1994 of 2002 (Supreme Court).
(xiii) Jindal Poly Films Ltd. and Anr. vs. The State of Maharashtra and Ors., Writ Petition (A.S.) No. 313 of 2010 and connected matters. (Bombay High Court).
(xiv) Khyerbari Tea Co. Ltd. and Anr. vs. State of Assam, AIR 1964 SC 925.
(xv) Ganga Sugar Corporation Ltd. vs. State of U. P., AIR 1980 SC 286.
(xvi) M/s. Hoechst Pharmaceuticals Ltd. vs. State of Bihar, AIR 1983 SC 1019.
(xvii) Vijay Kumar Sharma and Ors. vs. State of Karnataka, AIR 1990 SC 2072.
(xviii) State of A. P. and Ors. vs. Mc. Dowel, AIR 1996 SC 1627.
Page 52 of 76J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc (xix) State of Bihar and Ors. vs. Shree Baidyanath Ayurvedic, AIR 2005 SC 932.
(xx) State of West Bengal and Anr. vs. Kesoram Industries, AIR 2005 SC 1646.
(xxi) All India Federation of Tax Practitioners vs. Unionof India, AIR 2007 SC 2990.
(xxii) State of Karnataka and Ors. vs. Chamudeshwari Sugar Ltd., AIR 2009 SC (Supp) 494.
(xxiii) State of Madhya Pradesh vs. Rakesh Kohli, AIR 2012 SC 2351.
(xxiv) Rajkot District Co-operative Bank Ltd. vs. State of Gujarat, AIR 2015 SC 489.
(xxv) Shreya Singhal vs. Union of India, AIR 2015 SC 1523.
(xxvi) Shri. Prithvi Cotton Mills Ltd. and Anr. vs. Broach Borough Municipality and Ors. 1969 (2) SCC 283.
(xxvii) Indian Aluminium Co. and Ors. vs. State of Kerala and Ors. (1996) 7 SCC 637.
(xxviii) National Agricultural Cooperative marketing Federation of India Ltd. and Anr. vs. Union of India and Ors. (2003) 5 SCC 23.
(xxix) Godfrey Phillips India Ltd. and Anr. vs. State of U. P. and Ors. (2005) 2 SCC 515.
(xxx) M/s. Hiralal Rattanlal Etc. Etc. vs. State of U. P. and Anr., (1973) 1 SCC 216.
(xxxi) Union of India and Anr. vs. Raghubir Singh (Dead) by Lrs. Etc. and Ors., (1989) 2 SCC 754.
(xxxii) State of Karnataka etc. vs. M/s. Pro Lab and Ors. etc., 2015 SCC Online SC 81.
23) For properly appreciating the rival contentions, it must be noticed that the Petitioners are challenging the vires of Page 53 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:42 ::: WP.2060.1997+.Judgment.doc amended sections 2, 3 and 6 of the Act of 1962. They have also challenged the legality and validity of the three letters so also the Exemption Notification under section 12B dated 29 th March, 2003 Annexure 'H' read with Circular No. 12T of 2003 at Annexure 'I' dated 31st March, 2003. The Petitioners have also challenged the amendment of the Maharashtra Act 8 of 2003.
24) The Petitioners also state that the Maharashtra Act IX of 1962 is an Act to provide for the levy and collection of a tax on purchase of sugarcane for use in the "manufacture of sugar" and which words were then substituted with the words "manufacture or production of sugar including Khandsari Sugar". The Statement of Objects and Reasons leading to the enactment are relevant and some of the clauses thereof are reproduced herein below:-
"STATEMENT OF OBJECTS AND REASONS.
The Supreme Court in the case of Diamond Sugar Mills Ltd. versus State of Uttar Pradesh (1961) I. S. C. J. 652, held the U. P. Sugarcane Cess Act, 1956, ultra vires and beyond the competence of the State Legislature. Parliament thereupon enacted the U. P. Sugarcane Cess (Validation) Act, 1961 (4 of 1961) to protect the taxes collected under the U. P. Act. Later, Parliament enacted the Sugarcane Cess (Validation) Act, 1961 (38 of 1961) to protect similar levies collected under other State laws which were also affected by the aforesaid judgment. The latter Act, which inter alia protects the imposition and collection of the cess on entry of sugarcane into the premises of a factory for use therein, under the Bombay Sugarcane Cess Act, 1948 (Bom. LXXXII of 1948), was proposed to be brought into force in this State with effect Page 54 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc from 31st December 1961. As thereafter it was not possible to collect the tax on sugarcane, it was necessary to take immediate action to levy, with effect from 1st January 1962, a purchase tax on sugarcane purchased by factories for the manufacture of sugar to make up the loss of revenue due to cessation of the Sugarcane Cess Act from that date. As both Houses of the State Legislature were not in session, the Maharashtra Ordinance No. V of 1961 was promulgated by the Governor on the 30 th December 1961. The Bill seeks to replace the Ordinance by an Act of the State Legislature, subject to a few formal modifications."
25) The above material is necessary to understand the backdrop and the context in which the Act came to be enacted.
Some of the definitions as found in the Act of 1962 were amended by the Maharashtra Act 21 of 1998 with effect from 1 st May, 1998 and are reproduced. Since heavy reliance has been placed on the definitions of the terms "factory", "licence", "occupier", "purchase", "purchase price" and "turnover of purchases", we reproduce these definitions hereinbelow:-
"2(b) "factory" means any premises (including the precincts thereof), wherein twenty or more workers are working and in which, or in any part of which any manufacturing process connected with the production of sugar by means of vacuum pans is being carried on, or ordinarily carried on, with the aid of power.
2(c) "licence" means a licence granted or renewed under this Act.
2(d) "occupier" of a factory of or a unit means the person who has ultimate control over the affairs of the factory of the unit and where the said affairs are entrusted to a managing agent, such agent shall be deemed to be the occupier of the factory or of the unit, as the case may be; and the term includes also any person appointed by the occupier to act as a purchasing agent.Page 55 of 76
J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc 2(f-a) "purchase" means a purchase of sugarcane made within the State for cash or deferred payment or other valuable consideration and includes any supply by a shareholder to a co-operative society or limited company for cash, deferred payment or other valuable consideration.
2(f-b) "purchase price" means aggregate of the following sums, -
(i) the amount of valuable consideration paid or payable by the occupier for purchase of sugarcane made by the factory or by the unit;
(ii) the amount spent towards transport of sugarcane (whether separately spent or not); and
(iii) any other sum spent for anything done in respect of the sugarcane at the time of or before delivery thereof.
2(g-a)"turnover of purchases" means the aggregate to the amounts of purchase price paid and payable by an occupier during a given period.
26) These definitions indicate as to how the reference is to a factory where manufacturing process connected with the production of sugar and by the means set out in the definitions is undertaken. A licence is required for purchasing sugarcane for use in the manufacture or production of sugar and that is granted under the Act. The term "occupier" is defined so that an officer is identified for the purposes of discharging several obligations in terms of the Act. The term "purchase" is defined so that it would be understood as a deal within the State for cash or deferred payment or other valuable consideration. It includes any supply by a shareholder of the Co-operative Society or limited company by similar mode. Thus, purchase by the manufacturer or producer of sugar directly and any supply by shareholder of the Page 56 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc manufacturing or producing company or Co-operative Society by the aforestated modes is brought within the purview of the Act.
The term "purchase price" means aggregate of the sums referred to in the sub clauses of the definition of the term "purchase price".
The word "aggregate" means total amount or sum total. It is understood as composed of several, combined whole. It also means to collect into a whole (see "Advanced Law Lexicon by P. Ramanatha Aiyar 3rd Edition Reprint 2007").
27) The term purchase price, therefore, means the total of the amount of valuable consideration paid or payable by the occupier for purchase of sugarcane made by the factory or by the unit, the amounts spent towards transport of sugarcane, whether separately spent or not. The word "spent" is substituted for the word "charged" and shall be deemed to have been substituted with effect from 1st October, 1995 by the Maharashtra Act 21 of 1998. It also means any other sum spent or anything done in respect of the sugarcane at the time of the delivery thereof. The term turnover of purchase has been defined once again by using the word "aggregate". It means the sum total of the amounts of purchase price paid and payable by an occupier during the given period. Thus, by the charging section 3, it is stated that there shall be levied and collected a tax on the turnover of purchase of Page 57 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc sugarcane. It is such sugarcane purchased for the use thereof in the manufacture or production of sugar in the factory or unit on which the tax is levied and collected. The rates thereof are to be specified in terms of sections 2 and 3 and the tax as levied is payable by the occupier at such intervals and in such manner as may be prescribed.
28) We have also to consider other provisions of the Act, for, they have a bearing on the charge and levy of the purchase tax.
By section 5, it is mandated that except under and in accordance with law, conditions of a licence issued by the Commissioner, no person shall purchase any sugarcane for the purpose of the use thereof in the manufacture or production of sugar in a factory or a unit. By the sub-sections of this section 5 as also by sub section (1) of section 6, it is apparent that the licence is for purchasing sugarcane for the purpose of use thereof in the manufacturing or production of sugar in a factory or a unit.
By sub section (1) of section 6, every occupier liable to pay tax under this Act is obliged to file a return in the prescribed form and showing a turnover of purchases of sugarcane purchased by him for above use. Thus, upon a licence being issued, sugarcane can be purchased and for use in the manufacture or production of sugar in the factory or unit. The occupier of factory is obliged to Page 58 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc file a return depicting above details. The provision following the same, namely, assessment and collection of tax would indicate as to how a Commissioner shall assess the tax and by a single order of assessment payable in respect of the period, in any year to which all the returns under section 6 collectively relate. If the amount has already not been paid, then, the Commissioner shall issue a notice and serve it by requiring the payment of the amount assessed. The consequences of not filing the return are set out in sub section (2) of section 7. By section 7A, penalty is provided for failure without reasonable cause to submit a return as required and by sub section (1) of section 7B, interest payable by occupier in certain cases is set out. The provision of Appeal under section 8 and Revision under section 9 would indicate that a complete machinery for assessment and collection of tax is provided in the Act.
29) On a reading of the provisions together and harmoniously, we are not in agreement with Mr. Joshi that the tax is on expenses or expenditure and not on purchase of sugarcane. The above provisions have been minutely referred by us together with those enabling recovery of tax. There is a inherent fallacy in the submission of the Petitioners that components which are not germane or relevant to the purchase of Page 59 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc sugarcane and the price paid therefor are taken into consideration by the legislature. It is apparent that the term "purchase price" is defined in such a way as to include amounts mentioned in sub-clauses (i) to (iii) of section 2(f-b) of the Act of 1962. Once it is apparent that the components or elements stated therein go into fixation of purchase price and that is the measure for computation of the tax, then, depending upon facts and circumstances in each case, the occupier can point out that not all components or elements are included in the purchase price in his case. That it is only the actual costs which have been taken into account or that they have not included all the heads simply because not all of them form part of the purchase price. Then, it would be open for the Assessing Officer/Commissioner to consider such pleas and material in support thereof. He would, then, compute the tax liability after duly considering them. However, it is the turnover of purchases meaning the aggregate of the amounts of purchase price paid and payable by an occupier, on which tax is levied and collected. The turnover is computed on the basis of the purchase transactions and the price paid for the same. Thus, it would be open for the Petitioners to point out that the turnover of purchases in their case involves payment of purchase price without the elements that are set out in the definition of the term "purchase price" referred above. In the Page 60 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc event the Assessing Officer/Commissioner does not agree with the Petitioner, then, there are remedies open in law. We cannot presume on the strength of the arguments of the Petitioners' Counsel that the tax is not on turnover of purchase of sugarcane, but on expenditure or amount incurred on cultivation and supply of sugarcane. Thus, expenses of this nature incurred by the factory or unit is the measure of the tax according to the Counsel.
However, the levy of tax cannot be confused with the measure of tax. The levy is on purchase of sugarcane used for manufacture or production of sugar in a factory or unit. If that is the transaction or dealing on which the tax is levied and for such transaction or deal to be struck, a licence is required, then, all the more we cannot agree with Mr. Joshi.
30) Mr. Joshi's arguments as noted above are based on paras 28 to 33 of the Petition argued by him. We are not going by individual facts and circumstances of each Petitioner/factory. It could be open for it to point out to the Assessing Officer during the course of arguments that its mode of acquisition or purchase of sugarcane is as explained in the paragraphs 28 to 33 of Writ Petition No. 2060 of 1997 or somewhat different or distinct thereto. It could also be pointed out that all the elements or components of determination of purchase price are not taken Page 61 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc care of in the individual sugar factory's determination of purchase price. Thus, it is not compensating for the costs allegedly incurred by the cultivator or farmer or supplier and that is how it would be in a position to convince the Assessing Officer about the computation of the tax and the liability in pursuance thereof. It must at once be noticed that the definition of the term "purchase price" takes within its fold the amount of valuable consideration paid or payable by the occupier for the purchase of sugarcane made by the factory or by the unit. It could also include or be an aggregate of the sums such as amounts paid towards transport of sugarcane whether separately spent or not and any other sum spent for anything done in respect of the sugarcane at the time of or before delivery thereof. Thus, the purchase price determined would take care of all these expenses or expenditure, but they may be incurred by the transporter or such other entity at the time or before delivery of the Sugarcane.
It could be pointed out that the act of purchase of sugarcane was for cash or deferred payment or other valuable consideration, but does not include a supply by a shareholder of the factory or limited company. Therefore, it could be said that the supplier of sugarcane is not a shareholder. It could also be said that the sugarcane is obtained from the farmer or cultivator directly and it is his responsibility to reach the sugarcane, for which the Page 62 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc purchase price is tendered, directly to the factory or unit where the production or manufacturing of sugar is undertaken. The transporter may or may not be involved in such process. Equally, there would not be any sum spent for anything done in respect of the sugarcane at the time of or before delivery thereof. These expenses may be to the account of the cultivator or farmer. The Assessee/factory is not required to compensate him for the same.
The computation of the purchase price is indicated so that the tax to be levied and collected is correctly computed. If sum total of the purchases would constitute the turnover and the measure of that would be the amount of purchase price paid and payable by an occupier during the given period, then, it is only to enable the assessment and collection of tax in accordance with law that these provisions have been inserted. Thus, we are in complete agreement with Mr. Sonpal on the legality and validity of the tax.
It is not unconstitutional and ultra vires as alleged.
31) Mr. Joshi relied upon Entry 54 in the State List (List -
II), which enables the State to impose taxes on the sale or production of goods other than newspapers, subject to the provisions of Entry 92A of List I. The argument is that the subject levy is covered by this Entry. The further argument is that this Entry does not enable State legislature to levy tax in Page 63 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc such a manner so as to cover expenses that may or may not have been incurred. We are unable to accept this contention and for more than one reason. The term "tax on the sale or purchase of goods" has also been defined in the Constitution of India itself and by an amendment particularly by (Forty sixth Amendment Act, 1982). In Article 366 (29A), the term "tax on the sale or purchase of goods" is defined in a conclusive manner as under:-
"366(29A) "tax on the sale or purchase of goods" includes
- (a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration;
(b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;
(c) a tax on the delivery of goods on hire-purchase or any system of payment by installments;
(d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;
(e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;
(f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made"Page 64 of 76
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32) Therefore, a reading of the same would indicate as to how the tax could be on the delivery of goods on hire purchase system or any system of payment of installments, it could be a tax on the transfer of right to use any goods for any purpose for cash, deferred payment or valuable consideration, a tax on the supply of goods by any incorporated association or body of persons to a member thereof, a tax on the supply by way of or as a part of any service or in any manner whatsoever of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), whether such supply is for cash, deferred payment or other valuable consideration. The definition also clarifies that such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made. In the circumstances, the subject tax does not go beyond Entry 54 of List - II (State List) to the Seventh Schedule of the Constitution.
33) The other argument also need not detain us. That is that amendments which have been made with effect from 1 st October, 1995 by Ordinance VI of 1998 issued on 1 st May, 1998 are also ultra vires the Act. According to the Petitioners, the Ordinance was issued solely with a purpose of frustrating a Page 65 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc challenge to the provisions brought in the law from 1 st October, 1995. This argument has no substance, simply because an Act of the competent legislature can be amended from time to time. It is presumed also in matters of imposition of tax that the legislature understands and appreciates the economic realities. It performs a balancing act and while plugging loopholes and removing defects and lacunas, it has full freedom to make changes in the tax structure or in the process of assessment and collection of tax. Therefore and in the absence of any constitutional prohibition, the legislature was not prevented from amending the Act even during the pendency of these Petitions. Secondly, the executive is a sole Judge of the urgency and if it is required to act expeditiously to subserve larger public interest, then, it is equally empowered to issue an Ordinance. This contention therefore must be negatived.
34) Then, the argument is that the Act, which was enacted in 1962, came to be amended. The legislature in enacting the Amendment Act, stated that the Maharashtra Amendment Act 21 of 1998 would be effective from 1st October, 1995. Mr. Joshi would submit that Maharashtra Tax Laws (Levy and Amendment) Act in Chapter VI refers to the Amendment to the Maharashtra Purchase Tax on Sugarcane Act, 1962. It states Page 66 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc that the definition as appearing in section 2(f-b) of the term "purchase price" in its sub clause would have the word "spent"
instead of "charge" and it shall be deemed to have been substituted with effect from 1st October, 1995. Then, Mr. Joshi would submit that the Maharashtra Tax Laws (Levy and Amendment) Act, 2002 in Chapter I entitled 'Preliminary', particularly section 1(2)(a) thereof stated that sections 1 to 8, 10 to 12, 14, 15, 17, 18, 20 to 27 and 29 shall come into force on 1 st May, 2002 and by section 1(2)(b), it is stated that section 9, 16, 19 and 28 shall come into force on the dates expressly mentioned in those sections. Mr. Joshi relied upon Chapter V of this Act, which contains amendments to the Maharashtra Purchase Tax on Sugarcane Act, 1962. Chapter V reads as under:-
"CHAPTER V Amendments to the Maharashtra Purchase Tax on Sugarcane Act, 1962
10. Amendment of section 2 of Mah. IX of 1962. - In section 2 of the Maharashtra Purchase Tax on Sugarcane Act, 1962 (hereinafter, in this Act, referred to as "the Purchase Tax on Sugarcane Act"), clause (f-a), (f-b) and (g-
a) shall be deleted.
11. Substitution of section 3 of Mah. IX of 1962. -
For section 3 of the Purchase Tax on Sugarcane Act, the following section shall be substituted, namely:-
3. Levy of purchase tax. - (1) There shall belevied and collected a tax on the purchase of sugarcane being purchased for use in the manufacture or production of sugar in a factory or a unit.
(2) The tax under sub-section (1) shall be levied at such rate per kilogram of sugarcane purchased for the purpose aforesaid, as may be specified by the State Page 67 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc Government, by notification in the Official Gazette, and different rates may be specified for the sugarcane purchased for the manufacture or production of sugar in a factory and of Khandsari sugar in a unit:
Provided that, different rates may also be specified for sugarcane purchased for the manufacture or production of Khandsari sugar in units situated in areas, which are declared by the State Government, from time to time, by notification in the Official Gazette, as developed areas or undeveloped areas, so however that the rate or rates so specified shall not exceed four paise per kilogram of sugarcane so purchased.
(3) for the purpose of the levy of tax, as provided in sub-section (2), there shall be deducted from the gross weight of sugarcane so purchased, such portion thereof representing the average weight of the top of the sugarcane plant consisting of pith devoid of any sugar content and leaves and other trash usually present in the sugarcane, as may be prescribed; and the tax shall be levied only on the remaining weight of the sugarcane after such deduction has been made.
(4) The tax levied under the foregoing sub-
sections shall be paid by the occupier of the factory or of the unit, as the case may be, at such intervals and in such manner, as is hereinafter provided.
12. Amendment of section 6 of Mah. IX of 1962. - In section 6 of the Purchase Tax on Sugarcane Act, in sub-
section (1), for the words "the turnover of purchase of" the words "in kilograms the total quantity of" shall be substituted."
35) Thus, the argument is that these sections came into force on 1st May, 2002. In effect, it means section 2(f-a), 2(f-b) and 2(g-a) from the Act of 1962 stood deleted. However, Mr. Joshi then invited our attention to Maharashtra Act VIII of 2003, which is an Act to further amend certain Tax Laws in operation in the State of Maharashtra and by which section 12B of the act of 1962 was substituted. Section 4 of the Maharashtra Act VIII of 2003 reads as under:-
Page 68 of 76J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc "4. In section 1 of the Maharashtra Tax Laws (Levy and Amendment) Act, 2002 in sub-section (2) -
(a) in clause (a), the figures and word "10 to 12" shall be deleted and shall be deemed to have been deleted with effect from the 1st May 2002 and
(b) in clause (c), for the word and figures "section 13" the words and figures "sections 10 to 13" shall be substituted and shall be deemed to have been substituted with effect from the 1st May, 2002."
36) The argument is that though this Act amends the Maharashtra Tax Laws (Levy and Amendment) Act, 2002, insofar as the amendment relating to the Act of 1962, the figures and words "10 to 12" stand deleted and shall be deemed to have been deleted with effect from 1st May, 2002. Therefore, there is non application of mind on the part of the authorities. It only means that the amendments which were already brought into force were purported to be deleted. The amendments brought in by Maharashtra Act VIII of 2003 could not have changed the amended provisions or sections of the main Act.
37) Mr. Sonpal has clarified that this is an improper reading of the amended provisions. He would submit that the Act of 1962 was amended by the Maharashtra Act XVI of 1995 with effect from 1st October, 1995 and the Maharashtra Act XIX of 1996 with effect from 9th June, 1996. It was amended by Maharashtra Act XXI of 1998 with effect from 1 st May, 1998.
Our attention is invited to these amendments carried out Page 69 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc particularly by the Maharashtra Act XVI of 1995. It is urged by Mr. Sonpal that the Maharashtra Tax Laws (Levy and Amendment) Ordinance 1998 purported to amend several provisions in the Maharashtra Tax Laws. Insofar as that Ordinance is concerned, it was later on enacted as the Maharashtra Act XXI of 1998. The Maharashtra Act XXI of 1998, vide Chapter VI, amended section 2(f-b) of the Act of 1962 and for the word "charge", wherever it occurred, the word "spent"
stood substituted and is deemed to have been substituted with effect from 1st October, 1995. Mr. Sonpal then invited our attention to the Maharashtra Tax Laws (Levy and Amendment) Act, 2002 and the amendments contained in Chapter V thereof proposing changes in the Act of 1962. That deleted clauses (f-a), (f-b) and (g-a) in section 2 of the Act of 1962. It also substituted section 3 and made certain changes in section 6 of the Act of 1962. However, the further Act to amend certain Tax Laws in operation in the State of Maharashtra, namely Maharashtra Act VIII of 2003 substituted section 12B for the earlier section in the Act of 1962 and clarified that the Maharashtra Tax Laws (Levy and Amendment) Act, 2002 insofar as it amended the Act of 1962 and brought them into effect from 1st May, 2002 shall be deemed to have been deleted with effect from 1 st May, 2002.
Thus, the amendment sought to be made to the Act of 1962 by the Page 70 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc Maharashtra Tax Laws (Levy and Amendment) Act, 2002 never came into effect.
38) We find substance in the contentions of Mr. Sonpal, because by the 2002 Amendment Act, the legislature, vide section 10 thereof, sought to delete section 2(f-a), (f-b) and (g-a) from the Act of 1962. Though that deletion came into effect from 1 st May, 2002, that provision was not brought into force at all. That is how the Maharashtra Act VIII of 2003 reads. This Act of 2003 was first published after its having received assent of the Governor, in the Maharashtra Government Gazette on 29 th March, 2003. The impact of the same has been rightly understood that a levy on tax on purchase of sugarcane will continue to be based on purchase price as is defined prior to 1st May, 2002. The substitution of the Maharashtra Act XXI of 1998 with effect from 1 st October, 1995 in clause (f-b) with effect from 1st October, 1995 is unaffected.
That was sought to be affected by Chapter V of the Maharashtra Tax Laws (Levy and Amendment) Act, 2002 with effect from 1 st May, 2002. However, the Maharashtra Amendment Act 2002 seeking to amend the Act of 1962 itself stands deleted. That Chapter V of the Amendment Act, 2002 being deleted on account of subsequent Maharashtra Act VIII of 2003, we do not see any change in the position.
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39) We are not impressed by the argument of Mr. Joshi that such amendments cannot be construed to mean that provisions already brought into force and effected being deleted will not restore those sections which have already been removed from the Statute Book. In other words, amendment to an amendment already brought into effect would not restore the position prior to the first amendment. The contention as raised in writing is that if a statute is first amended and by the second amendment, the first amendment is deleted does not mean that the position prior to the first amendment stands automatically restored.
40) Mr. Joshi sought to rely on the principle enunciated in Maxwell on Interpretation of Statutes, particularly laid down in 12th Edition on Commencement, Repeal and Revival of Legislation. He would submit that where an Act is repealed and the repealing enactment is then repealed by another, which manifests no intention that the original Act shall continue repealed, the common law rule was that the repeal of the second Act revived the first ab-initio. However, according to the Maxwell, the common law on the point was altered in 1850, by a provision now to be found in section 11(1) of the Interpretation Act, 1889 to the effect that where an Act passed after 1850 Page 72 of 76 J.V.Salunke,PA ::: Uploaded on - 23/12/2015 ::: Downloaded on - 23/12/2015 23:57:43 ::: WP.2060.1997+.Judgment.doc repeals a repealing enactment, it shall not be construed as reviving any enactment previously repealed, unless words are added reviving that enactment. We have not been shown any such statutory prescription as far as India is concerned. The principle that repeal of a repealing Act does not necessarily revive what is repealed by the repealing Act thus cannot be stretched and applied to the present case. Rather the Principles of Statutory Interpretation as summarised by Justice G. P. Singh in 13th Edition, 2012 would show that the common law rule of revival has been abrogated by section 6(a) and 7 of the General Clauses Act, 1897. However, we are not concerned with such a wider controversy. In the present case, the amendment made by the Amendment Act of 1st May, 2002 did not come into effect at all. That has been clarified now by the Maharashtra Act VIII of 2003. Once these amendments made with effect from 1 st May, 2002 stood deleted from a prior date, then, the consequences are clear. No assistance can be derived from the principle which Mr.Joshi seeks to apply. Now, it is apparent that if one statute is repealed by a second which in turn is repealed by a third, the effect is to revive the first statute unless a contrary indication is indicated in the third statute. In such circumstances, we do not see any reason to accept the contentions of Mr. Joshi.
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41) Further, in the case of Ameer-un-Nissa Begum and Ors. vs. Mahboob Begum and Ors. reported in AIR 1955 SC 352, the Hon'ble Supreme Court settled the principles in the following words:-
".....
(24) The result will be the same even if we proceed on the footing that the various 'Firmans' issued by the Nizam were in the nature of legislative enactments determining private rights somewhat on the analogy of private Acts of parliament. We may assume that the 'Firman' of 26-6-1947 was repealed by the 'Firman' of 24-2-1949 and the latter 'Firman' in its turn was repealed by that of 7-9-1949.
Under the English Common Law when a repealing enactment was repealed by another statute, the repeal of the second Act revived the former Act 'ab initio'. But this rule does not apply to repealing Acts passed since 1850 and now if an Act repealing a former Act is itself repealed, the last repeal does not revive the Act before repealed unless words are added reviving it: vide Maxwell's Interpretation of Statutes, p. 402 (10th Edition).
It may indeed be said that the present rule is the result of the statutory provisions introduced by the Interpretation Act of 1889 and as we are not bound by the provisions of any English statute, we can still apply the english Common Law rule if it appears to us to be reasonable and proper. But even according to the Common Law doctrine, the repeal of the repealing enactment would not revive the original Act if the second repealing enactment manifests an intention to the contrary. In the present case the 'Firman' of 7-9-1949, does not repeal the earlier 'Firman' of 24-2-1949, 'simpliciter' but makes a further provision providing for fresh enquiry and report which presupposes the continuance of the repeal of the original 'Firaman' of 26-6-1947.
This being the position, we are constrained to hold that there was no final or effective decree in existence subsequent to the issuing of the 'Firman' of 7-9-1949, and the execution proceedings started by the respondents are, therefore, untenable in law. In the view that we are taking it becomes unnecessary to discuss the third point raised by the Attorney General, namely, whether the City Civil Court has jurisdiction to execute the decree.
....."
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42) Once all the legal submissions are taken care of and duly considered, then, on facts, we are not required to go into the rival contentions. If the assessment is not in accordance with law or the assessment is pending and not finalised in a given year, it would be open for the Petitioners to point out that no notices of demand can be issued straight away unless the amount due and payable is crystallised and ascertained. It is needless to clarify that unless the process is complete, recovery by coercive means is not permissible in law. Therefore, we need not consider the legality and validity of the demand notices in the light of this settled position in law. It would be open for the Petitioners to resist the demand by all means provided in law. We are, therefore, not required to consider factual aspects any further.
All the more, as the Department has understood the legal position correctly vide their Circular No. 23-T of 2003 dated 22 nd October, 2003. In paras 2 and 3 of this Circular, the Commissioner has clarified that no letter making a demand shall be issued even in the form of request, unless the party concerned is heard and appropriate statutory orders are passed. Though this is issued by the Commissioner of Sales Tax, the principle would equally apply to the present case and levy.
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43) In the light of the above, we are of the view that no factual aspects need to be gone into. In individual cases, it would be open for the Petitioners to contest the computation of tax. It would be open to produce such material as is permissible in law in the event the computation is erroneous and illegal. All such remedies and contentions therein are kept open.
44) We have only dealt with the arguments on legality and validity of the levy and the provisions with regard thereto. Since these contentions are negatived for the reasons as indicated above, each of these Petitions fail. Rule is discharged in each of them, but without any order as to costs. In the light of the dismissal of the Petitions, the Civil Applications do not survive and to stand disposed of as such.
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