Punjab-Haryana High Court
M/S Mehsana District Cooperative Milk ... vs State Of Haryana And Others on 9 October, 2013
Bench: Sanjay Kishan Kaul, Augustine George Masih
CIVIL WRIT PETITION NO.22442 OF 2010 :{ 1 }:
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
Reserved on: September 24, 2013
Date of Decision: October 9th, 2013
M/s Mehsana District Cooperative Milk Producers Union Limited,
District Gurgaon
...Petitioner
Versus
State of Haryana and others
...Respondents
CORAM: HON'BLE MR.JUSTICE SANJAY KISHAN KAUL, CHIEF JUSTICE
HON'BLE MR.JUSTICE AUGUSTINE GEORGE MASIH, JUDGE
1. Whether Reporters of local papers may be allowed to see the judgment?
2. To be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
Present: Mr. Akshay Bhan, Advocate,
for the petitioner.
Mr. Ajay Gupta, Additional Advocate General, Haryana,
for the State.
*****
AUGUSTINE GEORGE MASIH, JUDGE Petitioner, which is a registered Cooperative Society, has challenged the vires of Sections 3,6 and 9 of the Haryana Murrah Buffalo and other Milch Animal Breed (Preservation and Development of Animal Husbandry and Dairy Development Sector) Act, 2001 (for short, "2001 Act"), as far as it applies to milk plants registered under the Milk and Milk Products Order 1992 of the Central Government, imposing a cess and interest on the delayed payment of cess.
Khurmi Rakesh 2013.10.10 10:25 I attest to the accuracy and integrity of this document chandigarh
CIVIL WRIT PETITION NO.22442 OF 2010 :{ 2 }:
It is the contention of counsel for the petitioner that the impugned provisions of the 2001 Act are not sustainable as the same are beyond the legislative competence of the State. Reference in this regard has been made to Entry 52 of List I (Union List) of the Seventh Schedule of the Constitution, which, according to the petitioner, would fall under that category being a scheduled industry. Second assertion is that the impugned levy has all the trapping of a tax and consequently the same is beyond the legislative competence of the State. It is the exclusive domain of the Parliament to impose tax on items not authorised in Lists 2 and 3 under its residuary powers conferred under Article 248 of the Constitution of India. The impugned cess being a colourable exercise of powers is violative of Articles 246, 265, 202, 203, 204 and 266 of the Constitution of India as the State legislature has sought to do indirectly, for which it has no power to do directly.
The impugned cess has been imposed on the basis of licensed capacity of milk plants and not on the actual quantity of milk handled or processed or milk products/manufactured by the plant. The imposition of such a cess on the licensed capacity of the units irrespective of the degree of utilization of such capacity is arbitrary and unsustainable in law. There is clear cut discrimination, leading to violation of Article 14 of the Constitution of India merely based upon the licensed capacity of a unit. Levy on the milk plant registered under the Milk and Milk Product Order 1992 has been imposed on Khurmi Rakesh 2013.10.10 10:25 I attest to the accuracy and integrity of this document chandigarh CIVIL WRIT PETITION NO.22442 OF 2010 :{ 3 }:
the units having licensed capacity of more than 10000 liters per day whereas the milk plants having capacity of less than 10000 liters per day have been left out. The dairy farmers/milk producers, who are directly benefitted from the impugned cess, have been exempted and no cess has been imposed on them.
It is essentially a cess imposed on the process and manufacturing of milk and milk products and, therefore, the powers cannot be exercised under Entry 51 of List II, which is subject to limitation as imposed therein under the Constitution itself. The impugned cess is illegal, arbitrary and is violative of the right of the petitioner as guaranteed under Articles 14 and 19(1)(g) of the Constitution of India.
He has referred to the judgement of the Supreme Court in the case of Punjab Dairy Development Board and another Vs. Cepham Milk Specialties Ltd. And others, (2004) 8 SCC 621, wherein levy of milk cess by the State of Punjab under the Punjab Dairy Development Board Act has been struck down being arbitrary and discriminatory. The counsel has taken us through the said judgement in extenso to assert the same grounds before us and accordingly has prayed for allowing the writ petition by holding the impugned provisions of the 2001 Act to be ultra-vires and beyond the legislative competence of the State of Punjab.
On the other hand, learned counsel for the respondent- State has referred to the Division Bench judgement of this Court in Khurmi Rakesh 2013.10.10 10:25 I attest to the accuracy and integrity of this document chandigarh CIVIL WRIT PETITION NO.22442 OF 2010 :{ 4 }:
Civil Writ Petition No.16213 of 2002 (M/s Nestle India Limited Vs. The State of Haryana and others), decided on 28.5.2010 to contend that all the issues as have been raised by the petitioner in the present writ petition stand answered by the said judgement, wherein the constitutional validity of the impugned provisions of the 2001 Act has been upheld and a bunch of writ petitions stand dismissed. He states that the judgement of the Supreme Court in the case of Punjab Dairy Development Board's case (supra) has also been referred and on consideration has been distinguished and while doing so, it has been held that imposition of cess under the 2001 Act is in accordance with law and the case of the petitioner is not covered by the said judgement of the Supreme Court.
In response thereto, counsel for the petitioner has made a frantic effort to impress upon us that the issues raised in the present writ petition have not been referred to in detail by the Division Bench in the case of M/s Nestle India Limited (supra). His further submission is that the said judgement stands challenged before the Supreme Court in Civil Appeal No.6215 of 2012 titled as M/s Karnal Milk Foods Ltd. Vs. State of Haryana and others. In the interim order passed by the Hon'ble Supreme Court, it has been observed that operation of the impugned judgement shall remain stayed subject to the condition that all the milk plants are required to deposit 50% of the cess levied and demanded by the State. The case is pending adjudication before the Apex Court.
Khurmi Rakesh 2013.10.10 10:25 I attest to the accuracy and integrity of this document chandigarh
CIVIL WRIT PETITION NO.22442 OF 2010 :{ 5 }:
We have considered the submissions made by counsel for the parties and have gone through the records of the case.
In our considered view, the case of the petitioner is fully covered against it by the Division Bench judgement of this Court in M/s Nestle India Limited (supra) on all fours and, therefore, we are not inclined to take a different view from the one as taken in the said judgement dated 28.5.2010. The challenge, thus, to Sections 3,6 and 9 of the 2001 Act stands negated.
However, to avoid further addition to the pendency to the cases in the Hon'ble Supreme Court and in the light of the admission on the part of the counsel for the parties that ultimately this dispute will be dependent on the decision of the Apex Court to be taken in the judgement in M/s Nestle India Limited's case (supra), which is pending adjudication before the Hon'ble Supreme Court in the case of M/s Karnal Milk Foods (supra), wherein a conditional order of stay has been passed i.e. deposit of 50% cess levied and demanded by the State, we are of the considered view that this interim arrangement, as ordered, would also apply qua the petitioner from today and the parties would be governed by the final order, which may be passed by the Supreme Court.
The writ petition stands disposed of accordingly.
( SANJAY KISHAN KAUL ) (AUGUSTINE GEORGE MASIH)
CHIEF JUSTICE JUDGE
October 9th,2013
khurmi
Khurmi Rakesh
2013.10.10 10:25
I attest to the accuracy and
integrity of this document
chandigarh