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Article 246(2) provides that notwithstanding anything in clause (3), Parliament and, subject to clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule. The said List is referred to in the Constitution as the "Concurrent List". Article 246(3) provides that subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule. The said List is referred to in the Constitution as the "State List".

"Item 27. Trade and commerce within the province; markets and fairs; money lending and money lenders.

Item 29. Production, supply and distribution of goods; development of industries, subject to the provisions in List I with respect to the development of certain industries under Federal control."

Now, in Seventh Schedule part of Entry 27 is in Entry 26 of the State List; Markets and fairs is Entry 28 of List II; Money lending and money lenders (Entry 30 List II); Production, supply and distribution of goods subject to the provisions to Entry 33 of List III (Entry 27 List II); Industries subject to the provisions of Entries 7 and 52 of List I (Entry 24, List II). It would, thus, be seen that under 1935 Act, both production, supply and distribution of goods as well as development of industries were subject to the provisions of List I as provided in Entry 29. Our Constitution makers, however, bifurcated Entry 29 into two parts. Industries were put in Entry 24 of List II subject to the provisions of Entries 7 and 52 of List I. The production, supply and distribution of goods was put in Entry 27 of List II and made subject to Entry 33 of List III. The acceptance of the argument of Mr. Shanti Bhushan would mean that no object was sought to be achieved by such a bifurcation. It is clear that two entries have been separated. One made subject to the provisions of Entry 33 of List III and the other subject to the provisions of Entries 7 and 52 of List I. Therefore, to interpret the expression `industry' to include in it the aspect of raw material would mean that by the same analogy the subject matter of production, supply and distribution of goods should also be included therein and in fact that was the argument of Mr. Shanti Bhushan. Would the acceptance of that argument not negate the will of the Constitution makers. I think it would. Therefore, the argument cannot be accepted. The same argument would equally apply to Entry 14 of List II in respect of agriculture which is not subject to any List. It would so become if we accept the contention of Mr. Shanti Bhushan. Further, earlier when the Parliament felt the need to control raw material, it included "raw jute and raw cotton" in Entry 33, List III by Constitution Third Amendment Act, 1954. Even Article 369 indicates that agricultural raw material is in the State List for it refers to raw cotton, cotton seed and edible oil seeds and seeks to temporarily place it, by fiction, in the concurrent list to enable Parliament to make laws. The expression `industries' in Entry 24, List II or Entry 52, List I, cannot be interpreted in a manner that would make other entries of List II of the Seventh Schedule subject to Union control, which in fact they are not. Wherever it was intended to be made subject to such control, whether of List I or that of List III, it was said so. A perusal of List II shows that whenever a particular entry was intended to be made subject to an entry in List I or III, it has been so stated specifically. Therefore, an interpretation which tends to have the effect of making a particular entry subject to any other entry, though not so stated in the entry, deserves to be avoided unless that be the only possible interpretation. We do not think that such an interpretation on the entries in question, namely, Entry 52 of the Union List and Entry 24 of the State List deserves to be placed. The principles of interpretation are well settled. There is no doubt that the entries in the lists in the Seventh Schedule do not provide competence or power to legislate on the legislature for which the source of power is contained in Article 246 of the Constitution. In deciding question of legislative competence, it has to be kept in view that the Constitution is not required to be considered with a narrow or pedantic approach. It is not to be construed as a mere law but as a machinery by which laws are made. The interpretation should be broad and liberal. The entries only demarcate the legislative field of respective legislature and do not confer legislative power as such and if it is found that some of the entries overlap or in conflict with the other, an attempt to reconcile such entries and bring about a harmonious construction is the duty of the court. When, however, reconciliation is not possible, as here, then the court will have to examine the entries in relation to legislative power in the Constitution. The subject matter of the issue here is about the interpretation of Entry 52 in List I of the Seventh Schedule. It requires the Parliament to make a declaration by law identifying an industry, the control of which by the Union is expedient in the public interest. Under the said entry only an `industry' can be declared as an industry, the control whereof by the Union is regarded as expedient in public interest. It is, therefore, implicit that if an activity cannot be regarded as industry, Entry 52 will have no applicability to that activity. The question is about the concept of `industry' in Entry 52 of List I. As already stated, the entries in the Legislative List have to be construed in the widest sense cannot be disputed but it has also to be borne in mind that such construction should not make other entries totally redundant. The meaning of the word `industry' in various dictionaries reliance on which was placed by Mr. Shanti Bhushan, is not of any assistance while considering the constitutional meaning of the said term. There may not be any embargo or limitation on the power of the Parliament to enact the law in respect of activities other than manufacturing activities but that power is non-existent in Entry 52 of List I. It may be elsewhere. Reference in this regard can be made to Entry 33 of List III including in its ambit food stuff and certain raw materials. Tobacco, however, is admittedly not a food stuff. The validity of certain other acts such as the Cardomom Act, 1965, The Central Silk Board Act, 1958, The Coffee Act, 1942, The Rubber Act, 1947, The Tea Act, 1953, The Coir Industry Act, 1953 and The Coconut Development Board Act, 1979 reference whereof was made by Mr. Shanti Bhushan need not be examined for purposes of considering the legislative competence of the impugned State legislations. The legislative competence of Parliament to legislate these statutes is not in issue before this Court and, therefore, we do not think it necessary to examine the question of legislative competence only from academic view point insofar as these legislations are concerned. However, prima facie, there is no substance in the apprehension expressed by Mr.Shanti Bhushan that narrow approach of the concept of `industry' would make these acts beyond the legislative competence of the Parliament and make them ultra vires. As, when and if these acts are challenged, the question of legislative competence would be examined. Further, it may be noted that two out of the aforesaid legislations, namely, the Coffee Act, 1942 and The Rubber Act, 1947 are pre-Constitution enactments made under the Government of India Act, 1935 where the entries were different. Item 29 of List II of the said Act has already been reproduced above. In respect of the Coir Industry Act, on examination of the provisions contained therein, it may be possible to urge that the statute deals with the process of manufacturing and does not seek to control plantation and preservation of the coconut trees or the production of the coconut. The Central Silk Board Act has been dealt with by this Court in the case of B. Vishwanathiah & Co. & Ors. v. State of Karnataka & Ors. [(1991) 3 SCC 358] and I fail to appreciate how upholding the validity of the Agricultural Produce Marketing Acts would effect the validity of this enactment. In respect of Cardomom Act, it appears that the said Act is being applied for export purposes and it does not cover soil preparation of seed-lings. Regarding Coconut Development Act, it does not envisage setting up of auction platform and controlling marketing as in the present case. That enactment primarily deals with the field pertaining to recommendation for improving marketing, providing financial assistance for adoption of modern technology and for assisting growers to get incentive prices. This Court, however, need not examine in detail the aspect of legislative competence in regard to these enactments since, as already said, that is not the matter in issue here and it would suffice to indicate, as above, only the prima facie view to dispel the apprehension expressed by Mr. Shanti Bhushan.

"Applying the principles propounded by the apex Court in the cases mentioned above, it is apparent that the State Legislature is competent to make law in respect of the subject industries under Entry 24 of the List II subject to Entries 7 and 52 of List I of the Seventh Schedule and is further competent to enact law on the subject "trade and commerce within the State and Production, supply and distribution of goods," under Entry 26 and Entry 27 of List II subject to Entry 33 of List III of Seventh Schedule of the Constitution. But on declaration under Entry 52 of List I by Parliament in respect of the industries the control of which by the Union is by law held to be expedient in the public interest, three consequences flow. Firstly, on declaration by Parliament in respect of controlled industries the power of State Legislature to legislate under Entry 24 of List II shifts to Entry 52 of List I to the extent of control provided in the Act. The second result which follows upon declaration is that the power to enact law by State Legislature under Entry 26 and Entry 27 of the List II of Seventh Schedule becomes part of Entry 33 of List III which is a concurrent list. Third consequence that follows on declaration is that the products of the controlled industries would fell within Entry 33 of List III.

In Belsund Sugar Co. Ltd. v. State of Bihar & Ors. [(1999) 9 SCC 620], the Constitution Bench examined the question regarding the legality of levy of market fee under the provisions of Bihar Agricultural Produce Markets Act, 1960 pertaining to various commodities including sugarcane, sugar and molasses, wheat and tea. The Court first dealt with the transaction of purchase of sugarcane by the sugar factories functioning in the market areas falling within the jurisdiction of respective market committees constituted under the Market Act. It noticed that the Market Act had been enacted by the Bihar Legislature as per the legislative power vested in it by Entries 26, 27 and 28 of List II of the Seventh Schedule of the Constitution. The Court, however, noticed that the Market Act dealt with supply and distribution of the goods as well as the trade and commerce therein as it seeks to regulate the sale and purchase of agricultural produce to be carried on in the specified markets under the Act. To that extent, the Court said, the provisions of Entry 33 of List III override the legislative powers of the State Legislature in connection with legislations dealing with trade and commerce in, and the production, supply and distribution of goods. Thus, to the extent to which the Market Act seeks to regulate the transactions of sale and purchase of sugarcane and sugar which are foodstuffs and trade and commerce therein, the Constitution Bench said that it has to be held that the Market Act being enacted under the topics of legislative powers under Entries 26, 27 and 28 of List II will be subject to any other legislation under Entry 33 of the Concurrent List. The contention of Mr. Dwivedi being that as admittedly the tobacco is not foodstuff and does not fall under Entry 33 of List III, like the amendment to the Constitution made in 1953, the Parliament by further amendment of the Constitution can, if so advised, place tobacco raw material of the industry - in Entry 33 of List III and, thus, confer on itself the competence to legislate in respect to tobacco, need not be examined by this Court as being unnecessary. We may, however, note that the Constitution Bench, after noticing various provisions of the Act and the Rules, came to the conclusion that the need for regulating the purchase, sales, storage and processing of sugarcane, being an agricultural produce, is completely met by the comprehensive machinery provided by the Sugarcane Act enacted by the same very legislature which enacted the general Act being the Market Act.