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"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 J.V.Salunke,PA 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."