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Mr. Shanti Bhushan, learned counsel for the petitioners advanced arguments in these petitions under three main heads, namely (i) whether khandsari sugar manufactured by the petitioners in their mills by the open pan process is an agricultural produce, covered by the Adhiniyam as amended by the U. P. Ace 10 of 1970; (ii) whether khandsari sugar manufactured by the petitioners in their industrial units employing a large number of workmen to whom the Industrial Disputes Act, Employees Provident Fund Act, Factories Act and Minimum Wages Act apply and which is subject to levy of excise duty under the Sugar (Special Excise Duty) Act, 1959 is subject to the levy of market fee under the Adhiniyam and (iii) whether on account of the interpretation of the Adhiniyam, khandsari sugar manufactured by the petitioners could be said to be subject to the levy of market fee under the Adhiniyam there is any difference between khandsari sugar produced by the petitioners in the open pan process, and the plantation white sugar produced by the other mills in the vacuum pan process, and there is no discrimination between khandsari sugar sought to be subjected to the levy of market fee under the Adhiniyam and the plantation white sugar produced by the vacuum pan process which is not subject to the levy under the Adhiniyam. He clubbed his arguments on points (i) and

(ii) and submitted that khandsari sugar produced by the petitioners in their mills by the open pan process is not an agricultural produce contemplated to be covered by the provisions of the Adhiniyam for the purpose of levy of the market fee as it is not produced by the agricultural producer but produced in mills employing modern methods though under the open pan process. On the third point he submitted that there is no difference between the khandsari sugar produced by the petitioners in their mills by the open pan process and the plantation white sugar produced by the other mills by the vacuum pan process except that khandsari sugar is produced by the open pan process while the plantation white sugar is produced by the vacuum pan process and the difference in the composition of the two products is only as regards CAO, filterability and conductivity and consequently there is discrimination hit by Art. 14 of the Constitution in leaving plantation white sugar out of the levy and seeking to subject the khandsari sugar produced by the petitioners-mills alone to the levy of market fee under the Adhiniyam.

Dr. Y. S: Chitale, learned counsel for the Parishad, Samiti and Mandi, the respondents in W. Ps. 1348 to 1360 of 1981 submitted that s. 2 (a) of the Adhiniyam deals also with traders as held in Laxmi Khandsari Etc. Etc. vs. State of U. P. and Others(1) and that what the petitioners produce is khandsari though it may (1) [1981] 3 S. C. R 92.

be more refined than khandsari produced by the agriculturists with out the aid of power. On the question of discrimination he submitted that whatever was considered necessary to be regulated was included in the schedule to the Adhiniyam and that there is no discrimination in not subjecting plantation white sugar produced by the vacuum pan process to the levy of market fee under the Adhiniyam.

On the question of discrimination, Mr. Shanti Bhushan submitted that plantation white sugar produced is by the vacuum pan process, in the same manner as khandsari sugar is produced by the open pan process and that there is 110 major difference between the two industrial products and there is discrimination in so far as plantation white sugar is not sought to be subjected to the levy of market fee under the Adhiniyam where only khandsari sugar is (1) AIR 1995 SC 187.

sought t 1 be subjected to the levy. He submitted that the difference A in the process of manufacture alone is not a distinguishing factor and that the difference in the process of manufacture cannot be a ground for holding that there is no discrimination if the levy could be made on khandsari sugar under the Adhiniyam, leaving plantation white sugar out of its purview. He further submitted that plantation white sugar is produced in larger quantity than khandsari sugar and that traders in plantation white sugar also derive advantage by the use of the market area in the whole of the State of Uttar Pradesh which has been divided into 250 market areas and no part of that State is left uncovered by the Adhiniyam. In this connection, Mr. Shanti Bhushan invited the attention of this Court to the decision in Laksmi Khandsari etc. etc. v. State of U.P. and Ors.(l) where it is observed at page 94 that the restriction may be partial, complete, permanent or temporary but this must bear a close nexus with the object sought to be achieved. As stated earlier, Mr. Sinha submitted that the two products must be identical for attracting the bar of Art. 14 of the Constitution and that similarity alone will not do. But it must be remembered that the Adhiniyam is concerned with the levy of market fee on a variety of products, namely, agricultural produce and that if khandsari sugar produced by the petitioners in their mills by the open pan process out of sugarcane juice could be brought under the purview of the Adhiniyam it is difficult to understand how plantation white sugar for the production of which also sugarcane is the raw material could be exempted from the levy. The levy of market fee could not be said to depend upon the exact chemical composition of the commodity. Mr. Thakur submitted that plantation white sugar produced by the vacuum pan process does not require regulation and, therefore, there is no discrimination in not subjecting it to the levy under Adhiniyam. Similarly, Dr. Chitale submitted that whatever was considered necessary to be regulated was brought under the Adhiniyam and that there is no discrimination. It is not possible to accept this submission of Mr. Thakur and Dr. Chitale. Plantation white sugar does not require less regulation than khandsari sugar. Reference was made to this Court's decision in Andhra Sugars Ltd. and Anr. etc. v State of Andhra Pradesh and Ors.(2) where it has been held that factories producing plantation white sugar by the vacuum pan (1) [1981] 3 SCR 92 at 94.