RATHI KHANDSARI UDYOG Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) THE Judgments of the court were delivered by

(2.) WRIT Petition 1347 to 1360 of 1981 and WRIT Petition 147 of 1982 are by manufacturers of khandsari sugar in the open pan process and sellers thereof in Uttar Pradesh. WRIT Petition 21 to 23 of 1982, WRIT Petition 3178 to 3195 of 1982, WRIT Petition 4527 to 4532 of 1982 and WRIT Petition 3890 of 1983 are by traders in that product in U.P. The pleadings in WRIT Petition 1347 to 1360 of 1981 were referred to by the learned counsel for the parties when common arguments were advanced in all the writ petitions. Therefore, the pleadings in those WRIT Petition alone are referred to in this judgment.

(3.) IN the process of manufacture of khandsari sugar there is not only a physical change of the sugarcane used but also a chemical change and the white crystalline sugar of 90 per cent sucrose purity is obtained after drying, grading and wagging by eliminating all the ingredients of sugarcane except sucrose. But in the case of desi khandsari, gur, jaggery, rab and shakkar which are all manufactured from raw sugarcane juice, pectins, live saps, motal, minerals, nitrogenous compounds, waxes and salts are not removed and there is no chemical change in the manufacturing process. The Adhiniyam was enacted <PG>490</PG> to reduce multiple trade charges and provide amenities to the producers and sellers of agricultural produce, for certification of accurate weights and scales and for the establishment of market committees to ensure that the agricultural producer has a say in the matter of utilisation of the market funds. The Adhiniyam applies to agricultural products which according to S. 2 (a) are "such items of produce of agriculture, horticulture, viticulture, sericulture, pisciculture", animal husbandry or forest, as are specified in the schedule, and include an admixture of two or more such items and also include any such item in processed form and further include gur, rab, shakkar, khandsari and jaggery". The Adhiniyam does not define khandsari sugar but it is defined in Clause 2 of the U.P. Khandsari Sugar (Levy) Order, 1975 as "white crystalline sugar containing more than 90% sucrose and manufactured at a sulphitation unit by open pan process including a Bel". The khandsari sugar produced by the petitioners who hold licence for operating hydraulic power crushers is not khandsari but crystalline sugar as produced by sugar mills. The sugar produced by the petitioners is physically and chemically different from sugarcane which is one of the items specified in the schedule to the Adhiniyam and also from gur, rab, jaggery and khandsari and cannot be treated as a processed form of sugarcane. Therefore, the Adhiniyam cannot apply to the product manufactured by the petitioners which is plantation white sugar. The petitioners/firms which are producers of sugar are not liable to pay market fee under the Adhiniyam, S. 17(iii)(b) whereof provides that the market committee shall have power to levy and collect market fee which shall be payable on transactions of sale of specified agricultural produce in the market area at such rates being not less than one per cent and not more that one and a half per cent of the price of the agricultural produce so sold as the State government may specify by notification.