GUPTA SUGAR WORKS Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) This is a petition under Article 32 of the Constitution. The petitioner is engaged in the manufacture of Khandsari sugar. The petitioner challenges the validity of the U. P. Khandsari Sugar (Levy) Order, 1981 ("Levy Order"). It was issued in exercise of powers under Section 3 of the Essential Commodities Act, 1955 by virtue of delegation of power by the Central Government under Section 5 of the said Act. The Levy Order requires Khandsari manufacturing units to surrender levy of 50% of the production by sulphitation units in the first process. The balance 50% of that process with the total production by subsequent processes was left free to be sold in the open market by the manufacturing units. The price fixed for the levy Khandsari sugar was Rs. 320/- per quintal.

(2.) The petitioner challenges the price fixation on the ground that the State Government has not taken into consideration the guidelines in-built in sub-section (3C) of Section 3 of the Essential Commodities Act, 1955. The petitioner alleges that the levy order is unreasonable or excessive restriction on the fundamental rights guaranteed under Articles 19(l)(g) and 14 of the Constitution. It is also the case of the petitioner that the State Government sold the levy sugar by public auction realising large profit and the levy, therefore, was a colourable exercise of the power.

(3.) Before considering these contentions, we may start with recent observation of O. Chinnappa Reddy, J. in Union of India v. Cynamide India Ltd., AIR 1987 SC 1802 at p. 1805: