SCI INDIA LIMITED Vs. STATE OF BIHAR

JUDGEMENT

(1.) THESE seven writ petitions have been treated as analogous matters and heard together because they raise common issues by challenging the vires of Bihar Molasses (Control) (Amendment and Validation) Act, 1999 (Hereinafter referred to as the Validating Act) published in the official gazette on 10.01.2000. Petitioners have also sought for quashing of various demand notices issued pursuant to the aforesaid Validating Act by which they have been directed to pay administrative charges for the molasses consumed by them in their captive distilleries (in case of those petitioners who have sugar mills along with captive distilleries) or for the molasses lifted by them from various sugar mills during the period 1995 -2000. In some of the writ petitions interlocutory applications have been filed for refund of administrative charges already paid pursuant to the Validating Act.

(2.) THE issues falling for determination in these cases are mainly issues of law. The relevant facts lie within a narrow compass and are not in dispute. For the sake of convenience the facts and documents shall be referred from the records of CWJC No. 3829 of 2000. Only in case of necessity facts from other records may be referred to with due reference to the specific case. In general, it is evident that petitioners are distilleries holding relevant licenses under Bihar Excise Act and are engaged in the manufacture of spirit and Indian Made Foreign Liquor from molasses and other bases. Some of the petitioners also have their own sugar mills wherein they produce molasses which they consume in their captive distilleries. The dispute relates to levy of administrative charges under the provisions of Bihar Molasses Control Act, 1947 (hereinafter referred to as the 'Act').

(3.) AT this stage, it would be useful to keep the historical perspective of the Act in mind. In exercise of rule making power under Section 13(1) of the Act, the State of Bihar made certain rules in 1965 making provision for imposition of charges and fees through Rules 4 -A, 9 -A and 11 -A. These Rules and the levy of administrative charges imposed under them were successfully challenged by the affected parties as is evident from judgment of this Court in the case of Bhola Nath Gupta and Ors. v. State of Bihar, 1975 BBCJ 397. The Rules and the levy were struck down because there was no legal sanction for such levy in the Act as it stood at that time. By Bihar Molasses (Control) (Amendment) Act, 1977 Sub -section (f) in Section -2 and Section 8 -A were inserted in the Act empowering the State Government to impose administrative charges on molasses. In terms of Section 8 -A notifications were issued laying down the rates for levy of administrative charges. Such charges till issuance of a notification dated 20th December, 1995, were payable on the released molasses intended for supply to the distilleries of outside the State. When by an amendment notification dated December, 20th 1995 administrative charge was sought to be imposed on the released molasses intended for supply to the distilleries within the State, this notification and subsequent notification enhancing the rate of administrative charges were again successfully challenged by the distilleries and sugar mills in State of Bihar. Some of the petitioners in that case such as M/S Riga Sugar Company Ltd are again petitioners before us. By judgment of this Court in the Case of S.K.G. Consolidated Limited and Anr. v. The State of Bihar reported in, 1997 BBCJ 387, this Court held the imposition of administrative charges illegal in view of the nature of power provided under Section 8 -A and definition of released molasses under Section 2(f) of the Act.