PRATAPUR SUGAR AND INDUSTRIES Vs. STATE OF BIHAR

JUDGEMENT

(1.) M/s. Pratap Pur Sugar and Industries Ltd. is the petitioner in these two cases, which have been heard together and are being disposed of by this common judgment.

(2.) THE petitioner-factory, which is located in the State of Uttar Pradesh is engaged in crushing sugarcane. Admittedly the sugarcane being supplied to the petitioner in Uttar Pradesh is not sufficient to meet its requirement. It, therefore, applied for allotment of reserve-area in the State of Bihar. That was allotted to it. THE crushing season, according to the Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 (hereinafter to be referred to as 'the Act') commences on 1st day of July and ends on 30th June next following. In the year 1981-82, there was excess production of sugarcane in the State of Bihar. THE Officer, therefore, issued instruction that on account of non-lifting of sugarcane by some mills specified in the order, the cane in the area reserved for those mills could not be crushed. THE petitioner-factory was, therefore, directed to crush the cane of the area reserved for other factories also. As a result of this order, which is binding under Sub-section (9) of Section 13 of the Act, the petitioner had no option but to crush the sugarcane of the area that was reserved for other factories. THEre were some other factories also which had to do excessive crushing on account of high production of sugarcane and non-lifting of the same by some factories in the State. Those factories were given exemption with effect from 1st May, 1982 under Section 49(2) of the Act from payment of purchase tax which is payable under Section 49(1) of the Act. THE petitioner was not included in the list of factories which have been given this exemption. THE grievance is that the petitioner has been discriminated in the matter of exemption under Section 49(2) of the Act. THE prayer, therefore, in C.W.J.C. 4121/87 is to direct the respondent to give exemption to the petitioner also. So far as C.W.J.C. No. 4120 of 1987 is concerned, the facts are almost identical, excepting that it relates to the crushing Season 1982-83 and Annexure-1 dated 20.11.1985 while giving exemption to some other factories states that sugar factories of Uttar Pradesh shall not get the remission under this notification. THE prayer, therefore, is to quash that part of Annexure-1 by which the factories located in the State of Uttar Pradesh, have been excluded from the exemption granted under Section 49(2) ot the Act.

(3.) MR. Basudeo Prasad appearing in support of the application contended that Section 49(1) of tae Act provides that the State Government may by notification in the official Gazette impose tax on purchase of sugarcane by or on behalf of occupier of the factory. He says that under Sub-section (2) the purchase tax may be reduced, remitted, in whole or in part, in respect of cane used in any such factory for the purposes of research seed-distribution, crushing of diseased cane or intake of excessive crop. He says that these are the only four grounds which are relevant for exercise of powers under this Sub-section. According to MR. Basudeo Prasad, the fact that the petitioner-factory is located in the State of Uttar Pradesh is irrelevant for the purpose of Section 49(1) as well as Section 49(2) of the Act. MR. Additional Advocate General No. 1, while supporting the order contended that the Act makes a distinction between factories located within Bihar and beyond Bihar. He says that as such the petitioner-factory which is located beyond the limits of Bihar cannot claim to be treated alike, with the factories located in the State of Bihar. In that connection learned Counsel has drawn my attention to Section 31 of the Act. This section relates to declaration of reserve-area. The proviso to this section deals with factories situate outside the State of Bihar. This proviso prescribes the manner in which the application will have to be made and also the pre-conditions for malting such an application. The pre-conditions being that the factory should open a branch office in the State of Bihar and should deposit a security of five thousand rupees with the Collector in the State and also should give an undertaking the prescribed form to purchase cane grown in the reserve area solely through a co-operative society of such area. These pre-conditions do not apply to the factories in Bihar. He, therefore, said that the Act makes a distinction between factories located in Bihar and factories located beyond Bihar. MR. Additional Advocate General has also drawn my atetntion to Rule 2(d) and Rule 2(f) of the Rules framed under the Act, where 'external factory' and 'internal factory have been defined. 'Internal factory' is a factory located in Bihar, while 'external factory' is one which is situated beyond the territorial limits of Bihar. My attention was also drawn to Rule 23 which deals with reservation of the area to the factories and procedure for purchasing cane grown in such area. Sub-rule (2) says that the occupier of an external factory shall make an application, in Form XI, for an area within the State to be reserved for the purposes of his factory and shall give an under taking, in Form XII, to purchase cane solely through the co-operative society specified in the undertaking. On the basis of these materials, the Additional Advocate General urged that when the Act and the rules have made distinction between an external factory and internal factory then the authorities were fully justified in giving exemption to only those factories which are located within the limits of Bihar. He also has been drawn my attention to the case of M/s East India Tobacco Co. v. mate of Andhara Pradesh and another AIR 1982 SC 1733 which says that is deciding whether a taxation law is discriminatory or not it is necessary to bear in mind that the State has a wide discretion in selecting the persons or objects it will tax, and that a statute is not open to attack on the ground that it taxes some persons or objects and not others. It also says that "it is only when within the range of its selection, the law operates unequally, and that cannot be justified oh the basis of any valid classification, that it would be violative of Article 14". This case, in my opinion, does not help the respondents. Here a particular type of tobacco, namely, Virginia was being taxed leaving from its purview the other type of tobacco. It was held that virginia tobacco has features which distinguish it from countary tobacco, and can bf treated as a class in itself. MR. Additional Advocate General also refer id to a portion of the decision in the case of The State of Andhra Pradesh and Anr. v. Nalla Raja Reddy and Ors AIR 1976 SC 1458 which reads as follows: