VISHNU SUGAR MILLS Vs. STATE OF BIHAR

JUDGEMENT

(1.) IN all these writ petitions the notification issued by the State of Bihar through the Secretary, Sugar -cane Development Department regarding fixing 2% fee on the actual price paid per quintal of sugar cane under section 48(1) of the Bihar Sugar Cane (Regulations of Supply and Purchase) Act, 1981 being amended by Act No. 11 of 1994 has been challenged.

(2.) THE petitioners are the existing companies within the meaning of Indian Companies Act, 1956 having its sugar factories in the district of Gopalganj within the State of Bihar. Their business is of manufacture and sale of sugar for which raw materials grown in the agricultural fields of the State are being purchased through the Co -operative Societies. The subject of sugarcane is governed by the State enactment firstly came in the year 1981, as Bihar Sugarcane (Regulation of Supply & Purchase) Act, 1981. The supply of sugarcane to the factories are being regulated by the State machinery as per the Act itself. The factories are to pay tax on purchase of sugarcane together with commission to the Zonal Development Council and Co -operative Society under the provisions of the Act. The rate of purchase tax is governed by Section 49 and previously it was Rs. 1.00 per quintal and the same had been enhanced retrospectively by the re spondent authorities on 9.11.2000 fixing the same at Rs. 1.75 per quintal of sugarcane. The said enhancement of tax was challenged before this Court in CWJC No. 2271 of 2001. By an order dated 19.3.2001 a Bench of this Court had upheld the notification increasing the purchase tax holding that the same shall be implemented only prospectively and not retrospectively. Now by the present notification as contained in Annexure -2 the State Government is enhancing the commission payable to the Zonal Development Commission under the provisions of Section 48 of the Cane Act. The enhancement has been made from Rs. 0.15 paise per quintal to 2% of the actual price paid per quintal meaning thereby to a rate of Rs. 1.75 paise per quintal of sugarcane, and thus, enhancing the rate of commission eleven times at one stroke. The legality and validity of such enhancement has been challenged together with the pecuniary jurisdiction of the State Government in this respect. According to the petitioners such enhancement in the commission has cast an excessive financial burden wiping out its profit as a whole. When such enhancement has been done in absence of quid pro quo and without basis and jurisdiction itself.

(3.) THE respondent Nos. 2 and 3 have filed detailed counter affidavit contending that the present writ petition is not maintainable as the same suffers from the proposition of law of res Judicata as the notification had been challenged before this court by Subhash Singh and others in CWJC No. 4014 of 2002 and the validity of the notification as a whole not being challenged regarding the enhancement of fee etc. then the present writ petitions are barred by the principle of constructive res judicata. It has also been held that the notification as contained in Annexure -2 has not been invalidated in that writ being CWJC No. 4014 of 2002 but only ordered that necessary notification should be issued regarding the share of the Zonal Development Council and the Co -operative Society within a period of four weeks from the date of the order i.e. 8.5.2002. In that way the. maintainability of the writ petitions have been challenged as mentioned above. On other grounds of challenge regarding the Gazette notification it has been stated in the counter affidavit that to the knowledge of the petitioners gazette notification has already been made and such ground is only a myth but such gazette notification has not been included with the counter affidavit. On giving basis regarding enhancement of the fee the respondents tried to show quid pro quo by bringing analogies as has been done in the nearby State Uttar Pradesh. Regarding the confiscatory nature of the notification an attempt has been made from the side of the respondents to show that even if actual price is considered per quintal for the purpose of levying of fee then also it could not attack on the profits and gains of the factory, in any way whatsoever. Regarding the actual price and the price index being notified from time to time it has been stated that it is the discretion of the State being the legatee to raise/levy fee on the actual price being paid by the factories in purchase of sugar cane and the same cannot questioned by the petitioners as it is admitted fact that by giving advance to the sugar cane growers the factories purchase the sugar cane in higher price.