VISHNU SUGAR MILLS LIMITED, THROUGH ITS GENERAL MANAGER, SHRI P.R.S.PANICKER Vs. UNION OF INDIA THROUGH THE SECRETARY, MINISTRY OF CONSUMER AFFAIRS AND PUBLIC DISTRIBUTION (DEPARTMENT OF

JUDGEMENT

(1.) THE present writ application has been filed by the petitioner primarily for quashing the order of the Central Government dated 1.10.2008 as extended by order dated 3.12.2008 by which allotment in purported discharge of levy liability under the Sugar (Control) Order/Levy Sugar (Control) - Order has been directed. The contesting respondents have appeared and filed their counter affidavit and rejoinder has been filed. With consent of parties, the writ petition has been heard for final disposal at this stage itself.

(2.) UNDER orders duly issued and enforced under Section 3 of the Essential Commodities Act, every sugar mill is required to deliver as levy sugar varying percentage of sugar produced in a sugar year. A sugar year starts from 1st November and ends on 31st October, the next year. The levy liability, which was originally 67% of the production in a sugar year, is now down to, 10% of the production in a sugar year. For this levy sugar, the manufacturer, is entitled to a price determined in terms of Section 3(3C) of the Essentiai Commodities Act. A manufacturer of sugar is obliged to honour such an order of allocation of levy sugar, and on receipt of price thereof as statutorily fixed, deliver the same to the allottee within the period as fixed in the said allotment order issued by the Central Government. It so happened that from year to year, sugar having been produced and levy liability having been incurred, the Central Government was unable to provide for its full utilization. lt, accordingly, took a policy decision that the unutilized levy sugar liability of a particular year would get carried forward and be added to the liability of the next year. The validity of this policy decision was challenged before this Court in CWJCs No. 6964 and 7960 of 2006 both of which were heard and dismissed by judgment and order dated 4.9.2006 (Annexure -1). The policy was upheld but with a rider as quoted hereunder: "However, before parting, I may observe that carry forward rule is reasonable if it is carried forward for a reasonable short period. If it is pointed out that this carry forward rule is being extended for unreasonable long period then the question may arise as to its reasonableness or otherwise but in the facts of the present case, the period does not appear to be unreasonable especially, considering the circumstances in which earlier lifting could not be done."

(3.) IT would, thus, be seen this Court held that the carry forward rule was valid but could not be carried forward unreasonably. This was so because the manner in which liability was being carried forward is allowed to operate ad infinitum then after a short while, the entire production of a sugar year by a sugar mill would be appropriated towards levy liability still leaving substantial amounts to be delivered by sugar company which would be unreasonable. This judgment inter party attained finality.