Levy sugar price fixation must factor in clause 5A cane price liability, not exclude it as a cost component.

The Supreme Court noted that section 3(3-C) of the Essential Commodities Act and clause 5A of the Sugarcane (Control) Order, 1966 must be read together for levy sugar price fixation. The producer's liability to pay additional cane price under clause 5A was a relevant component of the cost structure and could not be excluded when refixing prices. The Government's attempt to justify later notifications by relying on the producer's retained share in extra realisation, rather than the statutory clause 5A liability, was found untenable for this purpose. Excluding that liability was therefore inconsistent with the binding directions already issued.

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Issues: Whether, in refixing levy sugar prices, the Government was bound to take into account the sugar producer's liability to pay additional cane price under clause 5A of the Sugarcane (Control) Order, 1966 while acting under section 3(3-C) of the Essential Commodities Act, 1955.

Analysis: The earlier judgment had held that section 3(3-C) and clause 5A were inter-connected and had to be read together for price fixation. The liability created by clause 5A was a relevant element bearing on the cost structure and could not be ignored while refixing levy sugar prices. The contention that the later notifications complied with the earlier directions was rejected, because the exclusion of the additional cane price was inconsistent with the binding directions already issued. The distinction drawn by the Government between the producer's retained share in extra realisation and the statutory liability under clause 5A was held to be untenable for the present purpose.

Conclusion: The Government was required to include the liability under clause 5A while refixing levy sugar prices, and its failure to do so was not a valid compliance with the earlier judgment.

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