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        VAT and Sales Tax

        2004 (10) TMI 624 - HC - VAT and Sales Tax

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        Writ maintainability and molasses allotment policy upheld despite alternative remedy and missing Advisory Committee. Writ jurisdiction remained available because an alternative statutory appeal cannot decide the vires of Government Orders or constitutional arbitrariness, ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Writ maintainability and molasses allotment policy upheld despite alternative remedy and missing Advisory Committee.

                          Writ jurisdiction remained available because an alternative statutory appeal cannot decide the vires of Government Orders or constitutional arbitrariness, so the maintainability objection failed. The absence of an Advisory Committee did not invalidate molasses allotment orders where the enabling provision was treated as directory and the Controller retained power to act with prior State approval. The challenge to reserving 20% of molasses for distilleries manufacturing country liquor also failed, as Article 47 is not enforceable as such and the policy was not shown to be constitutionally impermissible. The exemption for sugar mills having their own distillery was confined to captive distilleries engaged in country liquor manufacture.




                          Issues: (i) whether the writ petition was not maintainable in view of the alternative statutory remedy of appeal; (ii) whether the absence of an Advisory Committee under the molasses control law rendered allotment orders invalid; (iii) whether the State Government's reservation of 20% molasses for distilleries manufacturing country liquor was unconstitutional or otherwise invalid; and (iv) whether the exemption for sugar mills having their own distillery extended to all captive distilleries or only to those manufacturing country liquor.

                          Issue (i): Whether the writ petition was not maintainable in view of the alternative statutory remedy of appeal.

                          Analysis: The existence of an appeal under the statute did not bar writ jurisdiction where the challenge was to the validity of Government Orders and the action was assailed as arbitrary and violative of the Constitution. A statutory appellate authority cannot examine the vires of the statute or of subordinate Government Orders, whereas constitutional validity can be examined in judicial review under Article 226.

                          Conclusion: The alternative remedy objection was rejected and the writ petition was held maintainable.

                          Issue (ii): Whether the absence of an Advisory Committee under the molasses control law rendered allotment orders invalid.

                          Analysis: The provision empowering constitution of an Advisory Committee was read as directory in its language. Even assuming the committee's constitution to be mandatory, the Controller of Molasses retained power to make allotment orders with the prior approval of the State Government. The statute could not be treated as inoperative merely because the committee had not been constituted.

                          Conclusion: The allotment orders were not invalid merely because no Advisory Committee had been constituted.

                          Issue (iii): Whether the State Government's reservation of 20% molasses for distilleries manufacturing country liquor was unconstitutional or otherwise invalid.

                          Analysis: The challenge based on Article 47 and public policy was held to be misconceived. The Directive Principles are not enforceable as such in court, and the reservation policy was not shown to be contrary to the constitutional scheme governing liquor regulation.

                          Conclusion: The challenge to the reservation policy failed.

                          Issue (iv): Whether the exemption for sugar mills having their own distillery extended to all captive distilleries or only to those manufacturing country liquor.

                          Analysis: Clause 3 of the Government Order was construed harmoniously and in context. The reservation operated in favour of distilleries manufacturing country liquor, and the exception for sugar mills having their own distillery was confined to captive distilleries engaged in such manufacture. The clause did not extend the exemption to other captive distilleries.

                          Conclusion: The exemption was limited to sugar-mill-owned distilleries manufacturing country liquor.

                          Final Conclusion: The challenge to the molasses allotment policy and connected orders was unsuccessful, and the writ petition was dismissed.

                          Ratio Decidendi: Where a statutory scheme uses directory language for constituting an advisory body and simultaneously confers power on an executive authority to act with prior governmental approval, the absence of the advisory body does not invalidate allotment orders; and a writ court may entertain a constitutional challenge to the policy notwithstanding an alternate statutory remedy.


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