Court invalidates post-1950 cess, citing constitutional violations. State restrained from collection.

The Court invalidated the cess imposed on the Petitioner-company post-1950, ruling that the Darbar Order was an executive order and not a law, contravening Article 265 of the Constitution. The Court held that the cess was discriminatory, violating Article 14, but did not impede the Petitioner's right under Article 19(1)(g). Consequently, the State was restrained from collecting the cess from the Petitioner after 26-1-1950 and was directed to pay the Petitioner-company costs amounting to Rs. 150.

---

---

Issues Involved:
1. Legality of the cess imposed on the Petitioner-company.
2. Validity of the cess post-1950 under the Constitution of India.
3. Whether the Darbar Order dated 27-7-1946 constituted a law or an executive order.
4. Alleged violation of Articles 14 and 19(1)(g) of the Constitution.

Detailed Analysis:

1. Legality of the cess imposed on the Petitioner-company:
The Petitioner-company challenged the cess levied on sugar-cane purchased by it, arguing that it was without the authority of law. The cess was initially imposed based on a Darbar Order dated 27-7-1946 by the Maharaja of Gwalior. The Petitioner claimed that no law was ever passed by the Gwalior State Legislature imposing the cess, and the levy was merely an executive order.

2. Validity of the cess post-1950 under the Constitution of India:
The Petitioner-company did not contest the validity of the cess before the Constitution came into force. However, it challenged the validity of the cess post-1950 on the grounds that the Darbar Order was not a law under Article 265 of the Constitution, which mandates that no tax can be levied or collected except by authority of law. The Court agreed with this contention, stating that the Darbar Order was an executive order and not a law, thus invalidating the cess post-1950.

3. Whether the Darbar Order dated 27-7-1946 constituted a law or an executive order:
The Court examined whether the Darbar Order was a legislative act or an executive decision. The Court noted that the order was not in the form of legislation, was not enacted by the Legislature, and was never published in the official Gazette. The Court concluded that the order was an administrative decision and not a law. The Ruler of Gwalior had the prerogative to make laws, but the order in question did not follow the necessary legislative procedures and was not intended to operate as a law.

4. Alleged violation of Articles 14 and 19(1)(g) of the Constitution:
The Petitioner argued that the cess violated Article 14 (Right to Equality) and Article 19(1)(g) (Right to Practice Any Profession) of the Constitution. The Court found that the cess did not put any restriction on the Petitioner's right under Article 19(1)(g) as it was not a license fee but a tax. However, the Court agreed that the cess violated Article 14 as it was discriminatory. The cess was levied only on the Petitioner-company and not on other sugar factories in the State, creating an unreasonable classification and thus infringing the principle of equality.

Conclusion:
The Court allowed the petition, restraining the State from realizing any cess from the Petitioner-company post-26-1-1950 under the Darbar Order dated 27-7-1946. The Court also ordered the State to pay the Petitioner-company the costs of the application amounting to Rs. 150/-.

Separate Judgment:
A.H. Khan, J. concurred with the conclusions of P.V. Dixit, J. and elaborated on the procedural aspects, emphasizing the necessity of publication for any law to be effective and the distinction between executive orders and legislative acts. He reiterated that the Darbar Order was an administrative decision and not a law, thus invalidating the cess post-1950.

---