TaxTMI 
TaxTMI 
2004 (8) TMI 380
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....ith him), for the appellant in C.A. No. 5407 of 2004. -------------------------------------------------- The judgment of the Court was delivered by S.N. VARIAVA, J.-Leave granted. 2.. These appeals are against the judgment of the Punjab and Haryana High Court dated November 20, 2001 See Cepham Milk Specialities Ltd. v. State of Punjab [2002] 127 STC 116. 3.. Briefly stated the facts are as follows: 4.. Prior to July, 2000, companies like the first respondent-company which are engaged in the production of milk products, like ghee, skimmed milk powder, butter and cream, were subjected to a purchase tax at 4 per cent and a surcharge at 10 per cent of the purchase tax. On July 19, 2000, the Governor of Punjab promulgated the Punjab Dairy Development Board Ordinance, 2000. The Ordinance provided for creation of the Punjab Dairy Development Board, inter alia, for co-ordination between the organisations engaged in the dairy sector, to uplift professional standard of the dairy industry in the State and to develop modern dairy farming technology system. Under the Ordinance, cess was levied on milk plants by abolishing purchase tax on milk. 5.. On....
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....discriminatory. The High Court thus quashed the Act. 8.. It must be mentioned that by the Punjab Dairy Development Board (Amendment) Act, 2004, with effect from September 11, 2002, section 12 of the Act has been deleted. We are told that after the deletion of the cess, purchase tax has again been levied on milk. 9.. The relevant provisions of the Act need to be set out at this stage. They read as follows: "To provide for the creation of Punjab Dairy Development Board for co-ordination between the organisations engaged in dairy sector, to uplift professional standard of the dairy industry in the State and to develop modern diary farming technology system and to levy cess on the milk plants by abolishing purchase tax on milk- .......................... 1.. (1) This Act may be called the Punjab Dairy Development Board Act, 2000. (2) It shall come into force at once. 2.. In this Act, unless the context otherwise requires,- (a) to (c)............ (d) 'milk plant' means a milk handling, processing or manufacturing unit registered under the Milk and Milk Products Order, 1992 of the Government of India ; and (e)............ 9.. The Board shall be a nodal ag....
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....al of the State Government, create such posts and appoint such officers and other employees thereon, as it may consider necessary for the efficient discharge of its functions. (2) The conditions of service of the officers and other employees referred to in sub-section (1), and their functions and duties shall be such, as may be determined by the regulations made by the Board under this Act. 12.. (1) Subject to the Rules made under this Act, there shall be levied for the purpose of this Act, a cess at the rate of ten paise per litre of the licensed capacity of a milk plant by abolishing the purchase tax being charged on milk. (2) The cess levied under sub-section (1), shall be paid by the owner of the milk plant in such manner and to such person or officer as may be prescribed. (3) The arrears of the cess levied under sub-section (1), shall be recoverable as arrears of land revenue. 13.. (1) There shall be constituted a fund to be called the 'Punjab Dairy Development Fund', which shall vest in the Board. (2) The Fund constituted under sub-section (1), shall be administered by the Member-Secretary of the Board. (3) The amount of cess paid to the person or officer....
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....les laid down in these cases the High Court has correctly held that the levy was a tax. 12.. In our view, the law is quite well-settled. As the High Court has itself noticed the principles laid down in Kishan Lal Lakhmi Chand's case (1993) Supp 4 SCC 461, have been diluted by subsequent decisions, it has been held that the observations in the above case are obiter. This being the position, the High Court was not correct in following the principles laid down in Kishan Lal Lakhmi Chand's case (1993) Supp 4 SCC 461. 13.. Even otherwise we find that the High Court was wrong in concluding that the field was already occupied by a Central legislation, namely, the Industries (Development and Regulation) Act, 1951. As laid down in the case of Ch. Tika Ramji v. State of U.P. reported in AIR 1956 SC 676. [1956] SCR 393 and Belsund Sugar Co. Ltd. v. State of Bihar reported in (1999) 9 SCC 620 repugnancy must exist as a fact and not as a mere possibility. In the absence of any specific order or provision the question of repugnancy cannot arise. Admittedly, the Central legislation levies no cess or fee. Thus, there can be no question of repugnancy if a fee were to be levied. 14.. Whi....
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....ion being made they would be allowed to reduce their installed capacity. We are not impressed by this explanation. One fails to understand why a milk plant should apply for reducing its capacity. It may consume, as per its capacity in seasons when that quantity of milk is available, but it may not be able to consume, as per its capacity in seasons or at times when milk of that quantity is not available. Further, due to temporary closure of some machines for purposes of repairs or maintenance, they may be consuming less during a particular period. Further, even if there is no production/consumption and even if the plant is shut down the cess would still have to be paid. This would be so even if the closure is for more than six months in any particular year. Irrespective of what their consumption/production is, these plants would have to continue to pay cess at the rate of 10 paise per litre of their installed capacity. We find that such a levy is arbitrary. 16. We also find that the levy is discriminatory. There is no levy on the farmers and co-operative societies, who produce the milk and/or milk plants whose capacity is less than 10,000 litres per day. No explanation is g....