TaxTMI 
TaxTMI 
2010 (1) TMI 1139
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....pply and levy of purchase tax on the sugarcane. In that regard primary reliance of the petitioner has been on the judgment of the honourable Supreme Court in the case of Gobind Sugar Mills Ltd. v. State of Bihar [1999] 115 STC 358; [1999] 7 SCC 76. Likewise, on the same analogy a prayer has also been made for declaring section 19, item 4 of Schedule H of the Punjab Value Added Tax Act, 2005 (for brevity "the 2005 Act") as unconstitutional as the same would not be applicable in respect of sugarcane and purchase tax thus not leviable under the said Act. The petitioners are engaged in the manufacture of sugar, molasses, press muds and bagassee. They purchase sugarcane, which is the main raw material, from the farmers to produce sugar or molasses. Both the aforesaid products are sold under the Government control orders. The rate of raw material purchased, i.e., sugarcane being agricultural produce to be paid to farmers (producing and selling sugarcane) is also fixed by the Government of India from time to time. It can also be modified and increased by the State Government under the 1953 Act. The purchase tax is collected by the State of Punjab under the provisions of the PGST Act, 194....
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.... the farmers are allowed to sell their produce outside the reserved area nor the mill is permitted to purchase sugarcane from outside the reserved area. Therefore the prohibition between the cane growers and the mill part-takes the character of acquisition of property because there is no element of free consent which is an essential ingredient of a valid agreement. It is also asserted that there is no scope for principle of demand and supply to operate and the sugar mills, like the petitioner, are bound to pay the statutory minimum price to the cane growers as fixed by the Central Government. In the written statement filed by the respondents the broad facts have not been disputed. It has however been pointed out that the petitionermills have been paying tax on purchase of sugarcane under the PGST Act, 1948 at 1.1 per cent. They are also liable to pay the tax in accordance with the provisions of the 2005 Act. The respondent-State has asserted that the 1953 Act was enforced in order to control the supply of sugarcane and tax on the basis of the rate of the sugarcane was levied. As per the notification dated May 27, 1998 issued under section 17(1) of the 1953 Act, 50 paisa for 100 kg....
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....hase tax exclusively on sugarcane also deals with regulation of production, supply and distribution of sugarcane. According to the learned counsel it would override the provisions of the PGST Act, 1948 or even the 2005 Act. It has been submitted that both the PGST Act, 1948 and 2005 Act are general Acts which provides for collection of commercial taxes on sale and purchase of all goods whereas the 1953 Act deals only with the purchase of sugarcane. Placing reliance on various paras of the judgment rendered in the case of Gobind Sugar Mills' case [1999] 115 STC 358 (SC) ; [1999] 7 SCC 76 it has been submitted that both the Acts have been framed in exercise of legislative powers derived from entry 54 of List II of the Seventh Schedule and therefore the 1953 Act would govern the levy of purchase tax as it is a special Act. They have also referred to the statement of objects and reasons which deals specifically with the purchase of sugarcane to protect the interest of the cane growers. Referring to the reasoning adopted by a Division Bench of the Patna High Court in New India Sugar Mills Ltd. v. State of Bihar [1998] 109 STC 394 which has been reversed in Gobind Sugar Mills' ca....
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....ble Supreme Court in Jagatjit Sugar Mills' case [1995] 96 STC 344; [1995] 1 SCC 67, the Full Bench held that the purchaser of sugarcane is liable to pay purchase tax. The learned State counsel have also argued that even at the time when the judgment in Jagatjit Sugar Mills' case [1995] 96 STC 344 (SC); [1995] 1 SCC 67 and Morinda Co-operative Sugar Mills' case [1995] 99 STC 468 (P&H) was delivered the sugar mills have been paying purchase tax on the purchase of sugarcane from the cane growers under the 1953 Act. Thus the argument is that merely because after considering the Bihar Finance Act, Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 has come would not necessarily lead to re-opening the question which has already been settled. Another submission made by the learned State counsel is that there is nothing in article 265 of the Constitution which may indicate that there could be no double taxation. In that regard reliance has been placed on the judgment of the honourable Supreme Court in the case of Arvinder Singh v. State of Punjab AIR 1979 SC 321. It has been argued that even if on the same subject-matter the Legislature chooses to levy tax twice the....
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....trary view on the basis of the judgment rendered by a two-Judge Bench of the honourable Supreme Court in the case of Gobind Sugar Mills [1999] 115 STC 358; [1999] 7 SCC 76. The aforesaid judgment has been rendered by interpreting the Bihar Finance Act, 1981 and Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 by holding that both the Acts would operate in the same field. The underlying principle followed by the honourable Supreme Court is that the Sugarcane Act being a special Act pertaining to all aspects of control of the sugarcane as well as levy of purchase tax has to be preferred over the Finance Act which empower the State to levy all commercial taxes generally whereas the sugarcane Act empowered the levy of purchase tax only on sugarcane. Such a course would not be available to us as the specific Act which is applicable to the petitioner, namely, PGST Act, 1948 has been interpreted by a three-Judge Bench in the case of Jagatjit Sugar Mills' case [1995] 96 STC 344 (SC); [1995] 1 SCC 67. Furthermore we would prefer the interpretation adopted by the honourable Supreme Court for the PGST Act, 1948 which is in question before us. The judgment of Gobind Sugar Mill....