TaxTMI 
TaxTMI 
1979 (10) TMI 226
X X X X Extracts X X X X
X X X X Extracts X X X X
....ellant and the amount of cess impugned in each of the appeals as also other relevant particulars: No.of appeal Name of appellant Amount of Cess (Rs.) Period to which the amount relates Date of the order of assessment Authority passing the order 1 2 3 4 5 6 Civil Appeal No. 39 of 1969 The Shetkari Sahakari Sakhar Karkhana Ltd. Sangli. 370072.50 1-7-1959 to 30-6-1960 21-12-60 Sugarcane Cess Officer, Sangli. Civil appeal No.40 of 1969 The Shetkari Sahakari Sakhar Kar khana Ltd. Sangli. 801131.24 1-7-1960 to 30-6-1961 24-5-66 Sugarcane Cess Officer Sangli Civil Appeal No. 2470 of 1968 Do. 324610.35 1-7-1961 to 31-12-1961 24-5-66 DO. Civil Appeal No.1925 of 1972 Ashok Sahakari Sakhar Karkhana. Ltd.Ashok 373640.56 1-7-1961 to 31-12-61 12-4-62 Sugarcane Cess Officer, Ahmednagar. Civil Appeal No.1926 of 1972 Girna Sahakari Sakhar Karkhana Ltd.Dabhadi (i)577329.65 (ii)191409.53 1-7-1960 to 30-6-1961 1-7-1961 to 31-12-1961 18-7-62 18-7-62 Sugarcane Cess Officer,Nasik Do. 3. It may be of advantage to reproduce here the relevant provisions of the Bombay Act, Clause (1), (2), (3) and (4) of section 2 thereof read thus: '2. In this Act, unless th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y of sugarcane into the premises of a factory for use, consumption or sale therein. The constitutional validity of that section was challenged in Diamond Sugar Mills Ltd. & Another v. The State of Uttar Pradesh & Another. Reliance on behalf of the State was placed on Entry 52 in List II forming part of the Seventh Schedule to the Constitution of India in support of the argument that the cess was validly levied. That Entry reads thus: "52. Taxes on the entry of goods into a local area for consumption, use or sale therein." The counsel for the appellant in that case however contended that the premises of a factory were not a local area within the meaning of the Entry and that the Act was therefore beyond the competence of the State legislature. Out of the five Judges of this Court who decided the case, four (Jafar Imam, J. L. Kapur, K. C. Das Gupta and Raghubar Dayal, JJ.) accepted the contention and struck down the Act as a whole, being of the opinion that the proper meaning to be attached to the words 'local area' in Entry 52 was an area administered by a local body like a municipality, a district board, a local board, a union board, a Panchayat or the like and that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the Central Act merely authorized the collection of amounts which had already been imposed, assessed or collected and that no assessment, recovery or collection could be made under section 3 of the Central Act read with the relevant provisions of the Bombay Act after the enforcement of the Central Act. The contention is without force and in this connection we need do no more than refer to the language of clause (c) above extracted which specifically authorizes both assessment and recovery of the cess after the commencement of the Central Act, and to two earlier decisions of this Court in which an identical argument was made and repelled. The first of those decisions is reported as Jaora Sugar Mills (P) Ltd. v. State of Madhya Pradesh and Others. The following observations made therein by Gajendragadkar, C.J., who delivered the judgment of the Court, are pertinent : "Section 3 does not purport to validate the invalid State statutes. What Parliament has done by enacting the said section is not to validate the invalid State statutes, but to make a law concerning the cess covered by the said statutes and to provide that the said law shall come into operation retrospectively.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion in this Court in Jaora Sugar Mills (P) Ltd. v. State of Madhya Pradesh and Others with a specific reference to the provisions of the State Act, and it was once again held, following that decision, that the imposition of the cess was outside the legislative competence of the State. While examining that aspect of the controversy, this Court made it clear that what Parliament had done by enacting section 3 of the Validation Act was not to validate the invalid State statutes, but to make a law concerning the cess covered by the said statutes and to provide that the said law shall come into operation retrospectively. This Court clarified that by virtue of section 3 of the Validation Act, the command under which the cess would be deemed to have been recovered would be the command of the Parliament, because the relevant sections, notifications, orders and rules had been adopted by the Parliamentary statute itself." With respect, we also fully agree with the view expressed in Jaora Sugar Mills' case (supra). It is thus plain that section 3 of the Central Act did not merely validate what the State authorities had already done under the Bombay Act but actually re-enacted the provis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ommission." With the greatest respect, we find no reason at all to differ. 7. Article 265 of the Constitution of India was pressed into service by Mr. Shanti Bhushan in support of the proposition that no tax could be levied or collected except by authority of law. The proposition is unexceptionable but we fail to see in what manner Parliament lacked the authority of law while enacting the Central Act and incorporating into it the provisions of the Bombay Act. As pointed out above, Entry 97 in List I of the Seventh Schedule to the Constitution of India provides full legislative competence to Parliament in relation to the Central Act inasmuch as it vests all residuary powers of legislation in Parliament. The contention based on alleged lack of authority of law in Parliament is therefore repelled. 8. The submissions made by Mr. Patel appearing for the appellants in Civil Appeals No. 1925 and 1926 of 1972 alone now remain to be considered. He put forward two points. The first one was that section 4 of the Bombay Act was discriminatory, that the power conferred by it was unguided and uncanalised and that therefore it was hit by article 14 of the Constitution of India. When asked....