TaxTMI 
TaxTMI 
2023 (10) TMI 1500
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....fly narrated, are as follows: 2.1. Sugarcane is declared as an essential commodity by the Government of India under the Essential Commodities Act, 1955 [in short "EC Act"]. In exercise of powers conferred on it under Section 3 of EC Act, the first respondent issued Sugarcane (Control) Order, 1966 in connection with production, regulation and transportation of sugarcane. The object of the Act and the Control Order issued thereunder is to ensure that there is an adequate supply of sugarcane during every sugar season for production of sugar, having regard to the demand for sugar for domestic consumption. 2.2. The Scheme of the Order prior to the year 2009 was that the Central Government determined a minimum price called the Statutory Minimum Price (SMP) under Clause 3 of the Order. This price is fixed based on detailed study and recommendations made by the Commission for Agricultural Cost and Price (CACP) considering the relevant factors mentioned in Clause 3. Clause 5-A price had to be calculated as per the formula provided in the Second Schedule to the Order. The Schedule provided for the determination of an 'L' Factor, which was usually determined by the first respondent ....
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....ed along with connected writ petitions, vide common order dated 13.02.2019, against which the instant writ appeal is filed. 4. Mr. P.S. Raman, learned Senior Counsel appearing for the appellant submits that Clause 5(A) of the Control Order stood omitted and hence, ceased to have effect from 22.10.2009 and such omission is not saved in terms of Section 6 of the General Clauses Act, 1897, since it applies to enactments and regulations and the Control Order issued in exercise of the executive power of the Government of India under Section 3 of the Essential Commodities Act, will not fall within the definition of enactment under the General Clauses Act. It is further submitted that the Control Order is neither an Act nor a regulation and hence, Section 6 of the General Clauses Act does not apply. The learned Senior Counsel for the appellant further submitted that even when Clause 5A and the Second Schedule were there in the Control Order, "L" Factor can be fixed by taking note of empirical data of the entire country and not based on two States viz., Tamil Nadu and Pondicherry and even assuming there is power to determine the "L" factor, the private Sugar Mills are entitled to plead se....
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.... only prospectively, that is for the period after 22.10.2009. The learned Additional Solicitor General, in support of his contentions, has placed reliance upon the following decisions: (i) Mahabir Sugar Mills Pvt. Ltd., v. Union of India [1974 SCC Online All 335] (ii) A.P. State Electricity Board v. Union of India [1988 Supp SCC 371] (iii) P.V. Mohd Barmay Sons v. Director of Enforcement [1993 Supp (2) SCC 724] 6. Mr. Haja Nazirudeen, learned Additional Advocate General appearing for the second respondent would contend that the appellant Association Mill owners are bound to act in conformity with the terms of the contract entered into with the sugarcane growers and the vested right or the absolute right of the cane growers to receive the amount as being fixed by the Central Government cannot be denied and however, contrary to the terms as agreed between the mill owner and the sugarcane grower, the appellant had ventured into asserting that by virtue of 'omission' of Clause 5A, the mill owner is not liable to pay the amount which was accrued and the right was crystalized at the time of effecting the supply. The learned Additional Advocate General has relied upon th....
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....3 of the Control Order deals with Fair and Remunerative Price of sugarcane payable by producer of sugar, for brevity, it shall be referred as 'FRP'. Clause 5 provides for additional price for sugar cane purchase, which shall be in additional to the FRP. 9.5. Clauses 5 and 5A which stood prior to the amendment is quoted hereunder: "5. Additional price for sugarcane purchased.- (1) Where a producer of sugar or his agent purchases any sugarcane from a grower of sugarcane or a growers' cooperative society during each of the four successive years beginning on the 1st day of November, 1958, the producer shall, in addition to the minimum price of sugarcane fixed under sub-clause (1) of Clause 3 pay to the grower or the cooperative society, as the case may be, an additional price, if found, due, in accordance with the provisions 6 [of the First Schedule] hereto annexed. (2) Nothing in sub-clause (1) shall apply to the purchase of sugarcane,- (a) where such sugarcane is used for the production of sugar in a newly established factory until the expiry of three years commencing from the year in which the factory is so established; (b) where the purchase is made by a produce....
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....in the foregoing provisions of this clause, such payment shall be deemed to have been made in lieu of the payment provided for in this clause as if that sub-clause were in force when the direction was issued or payment was made. [5-A. Additional price for sugarcane purchased on or after 1st October, 1974.- (1) Where a producer of sugar or his agent purchases sugarcane from a sugarcane grower during each sugar year, he shall, in addition to the minimum sugarcane price fixed under Clause 3, pay to the sugarcane grower an additional price, if found due in accordance with the provisions of the Second Schedule annexed to this Order. (2) The Central Government or the State Government, as the case may be, may authorise any person or authority, as it thinks fit for the purpose of determining the additional price payable by a producer of sugar under sub-clause (1) and the person or authority as the case may be, who determines the additional price, shall intimate the same in writing to the producer of sugar and the sugarcane grower connected with the supply of sugarcane to such producer of sugar. (3) (a) Any producer of sugar or sugarcane grower, who is aggrieved by any decision of t....
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....cent of the sugarcane so agreed, if for the same supply he has not been subjected to any penalty by or under any Central or State Act or any rules or orders made hereunder for his failure to supply 85 per cent of sugarcane so agreed.] (8) Where the additional price determined under subclause (2) or sub-clause (3), as the case may be, is paid to a sugarcane growers' co-operative society or the local sugarcane growers' association of whatever name it may be called, it shall disperse the said additional price to such of its member who has supplied not less than 85 per cent of the agreed sugarcane in performance of his agreement with it, within one month of the receipt of such additional price by it from the producer of sugar. (9) The additional price payable but not actually paid in view of sub-clause (7) shall be added to the amount found payable for the following sugar year arrived at as per provisions of the Second Schedule. [(10) In case, the additional price determined under sub-clause (2) or sub-clause (3), as the case may be, remains unpaid on account of the sugarcane grower not coming forward to claim it 3 [x x x x x], it shall be deposited by the producer of sugar with ....
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....e the amount so recovered to the concerned growers of the sugarcane or the concerned sugarcane growers co-operatives in proportion to the ratio determined by the Collector on the basis of the sugarcane supplied by the concerned growers of sugarcane or the sugarcane growers' co-operative society as the case may be. (15) If the amount recovered and distributed under sub- clause (14) is less than the amount specified in the certificate under sub-clause (11), the Collector shall proceed to recover the remaining amount as if it were arrears of land revenue till the full amount is recovered and distributed to satisfy the remaining claims. (16) If the amount is given to the concerned sugarcane growers' co-operative societies, it shall distribute the amount through cheque, draft, or any other recognised banking instrument on any Scheduled Bank to the concerned sugarcane growers within ten days of the receipt of the amount from the Collector. (17) If the concerned sugarcane grower or the concerned sugarcane growers' co-operative society do not come forward to claim or collect the amount so recovered by the Collector within three years from the date of the public notice referred to in ....
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....e, namely reasonable returns and consequent upon the amendment, Clause 5A and Second Schedule to the Control Order stood omitted with effect from 22.10.2009 and at this juncture, the first respondent has no jurisdiction to determine "L" factor for the sugar season 2004-2009. It is further contended that Clause 5A of the Control Order stood omitted and ceased to have effect from 22.10.2009 and such omission is not saved in terms of Section 6 of the General Clauses Act, 1897, since it applies only to enactments ad regulations and the Control Order issued in exercise of executive power of the Government of India under Section 3 of the EC Act, will not fall within the definition of enactment under the General Clauses Act and since the Control Order is neither an Act nor a regulation, Section 6 of the General Clauses Act does not apply. "12. Section 6 of the General Clauses Act reads as follows: "6. Effect of repeal: ?Where this Act, or any [Central Act] or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not- (a) revive anything not in force or existing at t....
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....e under the corresponding provisions of the new statute and continue to be in force unless superseded by appointments, notifications, Orders, etc., made or issued under the new statute. 15. Law is a game of words - this quote holds true when courts are presented with the challenging task of differentiating between terms which sometimes appear to have a similar connotation. For example, the words 'repeal' 'substitute' and 'omission' have different tenor in a literal sense but tend to denote a similar meaning when used in the context of any amendment of law. While the words themselves may not cause a conflict, it's the consequences of the amendment on the rights and liabilities of the parties that have led to the courts differentiating between these terms. In the aforementioned backdrop, we will discuss the way the Supreme Court has dealt with these three terms used by the legislature while amending any law and whether the conflict between these words continues to be a cause of melee in interpretation. 16. One of the earliest authorities which brought up the question of interpretation between 'repeal' and 'omission' is the five-Judge Bench judgment of the Supreme Court in Rayal....
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....mon law, the normal effect of repealing a statute or deleting a provision is to obliterate it from the statute book as completely as if it had never been passed, and the statute must be considered as a law that never existed. To this rule, an exception is engrafted by the provisions of Section 6(1). If a provision of a statute is unconditionally omitted without a saving clause in favor of pending proceedings, all actions must stop where the omission finds them, and if final relief has not been granted before the omission goes into effect, it cannot be granted afterwards. Savings of the nature contained in Section 6 or in special Acts may modify the position. Thus the operation of repeal or deletion as to the future and the past largely depends on the savings applicable." (emphasis supplied) From the emphasised lines above, it can be seen that the Court uses the term repeal, omission and deletion interchangeably. This is also inferable that in case a provision is omitted, Section 6 may change the position which is contrary to Rayala Corporation judgment. Rayala Corporation supra clearly states that Section 6 of GCA is only applicable to the matters of repeal. So even though it ....
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.... further state that on an interpretation of the word "repeal", an "omission" would not be included. We are, therefore, of the view that the second so-called ratio of the Constitution Bench in Rayala Corporation (P) Ltd. cannot be said to be a ratio decidendi at all and is really in the nature of obiter dicta." (emphasis supplied) The Apex Court even declared that the above two five-Judge Bench decisions in Rayala Corporation case and Kolhapur Canesugar case were per incuriam, as they did not consider Section 6-A of the General Clauses Act. The Apex Court with this effect held that: "33. A reading of this section would show that a repeal by an amending Act can be by way of an express omission. This being the case, obviously the word "repeal" in both Section 6 and Section 24 would, therefore, include repeals by express omission. The absence of any reference to Section 6-A, therefore, again undoes the binding effect of these two judgments on an application of the 'per incuriam' principle." 20. The same two-Judge Bench of the Hon'ble Supreme Court in Fibre Boards case, once again decided the issue in detail in Shree Bhagwati Steel Rolling v. Commissioner of Central Excise [....
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....ission of Second Schedule with effect from 22.10.2009 leads to a situation where the first respondent has no jurisdiction to determine the "L" Factor for the sugar seasons 2004-2005 to 2008-09. It is further contended that omission of a Second Schedule with effect from 22.10.2009 is a deletion and no action can be taken on deleted / omitted provision since Section 6 of the General Clauses Act would have no application to a Control Order which is neither an enactment nor a regulation in terms of Section 6 of the General Clauses Act. 26. The Writ Court, taking into consideration the scope of Essential Commodities Act, the object of the Sugarcane Control Order, the decisions of the Hon'ble Supreme Court in Union of India v. Cynamide India Ltd and another [(1987) 2 SCC 720] and K. Ramanathan v. State of Tamil Nadu and another [(1985) 2 SCC 166], observed that no attempt can be permitted to be made to dilute the object and if done, would be against the public interest. 27. The right of cane growers to be entitled for Statutory Minimum Price (SMP) is a statutory right. It accrues on the date when supply of sugarcane is made to the sugar mills. The Central Government, though thought....
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.... judgments of the Hon'ble Supreme Court cited supra, the terms 'repeal' and 'omission' interchangeably used having same meaning and therefore, the omission of Section 5A of the Sugarcane Control (Amendment) Order, 2009 would apply only prospective in nature and it cannot be construed retrospectively. 33. It is trite law that if the amendment is substantive in nature or if it affects the vested rights of parties, then it will have a prospective effect but if it is procedural in nature, i.e., if the amendment changes jurisdiction, affects evidence, pleadings, or practice only, then it can have a retrospective effect too. It has also been held by the Supreme Court in the case of K.C. Arora v. State of Haryana [AIR 1987 SC 1858] that if the statute does not specifically provide for the retrospective application, then the statute will be said to have prospective effect only. Therefore, this Court is of the view that the said contention of the learned Senior Counsel for the appellant is liable to be rejected. 34. The effect of Section 6 of General Clauses Act is not to repeal anyone of those laws or abrogate them. Its object is to simply by-pass them when they are i....