LexI.T.C. LIMITED versus AGRICULTURAL PRODUCE MARKET COMMITTEE AND ORS.
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... I.T.C. LIMITED v. AGRICULTURAL PRODUCE MARKET COMMITTEE AND ORS. JANUARY 24, 2002 [S.P. BHARUCHA, en, G.B. PATTANAIK, Y.K. SABHARWAL, RUMA PAL AND BRIJESH KUMAR, JJ.] A B Constitution of India, 1950-Articles 246 and 254-Seventh Schedule C -List /, Entries 7, 48 and 52-List /1, Entries 24, 28 and 66-List Ill, Entry 33: Tobacco Industry-Power to legislate in respect of-Tobacco Board Act, 1975-JTC Ltd. v. State of Karnataka, [1985) Supp. 1 SCR 145 holding that once in the public interest Tobacco industry, was declared as industry D under Entry 52 of-List I of Vl/ Schedule of Constitution of India, the State Legislatures cea;ed to be competent to legislate on the subject-Held : not correctly decided Expression "industry "-Scope of-Held, it has to be given a restricted meaning-In the Constitutional context it has to be understood as meaning E "manufacture or production"-Activity regarding sale of raw tobacco as provided in Tobacco Board Act cannot be regarded as "industry"-To:~acco Board Act, 1975. Agricultural Produce Market Fee-Legislative competence of States- Held, State Legislatures are competent to enact legislation providing for the F levy and collection of market fee on the sale of tobacco in a market area - Tobacco Board Act, 1975. Agricultural Produce Marketing Acts-Enactment by State Legislatures viz-a-viz. Tobacco Board Act, 1975, a Parliamentary legislation-To the extent G the State Acts relate to sale of tobacco in market areas-Held, cannot co-exist and the State Acts prevail over the Parliamentary Act. Different State legislatures have enacted Agricultural Produce and Markets Acts for regulating the sale and purchase of agricultural produce within the market area and for levy and collection of market fee. Having H 441 442 SUPREME COURT REPORTS [2002) I S.C.R. A declared that it is expedient in the public interest that Union of India should take under its control the Tobacco industry, Parliament enacted Tobacco Board Act, 1975 which is an Act providing for the development "\ ,. of tobacco industry under the control of the Union Government. Under the Agricultural Produce Markets Act, the State Government having notified tobacco as an agricultural produce, the purchase and sale of B tobacco is to be regulated under the provisions of the State Act and the Market Committee has the right to levy and collect market fee on such sale and purchase of the notified agricultural produce viz. tobacco. In ITC Ltd. v. State of Karna/aka, [1985) Supp. 1 SCR 145, this Court held by majority that the tobacco industry having been taken over by the Central C Government under Entry 52 of List I and having passed the Tobacco Board Act, the State Legislature seized to have any jurisdiction to legislate in that field and therefore, the provisions contained in the Karnataka Act, entitling the Market Committee to levy market fee in respect of sale and purchase of tobacco within the market area directly, collides with the Tobacco Board Act, 1975 and as such the said Act so far as it relates to D tobacco was struck down. In similar matter arising from the Bihar State, the High Court remanded the matter for making a fresh assessment order after notice to ITC. E In respect of matters arising from the State of U.P., the Division Bench of the Allahabad High Court followed the judgment of this Court in ITC case and held that Mandi Samiti cannot charge market fee on sale and purchase of tobacco and consequently Krishi Utpadan Mandi Samiti has preferred appeals to this Court. In an another appeal from U.P., the F Full Bench of the Allahabad High Court considered the .:onstitutional ,. validity of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 and held that the Adhiniyam permitting levy and collection of fee under section 17(iii) in so far as it applies to tobacco is not repugnant to the provisions of the Tobacco Board Act. The Tobacco Merchants Association has come in appeal challenging the validity of the said Full Bench decision of the G Allahabad High Court. The Tamil Nadu Agricultural Marketing Board has challenged the judgment of the Madras High Court which followed the judgment of this Court in ITC v. State of Karnataka and held that the State legislature has no legislative competence to notify tobacco for the purpose of control and H regulation and levy market fee under the provisions of Tamil Nadu l.T.C. LTD. V. A.P.M.C. 443 Regulation Act, 1959. A ,,
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