LexJAORA SUGAR MILLS (P) LTD. versus STATE OF MADHYA PRADESH AND OTHERS
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.JAORA SUGAR MILLS (P) LTD.
v.
STATE OF MADHYA PRADESH AND OTHERS
April 19, 1965
{P. B.
GAJENDRAGADKAR, C.J., K.
N.
WANCHOO,
M. HIDAYATULLAH, J. C. SHAH ANI'l S. M. SJKRI, JJ.J
The Sugar Cane Cess (Validation) Act, 1961 (Central Act 38 of 1961),
1. 3-State Acts levying Sugar-cane Gess found to be ultra vires-Central
Act adopting provisions of State Acts and validating assessments and
collections made thereunder-Central Act, whether valid.
Under the Madhya Pradesh Sugarcane (Regulation of Supply and Pur-
chase) Act 1958 (1 of 1959) a cess was levied on sugarcane and for this
purposo a sugarcane factory was treated as a 'local area'. In the DiamoriJ
Sugar Mills case it was held by this Court that such a levy was not valid.
Followrng this decision the Madhya Pradesh High Court strnck down
s. 23, which was the charging section of the aforesaid Madhya Pradesh
Act No. 1 of 1959. There were Acts in several other States which suffered
from the same infirmity and to meet the situation Parliament passed the
Sugarcane Ce$ (Validation Act 1961 (38 of 1961). The Act made valid,
by s. 31 all the assessments and collections made before its commence-
ment under the various State Acts and laid down that all the provisions
of the State Acts as well as the relevant notifications, rules etc. made
under the State Acts would be treated as part of s, 3;· further. the said
section was to be deemed to have existed at all material times ·\\'hen the
cess was imposed, assessed and collected under the State Acts. The
appellant, a sugar factory, was asked to pay the cess for the years 1959-
60 and 1960-61. It however, challenged the levy in a writ petition bofore
the High Court. The High Court having dismissed the petition,
the
appellant came to this Court with certificate.
The contentions urged on behalf of the appellant were : (I) What
the vaJid::i.tion of the Act had done was to attempt to cure the legislative
incompetence of the State I~egislatures by validating State Acts vvliich were
invalid on the ground of absenc~ of legislative competence in the respective
State Legislatures;
(2) Parliament had passed the Act in question not
for the purpose of levyinG; a cess of its o'.vn, but for the purpose of
enablinq the respective states to retain the amounts which they had il!egally·
collected. The Act 'vas therefore a colourable piece of lcgislriJi0n;
(3)
The Act had not been passed for the purpo<>es of the IJnion of Ir:dia and
the recoveries of cesses \vhich were retrospectively au~horised by it were
not likely to go into the Consolidated Fund of India;
(4) The SU?;?.rcane
crushjng season wa..'> between October 1, and June 30th. The Cane Deve-
lopmc.n_t Council which \Vas constituted on August 26. 1960 wns not in
existence throughout the period covered bv the demand for the ye:ir 1950--
60. The demand wns a 'fee' nnd it was ille~al to recover such a wee for a
period during which the council did not exist at all andv::ould have rendered
no service \\1hatever.
HEl.D : (i) In view of the decision of this Court in Diamond Su~ar
MUls it was obvious that the cess in question was outside the leci~lative
competence of the States. This very conclusion led to the irresistihle in-
ference that Parliament would have legislative competence to deal with
the subject-matter in question,
havtn~ rog<'.rd to Art. 248 re:id \\'ith Entry
524
SUPREME
COURT
REPORTS
[1966) l S.C.R.
97 in List l of the Se\Cath Schedule to the Constitution. Thus the legis-
A
lative 001npetenc~ ol Parl1a.1ncnt tu levy a coss such as was in1r0s~J by
1. 3 of the Sugarcane Cess (Vaiidat1on) Act 1961 (Central Act 38 of
1961 J was not m douiJt.
Diamond Sugar Mills Ltd. & Anr. v. Staie of Vilar Pradesh & Anr.
11901] 3 S.C.R. 243, 1eferred to.
lii) \Vbcn an Act pa~scd by a Stale Legislature is invaJid on the
ground Lhat the Stale Leg1:,Jature did not
bilve legislative
compe~cace
to Jeal with the 1op1cs CO~t.!.Cd by 11, I.hen even Parli<.iment (.;annul \'-lli-
date such an Act,
because 1hc effect ot su.:h attempted validaii1Jn, in
substance, \Vould be to coufcr legisiative competence on the State legis-
latu1e in regard tu o tield or topic v.·hich. by the relevant provi~ions of
the schedules to the Cons'itution. is outside its jurisdiction. Where a topic
is not included within the relevant List dealing with lhe ~egislalive compe-
tence of the S!ate Legislatures,
Parlian1ent, by
making a
law canExcerpt shown. Read the full judgment & AI analysis in Lexace.