M/S. S.K.G. SUGAR LTD. versus STATE OF BIHAR AND ORS.

Citation: [1975] 1 S.C.R. 312 · Decided: 26-04-1974 · Supreme Court of India · Bench: A.N. RAY · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

312 
M/s. S. K. G. SUGAR LTD. 
A 
v. 
STATE OF BIHAR AND ORS. 
April 26, 1974 
(A. N. RAY, C. J., K. K. MATHEW, A. ALAGIRISWAMJ, P. K. GOSWAMI 
AND R. S. SARKARIA, JJ.) 
B 
J" 
T_he Bihar Sugar 1:ac~ori~s Control Act, (7 of 1937)-Provisions re : pro-
duction, s1;1pply and d~s~nbut1on of sugar held to be in con/Uc/ with provisions 
aj Essential Commod1fles Act (10 of 1955)-Validity of taxing provisions of 
Bihar Act, if affected-President's Act 8 of 1969-Efject of. 
~he Bihar _Sugar Factories Control. Act, (7. of 1937), was a temporary Act 
the hfe of which was extended from time to time and Bihar Act 7 of 1955 re-
enacted. it permanently. 
Bihar Act 17 of 1963 substituted in the Act, with re-
trospective effect. from January .1. 1?62, a new s. 29, which empowered the State 
G~vernmen! ~o impose by notification cess and tax on sugarcane. The Consti-
tutional vahdity of the Act was cha·lleng,ed and the Hicrh Court held the Act un-
consti_tutional and invalid. 
Who~n the matter came up o~ appeal to this Court (A. 
K. Jam"s case ([1969] 2 S.C.C. 340) it was held th&t if Bihar Act of 1937 provicks 
anything contrary to rule 3(3) of the Sugar Cane (Control) Order 1955 issued 
under the Essential Comn1odities Act 1955 it must be held to hav~ b-een' altered 
as per Art. 372 of the Constitution. 
In January, 1968, an Ordinance was pro-
mulgated. by the Governor of Bihar, and s. 35 of the Ordinance corresponded 
to s. 29 inserted by the 1963-Act. Sec. 50 of the Ordinance repealed Bihar Act 
7 of 1937, and s. 50(2) contained a saving and validating provfaion \~1ith regard 
to anything done, tax i111posed or liability incurred etc. under the Repealed .Act. 
A notification under s. 35 of th~ Ordinance imposing a tax was issued by the 
Government in February, 1968. 
Suc1:essive Ordinances thereafter promulgated 
by the Governor 
validated the provisions 
or anything 
done thereunder. 
In 
August 1969, during th~ President's Rule, the Bihar Sugar Cane (Regulation of 
Supply and Purchase) Act, (Presidents Act 8 of 1969) was passed. sec. 66(1) of 
the Act provided that notwithstanding any judgment, decree or order by any court 
all cesses and taxes imposed or collected under any State law before the com-
mencement of the Act shall be deemd to have been validly imposed etc., as if 
the Act had been in force at a1l material times. 
With respect to certain purchases of su_gar cane made by the petitioner in 
January 1968 the respondent State sent requisitions to the petitioner for realisa-
tion of cane cess and purchase tax due under the notification under Bihar Act 7 
c 
D 
E 
of 1937. The petitioner chaUenged the imposition in a petition under Art. 32, 
F 
on the ground that the imposition was without the authority of law. 
Dismissing the petition, 
HELD : The validity of the impugned notification and the cess and tax im-
posed thereunder has to ~ ju.dged with referen.ce t? ~uccessive Ordinanc~s a.nd 
the President's Act. 
By vir~ue of the 1legal fiction introduced by the validating 
provision ins. 66(1) of the President's ~ct, the impugned .notification will be 
deemed to have been issued not necessanly under the Ordinance of 1968 but 
under the President's Act itself deriving its legal force and validity directly from 
the latter. 
I 
(1 )_The Bihar Ordinance of 1968 was !within the competence of the Governor 
under Art. 213 of the Constitution. The two conditions required by that A.rticle 
are satisfied in the present case. 
The Sthte legislature was not in session nod 
the Governor was satisfied as to the necessity of promulgating the ordinance. The 
Governor is the sole judge as to the existence of the necessary 
circum5tances 
and his satisfaction is not a justiciable mf,tter. 
State of'Punjab v. Sat Pal Dang, [1969~ I S.C.R. 633, followed. 
(2) (i) The taxing pr?visions of the Bih?r Ac;t o~ 1937 never lost t~eir. vali~ 
dity and continued to be 10 force. 
The noufication issued under the B1ha1 Act 
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s KG SUGAR LTD. v. BIBAR (Sarkaria., J.) 
313 
of 1937 and continued under the latter Acts imposing the taxes or cesses also 
remained operative during the period in question till it was replaced by another 
notification under the Ordinance of 1968. lt is therefore incorrect to say that 
there was any period during whi0.::h the tax was levied without the authority of 
Jaw. 
The taxing provisions of the Bihar Act were neither rendered inoperative 
by Art. 254(1), nor repeal

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