NAGRIK UPBHOKTA M. MANCH versus UNION OF INDIA AND ORS.

Citation: [2002] 3 S.C.R. 735 · Decided: 02-05-2002 · Supreme Court of India · Bench: R.C. LAHOTI · Disposal: Appeal(s) allowed

Judgment (excerpt)

. _. 
• 
NAGRJK UPBHOKTA M. MANCH 
A 
v. 
UNION OF INDIA AND ORS. 
MAY 2, 2002. 
[R.C. LAHOTI AND BRIJESH KUMAR, JJ.] 
B 
Essential Commodities Act, 1955: Sections 3 and 5. 
Fixation of price of Kerosene oil, a controlled commodity-Central 
Government notified Kerosene Order-State Government issuing a Scheme C 
fixing the rates of Kerosene oil at wholesale/semi-wholesale/retail level-
lncluded Sales Tax, surcharge, profits and Transportation charges-Uniform 
price by rounding off method-Challenge of-High Court dismissed writ 
petitions-State Government framed Rules justifYing the Scheme-On appeal, 
held, Kerosene Order does not empower the State Government to prescribe D 
by themselves and levy any charges, rates, duties and taxes-The collection 
so accrued due to such levy in the guise of rounding off, is wholly an 
unauthorized collection and violative of Article 265 of the Constitution--
Accountant General of the State to carry out audit and submit report-Ti// 
then the funds shall stand frozen-Constitution of India, Article 265. 
Central Government has made the Kerosene (Restriction of Use and 
Fixation of Ceiling Price) Order, 1993. In pursuance of the said Order, 
Director, Department of Food, Civil Supplies and Consumer Rights, Madhya 
Pradesh had informed all the District Collectors to fix the rate of Kerosene 
E 
for Retailers as per Scheme of rounding off and to receive the amount of F 
rounding off at the level of wholesalers and to utilise it for purchasing tankers, 
drums etc. for the purpose of distribution of Kerosene oil to the consumer. 
Collector of Jabalpur district exercising the power conferred by Clause 2(d)(i) 
of Kerosene Order issued an order fixing the rates of Kerosene at wholesale, 
semi-wholesale and retail level; Ex depot price per kilo-litre, sales tax, 
surcharge on sales tax and profit of wholesale per kilo litre was kept uniform G 
throughout the district but transportation charges per kilo litre varied. 
· Appellants filed writ petitions challenging the price so fixed by including 
rounding off charges. The writ petitions "\\'ere dismissed by the High Court. In 
the meanwhile, State Government framed rules justifying the issuing of Scheme 
of rounding off, stating its purpose in ensuring supply of Kerosene at uniform H 
735 
736 
SUPREME COURT REPORTS 
[2002] 3 S.C.R. 
A rate after rounding off the rates and to utilise the amount of saving from 
rounding off to strengthen the Public Distribution System. Hence these appeals. 
+ 
B 
It was contended for the appellants that levy and recovery of any amount 
over and above the price fixed after taking into consideration the relevant 
factors is without any authority of law and amounts to taxation in disguise which 
is ultravires the Constitution; and that it results in the increase of price of 
kerosene by 5.13%. It was contended for the respondents that the purpose 
sought to be achieved by rounding off is to maintain a uniform price of kerosene 
throughout the State and the funds so available serves the laudable purpose of 
maintaining and strengthening supply and availability of kerosene to 
C consumers; and that levy of such rounding off charges is protected by the 
powers of the State Government in terms of clause (d) of Para 2 of the Kerosene 
Order. 
Allowing the appeals, the Court 
· D 
HELD : l. l. Kerosene Order defines the 'declared price' being the 
maximum selling price by reference to an area. Apart from the cost of 
production, what can be included therein are other charges, rates, duties, taxes 
prescribed by the State Government/District Collector. The term 'prescribed' 
contemplates the determination of charges, rates, duties and taxes which are 
E leviable on kerosene under the law of the State or local legislation and are, 
therefore, better known to the State Government or District Collectors and 
F 
would be available to be added to the maximum selling price declared by the 
Central Government or by the State Government subject to the delegation of 
power by the Central Government The definition of 'declared price' cannot be 
so read as empowering the State Government, the Director or the District 
Collectors to prescribe by themselves any levy on kerosene, any charges rates, 
duties and taxes in purported exercise of power under the Control Order. The 
term 'charges' must be read ejusdem generis taking colour from the succeeding 
terms-rates, duties and taxes. (748-D-E-F-G) 
1.2. State Government, the Director and 

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