TULSIPUR SUGAR CO. LTD. ETC. versus SECRETARY TO THE GOVERNMENT OF U.P. & ORS.

Citation: [1986] 2 S.C.R. 942 · Decided: 02-05-1986 · Supreme Court of India · Bench: P.N. BHAGWATI · Disposal: Dismissed

Judgment (excerpt)

942 
A 
lULSIPUR SUGAR CO. LTD. ETC. 
v. 
SECRETARY IO 1llE GOVERttmN'l" OF U.P. & ORS. 
MAY 2, 1986. 
B 
[P.N. 
Blli\Gi/ATI, C.J., 0. CHINNAPPA REDDY, 
R.B. MISRA, 
c 
D 
E 
F 
G 
V. KHALID AND G.L. OZA, JJ,] 
U.P. Sugarcane (Purchase Tax) Act, 1961, s. 
factories -
Grant of remission of purchase tax 
premissible/discriminatory. 
>--
14 - Sugar 
-
Whether 
Words and Phraseq: "encourage or regulate" - Meaning of -.., 
- s.14(l)(a) U.P. Sugarcane (Purchase Tax) Act, 1961. 
'
Section 3(l)(a) of the U.P. Sugarcane (Purchase Tax) 
Act, 1961 provides for imposition of tax on the purchase of 
sugarcane by the owners of sugar factories. Section 14(1) of 
the Act empowers the State Government to grant remission in 
whole or in part of the tax payable in the public interest, 
with a view to (a) encourage or regulate the supply of 
sugercane to, or its purchase by the factories, or (b) 
encourage the establishment of new factories, or (c) assist 
factories established after the crushing season 1957-58 and 
purchasing sugarcane yielding low sugar recovery. 
The Central Government by a notification dated September 
29, 1973 issued under cl.(3) of the Sugarcane (Control) Order, 
1966, fixed the minillllm price of sugarcane for factories 
situated in eastern U.P. at Rs. 8,38 per quintal. To meet the 
growers demand for a higher price the Government of U.P. 
refixed the sugarcane price at Rs.12. 25 per quintal for the 
sugar mills situated in the east zone. The sugar factories not 
being in a position to pay the higher price approached the 
State Government who by two notifications dated January 25, 
1975 issued under s.14(l)(a) of the Act granted remission in 
purchase tax to the extent of Re. 0.51 per quintal to twenty 
sugar factories in the area for the assessment year 1973-74. 
The appellants and some other factories having been 
denied any remission 
in purchase 
tax, 
challenged 
the 
I
I 
H 
notifications by filing petitions under Art. 
226 of the 
Constitution which were dismissed by the High Court. 
TULSIPUR SUGAR CO. v. SECY. GOVT. OF U.P. 
943 
-"" 
In these appeals by special leave, it was contended for 
the appellants that the State Government in ref using to extend 
the remission to the appellants had discriminated against them 
by singling them out 
for treating differently as 
the 
encouragement and regulation contemplated by cl..(a) of s.14(1) 
of the Act was necessary to all the factories in the eastern 
zone and not to a fortunate few, and that the impugned 
notifications suffered from the vice of Art. 
14 of the 
-.;, Constitution inasmch as the Government had discriminated 
between the factories falling in the same group as those which 
had a recover)' of 8. 5 or less had been granted remission, 
while the appellants who were also in similar position had 
been left out. 
r 
Dismissing the appeals, the Court, 
HELD: l. Article 14 of the Constitution forbids class 
legislation 
but 
permits 
reasonable 
classification. 
It, 
however, 1111st fulfil the twin requirements: (l) it 1111st be 
founded on an intelligible differentia which distinguishes 
persons or things that are grouped together from others left 
out of the group, and (2) that the intelligible differentia 
1111st have s relationship to the object sought to be achieved 
""' by the statute. (950 C-D] 
2. Section 14(1) of the Act confers a discretionary 
power on the State Government. It has been left entirely to 
the State to decide whether any particular factory should be 
granted remission or not, guided by the purpose set out in the 
-'< relevant clause. Neither in cl. (a) nor in any other clause of 
s. 14(1) there is anything to indicate that the State 
L Government 1111st grant remission to all sugar factories for 
....,.; encouraging or regulating the supply of sugarcane. [948 E-F] 
3. The three clauses of sub-s. (1) of s.14 of the Act 
have different object and purpose. The purpose of granting the 
power 
of remission under cl. 
(a) is encouragement 
and 
regulation of the supply of sugarcane, the object of cl.(b) is 
to encourage the establishment of new factories, and that of 
"-1 cl. (c) is to assist factories established after the crushing 
season 1957-58 and purchasing sugarcane yielding low recovery. 
A factory situated in one area or falling in one category may 
be in need of remission, while those which were not either 
A 
B 
c 
D 
'E 
F 
G 
H 
A 
944 
SUPRE)IE COURT REPORTS 
[1986] 2 S.C.R. 
situated in that area or did not fall in that 

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