TMI Blog1994 (11) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... -established. - Writ Petition (Civil) No. 1215, 951, 1821 of 1989, - - - Dated:- 25-11-1994 - JEEVAN REDDY B.P., SUHAS CHANDRA SEN AND PARIPOORNAN K.S. JJ. Writ Petition (Civil) No. 1215, 951, 1821 of 1989, Writ Petition (Civil) No. 177, Writ Petition (Civil) No. 402, Writ Petition (Civil) No. 179, Writ Petition (Civil) No. 256 of 1990, Writ Petition (Civil) No. 500, Writ Petition (Civil) No. 690, Writ Petition (Civil) No. 691, Writ Petition (Civil) No. 707, Writ Petition (Civil) No. 872, Writ Petition (Civil) No. 450, Writ Petition (Civil) No. 451, Writ Petition (Civil) No. 452, Writ Petition (Civil) No. 453 of 1993, Writ Petition (Civil) No. 908 of 1993, T.C. (Civil) No. 93 of 1984 -------------------------------------------------- The judgment of the Court was delivered by B.P. JEEVAN REDDY, J.- The validity of the levy of education cess and rural employment cess created by the West Bengal Taxation Laws (Second Amendment) Act, 1989, is called in question in these writ petitions preferred by several tea estates in West Bengal. Legislative background: For a proper appreciation of the questions arising herein, it is necessary to have a glimpse of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt such categories of despatches or such percentage of despatches from the liability to pay the whole or any part of the rural employment cess or reduce the rate..... By another amendment effected in 1982, the first proviso to clause (aa) in section 4(2) was omitted. Several notifications were issued by the Government from time to time as contemplated by section 4(2). The levy of the said cess was questioned by a number of tea estates by way of writ petitions filed in this Court. Certain writ petitions filed in the High Court were transferred to this Court to be heard along with the said writ petitions, all of which were disposed of on May 12, 1989, by a Bench comprising R.S. Pathak, C.J. and M.H. Kania, J., reported as Buxa Dooars Tea Co. Ltd. v. State of West Bengal [1989] 74 STC 447; (1989) 3 SCC 211. The challenge to the levy was based upon violation of article 14 and article 301 of the Constitution as also on the ground of lack of legislative competence on the part of the State Legislature. This Court examined the attack based upon article 301 in the first instance. It held that the levy was really on the despatches of tea from the tea estates. It noted that the first pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the impugned legislation is also void for want of legislative competence as it pertains to a covered field". As a result of the judgment in Buxa Dooars [1989] 74 STC 447 (SC); (1989) 3 SCC 211 the State became liable to refund the cess already collected and the relevant schemes came under jeopardy. The West Bengal Legislature intervened to remedy the situation and enacted the West Bengal Taxation Laws (Second Amendment) Act, 1989, impugned herein. Section 2 of the impugned Act contains amendments to the West Bengal Primary Education Act while section 3 sets out the amendments to the West Bengal Rural Employment and Production Act, 1976. As mentioned hereinbefore, it would be enough to notice the amendments to the 1976 Act since the amendments to both enactments are identical. Clause (aa) in sub-section (2) of section 4 was omitted with effect from April 1, 1981. After sub-section (2), sub-section (2A) was introduced with retrospective effect from April 1, 1981. Sub-section (2A) reads: "(2A) The rural employment cess shall be levied annually on a tea estate at the rate of twelve paise for each kilogram of green tea leaves produced in such estate. Explanation .-Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, beyond the competence of the State Legislature; for being a tax on land, the levy must be directly upon the land whereas the levy in question is really a tax on production of tea, a subject covered by entry 84 of List I. A levy on tea leaves is not a levy upon the land. The defect pointed out in Buxa Dooars [1989] 74 STC 447 (SC); (1989) 3 SCC 211 still continues under the impugned Amendment Act inasmuch as all that the impugned Act does is to levy the cess on production of green leaves instead of on despatches (as was done by the provisions struck down). A tax on land must be a constant figure whereas the impugned levy varies from year to year, based as it is on the quantity of tea produced in a tea estate in a given year; indeed, there may be a case where there is no production of tea leaves at all in a particular tea estate in a particular year in which event no cess would be payable in that year. The definition of "tea estate" further establishes the absence of nexus between the cess and the land; "tea estate" is defined to include not only the land covered by tea bushes but also the land covered by the factory and buildings; even fallow land within the tea estate is wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts diminishing and it gradually becomes uneconomic. Such bushes are generally removed and new bushes planted. It is thus a continuous process. For this reason, land intended for being planted with bushes is also included within the definition. The fact that in some cases there may be no factory or no building hardly makes a difference to the validity of the definition of the tea estate. The entire land covered in a tea estate as defined is treated as a separate category of land, as a unit, for the purposes of levy of the cess. That a wide discretion has to be conceded to the Legislature in matters of taxation is so well- established as not to call for a reference to the decisions saying so. Indeed, classification of tea estates as a separate category for the purposes of the said levy is not even questioned before us. It may also be noticed that generally speaking no tea estate markets green tea leaves. By applying a particular process, the green tea leaves are converted into tea as commercially known and then marketed. It is thus clear that tea estate is a well-understood entity and hence can legitimately and reasonably be classified as a separate category for the purpose of taxa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the meaning of entry 49 of List II or whether it is outside the purview of the said entry. In Sir Byramjee Jeejeebhoy v. Province of Bombay ILR (1940) Bom 58; AIR 1940 Bom 65 (FB), property tax was levied at 10 per cent on the annual letting value of lands and buildings by the Bombay Finance (Amendment) Act, 1939. The levy was impugned as ultra vires the Provincial Legislature on the ground that it was in truth a tax on income or on the capital value of assets. Negativing the said contention, Broomfield, J., observed: ".......The main ground on which it is sought to be shown that the impugned tax is a tax on income is that it is assessed on the same basis as income-tax, that is on annual value or the amount at which the property may reasonably be expected to be let. But the mode of assessment does not determine the character of a tax. Annual value may be the basis of assessment of income-tax. It may also be the basis of assessment of a tax on capital, e.g., in the case of succession to land under the Succession Duties Act in England: In re Elwes (1858) 28 LJ Ex 46, or again it may be the basis of assessment of rates such as the ordinary municipal rates in England, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act has adopted the annual value as the standard for determining the income, it does not follow that if the same standard is employed as a measure for any other tax, that tax becomes a tax on income. Applying the doctrine of pith and substance, it held that the Punjab tax is not a tax on income even though the basis of tax is the same as the one adopted by the Indian Income-tax Act. The encroachment into the federal field, it held, is not so great as to characterise it as a colourable piece of legislation. This decision has been uniformly followed by this Court without exception. In V. Pattabhiraman v. Assistant Commissioner of Urban Land Tax AIR 1971 Mad. 61 the validity of sections 5 and 6 of the Madras Urban Land Tax Act, 1966, was challenged on the ground that since the tax was based on the market value of the land it is really an income-tax and, therefore, outside the purview of entry 49 of List II. The contention was negatived following, inter alia, the decision of the Federal Court in Ralla Ram AIR 1949 FC 81. In Ajoy Kumar Mukherjee v. Local Board of Barpeta AIR 1965 SC 1561 a Constitution Bench of this Court dealt with the challenge to the constitutionalit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uswami Goundan [1940] FCR 188 at 201 to the effect: "It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee whereby the impugned statute is examined to ascertain its 'pith and substance', or its 'true nature and character', for the purpose of determining whether it is legislation with respect to matters in this List or in that: Citizens Insurance Company of Canada v. Parsons [1882] 7 AC 96, Russell v. Reg. [1882] 7 AC 829, Union Colliery Co. of British Columbia v. Bryden [1899] AC 580, Attorney-General for Canada v. Attorney-General for British Columbia [1930] AC 1116, Board of Trustees of Northern Irrigation District v. Independent Orders of Foresters [1940] AC 513. In my opinion this rule of interpretation is equally applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject in some way; but that is not the same thing as the law being on the latter subject. There might be overlapping; but the overlapping must be in law. The same transaction may involve two or more taxable events in its different aspects. But the fact that there is an overlapping does not detract from the distinctiveness of the aspects." Reference was made, inter alia, to the decision of the Privy Council in Governor-General in Council v. Province of Madras [1945] 1 STC 135; [1945] FCR 179 where the distinction between the duties of excise and tax on sale of goods was explained in the following words: "The two taxes, the one levied upon a manufacturer in respect of his goods, the other upon a vendor in respect of his sales, may, as is there pointed out, in one sense overlap. But in law there is no overlapping. The taxes are separate and distinct imposts. If in fact they overlap, that may be because the taxing authority, imposing a duty of excise, finds it convenient to impose that duty at the moment when the excisable article leaves the factory or workshop for the first time upon the occasion of its sale." It was further pointed out, and which is of some relevance to us in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Any such levy has been held to be arbitrary and discriminatory. We shall now deal with the two decisions in India Cement (1990) 1 SCC 12 and Orissa Cement (1991) 1 SCC 430, upon which strong reliance is placed by the learned counsel for the petitioners. India Cement (1990) 1 SCC 12 dealt with a levy under section 115 of the Madras Panchayats Act which imposed a local cess at 45 paise on every rupee of land revenue payable to the Government in respect of land for every fasli. The Explanation to section 116 defined "land revenue" to mean "public revenue due on land and includes water cess payable to the Government for water supplied or used for the irrigation of land, royalty, lease amount or other sum payable to the Government in respect of land held direct from the Government on lease or licence........". What is of crucial relevance is that the levy of cess was not upon the land or upon its yield (or its income) but upon the royalty amount payable to the lessor, which was included within the definition of the expression "land revenue". Question, therefore, arose whether such cess levied with reference to or calculated on the basis of amount of royalty can be called a tax on land. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which have upheld levy upon land and building measured on the basis of their yield or income. Only H.R.S. Murthy [1964] 6 SCR 666 was overruled in India Cement (1990) 1 SCC 12 and not others. The decision in India Cement (1990) 1 SCC 12 must be understood consistent with and in continuation of the earlier decisions on the subject. Now coming to Orissa Cement (1991) 1 SCC 430 it was again a case where the cess was imposed on royalty. As amended by Act 15 of 1988, section 5(2) of the Orissa Cess Act, 1962, read as follows: "(2) The rate at which such cess shall be levied shall be- (a) in case of lands held for carrying on mining operations in relation to any mineral, on such per centum of the annual value of the said lands as specified against that mineral in Schedule II; and (b) In case of other lands fifty per centum of the annual value." Clause (a) in sub-section (2) was amended by Act 17 of 1989, after which amendment, clause (a) read thus: "(a) in the case of land held for carrying on mining operations in relation to any mineral such per centum of the annual value as the State Government may, by notification, specify from time to time in relation to such mineral." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yalty rather than with respect to land." In our opinion, therefore, the ratio of India Cement (1990) 1 SCC 12 and Orissa Cement (1991) 1 SCC 430 is clearly distinguishable and has no relevance to the cases before us. In the case of the impugned West Bengal enactment, the cess is upon the land measured on the basis of the quantum of its produce. Being measured with reference to the yield of land, it is a levy upon the land, as explained in Ralla Ram AIR 1949 FC 81, Moopil Nair [1961] 3 SCR 77 and Ajoy Kumar Mukherjee AIR 1965 SC 1561. Strong reliance is placed by the learned counsel for the petitioners upon the following sentence in paragraph 22 of India Cement (1990) 1 SCC 12: "There is a clear distinction between tax directly on land and tax on income arising from the land" to contend that levy of tax on income of land is not tax on land. We are afraid, the learned counsel are tearing one sentence out of context and are seeking to construe it as a statute. That the tax on land and building can be levied with reference to, i.e., measured on the basis of their yield or income is the uniform view taken in the cases referred to hereinbefore. For instance, how is the property t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the minerals extracted. It may be mentioned that the Act does not use dead rent as a basis on which land is to be valued. Hence, there cannot be any doubt that the impugned legislation in its pith and substance is a tax on royalty and not a tax on land". Firstly, the situation contemplated in the said observation does not obtain in the present case. Here are tea estates, the tea bushes wherein yield tea leaves in the natural course. If they are properly tended and nurtured, they yield more but even otherwise they do yield-though may be in lesser quantity. Moreover, we must take the example of an ordinary prudent owner/occupier of tea estate and not of a freak. No ordinary person would leave the tea estates to nature or allow the leaves to wither on bushes. A freak may do it but the validity of laws are not to be judged with reference to freaks. May be, in certain extraordinary exigencies, it may happen that the tea leaves are not plucked but that is not the generality of the situation. That the basis of this argument is unrealistic and improbable would be evident from the provisions of the Tea Act, an aspect dealt with at a later stage. We are, therefore, of the opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery legislation particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid. The courts cannot, as pointed out by the United States Supreme Court in Secretary of Agriculture v. Central Reig Refining Co. (1950) 94 L. Ed. 381, be converted into tribunals for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any Legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The court must therefore adjudge the constitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in several decisions referred to hereinbefore that a tax on land within the meaning of entry 49 of List II can be levied with reference to their yield or income. It will be difficult to imagine a situation where a land yields income worth the name without any labour and/or capital investment. Not only labour has to be employed but also some capital has to be invested for raising the produce. On that account, the tax levied on land but quantified with reference to the income/yield of the land cannot be characterised as a tax other than tax on land. Whether it is an agricultural land, an orchard or a tea estate, they do require some capital and labour to make them yield and to produce income. Such yield or income can always be taken as a measure for quantifying the tax, which is undoubtedly levied upon the land. We cannot, therefore, agree with the said contention of Dr. Pal. Relying upon the decisions in Sudhir Chandra Nawn v. Wealth-tax Officer [1968] 69 ITR 897 (SC); [1969] 1 SCR 108, Assistant Commissioner of Urban Land Tax v. Buckingham and Carnatic Co. Ltd. [1970] 75 ITR 603 (SC); [1970] 1 SCR 268 and Second Gift-tax Officer v. D.H. Nazareth [1970] 76 ITR 713 (SC); [1971] 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge his lawful obligations have to be taken into account. In certain exceptional cases, where a person owes no debts and is under no enforceable obligation to discharge any liability out of his assets, it may be possible to break up the tax which is leviable on the total assets into components and attribute a component to lands and buildings owned by an assessee. In such a case, the component out of the total tax attributable to lands and buildings may in the matter of computation bear similarity to a tax on lands and buildings levied on the capital or annual value under entry 49, List II. But the legislative authority of Parliament is not determined by visualizing the possibility of exceptional cases of taxes under two different heads operating similarly on tax-payers. Again entry 49, List II, of the Seventh Schedule contemplates the levy of tax on lands and buildings or both as units. It is normally not concerned with the division of interest or ownership in the units of lands or buildings which are brought to tax. Tax on lands and buildings is directly imposed on lands and buildings, and bears a definite relation to it. Tax on the capital value of assets bears no definable rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cement (1990) 1 SCC 12, means that levy should not be an indirect levy on land like the one in India Cement (1990) 1 SCC 12 but it cannot be understood to say that levy on land quantified on the basis of its yield cannot be treated as a direct levy upon the land. There is no basis, therefore, for saying that the impugned cess is not a tax upon the land directly. As repeatedly pointed out above, the mere fact that it is measured with reference to the yield of the land does not make it any the less a tax upon the land directly. Now coming to the argument that since the production of tea leaves varies from year to year, the cess would also vary correspondingly from year to year and for that reason it cannot be called a tax on land, is again, in our opinion, unsustainable. It is not the essence of a tax-nor a condition of its validity- that the tax must be constant or uniform for all the years or for a particular number of years. The fact that generally property taxes on buildings and lands are revised every five years by the municipal bodies is a matter of convenience and not a matter of law. The tax can be revised every year, if the municipality so decides. Dr. Pal, learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tickets sold for a show but with reference to the gross collection capacity of the theatre, determined for each show, week, month or year, as the case may be. The fact that the Legislature departed from the rule "no show, no tax" did not affect the competence of the Legislature or the character of tax. Sri K.K. Venugopal, learned counsel for some of the writ petitioners, sought to establish the absence of connection between the tax (cess) and the land on the following basis: the entire land comprised in a tea estate may not be covered with tea bushes; for instance, a tea estate comprising 1,000 acres may have tea bushes only on 400 acres while another 400 acres may be kept fallow and the remaining 200 acres is covered by factory, buildings and the like. A tax on land to be a tax within the meaning of entry 49 of List II must be levied upon the entire 1,000 acres but in the case of impugned levy, the tax is determined, or assessed, as the case may be, on the entire 1,000 acres with reference to the yield of 400 acres only; thus it is clear, says the learned counsel, that the true nature of the tax is not a tax upon land but upon produce of land comprised in a tea estate. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtured and cared for by providing fertilizers, labour and attention to yield more. The fact remains that there is bound to be some yield each year. One need not take the case of a freak owner choosing not to pluck the leaves at all in a given year. Such a person is an exception and not the rule. One has to go by the generality of situation. The validity of a law-more so of a tax law-cannot be judged by taking a freak case or an unusual situation. No such instance of any tea estate, in any year, has been brought to our notice. This aspect has been dealt with by us hereinabove and need not be repeated here. Once a tea estate is validly classified as a unit of taxation, as held hereinbefore, the levy of tax on the basis of the produce of such tea estate-unit-cannot be faulted. More important, the situation envisaged by Sri Venugopal cannot really come to pass. Section 16B(1)(b) of the Tea Act read with section 16-C and section 16-D provides that if the Central Government is satisfied with respect to a tea estate that the average yield in three out of five preceding years is lower by 25 per cent or more than the district average yield, it can order investigation into the affairs of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve carefully perused paragraphs 10 and 11 (at pages 454- 455 of STC) of the said judgment and we are of the considered opinion that the main basis of the holding in the said two paragraphs is that the tax being levied upon the despatches of tea-and because no distinction is made with reference to the quality of tea produced in each estate-the levy cannot be said to be a levy upon the land. Though a reference is made to the power of exemption but that is not the reason for holding that it is not a tax on land. We are of the further opinion that if the said observations are so read, it would not be possible for us to agree with the same. Every tax enactment contains a provision for exemption. There is hardly a tax enactment which does not contain such a provision. The power of exemption is normally given to the Government to be exercised in appropriate cases. The said provision, in our opinion, can make no difference to the character of the tax. We can understand saying that the tax impugned in Buxa Dooars [1989] 74 STC 447 (SC); (1989) 3 SCC 211 was bad on account of levy being related to despatches and, therefore, the tax impinged upon article 301 of the Constitution but we find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as land revenue. Learned counsel submits that there can be more than one law levying land revenue and all of them will be relatable to entry 45. He submits that the impugned levy can be treated as additional land revenue. Counsel gives instances of more than one Act levying excise duty on manufacture and production of goods. He relies upon the following observations of Mukharji, J., in India Cement (1990) 1 SCC 12: "It is, however, clear that over a period of centuries, land revenue in India has acquired a connotative meaning of share in the produce of land to which the King or the Government is entitled to receive." The force of the submission cannot be denied. The presumption in favour of constitutionality obliges the court to sustain an enactment, if necessary, by relating it to an entry other than the one relied upon by the Government, if that can be reasonably done. Moreover, as pointed out by this Court in Sanjeev Coke Mfg. Co. v. Bharat Coking Coal Ltd. [1983] 1 SCR 1000, it is the function and power of the court to interpret an enactment. It is equally the function and power of the judiciary to say to which entry does an enactment relate. The opinion of the Government i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 3(n) to mean "the plant Camellia Sinensis (L) O. Kuntze as well as all varieties of the product known commercially as tea made from the leaves of the plant Camellia Sinensis (L) O. Kuntze including green tea", that according to this definition, tea leaves also fall within the expression "tea" and since Parliament has already levied a cess on the said produce, viz., tea leaves, an identical levy cannot be imposed by the State Legislature. Certain provisions of the Tea Act relating to control over cultivation and production of tea are brought to our notice for but-tressing the said argument. For a proper appreciation of these submissions, it is necessary to refer briefly to the provisions of the Tea Act, 1953. The preamble to the Act says that the Act is intended "to provide for the control by the Union of the tea industry including the control, in pursuance of the international agreement now in force, of the cultivation of tea in, and of the export of tea from, India and for that purpose to establish a Tea Board and levy of duty of excise on tea produced in India". Section 2 contains the declaration within the meaning of entry 52 of List I of the Seventh Schedule to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an earlier stage to the provisions of sections 16B, 16C and 16D which empower the Central Government to take steps for ensuring that the production of tea in a tea estate does not fall below a particular level. The powers include the power to order investigation, to issue directions as well as to assume management or control of the tea undertakings or tea units, as the case may be. ["Tea undertaking" is defined by clause (e) in section 16A(1) to mean "an undertaking engaged in the production or manufacture or both of tea through one or more different units" whereas the expression "tea unit" is defined in clause (f) to mean, "a tea estate or garden, including a sub-division thereof, which has a distinct entity for which accounts are kept and has a factory of its own for the production and manufacture of tea"] Section 16E empowers the Central Government to take over a tea undertaking or a tea unit without ordering a prior investigation, in certain specified circumstances. Section 16F specifies the powers of the Central Government where it takes over the management of a tea undertaking/tea unit under section 16D or section 16E, as the case may be. So does section 16G. The other provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 25 appropriate amounts shall be made over to the Tea Board by the Central Government from time to time. Section 26A empowers the Central Government to make grants or loans to the Tea Board. Section 27 provides for the constitution of the Tea Fund to which all the monies including the duty of excise levied under section 25 is to be credited. Chapter VI containing sections 30 to 32 empowers the Central Government to control the price and distribution of tea or tea waste while Chapter VII contains certain miscellaneous provisions to which it is not necessary to refer. The learned counsel for the petitioners have also placed before us a copy of the notification issued under section 25(1) of the Tea Act being the Ministry of Commerce Notification No. S.O. 488(E) dated August 13, 1986 [as amended by S.O. 799(E) dated October 30, 1986]. The notification reads as follows: "In exercise of the powers conferred by sub-section (1) of section 25 of the Tea Act, 1953 (29 of 1953), the Central Government hereby notifies, with effect from the 15th day of August, 1986, the rate of cess as specified in column (2) of the Table below on the variety/grade of teas specified in col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mprised in a tea estate. The declaration in section 2 of the Tea Act, it is evident, has again no relevance on the State Legislature's competence inasmuch as the impugned cess is not a cess on the tea industry but a cess on the land comprised in a tea estate. The fact that ultimately the tax may have to be borne by the tea industry is no ground for holding that the said levy is upon the tea industry. For that matter, even the imposition of a land revenue or non-agricultural cess upon the land comprised in a tea estate will ultimately affect the tea industry but that is no ground for invalidating those taxes. This proposition is too well-established and it would be enough to refer to the decisions in Ganga Sugar Corporation Ltd. v. State of Uttar Pradesh [1980] 45 STC 36 (SC); [1980] 1 SCR 769 and Federation of Hotel Restaurant [1989] 74 STC 102 (SC); (1989) 3 SCC 634 (at pages 137-138 of STC; page 655, para 37 of SCC). It is contended by Sri Ashok Desai that the impugned imposition is really an imposition of duty of excise on the goods produced in India within the meaning of entry 84 of List I and, therefore, outside the competence of the State Legislature. The learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elopment and Regulation Act-or which is governed by the Tea Act, as in the present case. Lastly, the learned counsel for the petitioners questioned the validity of the retrospective effect given to the impugned enactment. We fail to see any substance in this submission. If the Act is good, it is good both prospectively and retrospectively. Retrospective effect is given for the period covered by the anterior provisions which were struck down in Buxa Dooars [1989] 74 STC 447 (SC); (1989) 3 SCC 211. Once we hold that the defect pointed out in Buxa Dooars [1989] 74 STC 447 (SC); (1989) 3 SCC 211 is rectified and remedied in the impugned enactment, it can certainly be given retrospective effect to cover the period covered by the earlier enactment which is not only a well-known but a frequently adopted measure by all the Legislatures. For the above reasons, the writ petitions fail and are accordingly dismissed. The interim orders made in these writ petitions shall also come to an end. The petitioners shall pay the cesses stayed by the orders of this Court along with interest at 12 per cent per annum. There shall be no order as to costs. Petitions dismissed. - - TaxTMI - TM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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