TMI Blog1987 (2) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... , puke cake, Mohova cake, Soyabeen cake etc. by the solvent extraction process in its solvent extraction plant at Khamari-Amgaon, district Bhandara. 3. The respondent No. 2 issued show cause notices to the petitioners in Writ Petition No. 2049 of 1985 under Section 3 of the Vegetable Oils Cess Act, 1983 (for short the Cess Act ) for levy of cess on vegetable oil extracted by the petitioners Nos. 1 to 6 from the oil seeds and by the petitioner No. 7 from the oil cakes. He also issued show cause notice under Section 3 of the Cess Act to the Petitioner, in Writ Petition No. 133 of 1986 for levy of cess on oil extracted from oil cakes and rice bran. Section 3 of the Cess Act, it may be seen, provides for levy of cess on vegetable oil for the purpose of the National Oil Seeds and Vegetable Oils Development Board Act, 1983 (for short the Board Act ). There is however, no separate definition of the expression vegetable Oil given in the Cess Act but as provided in Section 2(2) of the said Act, the definition of the said expression given in Section 3(4) of the Board Act would be applicable in construing the said expression used in Section 3 of the said Act. The grievance of the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... See - State of U.P. v. Mohd. Norb (AIR 1958 SC 556) and M/s. Baburam v. Antarim Zilla Parishad, now Z.P. Muzaffarnagar (A.I.R. 1969 S.C. 556). Two well-recognised exceptions to the rule of exhaustion of statutory remedies are also pointed out in the aforesaid judgments. Even in the Dunlop Company s case itself the Supreme Court has pointed out such well recognised exceptions to the normal rule of exhausting of statutory remedies. It has pointed out that where the question of validity of the enactment itself is raised or where the orders are per se without jurisdiction, it is open to the High Court to entertain a writ petition notwithstanding the fact that there is an alternative statutory remedy. 6. Turning to the facts in the instant Writ Petition it may be seen that the petitioners have primarily moved this Court and the instant writ petitions are principally admitted on the ground that the Acts under which the cess is levied are unconstitutional which is a ground on which the writ petitions could be entertained notwithstanding the existence of an alternative statutory remedy even as per the decision of the Supreme Court in Dunlop Company s case cited Supra. It is only because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the above question by our decision particularly when the facts are not in dispute and the above question of law would be ultimately raised in this Court again after the statutory remedies are exhausted. The contention on behalf of the respondents that the petitioners should be relegated to their statutory remedies on this question also cannot therefore be accepted. 8. Turning to the merits of the controversy it may be seen that the whole controversy turns round the definition of the expression Vegetable Oil given in Section 3(h) of the Board Act. For the sake of convenience the said definition is reproduced below: 3(h): Vegetable oil" means any oil produced from oilseeds, or any other oil bearing materials of plant origin, and containing glycerides but does not include any such vegetable oil which has been subjected to any proceeding subsequent to the recovery of oil". A perusal of the said definition would show that it falls into three parts. The word used being means the said definition itself provides a dictionary for the meaning of the expression Vegetable Oil . According to the said definition it means (a) any oil produced from oil seeds or (b) any oil produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him the development of the products of oil seeds by recommending measures for improvement of their marketing is also covered. 12. In considering the above submission on behalf of the parties, it would be worthwhile to briefly notice the Scheme of the Board Act and the Cess Act. As its preamble shows, the Board Act is enacted to provide for the development under the control of the Union of the oil seeds industry and for other matters connected therewith. The constitution of the Board is provided under the said Act and it is clear from Section 9 that it is charged with the functions of promotion and development of the oilseeds industry and vegetable oils industry. Chapter III of the Act makes provisions for raising finances for carrying out the purposes of the Board. There is however no provision for raising finance by levying any cess under the Board Act. The cess is leviable only under the Cess Act under which the charging section is Section 3 in which it is provided that for the purposes of the Board Act a duty of excise on vegetable oils produced in any Mill in India shall be leviable at the rates stipulated therein. By sub-section (4) of Section 3 of the Cess Act, the machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced and not derived which would mean that the oil is produced from the oil bearing material by simple methods of deriving it. It would thus appear that definition covers natural oils produced directly from the plant such as it limbs, flowers, seeds, barks etc., the development of which and not of the highly processed oil is the object of the Board Act. 15. In the instant case, it is not in dispute that the oil can be extracted from oil cake only by the process of solvent extraction plant as alleged by the petitioners. It may also be seen that the oil cake is itself an independent commercial commodity different from the oil seeds which is independently liable to duty under the Excise Act. The learned counsel for the petitioners has in this regard relied upon the decisions of the Supreme Court in the case of State of Punjab and Ors. v. Chandu Lal Kishori Lal (AIR 1969 S.C. 1703). It is held by the Supreme Court in the said judgment that the seeds separated by ginning process cannot be said to be cotton itself or part of the cotton. It was held therein that the cotton seeds and cotton were two distinct commercial goods. In S. Kannappa Mudaliar v. State of Madras (21. Sales Tax C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion plant no cess can be levied upon the same under Section 3 of the Cess Act as it is not covered by the definition of the expression vegetable oil given in Section 3(h) of the Board Act. The show cause notices given by the Department in regard to the oil derived from the oil cakes therefore need to be quashed. 17. Before parting with this judgment, we may pertinently note that a bill is introduced in the Parliament to repeal the Cess Act so as to abolish all levy upon the vegetable oil because such a levy was to the detriment of the small producers of vegetable oil in the country. 18. In the result, the instant writ petitions are partly allowed. As regards the question of oil derived from the oilseeds and rice bran the petitioners in these writ petitions shall raise their contentions before the competent authorities which had issued the show cause notices to them and pursue their statutory remedies in that regard. However, as regards the question of levy of oil derived from oil-cakes the show cause notices issued to them in that regard are quashed in both these writ petitions and it is declared that the petitioners are not liable to pay any cess under Section 3 of the Cess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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