TMI Blog2010 (1) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... on of law. The prayer made in all the petitions is for quashing the notification dated May 27, 1988 imposing a tax at 50P. for 100 kgs. on the purchase of sugarcane by or on behalf of the sugarcane mill like the petitioners. The petitioners have also prayed for issuance of declaration to the effect that no purchase tax on purchase of sugarcane could be levied and collected from the petitioner under the provisions of the Punjab General Sales Tax Act, 1948 (for brevity, the PGST Act, 1948 ) in the face of levy and collection of such like tax under section 17 of the Punjab Sugarcane (Regulation of Purchase and Supply) Act, 1953 (for brevity the 1953 Act ) which is claimed to be a special Act governing all aspects of purchase, supply and levy of purchase tax on the sugarcane. In that regard primary reliance of the petitioner has been on the judgment of the honourable Supreme Court in the case of Gobind Sugar Mills Ltd. v. State of Bihar [1999] 115 STC 358; [1999] 7 SCC 76. Likewise, on the same analogy a prayer has also been made for declaring section 19, item 4 of Schedule H of the Punjab Value Added Tax Act, 2005 (for brevity the 2005 Act ) as unconstitutional as the same would no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sential Commodities Act, 1955 (for brevity, the 1955 Act ). As a consequence of the notification, the sugarcane grower in a particular area, as a reserved area, are directed to supply 75 per cent of the sugarcane produced by them to the petitioner-mill. The petitioner-mill is also bound to take delivery of the same. A prohibition is engrafted on the sugarcane growers from exporting their produce outside the reserved area and like wise the petitioner-mill is also prohibited from purchasing sugarcane outside the reserved area. Any violation of the Control Order and the notifications issued thereunder would attract criminal prosecution under section 7 of the Essential Commodities Act, 1955. The case of the petitioners is that neither the farmers are allowed to sell their produce outside the reserved area nor the mill is permitted to purchase sugarcane from outside the reserved area. Therefore the prohibition between the cane growers and the mill part-takes the character of acquisition of property because there is no element of free consent which is an essential ingredient of a valid agreement. It is also asserted that there is no scope for principle of demand and supply to operate an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Punjab have been assessed to tax after the decision of the Full Bench in the case of Morinda Cooperative Sugar Mills Ltd. v. Assessing Authority [1995] 99 STC 468 (P H). When the matter came up for consideration before this court for motion hearing an interim order was passed restraining the respondents from resorting to coercive steps for recovery of the tax demanded. Mr. Ashok Aggarwal, Mr. K.L. Goyal, Mr. G.R. Sethi and Mr. Vivek Bhandari, learned counsel have addressed arguments on behalf of the petitioners. Their submission is inspired by the judgment of the honourable Supreme Court in Gobind Sugar Mills' case [1999] 115 STC 358; [1999] 7 SCC 76. They have argued that the 1953 Act being a special enactment for levy of purchase tax exclusively on sugarcane also deals with regulation of production, supply and distribution of sugarcane. According to the learned counsel it would override the provisions of the PGST Act, 1948 or even the 2005 Act. It has been submitted that both the PGST Act, 1948 and 2005 Act are general Acts which provides for collection of commercial taxes on sale and purchase of all goods whereas the 1953 Act deals only with the purchase of sugarcane. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Mr. P.K. Jain and Mr. Amol Rattan, learned Additional Advocates-General, Punjab have argued that the matter is no longer res integra as the question had fallen for consideration of the honourable Supreme Court in the case of Jagatjit Sugar Mills' case [1995] 96 STC 344; [1995] 1 SCC 67. According to the learned counsel the sugarcane sold by the cane growers themselves to the petitioner-mill or the sugar manufactures may not be exigible to purchase tax under section 4B but would be so exigible under section 4(1) read with section 6. The aforesaid view has been considered by a five-Judge Bench of this court in the case of Morinda CoOperative Sugar Mills Ltd. v. Assessing Authority [1995] 99 STC 468. Following the view taken by the honourable Supreme Court in Jagatjit Sugar Mills' case [1995] 96 STC 344; [1995] 1 SCC 67, the Full Bench held that the purchaser of sugarcane is liable to pay purchase tax. The learned State counsel have also argued that even at the time when the judgment in Jagatjit Sugar Mills' case [1995] 96 STC 344 (SC); [1995] 1 SCC 67 and Morinda Co-operative Sugar Mills' case [1995] 99 STC 468 (P H) was delivered the sugar mills have been paying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the sugar mill was liable to pay purchase tax on the sugarcane purchased by it from the growers of the sugarcane. In a categorical answer to the aforesaid question it has been held that section 4(1) of the PGST Act, 1948 contemplates levy of purchase tax on all sales and purchases. Once the aforesaid judgment in the categorical terms lays down that purchase tax is leviable under section 4(1) then it is well nigh impossible for us to say that such a tax cannot be levied on the ground that the PGST Act, 1948 is a statute of general character which deals with sale or purchase tax in respect of all goods whereas the 1953 Act is a special Act which deals with all aspects including levy of purchase tax on sugarcane. The petitioner has canvassed for the contrary view on the basis of the judgment rendered by a two-Judge Bench of the honourable Supreme Court in the case of Gobind Sugar Mills [1999] 115 STC 358; [1999] 7 SCC 76. The aforesaid judgment has been rendered by interpreting the Bihar Finance Act, 1981 and Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 by holding that both the Acts would operate in the same field. The underlying principle followed by the honourabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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