TMI Blog2011 (3) TMI 1526X X X X Extracts X X X X X X X X Extracts X X X X ..... g statute, must be made in consonance with article 265 of the Constitution. In view of the above, we are of the considered opinion that the provisions of section 2(d1), section 8(4) and 8(5) of the U.P. Sheera Niyantran Adhiniyam amended by U.P. Act No. 10 of 2009, reproduced hereinabove, suffer from callous exercise of power and it can safely be concluded that the State has overstepped its limit of power.Accordingly, all the writ petitions are allowed and the aforesaid provisions are declared invalid. - Writ Petition Nos. 3991 of 2009,Writ Petition No. 11959 (MB) of 2009 Writ Petition No. 4344 (MB) of 2009 Writ Petition No. 4759 (MB) of 2009 Writ Petition No. 4518 (MB) of 2009 Writ Petition No. 4494 (MB) of 2009 Writ Petition No. 4421 (MB) of 2009 - - - Dated:- 17-3-2011 - RAJIV SHARMA AND SATISH CHANDRA (DR.), JJ. For the Appellant : Bharat Ji Agrawal and R.N. Trivedi, Senior Advocates assisted by Dr R.K. Srivastava, Akhilesh Kalra and Dhruv Mathur For the Respondents : J.N. Mathur, Additional Advocate-General assisted by H.P. Srivastava, Additional Chief Standing Counsel The judgment of the court was delivered by RAJIV SHARMA J. Heard S/Sri Bharat Ji ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd (5) of the section 8 of the Principal Act, the words sold or supplied have been substituted by the words transferred or sold or supplied . Therefore, it has been strenuously argued that the effect of these amendments is that the sugar factory will be required to pay administrative charges even on molasses, which is transferred to its own distillery, although it does not involve any sale or commercial transaction and the molasses is required for captive consumption. According to learned counsel for the petitioners, the storage, gradation and control of molasses produced by the sugar factories in Uttar Pradesh including regulation of its supply and distribution is governed by the provisions of the 1964 Adhiniyam. In the statutory scheme so laid in the Adhiniyam of 1964, a person requiring molasses for his distillery or for any purposes of industrial development is obliged to apply to the Controller of Molasses in terms of section 7A of the Adhiniyam of 1964. Sub-section (4) of section 8 provides that occupier of a factory shall be liable to pay to the State Government administrative charges on the molasses sold or supplied by him. The administrative charges are intended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot vary from the exact meaning of the said definition, which is beyond the scope of the U.P. Sheera Niyantran Adhiniyam, 1964. Further, the definition of molasses for captive consumption under the new section 2(d)(i) is contrary to the general principle of law and understood by the apex court in catena of judgments. According to counsels for the petitioners, the definition of molasses for captive consumption as sought to be introduced is clearly discriminatory and violative of article 14 of the Constitution of India and the impugned Act is nothing but a colourable exercise of power by the State. The classification of units or distilleries within the same premises or in contiguous vicinity of the sugar factory is not a reasonable classification. The words captive consumption clearly mean that anything which is manufactured or produced would not go out of the hands of the manufacturer but would be consumed for his own purpose. Viewed in the light of the above, it is clear that the distance of the unit to which the molasses is dispatched is clearly immaterial and irrelevant. The impugned amendments have a direct immediate effect and impact impeding the freedom of trade a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the aforesaid amendment in section 2, companies having more than one sugar factory and a distillery either in the premises of the sugar factory or situated at a distance, were not required to supply reserved quantity of molasses for country liquor, in view of the Supreme Court judgment dated September 24, 2007 in Dhampur Sugar Mills Ltd. v. State of Uttar Pradesh reported in [2007] 8 SCC 338. By the impugned amendment, the State Government has negated the judgment of the Supreme Court. The petitioners submit that the premise on which the State proceeded to promulgate the impugned Act is clearly fallacious and basically illegal and unconstitutional. The Supreme Court was merely dealing with the question of whether a sugar factory could be compelled to supply molasses to distilleries other than its own despite its own needs. In this sense, the impugned enactment neither removes the basis upon which the judgment was rendered nor is valedictory in nature. It has been vehemently argued that the words captive consumption cannot be given a restrictive meaning of being consumed within the factory premises. What is really necessary and essential is that the articles must be utiliz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Electricity Inspector and E.T.I.O. AIR 2007 SC 1984 has been placed. Paragraphs 53, 54 and 56 read as under: 53. Article 245 of the Constitution of India vests the Parliament with power of legislation on all matters enumerated in List and also the matters enumerated in List III of the Seventh Schedule of the Constitution of India. The State Legislature, however, has the exclusive right to legislate matters specified in the entries contained in List II. ... 55. Various entries in the three Lists provide for the fields of legislation. They are, therefore, required to be given a liberal construction inspired by a broad and generalize spirit and not in a pedantic manner. A clear distinction is provided for in the scheme of the Lists of the Seventh Schedule between the general subjects of legislation and heads of taxation. They are separately enumerated. Taxation is treated as a distinct matter for purposes of legislative competence vis-a-vis the general entries. Clauses (1) and (2) of article 248 of the Constitution of India also manifest the aforementioned nature of the entries of the List, and, thus, the matter relating to taxation has been separately set out. The power t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) The controller may by order require the occupier of any sugar factory to sell or supply, in the prescribed manner such quantity of molasses to such person, as may be specified in the order, and the occupier shall, notwithstanding any contract, comply with the order. (2) and (3) . . . (4) The occupier of a sugar factory shall be liable to pay to the State Government, in the manner prescribed, administrative charges at such rate, not exceeding five rupees per quintal as the State Government may from time to time notify, on the molasses sold or supplied by him. (5) The occupier shall be entitled to recover from the person to whom the molasses is sold or supplied an amount equivalent to the amount of such administrative charges, in addition to the price of molasses. Section 8 After amendment 8. Sale and supply of molasses. (1) The controller may by order require the occupier of any sugar factory to transfer or sell or supply in the prescribed manner such quantity of molasses to such person, as may be specified in the order, and the occupier shall, notwithstanding any contract, comply with the order. (2) and (3) . . . (4) The occupier of a sugar factory shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... micals Limited v. State of U.P. [1997] 106 STC 574 (All); [1997] UPTC 624, U.P. State Cement Corporation Limited v. Commissioner of Sales Tax [1979] 43 STC 476 (All); [1978] UPTC 653. Reliance has also been placed on State of Orissa v. Titaghur Paper Mills Co. Ltd. [1985] 60 STC 213 (SC); AIR 1985 SC 1293 and Ram Chandra Kailash Kumar Co. v. State of U.P. AIR 1980 SC 1124 wherein it has been observed that on any transaction, which is not a purchase or sale, no tax can be imposed. Thus, it has been asserted that the impugned amendments in the Act are clearly arbitrary and the State clearly lacks legislative competence to enforce the amendments contained in the impugned Act. Lastly, it has been informed that after the impugned amendment, the respondents have issued an order dated March 23, 2009 to all the Excise Inspectors directing them to charge administrative charges from all the sugar factories on transfer of molasses. In compliance with this order issued by the Excise Commissioner, the Excise Inspectors have started issuing notice to the sugar factories for payment of administrative charges on molasses transferred/supplied for captive consumption. On the other hand, Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (v) Section 7 provides for removal of adulterated molasses. This provision directly benefit the distilleries and industries and industries using molasses so as to get quality molasses and to remove possibility of distribution or supply of adulterated molasses. (vi) Section 7A of the Adhiniyam enables any person who requires molasses for his distillery or for any purpose of industrial development to apply in the prescribed manner to the Controller of Molasses specifying the purpose for which it is required and on receipt of the application the Controller of Molasses may make an order under section 8 of the Adhiniyam considering the availability of molasses, various requirements of molasses, better utilization to which molasses may be put in the public interest, genuineness of requirement, etc. (vii) Section 8 provides that Controller of Molasses may, with the prior approval of the State Government, by order require the occupier of any sugar factory to transfer, sell or supply in the prescribed manner such quantity of molasses to such persons, as may be specified in the order and the occupier shall, notwithstanding any contract, comply with the order. Sub-section (4) requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to State counsel, entry 33 of the Concurrent List covers the field of trade and commerce in, and the production, supply and distribution of the products of any industry where the control of such industry by the Union is declared by the Parliament by law to be expedient in the public interest and imported goods of the same kind products. There is no law enacted by the Union Government under this field and as such the notification issued by the State Government for the administrative charges on molasses is not repugnant to the law made by the Union Government. Moreover, a Full Bench of this court in the case of Shriram Industrial Enterprises Ltd. v. Union of India [1996] ALJ 468, while considering the question of legislative competence and the provision of section 18G of the Industries (Development Regulation) Act, 1951 observed in paragraph 69 as under: 69. The result of the aforesaid discussion is that section 18G of the Industries (Development Regulation) Act, 1951 enacted by the Parliament being a legislation under entry 33 of List III has not denuded the power of the State Legislature to legislate on regulating supply, distribution, and price of molasses-a product of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that in the absence of any notification under section 18G of the Industries (Development and Regulation) Act, there was no question of any repugnancy on the score of tariff of electricity fixed by the State Amending Act. Section 18G per se did not take away the State's right also to legislate under entry 33 of List III. This court also noted the provisions of article 254(2) of the Constitution in this connection. ... 24. The respondents have pointed out that the U.P. Sheera Niyantran Adhiniyam, 1964 has also received the President's assent under article 254(2). In any event, looking to the fact that the Molasses Control Order of 1961 passed by the Central Government in exercise of powers conferred by section 18G was not extended at any point of time to the State of U. P. or the State of Bihar, the question of repugnancy between the Molasses Control Order, 1961 and the U.P. Sheera Niyantran Adhiniyam, 1964 does not arise. In fact, the present litigation has commenced after the Molasses Control Order, 1961 of the Central Government has been rescinded and the only legislation which holds the field is the U.P. Sheera Niyantran Adhiniyam of 1964 which is in legitimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusive team of officers and staff posted at headquarter of Controller of Molasses, who are exclusively devoted to the regulatory services being rendered by the State Government in relation to molasses. Also, laboratories have been set up by the Excise Department for proper regulation of quality of molasses in the interest of distillers and industries. Thus, it is imminently clear that the State incurs huge expenditure on salary of officers, technicians and staff related to the laboratories and further incurs huge expenditure on equipment, maintenance of building, electricity and chemicals. From the circumstances mentioned above, the administrative charges under section 8(4) of the Adhiniyam are in the nature of regulatory fee and has direct co-relation between the fee and services rendered by the State Government to the beneficiaries, i.e., the distilleries and industries requiring molasses. The occupier of sugar factories has been required to deposit the administrative charges, which is a convenient mode of realization of the regulatory fee from the distilleries and industries requiring molasses. The administrative charges being a regulatory fee, quid pro quo is not required t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Dhampur Sugar Mills Ltd. v. State of Uttar Pradesh [2007] 8 SCC 338, whereby it has been held that reservation applies only to the excess stock of molasses, i.e., molasses which is in excess of and not used for own consumption by the sugar mill and reservation would not apply in case there is no balance stock of molasses with any sugar mill. The sugar factories including the petitioners' company, are required to maintain the above ratio of 3: 7 and are not at liberty to dispose of the molasses of the unreserved quantity at their discretion and are placed at a great disadvantage for the following reasons: (1) The sugar factories have to maintain high stock of molasses, as a result of which their cash flow position is adversely affected and the sale proceeds what they could have realized by selling molasses of the unreserved quantity is not available to them and their cane price payment to the growers is delayed, besides non-availability of funds of their other requirements. (2) The sugar factories are forced to sell molasses to the distilleries at much lower prices than the market price. (3) Maintaining high stock of molasses, at time results in overflow of mola ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1910, for the manufacture of power, portable or industrial alcohol; section 2(d) defines molasses and it means the heavy, dark coloured viscous liquid produced in the final stage of manufacture of sugar by vacuum pan from sugarcane or gur, when the liquid as such or in any form or admixture contains sugar; section 2(3) defines occupier in relation to a sugar factory and it means the person, who has ultimate control over the affairs of the factory and includes a managing agent of the factory. Section 2(h) deals with sugar factory or factory and it means any premises including the precincts thereof, whereon, twenty or more workers are working or were working on any day of the preceding twelve months and in any part of which a manufacturing process connected with the production of sugar by means of vacuum pans is being carried on or is ordinarily carried on with the aid of power. Section 7A(1) deals with the application for molasses and it reads as under: Any person who requires molasses for his distillery or for any purpose of industrial development may apply in the prescribed manner to the controller specifying the purpose for which it is required. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: The occupier of a sugar factory shall sell molasses in respect of which an order under section 8 has been made: Provided that the distilleries of potable alcohol which have been granted licence for wholesale contract supply of country liquor shall continue to be supplied molasses in respect of which an order under section 8 has been made at a price not exceeding that for the time being prescribed in the Schedule till March 31, 1998. In Chapter V of the Act, there are miscellaneous provisions and section 17 deals with the maintenance of accounts and furnishing of returns, which reads as under: 17. Every occupier of a sugar factory and every person to whom molasses is supplied by such occupier shall be bound (a) to maintain such registers, records, accounts, instruments and re-agents as may be prescribed; (b) to furnish all such information and return relating to the production and disposal of molasses in such manner, to such persons and by such dates as may, by order, be prescribed by the controller; (c) to produce, on demand by an excise officer not below the rank of sub-inspector (Excise), registers, records, documents, instruments and chemical re-a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the occupier of the sugar factory, one copy shall be handed over to the sub-inspector of Excise posted at the sugar factory before the removal of the molasses from the premises of the sugar factory, one copy shall be sent to the Controller, and one shall be sent to the excise inspector of the circle in which the sugar factory is situate. (2) Verification of the receipt of consignment On receipt of the consignment, the consignee shall verify the quantities received and note them on the back of the pass and return it to the occupier of the sugar factory concerned. The consignee shall take adequate safeguard to the see that the wastage or deficiency in transit does not exceed one per cent. In case the wastage or deficiency exceeds one per cent the consignee shall be liable to punishment imposed under the Act for the contravention of the rule: Provided that it is proved to the satisfaction of the controller that wastage or deficiency in excess of the prescribed limit has been caused by accident or any other unavoidable cause the consignee shall not be liable to punishment. (3) Officers authorized for verification consignment destined for use in distilleries in Uttar Prade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r own purpose. There are 30 such cases pending in honourable courts and around ₹ 23 crores have accrued as arrears so far which will increase in future. These sugar mills could get this benefit because there is no clear cut provisions in the Molasses Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 and the Rules made thereunder regarding captive consumption (own use). In view of this, option was sought from expert lawyers who advised for modification in the said Act. According to them captive consumption means goods not sold but consumed within factory. With the definition of captive consumption to be incorporated in the said Act and the rules only those sugar mills which have distilleries in the same campus shall be entitled for exemption from reservation/ administrative charges, whereas other sugar mills of such groups shall not fall in the ambit of captive consumption. Hence reservation and administrative charges may be imposed on production of molasses in such sugar mills. It has, therefore, been decided to amend the said Act (a) to define the words 'molasses for captive consumption supply and transfer': (b) to impose the Controller to require by order, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of trade and commerce in, and the production, supply and distribution of, the products of industries where the control of such industries by the Union was declared by Parliament by law to be expedient in the public interest. The controlled industries were relegated to entry 52 of List I which was the exclusive province of Parliament leaving the other industries within entry 24 of List II which was the exclusive province of the State Legislature. The products of industries which were comprised in entry 24 of List II were dealt with by the State Legislatures which had under entry 27 of that List. Power to legislate in regard to the production, supply and distribution of goods, goods according to the definition contained in article 366(12) including all raw materials, commodities and articles. It will also not be out of place to mention that prior to the impugned amendment, the respondents sought to levy administrative charges even on stock transfer of molasses. Aggrieved by the aforesaid action of the respondents, the petitioner had filed a Writ Petition No. 9457 (MB) of 2008 in this court on which interim order dated October 21, 2008 was passed providing that the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous entries in the three Lists are not 'powers' of legislation, but 'fields' of legislation. The power to legislate is given by article 246 and other articles of the Constitution. Taxation is considered to be a distinct matter for purposes of legislative competence. Hence, the power to tax cannot be deduced from a general legislative entry as an ancillary power. Further, the element of tax does not directly flow from the power to regulate trade or commerce in, and the production, supply and distribution of essential commodities under entry 33 of List III, although the liability to pay tax may be a matter incidental to the Center's power of price control. In the case of Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector and E.T.I.O. AIR 2007 SC 1984, the apex court held as under: 55. Various entries in the three Lists provide for the fields of legislation. They are, therefore, required to be given a liberal construction inspired by a broad and generalize spirit and not in a pedantic manner. A clear distinction is provided for in the scheme of the Lists of the Seventh Schedule between the general subjects of legislation and heads of taxati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: We now take the example of a producer-trader who is an agriculturist and produces paddy in his own field but owns a rice mill also in the same market area. He mills the paddy grown by him into rice and sells it as such. It is plain that in his case no market fee can be charged on paddy because there is no transaction of sale and purchase of paddy. . . In Vam Organic Chemicals Limited v. State of U.P. [1997] 106 STC 574 (All); [1997] UPTC 624, a Division Bench of this court observed as under (page 577 in 106 STC): We quite agree with the view taken by the learned single judge in U.P. State Cement Corporation Ltd. [1979] 43 STC 476 (All); [1978] UPTC 653. There is nothing to indicate in the charging section 3(1)(c) of the Act of 1939 that the requirement that there should be two parties for the transaction of sale and purchase is dispensed with. In the case at hand admittedly the distillery as well as the chemical factory are owned by the petitioner-company and the entire industrial alcohol manufactured in the distillery is being admittedly consumed captively in the manufacture of chemical preparations and, therefore, there is no transfer of goods by the petitioner to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la v. P.J. Joseph AIR 1958 SC 296 has held as under: Imposition of tax which is not supported by the law is violative of article 265 of the Constitution of India and such an imposition could not be said to be supported by law even if it was by means of endorsement made by Government or a reference made to by the Board of Revenue; the levy of duty which has not been published Gazette. As regards to the plea that the aforesaid tax is also covered by entry 54 of List II, we may look to the entry aforesaid as under: 54. Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I. At this juncture, it is relevant to add that the legislative competence of a State to tax sales or purchases of goods is derived from entry 54 of List II of Seventh Schedule to the Constitution. The term sale or sale or purchase of goods was not defined in the Constitution. The Parliament, therefore, inserted clause (29A), defining the expression tax on the sale or purchase of goods in article 366 of the Constitution. Clause (29A) reads as under: (29A) Tax on the sale or purchase of goods includes, (a) a tax on the transfer, oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... realized since it does not fall in any of clauses of (29A). The State has wrongly relied upon clause (f) of article 366(29A) which also contemplates the supply of goods being food or any other article for human consumption or any drink from one person to another person for cash deferred payment or for other valuable consideration. In Tamil Nadu Kalyana Mandapam Assn. v. Union of India [2005] 1 VST 180 (SC); [2004] 135 STC 480 (SC); [2004] 267 ITR 9 (SC); [2004] 5 SCC 632, the apex court in paragraphs 43 and 44 of the report held as under (pages 496 and 497 in 135 STC): 43. . . it is well-settled that for the tax to amount to a tax on sale of goods, it must amount to a sale according to the established concept of a sale in the law of contract or more precisely the Sale of Goods Act, 1930. The Legislature cannot enlarge the definition of sale so as to bring within the ambit of taxation, transactions which could not be a sale in law. The following judgments and the principles laid down therein can be very well applied to the case on hand: (1) J.K. Jute Mills Co. Ltd. v. State of Uttar Pradesh [1961] 12 STC 429 (SC); [1962] 2 SCR 1; (2) Gannon Dunkerley and Co. v. State o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislation is also bad in law as article 265 of the Constitution of India prohibits the imposition of tax and says that no tax shall be levied or collected except by authority of law. It is not in dispute that the molasses is a by-product generated in the course of manufacture of sugar by its factory and is used by its own distillery for manufacture of various other industrial products. Undoubtedly, as referred to above, the entry 33 of List III of the Seventh Schedule to the Constitution, the State has a right to regulate trade and commerce in the product of an industry. However, in the garb of the said power, the State is not conferred with the power to levy a tax on either captive consumption or a supply of a products of an industry other than by way of sale. In order to have the legislative competence to levy a tax, specific entries are incorporated in the three Lists placed in the Seventh Schedule. A general entry empowering the State to regulate trade and commerce is not and cannot be construed as conferring authority to levy a tax. In the case of Commissioner of Central Excise, Meerut v. Kisan Sahakari Chinni Mills Ltd. [2002] 125 STC 432 (SC); [2001] 6 SCC 697, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity to be borne by the person on whom it is imposed and from whom it is collected but it is intended to be passed on to those who purchased the goods on which the duty was collected. That excise duty is a tax as it is imposed in respect of some dealing with the commodities, such as their import or sale, or production for sale. It has been further held that going by the general tendency of a tax, it is capable of being passed on to the consumer or the buyer. In our view, the above test is important because a tax is capable of being passed on to the consumer or the buyer whereas a fee is a counter-payment by the buyer who receives the benefit of the services for which he is charged and such fees are not capable of being passed on as fees to the consumer or the buyer. The above point of distinction is applicable to the facts of this case. In the present matter, as stated above, levy of administrative charges under section 8(4) of the U.P. Act is on the producer of molasses; it is imposed on production of molasses for sale and under section 8(5) the same is passed on to the buyer-distillery. In the circumstances, levy of administrative charges under the U.P. Act is a tax. There is one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e principle of compulsory exaction. Hence, administrative charge under the U.P. Act is tax and not a fee. It may be noted that in the instant matter, it has been argued on behalf of the State by Sri J.N. Mathur, Additional Advocate-General, that the case of Commissioner of Central Excise, Lucknow, U.P. v. Chhata Sugar Co. Ltd. [2004] 2 RC 614; [2004] 3 SCC 466, cannot be applied in the facts and circumstances of the present case and that too when the State was not the party in the said matter but the same counsel in SAF Yeast Company Private Limited v. State of U.P. [2009] 24 VST 152 (All) [FB]; [2008] 3 VSTI 23 has taken a different stand. It would be useful to reproduce the relevant extract of paragraph 5 of the said judgment, which reads as under (pages 156 and 157 in 24 VST): 5. Sri J.N. Mathur, learned Additional General appearing on behalf of the opposite parties, submitted that the U.P. Sheera Niyantran Adhiniyam, 1964, is a special enactment for the control of storage gradation and price of molasses produced by sugar factories in Uttar Pradesh and the regulation of supply and distribution thereof. He fairly conceded that in view of the law declared by the honourable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eved by the decision of the apex court either directly or indirectly, they should have approached the apex court. Moreover, the respondents are estopped from raising such a plea when in earlier writ petition, their stand is altogether different. It may be clarified that the petitioners have not questioned the validity of the U.P. Sheera Niyantran Adhiniyam but have only questioned the validity of the provisions of section 2(d1), 8(4) and 8(5) insofar as it purports to levy tax, namely, administrative charges on the supply/transfer of molasses from the sugar factory to the distillery owned by the same, hence neither entry 33 is relevant. Therefore, the judgment of this court in the case of Shriram Industrial Enterprises Ltd. [1996] ALJ 468 nor that of the apex court in the case of SIEL Ltd. [1998] 7 SCC 26 declares or recognizes a power enuring the State Government to levy a tax on captive consumption and is of no help. The Constitution confers a power and imposes a duty on the Legislature to make law. The essential legislative function is the determination of a legislative policy and its formulation as a rule of conduct. In other words, the State Government in exercise of its le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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