TMI Blog1989 (5) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... e West Bengal Marketing (Regulation) Act, 1972, having been sent to the President and the President not having signified his consent to the amendment. Thus the impugned provisions brought into the West Bengal Act by the amendments in 1981 and 1982 so far as they purport to relate to tea estates are unconstitutional and void and cannot be given effect to. Appeal allowed & the petitioners are held entitled to the refund of cess paid by them under the impugned statutory provisions. - Writ Petition No. 2687, 5822 of 1983, 4527 of 1981, - - - Dated:- 12-5-1989 - Judge(s) : R. S. PATHAK., M. H. KANIA JJ. Tapas Ray, Anil B. Dewan and T.C. Roy, Senior Advocates (G.S. Chatterjee, Dalip Sinha and H.K. Puri, Advocates, with them), for the respondents. Dr. Shankar Ghosh and T.S. Krishnamoorthy Iyer, Senior Advocates (M.L. Lahoty, P.S. Jha, D.D. Gupta, S.K. Jain, D.P. Mukherjee, S.R. Srivastava, P.N. Tewari and Parijat Sinha, Advocates, with them), for the petitioners. JUDGMENT The judgment of the court was delivered by R. S. PATHAK C. J. I. -By these writ petitions and transferred cases, the petitioners challenge the validity of the levy of cess in respect, of tea est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the State Government by notification in the Official Gazette shall be excluded: Provided further that the State Government may fix different rates on despatches of different classes of tea. Explanation. --For the purpose of this section, 'tea' means 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 and green tea leaves, processed or unprocessed ;" Section 4 was also amended further by the insertion of sub-section (4) which provided "(4) The State Government may, if it considers necessary so to do, by notification in the Official Gazette, 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 of the rural employment cess payable thereon, under clause (aa) of subsection (2), on such terms and conditions as may be specified in the notification : Provided that the State Government may, at any time, add to, amend, vary or rescind any such notification." Thereafter, the West Bengal Taxation Laws (Amendment) Act, 1982, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olative of the freedom guaranteed by article 301, provided they directly or immediately affect the freedom of trade and commerce and not indirectly or in a remote manner. This principle was affirmed by this court in Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan [1963] 1 SCR 491 ; [1962] AIR 1962 SC 1406, and again in Firm A. T. B. Mehtab Majid and Co. v. State of Madras [1963] Suppl. 2 SCR 435 [1963] 14 STC 355. But the declaration in article 301 that trade, commerce and intercourse throughout the territory of India shall be free is subject to article 304(b) which provides "304. Restrictions on trade, commerce and intercourse among States. -Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law - . . . (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided that no bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President." Therefore, there is no violation of article 301 if the case falls under article 304(b) and its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... says that the levy will not exceed Rs. 6 on each kilogram of tea on the despatches from such tea estate of tea grown therein. The statute also provides that in calculating the despatches of tea for the purpose of levy of rural employment cess, the despatches for sale made at such tea auction centres as may be recognised by the State Government shall be excluded. And there is a proviso which empowers the State Government to fix different rates on despatches of different classes of tea. There is also section 4(4) which empowers the State Government to 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 to reduce the rate of the rural employment cess payable thereon under clause (aa) of sub-section (2) on such terms and conditions as it may specify by notification. As from October 1, 1982, the position remained the same except that the first proviso to section 4(2)(aa) excluding the despatches for sale made at recognised tea auction centres was deleted. The remaining provisions continued as before. Now, for determining the true nature of the legislation, whether it is a legislation in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tea rather than related to the tea estate. There is nothing to suggest that a particular tea estate produces only one class of tea, and when reference is made to a certain class of tea, the reference identifies a certain class of tea estates. We may presume that the same estate produces different classes of tea and not one class of tea only. While there must always be a nexus between the subject of the levy and the measure of the levy, that nexus extends into different dimensions. Variations considered appropriate for the purpose of determining the measure must correspond to variations in the subject of the levy. If the measure of levy is to Vary with the despatches of different classes of tea, there must be something in the class of tea concerned which points to a reason located in the particular tea estate or classes of tea estates which are made the subject of the levy. So also, if the measure varies with the centre of sale of tea, the variation must relate to a reason to be found in the nature of the tea estate or classes of tea estates. In other words, there must be a reason why one class of tea is treated differently from another class of tea when deciding upon the rate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in respect of tea estates, it would be referable to entry 49 in List 11 of the Seventh Schedule of the Constitution which speaks of "taxes on lands and buildings". But, if the legislation is, in substance, a legislation in respect of despatches of tea, legislative authority must be found for it with reference to some other entry. We have not been shown any entry in List 11 or in List III of the Seventh Schedule which would be pertinent. It may be noted that Parliament had made a declaration in section 2 of the Tea Act, 1953, that it was expedient in the public interest that the Union should take under its control the tea industry. Under the Tea Act, Parliament has assumed control of the tea industry including the tea trade and control of tea prices. Under section 25 of the Act, a cess on tea produced in India has also been imposed. It appears to us that the impugned legislation is also void for want of legislative competence as it pertains to a covered field. We do not consider it necessary to express our opinion on the other points raised between the parties in this case. In the result, the writ petitions filed in this court and the petitions in the transferred cases are all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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