Important Points
1. While determining the question whether a Statute is a general or a special one, focus must be on the principal subject-matter coupled with particular perspective with reference to the intendment of the Act.
2. Purchase tax on purchase of sugarcane under the Bihar Finance Act, 1981 cannot be levied since purchase of Sugar is regulated by Bihar Sugarcane Act, 1981, which being a Special Act overrides Finance Act, 1981.

Headnote:(i) Purchase Tax on Sugarcane-Tax collection under two laws-One under Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 and another under Bihar Finance Act, 1981-Legality of-Sugar mills plea that purchase tax collected twice and levy under Finance Act not permissible as purchase of sugarcane is governed by Sugarcane Act, it being a Special Act-State’s stand that both Acts are different and are enacted for different purposes-Held : Sugarcane Act is Special Act-Object of both Acts same-Sugarcane Act overrides Finance Act-Government cannot levy purchase tax on purchase of sugar mill under Finance Act.
       Held : The object of the Sugarcane Act says that it is an Act to regulate the production, supply and distribution of sugarcane intended for use in sugar factories and for taxation of sugarcane (emphasis supplied) and matters incidental thereto . The incidence of taxation is on the purchase of sugar cane, as in the Finance Act. This section nowhere says that the levy of purchase tax therein is in addition to the levy under the Finance Act. Therefore, it is seen that this Act specifically provides for levy of purchase tax on sugarcane and it is not applicable to levy of purchase tax on any other goods which are otherwise taxable under the Finance Act. The Sugarcane Act also provides for regulation of production, supply and distribution of sugarcane. Thus, it is an enactment which is specifically meant for the control of the activities of production, supply and regulation of sugarcane, including the levy of purchase tax. So far as the activity of levy of purchase tax on sugarcane is concerned, both the Acts, namely, the Finance Act and the Sugarcane Act operate in the same field. Therefore, the Sugarcane Act being a special Act pertaining to all aspects of the control of sugarcane as well as levy of purchase tax, the same will have to be construed as a special enactment with reference to sugar cane. (Para 6)
       On a perusal of the provisions of the above Acts including the objects of the two Acts, it could be seen that the two enactments in question contemplate levy of purchase tax. While the Finance Act empowers the State to levy all commercial taxes generally, the Sugarcane Act empowers the levy of purchase tax only on sugarcane. In this background, there can be no doubt that the Legislature intended to enact a special enactment for the purpose of levy of purchase tax with reference to sugarcane under the Sugarcane Act to the exclusion of such levy under the Finance Act. Once we come to the conclusion that this is the intention of the legislation then the rule “general provision should yield to special provision” is squarely attracted. (Para 7)
       The tax collected under Section 49(1) (b) of the Sugarcane Act is the same as is contemplated under Section 4 of the Finance Act but confined to sugarcane. A perusal of Section 49(8) of the Sugarcane Act shows that a part of the amount of purchase tax collected under its sub-section (3) is utilised for the purpose of the Board and the Council as grant but sub-section (8) of Section 49 does not, in any manner, indicate that entirety of this collection under Section 1(b) of Section 49 is solely earmarked for the purpose of the expenditure of the Board or the Council. A perusal of Sections 6 and 9 of the Sugarcane Act clearly shows that the legislature has made separate provisions for the funds of the Board as well as the Council under the said Act, and only a portion of the collection under sub-section 1(a) of Section 49 is earmarked for these purposes, hence, it is clear that the balance of collection goes to the State exchequer/general fund. So, there is no merit in the arguments advanced on behalf of the State that the collection of purchase tax under sub-section 1(b) of Section 49 is for the purpose of creating a fund for the exclusive use of the Board and the Council created under the said Act. (Para 8)
       (ii) Interpretation of Statutes-Test to determine whether a Statute is general or special one.
       Held : While determining the question whether a Statute is a general or a special one, focus must be on the principal subject-matter coupled with particular perspective with reference to the intendment of the Act. (Para 7)
       (iii) Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 -Section 49-Purchase tax-Whether levy amounts to fee and not tax?-Held: No.
       Held : Legislative history of the Sugarcane Act bears testimony to the fact that at one point of time the legislature had intended to collect a levy under sub-section (3) of Section 49 as a fee which imposition came to be challenged before the High Court and the challenge succeeded because the State was not able to satisfy the Court that the said levy was supported by quid pro quo. It is in this background that the present section 1(b) of Section 49 came to be brought on the Statute book, first by way of an Ordinance and then by virtue of an Act, making the collection a tax under Entry 54 of List II of the Seventh Schedule. It is too late in the day for the State now to contend once again that the said levy is a fee and not a tax. It may also be noted at this stage that nowhere in the pleadings, material has been placed by the State to satisfy the requirement of levy of fee by showing that there is a reasonable service rendered to the purchasers of sugarcane so as to justify the said levy as a fee. (Para 9)

Judgment

Santosh Hegde, J.-These appeals by special, leave are against the judgment and order dated 4.7.1996 passed by the High Court of Judicature at Patna in C.W.J.C. No. 8754/93 and other connected matters. The appellants in these appeals are engaged, inter alia, in the business of manufacturing sugar and for its production they use sugarcane as the basic raw-material. The State of Bihar, according to the appellants, is levying and collecting purchase tax on the sugarcane purchased by them both under the provisions of the Bihar Finance Act, 1981 (for short ‘the Finance Act’) as well as the Bihar Sugarcane (Regulation of Supply & Purchase) Act, 1981 (for short ‘the Surgarcane Act’). Thus, subjecting the same purchase of sugarcane to tax twice under two different Acts. The appellants contend that the State legislature having once provided for the levy of purchase tax under the sugarcane Act, cannot impose the same levy under the Finance Act.

2. This challenge of theirs having failed before the High Court, the appellants are now before us in these appeals.

On behalf of the appellants, Mr. Shanti Bhushan, learned senior counsel, contended that the Sugarcane Act being a special enactment for levying purchase tax exclusively on sugarcane while providing also for regulation of production, supply and distribution of sugarcane, it would become a special enactment and would override the provisions of the Finance Act, with reference to levy of purchase tax on sugarcane. He contended that the Finance Act is a general Act which provides for collection of commercial taxes on sale and purchase of goods. Hence, on a harmonious construction of the two enactments, it should be held that the State of Bihar could only levy purchase tax on the purchase of sugarcane under the Sugarcane Act.

3. In response, Mr. Rakesh Dwivedi and Mr. S.B. Sanyal, learned senior counsel appearing for the State of Bihar, contended that the purchase tax levied under these two Acts are two different levies, covering different aspects and operate in different fields. Therefore, according to them, the rule of special Act overriding the general is not attracted in the instant case. It is also contended on behalf of the State that the levy of purchase tax under Section 49(1)(b) of the Sugarcane Act is a provision to create a separate fund to cover the expenses of the Board and the Council created under sub-section (8) of Section 49 of the said Act. Lastly an attempt was made to contend that the levy of purchase tax under Section 49 of the Sugarcane Act is, in fact, in the nature of fee and not a tax on purchase.

4. On the above arguments, the following points arise for our consideration :

(a) Whether the two Acts under reference operate in the same field? If so, which one of the two Acts is a special Act?

(b) Is the Sugarcane Act an enactment intended solely for the purpose of regulation of supply, production and distribution of sugarcane and the collection of purchase tax under the said Act is only incidental for the purpose of creating a fund for maintenance and functioning of the Board and the Council under the said Act?

5. At the outset, it should be borne in mind that both the enactments are legislated under the same Entry, namely, Entry 54 of List II of the Seventh Schedule which empowers the State Legislature to levy tax on sale and purchase of goods. If it is not so, the State of Bihar could not have imposed the levy of purchase tax under the Sugarcane Act.

The object of the Finance Act reads thus:

“An Act to consolidate and amend the law relating to the levy of tax on the sale and purchase of goods in Bihar;”

This clearly shows that the Finance Act is a general Act relating to the levy of tax on sale and purchase of goods in the State of Bihar and the same would apply to all transactions of sale and purchase of goods wherever applicab

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