Judgment

SHINGHAL, J.:- This appeal by a certificate issued by the Madhya Pradesh High Court is directed against its judgment dated April 25, 1968.

2. The appellant is a company which cultivates sugarcane and manufactures sugar in its factory in Sehore, Madhya Pradesh, by crushing the sugarcane cultivated by it and purchased from other cultivators. The State Legislature enacted the Madhya Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1958, hereinafter referred to as the State Act, which came into force on July 1, 1959. The State Government issued a notification on November 28, 1959, which appeared in the State Gazette dated December 4, 1959, under Section 23 of the State Act imposing a cess of 12 paise per maund on the entry of sugarcane during a crushing season in the area comprised within such of the factories in which the total quantity of cane entering for consumption, use or sale to the factory during such season exceeded 10 lakh maunds". The appellants challenged the validity of the imposition, and the High Court on August 31, 1961,* held that the notification was illegal as the imposition of the levy was with reference to particular premises. A similar view was taken in regard to the Acts in some other States and Parliament thereupon enacted the Sugarcane Cess (Validation) Act, 1961, hereinafter referred to as the Validation Act, which came into force on December 26, 1961. Section 3 of the Validation Act was taken to validate the imposition and collection of the cess under the State Act. The Manager of the appellant company received an intimation from the Additional Collector of Sehore dated April 13/15, 1964, stating that a sum of Rupees 5,49,262.92 was due from it on account of cess for the period "1959-60 to December 25, 1961" and asking for a bank guarantee for payment of the balance. The appellant wrote back saying that the amount of the cane cess worked out to Rs. 5,44,835.68 and not Rs. 5,49,262.92, and that as the Collector had not assessed the amount of the cess in accordance with the rules, it was not payable by the appellant. As the Collector ignored the objection of the appellant, a demand notice was served upon it under section 146 of the Madhya Pradesh Land Revenue Code, 1959, asking it to deposit Rs. 5,49,262.92 by August 1, 1964. Once again the appellant denied its liability, but as that was not acceptable to the Collector, the appellant filed a writ petition in the High Court stating that the Collectors demand on account of the cess was illegal as the Validation Act was ultra vires the Constitution.

* 1963 MPLJ (Notes) 234.

3. The State of Madhya Pradesh traversed the claim in the writ petition. The High Court upheld the imposition of the cess but reduced it to Rupees 5,44,835.69, by its impugned judgment dated May 25, 1968, and that is why the Company has come up in appeal to this Court.

4. It has been argued by Mr. Desai on behalf of the appellant that Sec. 23 of the State Act was not ultra vires the Constitution and there could be no question of validating a valid Act. According to him, the State Act fell within the scope of Entry 52 of List II of the Seventh Schedule of the Constitution and was valid, and Parliament could not legislate in respect of that occupied field and pass the Validation Act. These arguments have been based on the main contention that the expression an area in sub-sec. (1) of Section 23 of the State Act really means a local area within the meaning of the aforesaid Entry 52 and no other area.

5. Sub-section (1) of Section 23 of the State Act reads as follows:-

"23. Levy of cess on cane.- (1) The State Government may, by notification, impose a cess not exceeding 25 paise a maund, on the entry of cane into an area, specified in such notification, for consumption, use or sale therein;"

There are two provisos to the sub-section, but they are not relevant for the purpose of the controversy before us. It would appear from the sub-section that it permits the State Government to im