( 1 ) THE respondent, M/s. Gulshan Sugar and Chemicals Limited, is a company carrying on the business of manufacturing of chemicals. For undertaking the manufacturing work, it has to consume coal, which is an essential commodity and attracts the provisions of the Uttar Pradesh Coal Control Order, 1977 (the control Order), which has been issued under Section 3 of the Essential Commodities Act, 1955. The Government of Uttar Pradesh vide its Memo dated 6-6-1985 required the District Magistrate, Bulandshahar, to see if any industrial unit was selling unused coal or coal dust improperly; and if so, to take action, inter alia, under clause 15 of the Control Order. By Memo of 19-9-1985 all District Magistrates of the State were required to take action against the industrial units if they sell or transfer unused coal/coal dust without obtaining licence under the provisions of the Control Order.

( 2 ) THE respondent challenged the validity of these two Government Orders by filing a petition under Article 226 of the Constitution before the Allahabad High Court. A Division Bench of High Court by its judgment, which has been impugned in this appeal, held that the aforesaid Orders could not have been issued and it was further held that the respondent was not required to obtain licence for the transfer of the surplus or rejected coal or coal dust. The legality of the judgment has been assailed by the State of Uttar Pradesh in this appeal.

( 3 ) THERE is no dispute of facts. The same are that the respondent consumed coal for running its factory. Sometimes quality of coal supplied is not of the kind required by the respondent. The same, is therefore, rejected. Further, a huge quantity of coal dusts collected during the storage, loading and unloading of coal. Coal dust is also produced when coal is broken into pieces of required sizes. The rejected coal and the coal dust being of no use to respondents it disposes of the same without obtaining any licence under the Control Order.

( 4 ) ON the aforesaid facts the question for determination is whether licence as mentioned in the aforesaid G. Os. is necessary. The High Court has answered this question in negative for two reasons. First, the respondent cannot be said to be "dealer" as defined in clause 2 (d) of the Control Order; secondly, the case of the respondent is squarely covered by clause 3 (B) of the Control Order. The High Court did not accept the contention of the State that because of what has been provided in clause 3 (A) the respondent is required to obtain licence in question. 5. The learned counsel for the parties have reiterated the stand which had been taken by the contestants before the High Court.

( 5 ) WE may first note the relevant provisions of Control Order, which are as below :2. Definitions : In this Order unless there is anything repugnant in the subject or context - (c) "coal means coal, coke and other derivatives and includes slack coal, steam coal, soft coke, hard coke or dust coal of various grades but does not include cinder and ashes and products and byproducts of coal; (d) "dealer" means a person carrying on as a principal or agent, whether separately or in conjunction with some other business, the business of import, purchase or storage for sale and sale of coal, in wholesale and granted a licence in Form b and commonly known and therein referred to as coal Agent or in retail and granted a licence in Form c and commonly called and referred to herein as coal Depot Holder, but does not include a consumer who imports, purchases or stores coal for his own use. "3a. "nothing in this Order shall apply to- (a) movement of coal under the authority of the Coal Commissioner, Government of India or any other officer acting on his behalf; (b) coal moved on Railway account; (c) movement of coal under and in accordance with a Military Credit Note on Defence Account; (d) movement of coal meant for the use of any Central Government Department of Corporation or under Central Govern