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IN THE HIGH COURT OF BOMBAY
S. C. DHARMADHIKARI & B. P. COLABAWALLA, JJ.
Niphad Sahakari Sakhar Karkhana Ltd. - Petitioner
Versus
State of Maharashtra – Respondent
WP NO.2060 OF 1997, WP NO. 2364 OF 1999, WP NO. 3198 OF 2015, WP NO. 7543 OF 2015, CA NO. 2197 OF 2015, WP NO. 12068 OF 2012, CA NO. 1696 OF 2015, WP NO. 12070 OF 2012, CA NO. 2649 OF 2013, CA NO. 2984 OF 2013, WP NO. 12071 OF 2012, WP NO. 12072 OF 2012, WP NO. 12073 OF 2012, WP NO. 12074 OF 2012, WP NO. 12075 OF 2012, WP NO. 12076 OF 2012, WP NO. 12077 OF 2012, WP NO. 12078 OF 2012, WP NO. 12079 OF 2012, WP NO. 1441 OF 2014
Decided on : 22.12.2015
The Court held that the Maharashtra Purchase Tax on Sugarcane Act, 1962 (the Act) is constitutional and intra vires the State Legislature. The definition of "purchase price" in the Act includes the amount spent towards transport of sugarcane, whether separately spent or not, and any other sum spent for anything done in respect of the sugarcane at the time of or before delivery thereof. The tax is levied on the turnover of purchases, which is the aggregate of the amounts of purchase price paid and payable by an occupier during a given period. The Court rejected the Petitioners' contention that the tax is on expenses or expenditure and not on purchase of sugarcane. The Court also held that the amendments made to the Act from time to time are valid and do not violate any constitutional provisions.
Fact of the Case:
The Petitioners, who are Co-operative Societies engaged in the manufacture of sugar, challenged the constitutional validity of certain provisions of the Maharashtra Purchase Tax on Sugarcane Act, 1962 (the Act). They contended that the Act, as amended from time to time, imposed a tax on the purchase of sugarcane based on the purchase price, which included the expenses incurred for sugarcane transport and other expenses, and that this was beyond the competence of the State Legislature.
Finding of the Court:
The Court held that the tax levied under the Act is not a tax on expenses or expenditure, but a tax on the purchase of sugarcane. The definition of "purchase price" in the Act includes the amount spent towards transport of sugarcane, whether separately spent or not, and any other sum spent for anything done in respect of the sugarcane at the time of or before delivery thereof. The tax is levied on the turnover of purchases, which is the aggregate of the amounts of purchase price paid and payable by an occupier during a given period. The Court rejected the Petitioners' contention that the tax is on expenses or expenditure and not on purchase of sugarcane.
Issues: 1. Whether the Maharashtra Purchase Tax on Sugarcane Act, 1962 (the Act) is constitutional and intra vires the State Legislature? 2. Whether the definition of "purchase price" in the Act includes the amount spent towards transport of sugarcane, whether separately spent or not, and any other sum spent for anything done in respect of the sugarcane at the time of or before delivery thereof? 3. Whether the tax is levied on the turnover of purchases, which is the aggregate of the amounts of purchase price paid and payable by an occupier during a given period? 4. Whether the tax levied under the Act is a tax on expenses or expenditure, or a tax on the purchase of sugarcane?
Ratio Decidendi: The Court held that the Act is constitutional and intra vires the State Legislature. The definition of "purchase price" in the Act includes the amount spent towards transport of sugarcane, whether separately spent or not, and any other sum spent for anything done in respect of the sugarcane at the time of or before delivery thereof. The tax is levied on the turnover of purchases, which is the aggregate of the amounts of purchase price paid and payable by an occupier during a given period. The Court rejected the Petitioners' contention that the tax is on expenses or expenditure and not on purchase of sugarcane.
Final Decision: The Court dismissed the Petitions, holding that the Act is constitutional and intra vires the State Legislature.
(Per S. C. Dharmadhikari, J.)
In all these Petitions, the Petitioners have challenged the constitutional validity of some of the provisions of the Maharashtra Purchase Tax on Sugarcane Act, 1962 (for short “the Act of 1962”). Since common questions of fact and law are involved, all these Petitions are disposed of by this common judgment.
2) We grant Rule in some of the Petitions which have been listed for admission and along with others which are ready for hearing. Even these Petitions would be disposed of finally by this judgment. In other words, since all parties agreed and are present before the Court, with their consent, the Petitions are disposed of finally by this judgment.
3) The leading argument canvassed is in Writ Petition No. 2060 of 1997. We would refer to the facts in this Writ Petition.
4) The Petitioner is a Co-operative Society registered under the Maharashtra Co-operative Societies Act, 1960. It is a Co-operative Sugar Factory situate at Nashik District of Maharashtra. The Respondents to the Petition are the State, Commissioner of Purchase Tax (Sugarcane), Purchase Tax Officer (Sugarcane). The Petitioner also holds licence under the Act of 1962. It is stated that the Petitioner, at its factory, manufactures sugar and allied products out of sugarcane received from respective members, majority of whom are cultivators of sugarcane having their own land under cultivation. Apart from challenging the constitutional validity of sections 2, 3 and 6 of the Act of 1962 as amended from 1st October, 1995, the Petitioner also challenges the legality and validity of the letters dated 19th October, 1996, 20th November, 1996 and 6th January, 1997, issued to the Petitioner by Respondent No. 3. The Maharashtra Act IX of 1962 was enacted on 18th April, 1962. It is an Act to provide for levy and collection of a tax on the purchase of sugarcane for use in manufacture or production of sugar including Khandsari Sugar. The words commencing from “the manufacture or production of sugar including Khandsari Sugar” were substituted for the words “the manufacture of sugar” by Maharashtra Act 60 of 1974. Section 1 provides that this Act will extend to the whole Maharashtra. Section 2 contains definitions and we are concerned with the definition of the terms “factory”, “licence”, “occupier”, “prescribed” and “unit”. These definitions read as under:-
“2(b) “Factory” means any premises (including the precincts thereof), wherein twenty or more workers are working and in which, or in any part of which any manufacturing process connected with the production of sugar by means of vacuum pans is being carried on, or ordinarily carried on, with the aid of power.
2(c) “licence” means a licence granted or renewed under this Act.
2(d) “occupier” of a factory or of a unit means the person who has ultimate control over the affairs of the factory or the unit and where the said affairs are entrusted to a managing agent, such agent shall be deemed to be the occupier of the factory or of the unit, as the case may be; and the term includes also any person appointed by the occupier to act as a purchasing agent.
2(f) “prescribed” means prescribed by rules made under this Act.
2(h) “unit” means a unit engaged or ordinarily engaged in the manufacture or production of Khandsari sugar and which is capable of handling or processing sugarcane juice produced with the aid of a crusher driven by power.”
5) Therefore, unless the context otherwise requires, the definitions will have to be read and understood as enacted above. By section 3, it is stated that there shall be levied and collected a tax on the purchase of sugarcane being purchased for use in the manufacture or production of sugar in a factory or a unit. By section 3A, which was inserted by Maharashtra Act 15 of 2011, certain provisions of the Maharashtra Value Added Tax Act, 2002 and Rules made thereunder are made applicable so far as they relate to the electronic filing of returns and electronic paymen
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