Judgment

SANTOSH HEGDE, J.

( 1 ) 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 and Purchase) Act, 1981 (for short the Sugarcane 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.

( 3 ) 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 sugar cane. 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.

( 4 ) 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.

( 5 ) 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 123 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 ?c) Whether the levy under the Sugarcane Act is only a fee for the services rendered ?

( 6 ) 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.

( 7 ) THE object of the Finance Act reads thus:"an Act to consolidate abd amend the law relating to the levy of tax on the sale and purchase of goods in Bihar;"

( 8 ) 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 abd the same would apply to all transactions of sale and purchase of goods wherever applicable. S. 4