M.HIDAYATULLAH, J. - (1.) THE following Judgment of the court was delivered by
(2.) WRIT Petition No. 9 of 1959 has been filed by the Lord Krishna Sugar Mills, Ltd., Saharanpur and Shri Sushil Kumar, a Director of the said Mills. It was heard along with WRIT Petition No. 14 of 1959, which has been filed by Shiva Prasad Banarsidas Sugar Mills, Bijnor, through Seth Munnalal and also by him in his own name. These Mills are hereinafter referred to as the L. K. S. Mills and S. P. B. Mills, respectively. The petitions raise the same contentions, but in WRIT Petition No. 14 of 1959, there is one more circumstance, which will be mentioned later. The petitions are directed against the Union of India and the Indian Sugar Mills Association (Export Agency Division) Calcutta. The petitioners challenge inter alia the constitutionality of the Sugar Export Promotion Act, 1958 (30 of 1958),which shall hereafter be referred to as the Act. They question also the legality of certain orders passed by the second respondent purporting to be under the Act. Before describing how this matter came before the court, it is convenient to give the scheme of the Act and to set out some of its provisions. On 27/06/1958, the President promulgated the Sugar Export Promotion Ordinance, 1958, which was repealed by and reenacted as the Act on 16/09/1958. The Ordinance was in the same terms as the Act, and it is not necessary to refer to the Ordinance separately. more so because by s. 14 of the Act which repealed the Ordinance, anything done or any action taken under the Ordinance is deemed to have been done or taken under the Act, and the Act itself is deemed to have commenced on the 27/06/1958. Both the Ordinance and the Act were passed to provide for the export of sugar in the public interest and for the levy and collection in certain circumstances of an additional duty of excise on sugar produced in India. To achieve this objective, the Act authorises the central government (as did the Ordinance previously) to specify an export agency to 'perform the functions mentioned in the Act, and the central government by a notification issued the same day, specified the Indian Sugar Mills Association (Export Agency Division) Calcutta, as the export agency. The Act next provides that the central government may by notification in the Official Gazette, fix the quantity of sugar to be exported during any period taking into consideration : (a) the quantity of sugar available in the country; (b) the quantity of sugar required for consumption in the country; and (c)the necessity of exporting sugar with a view to earningforeign exchange in the public interest, but, so as not to exceed 20 per cent. of the quantity to be produced in India in the season ending with the month of October falling within that year. The central government fixed 50,000.00 tons as the quantity to be exported up to ] 31/12/1958, later extended to 31/01/1959. This notification was also issued on 27/06/1958. Section 5 of the Act enables the central government to apportion, by order in writing, the quantity to be exported among ` owners ` of factories, the word ` factory ` being confined to a factory where sugar is produced by the vacuum pan process. The term ` owner ` is defined to include transferees, and agents and managers under Industries (Development and Regulation) Act, 1951. The apportionment of the quantity of sugar to be exported is to be in proportion to the quantity of sugar produced or likely to be produced by the owners during the season referred to earlier. On the communication of the order to an owner, the quantity so apportioned is deemed to be the export quota for the factory of that owner.
(3.) SECTION 6 then provides that on demand by the export agency, every owner shall deliver to it from time to time, sugar produced in his factory in such quantities (not exceeding in the aggregate his export quota fixed for the factory or group of factories, as the case may be), of such grade, in such manner,' within such time and at such place, as may be specified by the export agency in this behalf. If the sugar is delivered by an owner in accordance with the provisions of this section, he retains no rights in such sugar except his rights to receive payment therefor under s. 9 of the Act. Section 7 provides for levy of additional excise duty on sugar dispatched from the factory for consumption in India, if the owner of a factory does not fulfil the demands under s. 6. It provides: ` (1) Where sugar delivered by any owner falls short of the export quota fixed for it by any quantity (hereinafter referred to as the said quantity), there shall be levied and collected on so much of the sugar dispatched from the factory for consumption in India as is equal to the said quantity, a duty of excise at the rate of seventeen rupees per maund. (2)The duty of excise referred to in Ss. (1) shall be in addition to the duty of excise chargeable on sugar under any other law for the time being in force, and shall be paid by the owner to such authority as may be specified in the notice demanding the payment of duty and within such period not exceeding ninety days as may be specified in such notice. (3)If any such owner does not pay the whole or any part of the duty payable by him within the period referred to in Ss. (2), he shall be liable to pay in respect of every period of thirty days or part thereof during which the default continues a penalty which may extend to ten per cent. of the duty outstanding from time to time, the penalty being adjudged in the same manner as the penalty to which a person is liable under the rules made under the central Excises and Salt Act, 1944 (1 of 1944), is adjudged.` By sub-s. (4) of this section, the provisions of the central Excises and Salt Act, 1944 and the rules made thereunder are made applicable as far as may be, including those relating to refunds and exemptions from duty in relation to the duty mentioned in this section or any other sum due as a penalty. Section 8 then deals with the export by the export agency of sugar delivered to it. The section also authorises the sale of such sugar within India under certain circumstances. The section may be reproduced in full here, as its terms will form the subject of consideration in the sequel. 8(1) ` The export agency shall take all practical measures to export sugar delivered to it under this Act: Provided that, if the export agency is of opinion that having regard to the quality of the sugar delivered to it by any owner, or to the expenses involved in transporting the sugar from one place to another, or to the delay likely to be involved in exporting it, or to the conditions prevailing in the markets for sugar, whether in or out of India, or to any other relevant circumstance, it is expedient so to do, the export agency may sell the whole or any part of the sugar in India and may, if it thinks fit, purchase such quantity of sugar as it may consider necessary for export at the appropriate time. (2)For the purposes of sub-section (1), the export agency may itself sell sugar or permit the owner to sell the whole or any part of the export quota in his custody at a price approved by it on condition that the sale-proceeds are payable to it.` ;