INDIA GLYCOLS LIMITED Vs. STATE OF UTTARAKHAND
LAWS(UTN)-2013-12-34
HIGH COURT OF UTTARAKHAND
Decided on December 20,2013

INDIA GLYCOLS LIMITED Appellant
VERSUS
STATE OF UTTARAKHAND Respondents

JUDGEMENT

Sudhanshu Dhulia, J. - (1.) THE petitioner, before this Court, is a Company which is engaged, inter alia, in the manufacture of chemicals. One of the essential raw materials or ingredients for manufacture of these chemicals is "Molasses", which is a by product in the manufacture of "sugar", by Sugar Industries. The petitioner is, presently, challenging the order dated 20th June, 2013 (Annexure No. 2 to the writ petition), by which the Additional Secretary to the Government of Uttarakhand has passed an order, declaring State's policy, regarding distribution of "Molasses" such as what percentage has to go for the manufacturing of country made liquor, what percentage has to go to industrial and chemical units and the remaining for free sale, for different years 2012 -13, 2013 -14, 2014 -15 and 2015 -16. Apart from this, they have imposed a charge on the "Molasses" in the form of "Administrative Charge" @ 11.00 per quintal on import of Molasses from other States," 15.00 per quintal on such Molasses which is imported from other countries. There is also a charge of 20.00 per quintal on the export of "Molasses" outside the State and 15.00 per quintal on the sale of "Molasses" reserved for country made liquor, Molasses based chemical and industrial units and Rs. 20.00 per quintal administrative charge on the free sale of "Molasses".
(2.) THE petitioner has challenged the said order on various grounds. Initially, the learned counsel for the petitioner, has argued that the only "Statute" under which State Government can levy charge is known as "U.P. Sheera Niyantran Adhiniyam, 1964 (from herein after referred to as the "1964 Act"). Under the provisions of Section 86/88 of the U.P. Reorganization Act, 2000, said Act is applicable in the State of Uttarakhand. The relevant provisions for our purpose will be Section 7 -A and Section 8 which reads as under: - "7 -A. Application for molasses -(1) Any person who requires molasses for his distillery or for any purpose of industrial development may apply in the prescribed manner to the Controller specifying the purpose for which it is required. (2) On receipt of an application under sub -section (1) and after making such inquiries in the matter as he may think fit, the Controller may make an order under Section 8. (3) In disposing of an application under sub -section (1) the Controller shall consider: - (a) the general availability of molasses; (b) various requirements of molasses; (c) the better utilization to which molasses may be put in the public interest; (d) the extent to which the requirements of the applicant are genuine; (e) reasonable likelihood or otherwise of the molasses that may be obtained by the applicant being diverted to purposes other than those specified in the application and where the application is rejected in whole or in part, he shall record reasons therefor. 8. Sale and supply of molasses. - (1) The Controller with the prior approval of the State Government by order require may be occupier of any sugar factory to sell or supply in the prescribed manner such quantity of molasses to such person, as may be specified in the order, and the occupier shall, notwithstanding any contract, comply with the order: "(1 -a) Notwithstanding anything contained in sub -section (1) the occupier of a sugar factory shall sell or supply forty per cent of the molasses produced in each quarter of a molasses year in the sugar factory to such chemical industries which are actual users of molasses and are granted licence under the United Provinces Excise Act, 1910: Provided that such quantum of molasses as is not required by the said chemical industries may be sold or supplied by the occupier of the sugar factory to any other unit which is actual users of molasses with the prior approval of the Controller." (2) The order under sub -section (1): (a) Shall require supply to be made only to a person who requires it for his distillery or for any purpose of industrial development: (aa) may require the person referred to in Clause (a) to utilise the molasses supplied to him under an order made under this section for the purpose specified in the application made by him under sub -section (1) of Section 7 -A and to observe all such restrictions and conditions as may be prescribed. (b) may be for the entire quantity of molasses in stock or to be produced during the year or for any portion thereof; but the proportion of molasses to be supplied from each sugar factory to its estimated total produce of molasses during the year shall be the same throughout the State save where, in the opinion of the Controller, a variation is necessitated by any of the following factors: (i) the requirements of distilleries within the area in which molasses may be transported from the sugar factory at a reasonable cost; (ii) the requirements for other purposes of industrial development within such area; and (iii) the availability of transport facilities in the area. (3) The Controller may make such modifications in the order under sub -section (1) as may be necessary to correct any error or omission or to meet a subsequent change in any of the factors mentioned in Clause (b) of sub -section (2). (4) The occupier of a sugar factory shall be liable to pay to the State Government in the manner prescribed, administrative charges at such rate, not exceeding five rupees per quintal as the State Government from time to time notify, on the molasses sold or supplied by him. (5) The occupier shall be entitled to receive from the person to whom the molasses is sold or supplied an amount equivalent to the amount of such administrative charges, in addition to the price of molasses." The main argument of the petitioner is that "Administrative Charges" on molasses have to be fixed by the Controller. This exercise is undertaken by the Controller on the aid and advice of an "Advisory Committee". Under the 1964 Act, Advisory and Administrative Machinery has been created under Section 3 which is known as "Advisory Committee". Section 3 of 1964 Act reads as under: - "3. Constitution of Advisory Committee. -(1) The State Government may, by notification in the Gazette, constitute an Advisory Committee to advise on matters relating to the control of storage, preservation, gradation, price, supply and disposal of molasses. (2) The committee shall consist of such number of persons and shall be constituted on such terms and conditions as may be prescribed."
(3.) FURTHER under Section 4 of the 1964 Act, the State Government appoints a Controller of Molasses. Section 4 of 1964 Act reads as under: - "4. Appointment of Controller of Molasses. - The State Government may, by notification in the Gazette, appoint a person to be the Controller of Molasses for the purposes of exercising the powers and performing the duties of Controller of Molasses under this Act or the rules made thereunder.";


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