B. L. Yadav, J. - (1.) (for self, S. D. AgarwaJa and A. P. Misra, JJ.)-Being of the opinion that there was conflict in Ram Chandra Kailash Kumar and Co. v. State of U. P., AIR 1980 SC 1124 and in I. T. C. Ltd. v. State of Karnataka, 1985 I. T. C. Ltd. v. State of Karnataka, 1985rnnt of U. P. for levy and collection of fee under Section 17 (iii) of the U. P. Krishi Utpadan Mandi Adhiniyam, (Act No. 25 of 1964), (for short the U. P. Act or Adhiniyam), by Market Committees, a Division Bench of this Court has referred this petition to the Larger Bench This is how this matter has come before us. After hearing the learned counsel for the parties, the following questions emerge for our consideration : (1) Whether the provisions of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 in respect of levy and collection of fee under Section 17 (iii) of the Adhiniyam in so far as the same applies to tobacco was repugnant to the provisions of Tobacco Board Act, 1975 (Central Act No. 4 of 1975) ? If so, its effect ; and (2) Whether the law declared by a Constitution Bench or by a subsequent Division Bench of the Supreme Court is binding on the High Court under Article 141 of the Constitution ?
(2.) THE factual matrix of the case may be set out in order to appreciate the questions and their answers. U. P. Krishi Utpadan Mandi Adhiniyam, 1964 was enforced on 4-4-1965. Section 2 (a) defines the expression 'agricultural produce' to mean all or any of products of agriculture, epiculture, cericulture, pisciculture and the animal husbandary and forest whether processed or not. THE Adhiniyam applies to specified agricultural produce. Section 2 (t) of the Adhiniyam defines the expression 'specified agricultural produce' to mean agricultural produce specified in the notification under Section 6 or as modified under Section 8. THE definition 'agricultural produce' was substituted by U. P. Act No. 10 of 1970. THE amended definition reads as under : "2 (a) "agricultural produce" means such items of produce of agriculture, horticulture, epiculture, cericlture, pisciculture and animal husbandary and forest whether processed or not, as specified in the Schedule........." In the Schedule sub-category (5) of Category 'A' mentions tobacco to be a specified agricultural produce under Section 6. In this view of the matter the Adhiniyam applies to tobacco, but for limited purposes of levy and collection of fee by the Market Committees only at a particular point when the same is brought in the market yard. The purpose of Adhiniyam or the intention is not to control the industry of tobacco as such. The legislative power under Item 52 of List I of the Union List, is "Industries," the control of which by the Union, is declared by Parliament by law to be expedient in the public interest. The Parliament in 1975, enacted Tobacco Board Act, 1975, (Central Act No. 4 of 1975), (for short the Central Act), with an object to provide for the development of tobacco industries under the control of the Union of India. In brief the statement of objects and reasons of the Central Act may be stated as under : "India being third largest producer of tobacco including Virginia tobacco in the world. The Virginia tobacco is the most important variety grown in the country. For effectively regulating tobacco industry, particularly Virginia tobacco industry and for maintaining and improving exports and thereby augmenting countries' foreign exchange resources, it is absolutely necessary to take various measures right from the stage of its production. The production of tobacco, particularly Virginia tobacco has to be planned carefully to suit the specified need of the market by ensuring requisite standard of quality and the fluctuation in production and prices have to be maintained. It is also necessary that services and facilities for research etc...................... should be extended to this important export oriented industry in an integrated manner. At present there is no central authority in India which can deal with various aspects of this industry in an integrated and effective manner. There are as many as five different independent organizations looking for or exercising control over movement, production etc. With this object the Act was enacted that it was expedient in public interest." It may, however, be also stated that the finances of the Board would be, under the specified Act, consisting of fee collected by it, apart from other resources. The other important functions of the Board is to set up auction plateform of its own or to function as auctioneer at such plateforms. Under Section 2 of the Central Act, the following declaration was made : "It is declared that it is expedient in the public interest that the Union should take in its control the tobacco industries."
(3.) IN order to appreciate sequence of events some more facts may be noticed. U. P. Government issued a notification on 9th September, 1975 in exercise of its powers under Section 8 of Adhiniyam with a view to modify the list of agricultural produce within the meaning of Section 8 and definition of agricultural produce under Section 2 (a) of the Adhiniyam adding 'tobacco' as an item of agricltural produce for the purposes of Section 9 with effect from 10th October 1975. The Secretary of Mandi Samiti in pursuance of provisions of Section 9 (2) of Adhiniyam directed the petitioners of writ petition No. 11668 of 1975, Nisar Ahmad and others v. Krishi Utpadan Mandi Samiti and others to obtain licence from Samiti and to comply with the provisions of Adhiniyam and Rules framed thereunder. That direction was challenged by Nisar Ahmad and others and two writ petitions were filed, in which similar points were urged that as manufacture and sale of tobacco was regulated by Central Act i.e. Central Excise and Salt Act 1944, State Legislature has no legislative competence to regulate sale and purchase of tobacco and the provisions of Adhiniyam were repugnant to Central Excise and Salt Act. Those petitions came up for hearing before a Division Bench of this Court, (comprising of Hon'ble K. N. Singh and Hon'ble N. D. Ojha, JJ. as their lordships then were) and were dismissed on 9-11-1976 holding that the provisions of Adhiniyam were not repugnant to Central Excise and Salt Act nor the Adhiniyam was beyond the legislative competence of U. P. State Legislature. Records of these petitions have been summoned and perused by us. Prior to that, involving similar rather same questions, Writ Petition No. 2287 of 1971 (Hindu Muslim Trading Company and 37 others v. Krishi Utpadan Mandi Kayamganj and others) was filed in this Court before Single Judge which was dismissed on 1-1-1974. That judgment was challenged in Special Appeal No. 83 of 1974 which was dismissed by the Division Bench of this Court (consisting of Hon'ble Satish Chandra and Hon'ble H. N. Seth, JJ. as their lordships then were) by the judgment dated 6-11-1974. The Division Bench considering the arguments in detail affirmed the judgment of Single Judge holding that U. P. Legislature has legislative competence to legislate the Adhiniyam and the provisions of Adhiniyam were not repugnant to the Central Excise and Salt Act, 1944. IN that special appeal also the submissions of learned counsel for the appellants were that the provisions of Adhiniyam were in conflict and rather repugnant to the provisions of Central Excise and Salt Act hence in view of the provisions of Article 254 the Adhiniyam would be void as trade in tobacco stands regulated by the Rules 33 to 35, 39, 42, 139, 152, 154, 174 and 178 of the Rules framed under Central Excise and Salt Act, where detailed procedure for sale of tobacco has been laid down and the tobacco cannot be sold in the manner specified under Rule 76 of the Niyamawali. Against those decisions and some other decisions of this Court, writ petitions and Special Leave Petitions were filed in Supreme Court. All those matters were consolidated and were decided by a Constitution Bench (in Ram Chandra Kailash Kumar Co. v. State of U. P., 1980 SC 1124 (Supra) (Presided over by Hon'ble Y.V. Chandrachud, C.J. and other members of Bench were Hon'ble V. R. Krishna Iyer, Hon'ble N. L. Untawalia, Hon'ble P. N. Singhal and Hon'ble A. D. Koshal, JJ.). In these writ petitions and civil appeals a number of questions pertaining to power of Mandi Samiti in respect of levy and collection of fee by Market Committees came up for consideration. All the submissions of learned counsel for the appellants and petitioners were repelled with the following observations (vide para 2 page 1129, AIR 1980 SC 1124) : "In order to enable the Market Committees in their attempt to implement the law as far as possible and to save their attempt from being thwarted by any unnecessary litigation we allowed the parties to advance a full throated argument in this Court including some of the points which were not argued in the High Court or in support of which foundations of fact were lacking. In this judgment our endeavour will be to formulate the points of law and decide them as far as practicable so that in future the business of the Market committes may be conducted in the light of this judgment leaving no scope for unnecessary litigation. Of course even in our judgment at places it would be indicated, and even apart from that, some genuine and factual disputes may crop up which in the first instance may be decided by the Market Committees." ;