H.N. Seth, J. - (1.) By this petition under Art. 226 of the Constitution the petitioner seeks to challenge the demand for payment of purchase tax, for the period December 1969 to April 1970, under the U.P. Sugar-Cane Purchase Tax Act, 1961.
(2.) Petitioner runs a Khandsari Unit in an Area which was reserved for Dhampur Sugar Mills, Section 5 of the U.P. Sugarcane Purchase Tax Act provides that there shall be levied and collected in the manner as may be prescribed, tax on the purchase of sugar-cane by the owners of Units, the rate specified therein. The expression Unit is defined in Section 2(c) as meaning Gur, Rab or khandsari sugar manufacturing Unit engaged in or ordinarily engaged in the manufacture or production of Gur Rab or Khandsari sugar in a reserved area. Accordingly, under the Sugar Purchase Tax Act, 1961 as it safood in 1969-70, the petitioner became liable to pay purchase tax in respect of the sugar-cane purchased by him, but in similar circumstances, no such purchase tax was payable by Units situated outside the reserved area. Learned counsel for the petitioner contends that Section 3 of the U. P. Sugar-Cane Purchase Tax Act 1961, as it stood on 1969-70, contravenes Art. 14 of the Constitution in as much as it classified Units into those situated within the reserved area and those situated outside reserved area without any basis. It authorised levy and collection of Purchase Tax from units situated within the reserved area and not from similar Units situated outside reserved area. This section, therefore, is unconstitutional and void.
(3.) The respondents seek to justify the aforesaid classification of Units between those situated within reserved areas and those situated outside such areas on the ground that on account of concentrated efforts of cane Unions and the State Government in the re-served areas, the quantity of sugarcane produced there is much superior and results in high recovery, giving better margin of profit as compared to the cane produced in free areas where its quality generally is poor. Keeping into consideration the aforesaid fact the State Legislature, for imposition of purchase tax, classified units on the basis of their tax bearing capacity. ln his rejoinder-affidavit, the petitioner merely denied these assertions made in the counter-affidavit, but did not state any facts to show that aforesaid facts mentioned in the counter-affidavit are not correct. In our opinion, aforesaid facts provide sufficient basis for classifying Units for purchases of levy of Purchase Tax into those situated in the reserved area and those situated outside such area.;