YATINDRA SINGH, J. - (1.) THESE cases revolve around constitutionality, interpretation, and applicability of the explanation to Section 17(iii) of the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (the Act) and Rule 50-A of the Uttar Pradesh Krishi Utpadan Mandi Niyamavali, 1965 (the Rules). These are quoted in Appendix-1 to this judgment.
(2.) ITC Limited (ITC) is a company registered under the Companies Act. Its registered office is at 37, JL Nehru Road, Kolkata (West Bengal). It initially started business with making cigarettes but at present has diversified itself into many other businesses. However, here, we are concerned with its business relating to cigarettes only. In order to make cigarettes, raw tobacco is first converted into cut tobacco thereafter cigarettes are made from the cut tobacco. According to ITC: * The raw tobacco is purchased in public auction from auction platform maintained by Tobacco Board of India in the State of Andhra Pradesh and Karnataka. * It has two thrashing units : one at Anaparti (Andhra Pradesh) and the other at Chirala (Andhra Pradesh). * The raw tobacco is brought to the thrashing units and converted into cubical form. This is sent to its other units for converting it into cut tobacco. * It has four manufacturing units of cigarettes: they are situate at Saharanpur (UP), Munger (Bihar), Bangalore (Karnataka) and Kidderpore (West Bengal). However, the facility for making cut tobacco is only in the first three. * Thrashed tobacco is first brought into the first three units and converted into cut tobacco. The three units sent part of cut tobacco to the fourth unit at West Bengal.
(3.) ACCORDING to the ITC, its Saharanpur unit converts thrashed tobacco into cut tobacco and uses it in three different ways : (i) A part of it is sent to its unit at West Bengal where there is unit for making cigarettes but has to facility of making cut tobacco. (ii) A part of it sent to private contractors in Madhya Pradesh for making cigarettes of ITC brand on work contract basis. (iii) The remaining part is converted into cigarettes at Saharanpur. ;