- (1.) THE writ petition has been filed for quashing the recovery certificate dated 26-5-1992 (Annexure-1 to the writ petition) and further a writ in the nature of mandamus directing the respondents from levying and recovering any purchase tax on the consumption of sugarcane obtained by the petitioner from its own Farm attached to the Factory.
(2.) THE question involved in the present writ petition for consideration before this Court is that whether there can be a liability upon a person for payment of purchase tax under the U. P. Sugarcane (Regulation of Supply & Purchase) Act, 1953 (hereinafter referred as to 'act, 1953'), in case the owner of the sugarcane has consumed the sugarcane for manufacturing the sugar in his Factory. The petitioner was earlier known as M/s. Kesar Sugar Works Limited. In the year 1984 the name was changed as M/s. Kesar Enterprises Limited and the same has been registered under the Indian Companies Act. The dispute of the purchase tax sought to be recovered by the respondents relates to the years 1986-87 and 1987-88. A recovery certificate was issued against the petitioner which was received in the 1st week of June, 1992 for recovery of certain amount as purchase tax. The Sugarcane Commissioner and Cane Inspector, Bareilly have issued a certificate dated 4-4- 1992, certifying that no purchase tax was due against the petitioner for the year 1991-92 and for the earlier years, a certificate to that effect has been annexed as Annexure-3 to the writ petition. The recovery certificate issued against the petitioner goes to show that period mentioned in the said certificate is 4 to 5 years ago, on the basis that the petitioner had crushed certain quantity of sugarcane mentioned therein in order to manufacture sugar out of it. It appears that the Cane Commissioner was of the opinion that certain quantity of sugarcane had been consumed by the petitioner without payment of purchase tax. The petitioner further submits that from the date of manufacturing of sugar, the petitioner had never paid purchase tax with respect to the sugarcane grown by the petitioner in its own farm, which is attached to the factory. The Farm of the petitioner, which spans over a large area is a part of the factory and in law, petitioner is entitled to grow the sugarcane for the purpose of manufacturing the sugar but inspite of the aforesaid fact, the respondents issued a letter for payment of purchase tax. The petitioner is not member of any Cane Society and he cannot be compelled to become a member of the Cane Society through which the farmers used to supply their sugarcane. In such a situation the petitioner submits that in view of the provision of law, if the petitioner consumes sugarcane owned and grown in his own farm and has been used for manufacturing the sugar, no Authority is empowered to charge the purchase tax. When the recovery certificate was issued, the petitioner submitted a representation to the District Magistrate, Bareilly as well as Sugarcane Commissioner to this effect. The petitioner was required to furnish the detail about the private farm of the factory. The petitioner submitted its reply on 6-10-1989. In his reply, it has clearly been stated that the sugarcane which has been grown and consumed by the petitioner was of his personal farm attached to the factory, therefore, no purchase tax can be levied upon the petitioner.
(3.) INSPITE of the aforesaid fact and submissions of the relevant document, a recovery certificate has been issued. Feeling aggrieved by the aforesaid recovery, the petitioner has filed the present writ petition. The writ petition was admitted and an interim order was granted by this Court on 25-6-1992 and respondents were directed to file a counter-affidavit. Learned Counsel for the petitioner submits that the State Government has framed U. P. Sugarcane (Regulation of Supply & Purchase) Act, 1953 for regulation of sugarcane. Section 12 of the aforesaid Act, provides that the Cane Commissioner by an order require the occupier of any factory to furnish in the manner and by the date specified in the order to the Cane Commissioner an estimate of quantity of cane, which will be required by the factory during the crushing seasons, Rule 22 of the aforesaid Act provides that the Cane Commissioner while determining the quantity of cane in reserving an area or assigning an area to the factory will be determined by him, Rule 22 of the Act is being reproduced below : "22. In reserving an area for or assigning an area to a factory or determining the quantity of cane to be purchased from an area by a factory, under Section 15, the Cane Commissioner may take into consideration - (a) the distance of the area from the factory, (b) facilities for transport of cane from the area, (c) the quantity of cane supplied from the area to the factory in previous year, (d) previous reservation and assignment orders, (e) the quantity of cane to be crushed in factory, (f) the arrangements made by the factory in previous years for payment of cess, cane price and commission, (g) the views of the Cane-growers' Co-operative Society of the area, (h) efforts made by the factory in developing the reserved or assigned area. ]";