BAJAJ HINDUSTAN LIMITED Vs. STATE OF U P

JUDGEMENT

(1.) The petitioner is a public limited company and is engaged in the manufacture and sale of sugar. The writ petitions have been filed for the quashing of the demand notices whereby the respondents are seeking to realise purchase tax on the purchase of sugarcane made by the petitioner. The facts leading to the filing of the writ petitions are that the sugar industry is one of the largest sectors of the Indian economy and India is the second highest cane producing and sugar producing country in the world, next to Brazil. Sugar is an important cash crop in the country occupying 1.86 million hectares and contributing around 7.5% of the gross value of the agriculture produce in the country. About 50 million farmers depend on the sugarcane cultivation for their livelihood and an equal number of agricultural labour earn their living by working in the sugarcane farms..

(2.) The demand for sugar in the country is continuously rising. The State of U.P. is spread over an area of 2.41 lacs sq.kms. having a population of around 18.00 crores and is the largest State in the country. The sugar industry is one of the most important industries in the State of U.P., with the sugar cane being the chief cash crop. The economy of the State being mainly agro-based, the sugar industry plays a pivital role in the economy of the State by creating livelihood for about 32.00 lacs farmers, 1.6 lacs industrial workers and one crore of people by way of indirect employment in the form of contract labour, cane harvesting labour, transport labour, etc. Nearly half of the India's sugarcane area is located in Uttar Pradesh. Uttar Pradesh is presently the highest sugarcane producing and second highest sugar producing State in the country sharing about 42% of the sugarcane and 28% of sugar production of the country. It is relevant to note that in U.P. 58.5% of the sugarcane produce is diverted to other industry for production of Gur, Khandsari, Rab, etc.

(3.) Even though the demand of sugar in the country has increased manifold, the sugar industry in Uttar Pradesh has remained stagnant over a long perid of time due to various reasons such as sickness of uneconomic and unviable units mainly in the government and in the cooperative sectors having outdated machinery and less installed capacity. Due to low sugar crashing capacity of the sugar mills, farmers are forced to sell their sugarcane to Khandsari and Gur industry at a lower price as a result, the farmers are not getting adequate price for their produce.