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Issues Involved:
1. Validity of the Bombay Sugarcane Cess Act, 1948 and the Sugarcane Cess (Validation) Act, 1961 2. Legislative Competence of State and Central Acts 3. Retrospective Validation by Parliament 4. Article 265 of the Constitution of India 5. Discrimination and Article 14 of the Constitution of India 6. Liability of Managing Agents vs. Owners Issue-wise Detailed Analysis: 1. Validity of the Bombay Sugarcane Cess Act, 1948 and the Sugarcane Cess (Validation) Act, 1961: The appellants, registered co-operative societies, challenged the judgment of the High Court of Bombay which dismissed their petitions against the levy and demand of cess imposed under the Bombay Sugarcane Cess Act, 1948, supplemented by the Sugarcane Cess (Validation) Act, 1961. The Supreme Court examined the relevant provisions of the Bombay Act, including definitions and the mechanism for cess imposition, assessment, and collection. 2. Legislative Competence of State and Central Acts: The constitutional validity of similar state acts, such as the U.P. Sugarcane Cess Act, was previously struck down by the Supreme Court in the Diamond Sugar Mills case due to lack of legislative competence. The term "local area" was interpreted to mean an area administered by a local body, not the premises of a factory. To address this, Parliament enacted the Central Act to validate cess imposed by state enactments retrospectively. The Supreme Court upheld this approach, citing previous judgments in Jaora Sugar Mills and Bhopal Sugar Industries, which clarified that Parliament's enactment was within its competence under Entry 97 in List I of the Seventh Schedule to the Constitution. 3. Retrospective Validation by Parliament: The appellants argued that the Central Act could not retrospectively validate assessments made under invalid state statutes. The Supreme Court rejected this argument, affirming that Parliament had the authority to enact laws with retrospective effect, thereby converting the character of collections made under state statutes to those made under its own statute. The Court emphasized that the Central Act did not merely validate past actions but re-enacted the provisions of the state acts, making them operative as Parliamentary enactments. 4. Article 265 of the Constitution of India: The appellants contended that the cess imposition violated Article 265, which mandates that no tax shall be levied or collected except by authority of law. The Supreme Court dismissed this contention, asserting that Parliament had full legislative competence to enact the Central Act under Entry 97 in List I, thereby providing the necessary authority of law. 5. Discrimination and Article 14 of the Constitution of India: Mr. Patel, representing some appellants, argued that Section 4 of the Bombay Act was discriminatory and violated Article 14 of the Constitution. However, this point was not raised before the High Court nor laid in the pleadings. Consequently, the Supreme Court did not entertain this argument at the appellate stage. 6. Liability of Managing Agents vs. Owners: Mr. Patel also argued that under the proviso to clause (4) of Section 2 of the Bombay Act, managing agents, not the owners, should be liable for the cess. The Supreme Court found this argument unsubstantiated since no managing agent was involved in the appeals. Additionally, the Court clarified that the definition of "occupier" did not limit the liability to pay cess to the occupier alone; owners could also be held liable as indicated by other provisions in the Act. Conclusion: All five appeals were dismissed with costs, affirming the validity of the cess imposition under the Central Act and the Bombay Act as incorporated into it. The Supreme Court upheld the legislative competence of Parliament to enact retrospective laws validating the cess and rejected all contentions raised by the appellants.
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