2004 (10) TMI 624 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of Government Orders and allotment orders related to molasses.
2. Constitution and necessity of the Advisory Committee under the U.P. Sheera Niyantran Adhiniyam, 1964.
3. Availability of alternative remedy through appeal.
4. Public policy and Directive Principles under Article 47 of the Constitution.
5. Interpretation of exemption clauses for sugar mills with their own distilleries.

Issue-wise Detailed Analysis:

1. Validity of Government Orders and Allotment Orders:
The petitioner challenged the validity of various Government Orders (G.Os.) and allotment orders related to the reservation and distribution of molasses. The petitioner contended that the orders were arbitrary and violated Article 14 of the Constitution. The court examined the statutory framework under the U.P. Sheera Niyantran Adhiniyam, 1964, and determined that the Controller of Molasses had the authority to issue such orders with the prior approval of the State Government, even in the absence of an Advisory Committee. The court upheld the validity of the orders, noting that the Act had been enforced since 1964 and could not be rendered inoperative due to the non-constitution of the Advisory Committee.

2. Constitution and Necessity of the Advisory Committee:
The petitioner argued that the absence of an Advisory Committee, as mandated by Section 3 of the Act, invalidated the allotment orders. The court interpreted the term "may" in Section 3 as directory rather than mandatory, allowing the Controller of Molasses to act with the State Government's approval in the absence of the Committee. The court held that the Act's provisions allowed for the Controller's actions and that the non-constitution of the Advisory Committee did not invalidate the orders.

3. Availability of Alternative Remedy through Appeal:
The respondents contended that the petitioner should have sought remedy through an appeal under Section 9 of the Act. The court noted that the writ petition was entertained because the petitioner challenged the validity of the Government Orders themselves, a matter that could not be addressed in an appeal under the Act. The court cited precedents to emphasize that authorities created by statute cannot question the vires of the statute or its provisions, and thus, the writ petition was the appropriate forum for such challenges.

4. Public Policy and Directive Principles under Article 47 of the Constitution:
The petitioner argued that the allotment of molasses for the production of country liquor was against public policy and the Directive Principles of State Policy under Article 47, which aims to prohibit the consumption of intoxicating drinks. The court rejected this argument, referencing the Supreme Court's decision in Khoday Distilleries Ltd. v. State of Karnataka, which upheld the State's power to regulate and restrict the production and sale of liquor. The court noted that Directive Principles are not enforceable in a court of law and that the State's actions were within its regulatory powers.

5. Interpretation of Exemption Clauses for Sugar Mills with Their Own Distilleries:
The petitioner claimed that the exemption from the 20% reservation of molasses should apply to all sugar mills with their own distilleries, not just those producing country liquor. The court interpreted Clause 3 of the Government Order, which provided an exemption for sugar mills with distilleries manufacturing country liquor. The court concluded that the exemption was intended only for distilleries producing country liquor, and not for those producing other types of alcohol.

Conclusion:
The court dismissed the writ petition, upholding the validity of the Government Orders and the actions of the Controller of Molasses. The court found no merit in the petitioner's arguments regarding the necessity of the Advisory Committee, the availability of alternative remedies, public policy, and the interpretation of exemption clauses. The parties were directed to bear their own costs.