2020 (8) TMI 839 - HC - Indian Laws

Levy of administrative charges - purchase of Molasses from various sugar factories situated in the State of Uttar Pradesh - HELD THAT - As an interim protection we provide that the respondents shall not demand any Administrative Charges provided the petitioner continues to deposit GST as demanded both by the Central and the State Government under the said enactments - It is further provided that separate accounts for sale/supply/purchase of molasses shall be maintained both by the petitioner as also the State. The same shall abide by final outcome of this writ petition. List immediately after four weeks.

Summary

Issues:

1. Administrative charges under Uttar Pradesh Sheera Niyantran Adhiniyam, 1964
2. Nature of administrative charges as tax
3. Impact of GST implementation on administrative charges
4. Request for interim protection from demanding administrative charges

Analysis:

1. The petitioner, engaged in manufacturing white crystal sugar, purchases Molasses from sugar factories in Uttar Pradesh. As per Section 7A (4) of Uttar Pradesh Sheera Niyantran Adhiniyam, 1964, occupiers of sugar factories are liable to pay administrative charges to the State Government, which can be recovered from the buyer. The petitioner seeks relief regarding these charges.

2. Referring to a previous case, M/s SAF Yeast Company Private Ltd v. State of U.P., where a Division Bench held administrative charges as a tax, the petitioner argues for similar treatment. The matter is sub judice in the Supreme Court, which has stayed the imposition of administrative charges until the appeal is decided.

3. Following the 101st amendment to the Constitution of India in 2016, GST was introduced by the Union and State Governments. The U.P. Distillers' Association and individual units obtained interim protection against administrative charges. The petitioner requests similar protection due to the changed tax regime.

4. The court grants interim relief, directing the State not to demand administrative charges as long as the petitioner complies with GST requirements. Both parties are instructed to maintain separate accounts for molasses transactions until the final decision on the writ petition. The case is listed for further hearing after four weeks.