1990 (3) TMI 68 - SC - VAT and Sales Tax

Challenge regarding inhibition of the State to legislate on sugar Held that - Sugar is one of the items which was included in the Schedule to the Act, statutorily, right from its inception. Such inclusion is found in Maharashtra, Gujarat, West Bengal, Bihar, etc. Whether it was subsequently deleted or re-included or re-grouped or it was added later was immaterial as section 40 of the Act empowered the State Government to amend or include any item in the Schedule of agricultural produce. Existence of such delegated power is a usual feature of the statutes. No illegality or infirmity could be pointed out in ft. Any challenge, therefore, founded on excessive delegation of legislative power, was misconceived. Appeal dismissed.

Summary

Issues:
Challenge to the validity of the Rajasthan Agricultural Produce Marketing Act, 1961 on grounds of legislative competence, constitutional violations, lack of quid pro quo, and inclusion of manufactured articles. Similar challenges to Acts of other states. Inclusion of sugar in the Schedule of the Act questioned as arbitrary and illegal. Interpretation of the term "agricultural produce" and whether sugar qualifies. Legalistic challenge regarding the State's authority to legislate on sugar.

Analysis:

The judgment addressed the challenge to the Rajasthan Agricultural Produce Marketing Act, 1961, by dealers questioning its validity on various grounds, including legislative competence, constitutional violations, absence of quid pro quo, and the inclusion of manufactured articles like sugar in the Schedule. Similar challenges to Acts of other states were also considered. The petitioners argued that the inclusion of sugar in the Act was arbitrary, especially due to its classification as a commodity of public importance under List I of Schedule VII, which they claimed precluded state legislation on it. However, the court found that the State Government had the power to amend or include items in the Schedule, and such delegation of power was not illegal. The court rejected the challenge based on excessive delegation of legislative power.

The petitioners contended that sugar should not be considered agricultural produce as it is not produced from the soil, a fundamental characteristic of agricultural produce. The court disagreed, emphasizing that the Act's definition of "agricultural produce" was inclusive and not limited to items produced from soil. The court cited judicial interpretations from other states and legal references to support the broad interpretation of agricultural produce, which includes products derived from agriculture or horticulture, even if processed in mills or factories. The court highlighted that the method of production, whether traditional or modern, does not alter the classification as agricultural produce.

A legalistic challenge was raised regarding the State's authority to legislate on sugar, arguing that it fell under the Centre's jurisdiction. However, the court referenced a previous Constitution Bench decision that clarified sugar legislation as within the scope of the concurrent list, allowing both Central and State legislatures to enact laws on sugar. The court dismissed the argument of occupied field and repugnancy between Central and State legislation, stating that the Act had received Presidential assent and was protected under article 254(2). Consequently, the court dismissed the petitions challenging the Act, emphasizing that there was no clash between the relevant entries in the Seventh Schedule of the Constitution.

In conclusion, the court rejected the challenges to the Rajasthan Agricultural Produce Marketing Act, 1961, and upheld the validity of including sugar in the Schedule of the Act. The judgment provided a comprehensive analysis of the legislative competence, interpretation of agricultural produce, and the State's authority to legislate on sugar, ultimately ruling in favor of the State legislation and dismissing the petitions with costs.