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TMI Blog2002 (1) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... ket Committee was not entitled to levy market fee. The Division Bench however without entering into the aforesaid controversy, came to the conclusion that no clear notice appears to have been given to the company to produce the records for the purpose of satisfying the Market Committee that the tobacco leaves in question were either not processed or exported from the market area and, therefore, the company must be given a fresh opportunity of adducing all the relevant documents before the Market Committee to escape the presumption arising out of proviso to Section 27 of the Act. The High Court having remitted the matter to the Market Committee for passing a fresh assessment order, the company has approached this Court, which is the subject matter in Civil Appeal No. 6453 of 2001 arising out of SLP(Civil) No. 12374/84. When the Special Leave Petition was listed before a Bench of this Court in February, 1987, the judgment of this Court in I.T.C. Ltd. etc. vs. State of Karnataka, reported in 1985 Supp.(1) S.C.R. 145 had been placed. The Bench tentatively being of the view that the decision of this Court requires reconsideration directed that the matter be placed before a Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s can operate in their respective fields and there is no repugnancy if both the Acts are considered in the light of their respective true nature and character. The majority view relied upon the decisions of this Court in State of Orissa vs. M.A. Tulloch and Co., 1964(4) S.C.R. 461 and Baij Nath Kedia vs. State of Bihar and Ors., 1969(3) S.C.C. 838. The other matter, arising out of the judgment of Patna High Court is one filed by Agricultural Produce Market Committee, against a similar order as in Civil Appeal No. 6453 of 2001, remanding the matter for making a fresh assessment order, after issuing notice to the ITC. So far as Civil Appeals arising out of the judgment of Allahabad High Court is concerned, the Division Bench of Allahabad High Court followed the judgment of this Court in ITC vs. The State of Karnataka 1985 (Suppl.) Supreme Court Cases, 476, and held that Mandi Samiti cannot charge a market fee on sale and purchase of Tobacco, and consequently Krishi Utpadan Mandi Samiti has preferred the appeals in question. Civil Appeal No. 3872 of 1990 also arises out of a judgment of Allahabad High Court and the Tobacco Merchants' Association and Ors., are the appellants. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utional validity of the State Act, the High Court held the M.P. Krishi Utpadan Mandi Adhiniyam 1972 as amended by M.P. Krishi Utpadan Mandi Sanshodhan Adhiniyam, 1986 to be valid. Mr. Shanti Bhushan, learned senior counsel appeared for ITC, and argued, that the majority view in the decision of ITC case is correct and once Parliament has made a law relating to tobacco industry, which provides for the manner and place of sale as well as levy of fee on the sale, the Market Committee Act enacted by the State Legislature, providing levy of fee for sale of the tobacco within the market area will be repugnant to the Central law, and therefore, the State Act, so far as it deals with tobacco, must be held to be ultra vires. Mr. Rakesh Dwivedi, the learned senior counsel, appearing for the State of Bihar, on the other hand contended, that the majority decision in ITC case must be held to be contrary to several Constitution Bench decisions of this Court starting from Tika Ramji vs. State of U.P. (1956) SCR 393, and the word 'industry' in Entry 52 of List I must be given a limited meaning. So construed, according to Mr. Dwivedi, the Parliament cannot be said to have legislative compe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in view of the judgment of this Court in ITC case. Ordinarily, this Court does not embark upon an enquiry on the constitutionality of the legislation if that had not been assailed. But taking into account the procedure, that had already been adopted, and noticing all the Advocate Generals and the Attorney General, in view of the amplitude of arguments advanced by the counsel for the parties, we do not think it appropriate to dispose of this batch of cases without examining the constitutional validity of the Tobacco Board Act, enacted by the Parliament under Entry 52 of List I. In fact the main thrust of the rival contention centers round the same. Mr. Shanti Bhushan, learned senior counsel appearing for the ITC Ltd. Contended, that Entry 52 of List I of the VIIth Schedule of the Constitution requires the Parliament to make a declaration by law identifying an industry, the control of which is expedient to be taken over by the Union in the public interest. Once such a declaration is made by the Parliament, the entire gamut would be within the legislative competence of Parliament to make law, and the very industry having been made the subject of legislation, the Parliament gets exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . According to Mr. Shanti Bhushan, in the Constitution Bench decision of this Court in Harakchand (supra) while construing the expression 'industry' in Entry 52 of List I the wider definition of the Industry in the Webster's Dictionary has been approved and, therefore, there is no justification in giving the expression any restrictive meaning. The learned counsel also urged that in the very same case, construing Entry 27 of List II, the Court observed that the Entry Indusry is a special Entry while Entry 27 dealing with production, supply and distribution of goods is a general Entry. Mr. Shanti Bhushan contends that the word 'industry', if has been held to be a special Entry, whether in Entry 24 of the List II or Entry 7 and Entry 52 of List I, law made under that Entry must prevail over any law which could be referrable to a general Entry. According to Mr. Shanti Bhushan, applying the ratio in Harakchand (supra), it must be held that the majority view in the ITC case is correct. Mr. Shanti Bhushan further urged, a particular industry, in respect of which a declaration is made by the Parliament in terms of Entry 52 of List I, the industry itself having become a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely interwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the legislature enacting them may appear to have legislated in a forbidden sphere" approved the same and held that it was a correct method of interpreting the various items in different lists. Mr. Shanti Bhushan also pointed out that in the aforesaid judgment the Constitution Bench followed the earlier observation of Hon'ble Hidaytullah, J. in the case of State of Rajasthan vs. G. Chawla (AIR 1959 SC 544) to the effect ; "It is equally well settled that the power to legislate on a topic of legislation carries with it the power to legislate on an ancillary matter which can be said to be reasonably included in the power given". According to the learned counsel, it would be within the competence of the Central Legislature to provide for matters which may otherwise fall within the competence of the State legislature if they are necessarily inciden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mr. Shanti Bhushan also urged, that Entry 27 of the State List relating to production, supply and distribution of goods cannot be held to be a special Entry so as to be excluded from the purview of Entry 52 of List I. According to him the two entries do not form the part of the same genus so as to apply in the same field, and if the ratio in the judgment in Harakchand(supra) case is applied then Entry 27 cannot be held to be a special Entry. He also relied upon the Constitution Bench judgment in Waverly Jute Mills Case (1963) 3 SCR 209, where the Court was required to examine the competence of the Parliament to enact Forward Contract Regulation Act, 1952 , and whether it encroached upon the subject matter falling under Entry 26 and Entry 28 of List II. The Court upheld the validity of the law by holding that the Parliament has legislative competence under Entry 48 of List I relating to stock exchanges and future markets, and in fact it has the exclusive competence. Mr. Shanti Bhushan contended, that apart from the fact that in Tikaramji (supra), in Calcutta Gas (supra), in Mcdowell (supra) the competence of the Parliament to make law had not been assailed, and on the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exist. It is urged that a restricted meaning, being given to the expression 'industry' in Entry 7 and 52 of List I or Entry 24 of List I will have disastrous consequences, inasmuch as the Parliament would declare by law a particular industry to be necessary for the purposes of defence or for the prosecution of war under Entry 7, and yet in such law, cannot make any provision in respect of raw-materials or growth of any item, which may be absolutely necessary for the industry in question. According to Mr. Shanti Bhushan, the learned senior counsel, the majority judgment in ITC case, no doubt, relied upon the decisions of this Court in State of Orissa vs. M.A. Tulloch (1964) 4 SCR 461 and Baijnath Kedia vs. State of Bihar - (1969) 3 SCC 838, for the proposition that, when the Central Government takes over an industry under Entry 52 of List I and passes an Act to regulate the legislation, the State Legislature ceases to have the jurisdiction to legislate in that field, and if it does so, then it would be ultra vires of the powers of the State Legislature as the entire field is occupied by the Central Legislation. The case of Tulloch (supra) as well as the case of Baijnath (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under any other Act, it should not be taken as if in respect of any matter relating to Tobacco, all other acts whether consistent or inconsistent with the Tobacco Act will cease to prevail. In other words, if there is any field which is not covered by the Tobacco Board Act, and if there was some other valid provision, then the Tobacco Board Act would not come in the way. In support of this contention Mr. Shanti Bhushan relied upon the decision in M. Karunanidhi vs. Union of India (1979) 3 SCC 431, wherein in paragraph 57 this Court in unequivocal terms expressed the intention that the State Act which was undoubtedly the dominant legislation would only be in addition to and not in derogation of any other law for the time being in force, which manifestly includes the Central Acts, namely the Indian Penal Code, the Corruption Act and the Criminal Law (Amendment) Act. In analysing the provisions of the Tobacco Board Act, the counsel contends, that the intention of the Parliament is to cover the field of trade in Tobacco. Relying upon the Constitution Bench decision in Belsund Sugar Company (1999) 9 SCC 620, the learned counsel contends that if a special Act deals with regulating trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression 'industry' in Entry 24 of List II. Entry 24 of List II being subject to Entry 52 of List I, when Parliament makes a law in respect of an industry in exercise of its power referable to Entry 52 of List I then that expression cannot be wider than the word 'industry' in Entry 24 of List 2. It would, therefore, be given a restricted meaning to the expression 'industry', as was done by this Court in Tikaramji's case, which was followed in Calcutta Gas, Kannan Devan Hills and Ganga Sugar Corporation. According to Mr. Dwivedi, even in the case of B. Viswanathaiah & Co. vs. State of Karnataka (1991) 3 SCC 358, a three Judge Bench of this Court construed the declaration made in terms of Entry 52 of List I in relation to silk industry and held that taking over the control of raw silk industry must be restricted to the aspect of production and manufacture of silk yarn or silk and did not take in the earlier stages of the industry, namely the supply of raw-materials. According to Mr. Dwivedi, in the aforesaid case the Court unequivocally held that the declaration in Section 2, which is under Entry 52 of List I, do not in any way, limit the powers of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r auction platform and by seeking to regulate growing of raw-tobacco, must be held to be beyond the competence of Parliament, and on the other hand, is within the exclusive domain of the State Legislature. State Legislature having provided for a market where alone the trade and commerce in and the production supply and distribution of tobacco can take place, the Tobacco Board Act would cease to operate and it is the State law which would prevail. With reference to the judgments in M.A. Tulloch and Baij Nath Kedia relied upon in the majority judgment of ITC's case, Mr. Dwivedi contends that those decisions will have no application, inasmuch as a comparison of Entry 23 of List II and Entry 54 of List I would indicate that the head of the Legislation is one and the same, and Entry 23 of List II itself is subject to Entry 54 of List I. Necessarily, therefore, the entire field, which was there available for the State Legislature to make law under Entry 23 of List II, once assumed by the Parliament under Entry 54 of List I, then the State Legislature is denuded of its power. Question of giving narrow meaning or wider meaning to the legislative Entry does not arise for consideration i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote of Article 369 throws sufficient light on the subject. By referring to Articles 249, 250, 252 and 253, the learned counsel urged that they are special provisions which provide that in the national interest, during proclamation of emergency with the consent of two or more states Parliament can make law with respect of any of the matters coming within the State List. In fact in the Constituent Assembly there was a heated debate in relation to Article 249 and there was a strong objection to wide power being given by that Article for legislation in the national interest with respect to the State List. The Founding Fathers apprehended that in the name of national interest the federal character of the Indian polity could be completely destroyed and India could be converted into a unitary state, therefore, Article 249 was re- tailored and was provided for a shorter duration of operation of parliamentary law so made. Mr. Dwivedi urged that the term 'industry' in Entry 7 of List I as well as Entry 52 of List I should be confined to the process of manufacture of the industries which are declared to be necessary for the purposes of defence or for prosecution of war. According to M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature of the Constitution, and therefore, the Court should avoid giving a wider meaning to the expression 'industry' Entry 7 and Entry 52 of List I as well as Entry 24 of List II. With reference to different Articles of the Constitution, Mr Dwivedi contends that the State Legislatures have exclusive power to make laws with respect to Entries in the State List and only in specified contingencies Parliament can legislate with respect to them. In this view of the matter counsel contends, entries in List I ought not to be construed very widely as construed by this Court in ITC case. The counsel says that in the State of Bihar, Market Act in relation to tobacco is relatable to Entries 26 and 27 of List II whereas Tobacco Board Act, enacted by the Parliament includes within its fold the entire process of growing, curing and marketing of tobacco and unlike the sugar industry and purchase of sugar cane by it which was dealt with by the Constitution Bench in the case of Tika Ram ji the tobacco industry cannot be split up with reference to the raw-material. According to learned counsel growing of tobacco, its curing and marketing being one integrated industrial process the same would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticularly when the Tobacco Board has not set up any auction platform or any kind of market centre in Bihar and in fact several relevant provisions like Section 13, 13A and 14 have not been enforced in the State of Bihar. If the provision of the Tobacco Board Act is construed in its wide meaning then the Parliament must be held to have no competence to make laws in respect of anything prior to the curing of tobacco. According to the learned counsel, when this Court in ITC case held the State Act to be invalid, it so held on the conclusion that the entire field is covered by the Central Legislation. But no steps having been taken by the Tobacco Board in the State of Bihar under Sections 8, 20 and 20A and other provisions not having been applied, it is difficult to subscribe that the entire field is covered by the Tobacco Act. Mr. Dwivedi also very seriously contended that the Parliament by enacting the law under Entry 52 of List I in relation to the Tobacco Industry and having enacted Tobacco Board Act included the provisions of Section 31, which unequivocally indicates that the Act is in addition and not in derogation of any other law for the time being in force. This being the pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occurring in different Entries of List I and List II, it would be wholly inappropriate to refer to the meaning of the word given in Encyclopaedia of Britannica, as was held by this Court in Tikaramji. It is also urged that the scope of Constitutional Entry in the 7th Schedule can never be left to be determined on a case to case basis depending upon how much field the Parliament deems fit to cover. The scope of the word 'industry' in Entry 52 of List I will not expand or restrict depending upon what the Parliament does in its legislation. The competence of Parliamentary law can never be adjudged with reference to the nature of the law which is being enacted. The scope of the Entries in List II also cannot be determined with respect to Parliamentary enactment made from time to time. On the other hand, the scope of entries have to be determined by reference to each other and by modifying one with respect to the other on the basis of the context without making any of the entries otiose. It was so held by this Court in the case of McDowell (1996) 3 SCC 709. Since a law made by a legislature, be it Parliament or be it the State, has to be tested on the anvil of the entries in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts. The Court was however, satisfied that the manufacture of gold ornaments by the Goldsmith is a process of systematic production for trade or manufacture and, would therefore fall within the connotation of the word 'industry' in the appropriate legislative entries. Thus Harakchand also follows the ratio in Tikaramji and not departed from the view taken in Tikaramji. In HR Banthia, the Supreme Court rejected the submission to adopt the definition of 'industry', as given in the Industrial Disputes Act. According to Mr. Dwivedi, the observations of this Court in Harakchand and Banthia cannot be utilised for the purposes of the agricultural raw-material and its production within the word 'industry' in Entry 52 of List I, how so ever wide the same word may be construed. With reference to the judgment of this Court in Ishwari Khaitan Mr. Dwivedi contends that the enunciation of law made therein would indicate that the Court was examining to find out by virtue of law made under Entry 52 of List I to what extent there has been denudation of the State Legislature's power to legislate under Entry 24 of List II. The Court did find that the extent of erosion is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Full Bench had considered all the relevant decisions and has come to the right conclusion. According to Mr. Dwivedi, Tikaramji principles enunciated therein having been approved in the subsequent cases, and even in Ganga Sugar case Hon'ble Krishna Iyer, J. having negatived a similar contention, as was urged in the present appeal as a desperate plea and Belsund's case have approved Tikaramji, irresistible conclusion would be that the majority view in ITC judgment is incorrect and necessarily, therefore, the Parliament did not have the legislative competence while enacting the Tobacco Board Act after declaring Tobacco industry to be taken over as a controlled industry to make any provision therein relating to growing of tobacco or sale of tobacco within the market area prior to its curing or any subsequent process of manufacturing. Dr. A.M. Singhvi, appearing for the Agricultural Produce Market Committee, Munger, on an analysis of different entries made in List I, List II and List III of the Seventh Schedule submitted that there are as many as nine entries in List II out of 66 entries which are specifically made subject to List I. 3 of the entries in List II are subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only relevant in the case of laws made with reference to entries in List III. Consequently, neither Entry 14 nor Entry 28 being subject to any of the entries in List I, the Bihar Legislature was fully competent to enact the Agriculture Produce Markets Act and once in exercise of the provisions contained in the Act, tobacco is notified to be one of the agricultural produce, then the power to levy fee for sale or purchase of tobacco within the market area cannot be whittled down by the Central Legislation. According to Dr. Singhvi, the Central Legislation to that extent must be held to be invalid. The learned counsel further urged that in case of a seeming conflict of entries of two lists, the entries should be read together without giving a narrow or restrictive sense to either of them and every attempt should be made to see whether the two entries can be reconciled or harmonized . This approach to the interpretation is necessary to uphold and promote the "Federal Structure" of the Constitution which is a basic structure, as held by this Court in S.R. Bommai vs. Union of India, 1994(3) SCC 1. The fundamental feature of federalism being that within each list each legislatur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rket Committee under the State Act for services provided by it on the principle of quid pro quo. It is in this connection, he placed reliance on the decision in Synthetics and Chemicals JT 1989(4)SC 467. According to Dr. Singhvi, the expression "industry" both under Entry 24 of List II and Entry 52 of List I would not cover subject matters which are mentioned sui generis in different entries and separately from Entry 24 of List II. If a wide meaning to the expression is given, it would run counter to the scheme of distribution of powers and the structural inter-relationship between Entry 52 of List I and Entries 24, 26 and 27 of List II and Entry 33 of List III and would make the State List redundant qua that industry. In this view of the matter, the counsel urged that the decisions relating to mines and minerals would not be relevant because of inter- relationship of Entry 23 of List II and Entry 54 of List I. Once the declaration is made by Parliament in terms of Entry 54 of List I, then both mines and its product minerals get extracted from the State list and get submerged in the Entry 54 of List I but that would not be the case when the power under Entry 52 of List I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State Act and the object of the State Act are not defeated by the existing or even non-enforced provisions of the Tobacco Board Act. In this view of the matter, according to Mr. Sanghi, the minority view in ITC case must be held to be correct and both the Central Act and the State Act should be permitted to operate in their own sphere. Mr. A.K. Ganguli, the learned senior counsel, appearing for the Tamil Nadu Agricultural Marketing Board, analysed the provisions of Article 246(3) of the Constitution and contended that the expression "subject to" appearing in Article 246(3) has reference to those entries in List II which provides that the subject matter of said entries are subject to the provisions contained in certain specified entries appearing in either List I or List III as for example Entry 2 in List II provides Police (including railways and village police) subject to the provisions of Entry 2A of List I. Similar provisions are found in several entries. In List II like Entry 17, 22, 24, 26, 27, 32, 33, 37, 54, 57 and 63 but only three entries in List II namely Entries 13, 23 and 50 do not specify any entry in List I or List III subject to which the said entries wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II, then the law would be valid in its entirety. It is only in case of a seeming conflict between the law made under any of the entries in List I and II, then the principle of federal supremacy could be invoked in view of the opening words in Article 246(1). So far as the meaning of the expression "industry" in Entry 52 of List I , the counsel urged that the said word must have the same meaning as would be ascribed to the word in Entry 24 of List II. So far as the raw materials are concerned, it has been held to be goods and would fall within the subject matter comprised in Entry 27 of List II. The products of the industry would also be comprised in Entry 27 of List II except that in the case of controlled industry, they would fall under Entry 33 of List III and only the process of manufacture and production would fall under Entry 24 of List II and if the concerned industry is a declared industry, then the process of manufacture and production would fall under Entry 52 of List I. It is, therefore, logical to hold that the activities relating to production and manufacture which would otherwise come within the purview of the expression "industry" in Entry 24 of L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... field. If the two laws are found to be operating in the same field and are also found to be inconsistent with each other, only then the law made by the Parliament would prevail. But that would apply only when the law made by the Parliament and State Legislature are both in respect of the same subject matter, enumerated in the concurrent list, as was held in Hoechest Pharmaceuticals 1983(4) SCC 45. Even in Deep Chand's case the two sets of laws made by the State Legislature and the Parliament with respect to the same subject matter enumerated in Entry 35 of List III, was under consideration and the Court was examining the question of repugnancy. But that will have no application to the question involved in the present case inasmuch as the State Act falls within the subject matter comprised under Entry 28 of List II in respect of which the State Legislature enjoys the exclusive power to make laws. On an analysis of the provisions of Tobacco Board Act and Section 31 thereof, Mr. Ganguli contends that the provisions of Tobacco Act would operate only in addition to other laws and, therefore that Act cannot be pressed into service to give an over-riding effect over other legislation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be a special Act dealing with tobacco industry right from the stage of growing till it is exported. This being a special Act and the Market and Fairs under Entry 28 being a general entry and Agriculture under Entry 14 of List II being a general entry, the special Act enacted by the parliament must prevail and there is no question of lack of competence of the Parliament to enact the law. In support of this contention reliance was placed on the Constitution Bench decision of this Curt in Belsund Sugar Company Limited 1999(9) SCC 620. Mr. Malhotra relied upon several decisions of the Federal Court and this Court and contended that entries in the schedule must be given its widest meaning and it would not be a correct approach to give a restricted meaning to the subject matter of legislation described in an Entry. In support of this contention, he placed reliance on the decision of the Federal Court in The United Provinces vs. Mst. Atiqa Begum & Ors. - 1940(2) Federal Court Reports 110, The First Additional Income- Tax Officer, Mysore vs. H.N.S. Iyengar -1962 Supp. SCR 1, Chaturbhai M. Patel vs. The Union of India & Ors. 1960(2) SCR 362, Navinchandra Mafatlal vs. The Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at case, as in that case the Court was never concerned with the entire process as in the present case. According to the learned Additional Solicitor General, it was not necessary for the Court to examine the ambit of the expression "industry" in Entry 52 of List I. If the ordinary principle of construction of an entry in the legislative list is that the entry should be given wide meaning as has been held in several cases of this Court, there is no reason why on the basis of the said observations made in Tikaramji, the Court would give a limited meaning to the expression "industry" in Entry 24 of List II and Entry 52 of List I. With reference to the judgment of this Court in H.R. Banthia 1969(2) SCC 166, the learned Additional Solicitor General stated that for the purpose of that case, it was not necessary for the Court to make an attempt to define the expression "industry". The Court was merely concerned with the question whether manufacture of gold ornaments would be a process of systematic product, so as to fall within the expression "industry" in the appropriate legislative entry. The Court did come to that conclusion. The learned Addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and similarly enumerating the subjects in List II with respect to which the State Legislature can frame law, in fact constitutes the heart of the federal scheme of the Constitution. But the Constitution Makers having found that the need for power sharing devices between the Central and the State must be subordinated to the imperatives of the State's security and stability propelled the thrust towards centralisation and by using non obstante clause under Article 246 the federal supermacy is achieved. Article 246 of the Constitution deals with the distribution of legislative powers as between the Union and the State Legislature, with reference to the different Lists in the 7th Schedule. The various entries in 3 Lists of the 7th Schedule are not powers of legislation but the fields of legislation. The entry in the List are legislative heads and are of enabling character. They are designed to define and limit the respective areas of legislative competence of the Union and the State Legislature. It is a well recognised principle that the language of Entry should be given a widest scope and each general word should be interpreted to extend to all ancillary or subsidiary matters whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... List II. The industry in question having been identified and necessary declaration to that effect being made in terms of Entry 52 of List I then over that subject the Parliament gets exclusive power to make laws under Article 246(1) of the Constitution. The Tobacco Board Act having been enacted by the Parliament under Article 246(1) of the Constitution and the law in question being referable to Entry 52 of List I, the moot question that arises for adjudication is, what is the extent and ambit of the expression 'industry' used in Entry 52. As has been stated earlier, the expression 'industry' has been used in Entry 24 of List II and Entry 7 and Entry 52 of List I. In deciding the legislative competence of the Parliament in enacting Tobacco Board Act and in making provision therein in relation to the growing of tobacco as well as sale of tobacco in the places specified therein, and on terms and conditions mentioned therein, the moot question is whether the word 'industry' would be given a wide meaning so as to bring within its ambit all that is necessary for the industry, including the raw material as well as the growing of the raw material, as contended by M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd purchase of tobacco within the market area, as the field is fully occupied by the Central Act, namely, the Tobacco Board Act, the minority view proceeded on a finding that both Acts can be permitted to operate in their respective sphere. In the Constitution Bench decision of this Court in Harakchand Ratanchand Banthia & ors. etc. vs. Union of India and Ors., 1970(1) S.C.R. 479, the legislative competence of the Parliament under Entry 52 of List I came up for consideration, while dealing with validity of the provisions of the Gold Control Act, which Act included within its ambit the gold ornaments. One of the contention that had been advanced was that the goldsmith's work was handicraft, requiring application of skills and the art of making gold ornaments was not an 'industry' within the meaning of Entry 52 of List I. It had been contended on behalf of the Union Government that the legislative entry must be construed in a large and liberal sense and goldsmith's craft was an industry within the meaning of Entry 24 of List II as well as Entry 52 of List I and therefore, Parliament was competent to legislate in regard to the manufacture of gold ornaments. Having con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord English Dictionary as well as the meaning of the said word in Webster's Third New International Dictionary and the contention raised on behalf of the applicant that if the word "industry" is construed in this wide sense, then Entry 27 of List II will lose all meanings and contents, was not accepted by the Court. It is, thus clear that the Court did apply the theory that widest amplitude and meaning should be given to the entries in the legislative lists. Further the contention of the applicant that the legislation in fact is a legislation under Entry 27 of List II, dealing with "Production, supply and distribution of goods" and being a special entry, the contents of Entry should be excluded from the expression "industry" in Entry 52, was not accepted and rejected. In Chaturbhai M. Patel vs. Union of India, 1960(2) S.C.R. 362, a Constitution Bench of this Court was construing the Entries under the Government of India Act, 1935 and one of the contention raised in that case was Sections 6 and 8 of the Central Excise & Salt Act, 1944 and the Rules made thereunder were beyond the legislative competence of the central legislature. The relevant entri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egislature did have the competence to make provisions in Sections 6 and 8 of the Central Excise & Salt Act under Entry 45 of List I of the Government of India Act, 1935 and observed thus: "It is within the competence of the Central legislation to provide for matters which may otherwise fall within the competence of the Provincial legislature if they are necessarily incidental to effective legislation by the Central legislature on a subject of legislation expressly within its power." This indicates that the Court has all along been construing a particular legislative Entry to give wide connotation possible and in that case, it was held while legislating upon an industry, Parliament would be entitled to legislate also on the raw materials of that industry which is an ancillary to the industry and there should not be any limitation in interpreting the expression "industry" to denude the power of the Parliament and thereby make the law ineffective. In the aforesaid judgment of this Court, it has been held: "Looking at the scheme of the Act, its object and purpose, its true nature and character and the pith and substance the conclusion is inevitable that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be read in a narrow or pedantic sense but must be given their fullest meaning and the widest amplitude and be held to extend to all ancillary and subsidiary matters, which can fairly and reasonably be said to be comprehended in them." As has been stated earlier, even in his minority judgment in ITC case, Justice Mukherjee had observed: "It is well settled that the cardinal rule of interpretation is that the words should be read in their ordinary natural and grammatical meaning. But words in a constitutional document conferring legislative powers should also be construed most liberally and in their widest amplitude." In view of the aforesaid rules of interpretation as well as the Constitution Bench decision referred to above, it is difficult for us to accept the contention of Mr. Dwivedi that the word "industry" in Entry 52 of List I should be given a restricted meaning, so as to exclude from its purview the subject of legislation coming within entry 27 or Entry 14 of List II. Bearing in mind the constitutional scheme of supremacy of Parliament, the normal rule of interpretation of an Entry in any of the list in the Seventh Schedule of the Constitution, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Kanandevan and Ganga Sugar Corporation, all of which are Constitution Bench decisions. In Tikaramji, no doubt the Constitution Bench of this Court held that the raw materials which are integral part of the industrial process, cannot be included in the process of manufacture or production and thus "industry" within the meaning of Entry 52 of List I under which the Parliament makes a law, would not bring within its sweep the raw materials. The aforesaid observations had been made in connection with sugar industry and sugar-cane. According to Mr. Dwivedi, the majority decision in ITC case, cannot be sustained, since the earlier constitution Bench decision of this Court in Tikaramji, Calcutta Gas, Kanandevan and Ganga Sugar Corporation have not been noticed. Mr. Dwivedi's further contention is that a legislative Entry in any List should be so interpreted so as not to denude another entry in the same list or in any other list and, therefore, it is necessary to give a restricted meaning to the expression "industry" occurring in Entry 24 of List 2 as well as Entry 52 of List 1.According to Mr. Dwivedi, while examining the constitutionality of the Market Committ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment and Regulation) Act and control of the industry has been taken over by the Union. Negativing that contention and on examining the contents of Entry 24 of List II and Entry 27 of the said List II, the Court observed that the controlled industries were relegated to Entry 52 of List I which was the exclusive province of Parliament leaving the other industries within Entry 24 of List II. In that case, the Court was not required to examine the content and scope of the expression "industry" in Entry 52 of List I and in fact the Court observed that it was concerned with as to whether the raw materials of an industry which form an integral part of the process are within the topic of "industry" which form the subject matter of Item 52 of List I. The Central legislation which was under consideration in that case as well as the notifications issued by the Central Government were held to have been enacted by the Parliament in exercise of the legislative power conferred upon it by Entry 33 of List III and was an exercise of concurrent jurisdiction and once the law is made by the Parliament in exercise of its concurrent jurisdiction, then it would not deprive the Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e jurisdiction vested in the Centre under Entry 52 of List I. In other words in Tikaramji, neither this Court was called upon to examine the content of the expression "industry" under Entry 52 of List I nor the relevant Central law which was under consideration had been enacted with reference to power under Entry 52 of List I. This being the position, we do not find much force in the submission of Mr. Dwivedi that the conclusion recorded by the majority view in ITC case is vitiated, as it had not noticed observations of the Constitution Bench decision in Tikaramji. In our opinion, it would be wholly inappropriate for this Court to apply the observations made in Tikaramji's case with regard to raw materials of "industry". The Court in Tikaramji's case having not been called upon to determine the question whether the expression "industry" in Entry 52 of List I should be given a restricted meaning at all is contended by Mr. Dwivedi, it would be wholly inappropriate to import the observations in Tikaramji for construing the ambit and content of the subject head of legislation "industry" under Entry 52 of List I. Since the Court was examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State Legislature. The validity of the Act was upheld on a conclusion that the law was referable to the legislative head under Entry 18 of List II relating to land and legislative Entry 42 of List III relating to acquisition and requisitioning of property. It is in that context, it was observed that the power of the State legislature to make the law under the aforesaid two entries could not be denied merely on the ground that it had some effect on the industry, the control of which has been taken over under Entry 52 of List I. But the Court was careful to hold that the effect was not the same thing as subject matter. In other words, the subject matter of "industry" under Entry 52 of List I really was not under consideration. In paragraph 29 of the said judgment, referring to the case of Baijnath Kedia vs. State of Bihar, where the Court had construed Entry 23 of List I and Entry 52 of List I, it was observed that the scope of Entry 52 of the Union List is slightly different and once it is declared by Parliament by law to be expedient in public interest to control an industry, Parliament can legislate on that particular industry and the States would lose their power to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961, was under challenge on the ground that the legislation in question being in respect of a controlled industry, the power belongs exclusively to Parliament under Entry 52 of List I. The Court repelled this contention on the ground that Entry 54 in List II of the Seventh Schedule empowers the State to legislate for taxes on purchase of goods and therefore, it cannot be said to have invaded Entry 52 of List I. The Court posed the question as to whether the Purchase Tax Act is bad because it is a legislation with respect to a controlled industry namely the Sugar industry and answered the same in the negative, following the observations of the earlier Constitution Bench decision in Tikaramji's case. Thus the extreme argument that the State Legislature is incompetent to make any law with regard to a controlled industry, the control of which has been taken over by the Union Government by making a declaration, was negatived and it is in that context, the observations on which Mr. Dwivedi relied upon had been made. We are unable to accept the submission of Mr. Dwivedi to hold that the decision of this Court in Ganga Sugar, can be pressed into service for a contention that the Parl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, on the remainder the State legislature will have power to legislate in respect of declared industry without in any way trenching upon the occupied field. Applying the aforesaid ratio to the case in hand and having examined the provisions of the Tobacco Board Act, the answer is irresistible that the State legislature is denuded of its power to make any law in relation to growing of tobacco or sale and purchase of raw tobacco when such a provision has already been made in the Tobacco Board Act. The two other decisions which require to be noticed by us are the case of Viswanathiah & Co. vs. State of Karnataka (1991) 3 SCC 358 and Belsund Sugar (1999) 9 SCC 620. So far as Viswanathiah's case is concerned, Mr. Dwivedi relied upon the observations made in paragraph 8 of the said judgment wherein the Court had observed :- "It is true that the Silk Board Act purports to control the raw silk industry in the territory of India. But, as pointed out by the High Court in the light of the earlier decisions of this Court therein referred to, the control of the industry vested in Parliament was only restricted to the aspect of production and manufacture of silk yarn or silk. It did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t all, and therefore, the levy of market fee by the Market Committee was held to be invalid. On examining different provisions of the two Acts the Court also held that there consists direct conflict between the two Acts and that conflict could be avoided only if it is held that the Market Act being a general Act covering all types of the agricultural produce and the Sugar Cane Act, which also deals with an agricultural produce like sugar, being a special enactment laying down an independent exclusive machinery for regulating sale, purchase and storage of such a commodity under a special Act, then the special Act would prevail over the general Act for that commodity and by necessary implication will take the said commodity out of the sweep of the general Act.This decision, in our considered opinion is not an authority for the proposition that the expression 'industry' in Entry 52 of List I should be given a restricted meaning, as contended by Mr. Dwivedi. In that case also the extreme contention that there exists possibility of issuance of control order by the Central Government would denude the State Legislature of its authority to make a law in respect of any matter coming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scope and content of Entry 52 of List I and once it is held that the expression 'industry' cannot be given any restricted meaning and the law enacted by the Parliament, the Tobacco Board Act, is held to be intra vires then the State legislation, namely, the Bihar Agricultural Produce Market Act, so far as it deals with the commodity tobacco will go out of the general sweep of all agricultural produce notified under the State Act, as the provisions in respect thereof have been made by the Central legislation and by application of Article 246 of the Constitution the Central Act would prevail. Mr. Dwivedi placed reliance on the Full Bench decision of Allahabad High Court in SIEL's case (supra), but in view of our conclusions already arrived at, the aforesaid Full Bench decision must be held not to have been correctly decided. It is also difficult for us to accept the submission of Dr. Singhvi, learned senior counsel appearing for the Market Committee of Monghyr, that if the subject head of legislation in List II is not subject to the corresponding Entry in List I then the power of State Legislature to legislate with regard to that matter is paramount and supreme, and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had the legislative competence to enact the Market Committee Act under 28 of List II. His other submission on the question that there is no irreconciable clash between the two Acts and the meaning of Section 31 of Tobacco Board Act will be considered while considering the different provisions of the two Acts. Mr. Ganguli, learned senior counsel appearing for the Tamil Nadu Agricultural Marketing Board also submitted in the same manner as Dr. Singhvi and relied upon Article 246(3) of the Constitution. But in our considered opinion Article 246(1) itself being notwithstanding anything in clauses 2 and 3 of the said Article the submission of Mr. Ganguli is devoid of any force. The elaborate submissions of Mr. Ganguli in relation to the decisions of this Court in Baij Nath Kedia, M.A. Tulloch, India Cement and Orissa Cement, all of which dealt with mining legislations are not necessary to be dealt with inasmuch as we have not relied upon the principles enunciated in those decisions, even though Mr. Shanti Bhushan pressed those decisions in support of his contention. In the aforesaid premises, we are of the considered opinion that the Tobacco Board Act enacted by the Parliament under En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Committee to levy fee for sale and purchase of raw tobacco within the market area will not be operative, so far as the produce 'tobacco' is concerned. In other words, Central Act would prevail and would govern the entire gamut of tobacco industry. It is also important to bear in mind that when parliament decides to take over the control of a particular industry in the interest of the said industry as well as in the national interest, the control should be effective and should be in such a manner that the desired object can be achieved. Necessarily therefore, legislation ought to be made providing control over the growing of tobacco as well as on its sale and purchase, which alone would subserve the very purpose for which the control of the industry has been taken over by the Parliament. In this view of the matter, we hold that the Tobacco Board Act and the Agricultural Produce Markets Act, collide with each other and cannot be allowed to be operated simultaneously. Necessarily, therefore, the Tobacco Board Act would prevail and the Agricultural Produce Markets Act, so far as it relates to levy of fee for sale and purchase of tobacco within the market area must be held to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, without any condition. All these orders stood modified by order dated 27.2.89, when the Court passed the following order: ".. There will be no recovery of arrears due. There will also be no stay of the refund collected if any. The amount collected may be refunded within four months from this date. In future there will be no stay of recovery of market-fee found due and payable from the date of the High Court's judgment. It is, however, made clear that if the parties have filed objection against the levy, the objection shall be disposed of in accordance with law before the recovery is restored. In case, ultimately if the respondents succeed then the amount collected will be refunded by the appellants along with the interest @ 12% per annum. In case the appellants succeed then the respondents undertake to pay the arrears of market-fee along with the interest @ 12% per annum from the date of the payment." Now that the judgment of the High Court is being upheld and the appeals are being dismissed, the question for consideration would be as to whether the said order of stay dated 27.2.1989 should be modified or the order should be allowed to operate and the collecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase the majority held that the provisions of the Karnataka Agricultural Produce Marketing (Regulation) Act, 1966 are repugnant to the parliamentary legislation, the Tobacco Board Act, 1975 and, therefore, tobacco is liable to be removed from the Schedule of that enactment. Expressing the minority view, Sabyasachi Mukharji, J held that the State legislation and the Tobacco Board Act, 1975 can co-exist. The first question to be determined is can State legislation and Tobacco Board Act co-exist in respect of sale of Tobacco in the market areas within the framework of Agricultural Produce Marketing Acts - the State legislations under consideration? If our answer to this question is that the two legislations can co-exist, in that event it may not be necessary to go into the aspect of legislative competence. If, however, our answer is that the State legislations and the parliamentary legislation are incapable of reconciliation and the two cannot co-exist, in that case, the next question that would require determination will be about the validity of the State legislations. In the proposed judgment, Hon'ble Mr. Justice Pattanaik has come to the conclusion that the Agricultural Produce Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to be integral part of tobacco industry has been transferred from Entry 24 of the State List to Entry 52 of the Union List -- Entry 24 being subject to the provisions of Entries 7 and 52 of the Union List. The contention is that in this view, the State Legislature is deprived of competence to legislate in the field of sale of tobacco in market area and levy market fee. Under these circumstances, the competence of the State Legislature to legislate in regard to sale of tobacco would depend upon the answer to the question whether under Entry 52 of the Union List, the Parliament is competent or not to legislate in respect of sale of raw tobacco. If the answer to the question is that the Parliament is competent, in that eventually, the State legislation will have to be invalidated for want of legislative competence. The answer to the question would, however, depend upon the scope of the expression 'Industries' as deployed in Entry 52 of the Union List and Entry 24 of the State List. If we find that the expression ' Industries' is wide enough to include the raw material of the industry and the Parliament is, thus competent to enact law under Entry 52 of the Union List, in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the public interest that the Union should take under its control the Tobacco industry. Article 246(2) provides that notwithstanding anything in Clause (3), Parliament and, subject to Clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule. The said List is referred to in the Constitution as the "Concurrent List". Article 246(3) provides that subject to Clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule. The said List is referred to in the Constitution as the "State List". In exercise of power under Article 246(3), various State Legislature have enacted Agricultural Produce Marketing Acts for regulating sale and purchase of the agricultural produce and levying market fee within the framework of those Acts which, inter alia, permit levy and collection of market fee. The tobacco under the Acts in question has been notified as an agricultural produce. In ITC's case , by majority, it was held that the Tobacco industry ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1975 and the Karnataka Agricultural Produce Marketing (Regulation) Act, can co-exist and operate cumulatively. The further view expressed by the High Court was that any intention of the superior legislature to cover the whole field to make a comprehensive law with regard to marketing of tobacco was not manifest in the legislation. The contention canvassed before this Court in ITC's case was that in view of the Central Act, the State Legislature was not competent to bring into fold of the State Act, the tobacco, the matter being covered by Entry 52 of the Union List of Seventh Schedule of the Constitution of India. The precise question in ITC's case was as to whether in respect of marketing of tobacco, the State Government was entitled to legislate or whether in view of the fact that there was a declaration under Entry 52 of the Union List, the State Legislature had no competence to legislate on tobacco and as such the impugned legislation was ultra vires. In the minority opinion, Mukharji, J. noticed that the karnataka Agricultural Produce Marketing (Regulation) Act, 1966 deals with the subject of market in Entry 28 read with Entry 66 of List II and that it had to be borne in m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 52 of List I of the Seventh Schedule and passes an Act to regulate the legislation, the State Legislature ceases to have any jurisdiction to legislate in that field and if it does so, that legislation would be ultra vires the powers of the State Legislature. It was further observed that acceptance of the minority opinion would rob the Central Act of its entire content and essential import by handing over he power of legislation to the State Government which per se had been taken over by the Parliament under Article 246 by enacting the Tobacco Board Act, 1975. In the majority opinion reliance was placed on the following passage of Baijnath Kadio's case as extracted at page 174 as under. "It is open to Parliament to declare that it is expedient in the public interest that the control should rest in Central Government. To what extent such a declaration can go is for Parliament to determine and this must be commensurate with public interest. Once this declaration is made and the extent laid down, the subject of legislation to the extent laid down becomes an exclusive subject for legislation by Parliament. Any legislation by the State after such declaration and trenching upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ching of field by one or the other legislature. The Court is concerned with the question of legislative competence. We are examining a case where what has been questioned is the legality of legislation is respect of a field on the State List to which Article 246(3) applies. The validity and applicability of the State legislations in respect of a field of legislation on State List has come under a cloud on account of a legislation passed by the Parliament in respect of field of legislation under Entry 52 of the Union List, namely, the Tobacco Board Act, 1975. It is on account of this legislation containing declaration as contemplated by Entry 52 of the Union List that doubts have arisen about the validity and applicability of State legislation about the sale of agricultural produce of tobacco in market areas and levy thereupon of market fee which aspect are on field of legislation on the State List (Entries 14, 27, 28 and 66). Entry 24 of the State List is subject to Entries 7 and 52 of List I. We are not concerned in these matter with Entry 7. The question here is as to the effect of transfer of field of legislation under Entry 24 of the State List to the Union List (Entry 52), on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an contends that Entry 52 has been equated with Entry 54 of the Union List. Both sides have relied upon the case of Ishwari Khetan . Let us examine that case. In Ishwari Khetan's case the contention urged was that the Parliament has made the Industrial (Development and Regulation) Act, 1951 (for short, 'the IDR Act') in Entry 52 List I declaring control of sugar industry and that industry goes out of Entry 24 of List II and, therefore, State Legislature is denuded of legislative powers in respect of sugar industry and impugned legislation was with respect to acquisition of sugar undertaking is sugar industry. The Attorney General and contended that the power to acquire property was derived from Entry 42 of List III. Ishwari Khetan's case involved the determination or scope of Entry 52 of List I and Entry 24 of List II only. The scope of these entries with respect to Entries 26 and 27 of List II and Entry 33 of List III did not fall for consideration. Further in paragraphs 7, 8 and 11 of Ishwari Khetan's case the Constitution Bench repeatedly pointed out that a declaration in Entry 52 of List I denudes the power of State Legislature to legislate under Entry 24 List II only. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been referred to. The reliance on Baijnath Kadio's case in Ishwari Khetan's case was to show the denudation of States' power being limited to the extent of control. While Baijnath Kadio's case dealt with Entry 23 List II, Ishwari Khetan's case dealt with Entry 24 List II. The subject matter of the other entries was not in issue in this decision. The structure in Entry 54 of List I was not equated with that of Entry 52 List I as contended by Mr. Shanti Bhushan. This decision does not adopt the mines and minerals cases for the purposes of considering the scope of Entry 52 of List I. In our view, the cases of mines and minerals are not of much assistance while examining the scope of Entry 52 of List I. In State of A.P. and Ors. v. Mcdowell & Co. and Ors. also it was held that the ambit and scope of a constitutional entry cannot be determined with reference to a parliamentary enactment. If it is otherwise, it would result in the Parliament enacting and/or amending an enactment thereby controlling the ambit and scope of the constitutional provision. That cannot be the law. The power to legislate with which we are concerned in contained in Article 246. The fields are demarcated in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was left that this Act was not sufficiently comprehensive for dealing with the problems of sugar industry. Therefore, it was found necessary to replace it so as to provide for better organisation of cane supplies to sugar factories. The U.P. Legislature accordingly enacted on 10th February, 1938, the U.P. Sugar Factories Control Act, 1938 to provide for licensing of the sugar factories and for regulating the supply of sugarcane intended for use in such factories and the price at which it may be purchased and for other incidental matters and repealed the Sugarcane Act, 1934. The 1938 Act was to remain in force initially upto 30th June, 1947 but the period was extended to 30th June, 1952 and then to 30th June, 1952. On intervention of Section World War, a proclamation of emergency was issued by the Governor General under Section 102 of the Government of India Act, 1935. The Dominion Legislature acquired the power to make laws for the Provinces with respect to any of the matters enumerated in the Provincial Legislative List. The proclamation of emergency was to operate until revoked by a subsequent proclamation and the laws made by the Dominion Legislature were to have effect unti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e years to make laws with respect to the following matters as if they were enumerated in the Concurrent List. "(a) trade and commerce within a State in, and the production, supply and distribution of,.... foodstuffs (including edible oil seeds and oil),....' The life of the Act was accordingly extended from time to time upto 26th January, 1955 by Acts passed by Parliament. Food crops under the aforesaid 1946 Act were defined as including corps of sugarcane. The Central Government in exercise of powers conferred upon it by Section 3 of the 1946 Act, promulgated the Sugar and Gur Control Order, 1950, inter alia, empowering it to prohibit or restrict the export of sugarcane from any area; to direct that no gur or sugar shall be manufactured from sugarcane except under and in accordance with the conditions specified in the licence issued in this behalf. There was also power to fix minimum price in exercise whereof the Central Government from time to time issued notifications fixing the minimum price to be paid by the producers of sugar for sugarcane purchased by them. On 31st October, 1951, Parliament enacted the Industries (Development and Regulation) Act, 1951 to provide for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a necessary ingredient in the production of sugar, it was a colourable exercise of legislative power by the State, ostensibly operating in its own filed within Entry 27 of List II but really trespassing upon the field of Entry 52 of List I. True, the challenge was to the vires of the State legislation and not to the parliamentary legislation but at the same time the entire basis of challenge was that in respect of the sugarcane, only Parliament had the power to legislate on account of the filed being covered under Entry 52 of List I, the Sugar industry having been included in that Entry and the connotation of industry being very wide to include in it raw material, i.e., sugarcane as well. Thus, the exclusive power of Parliament to legislate was urged as the main ground to seek invalidation of the State legislation -- the filed of sugarcane not being available to the State Legislature to legislate. In view of the controversy as aforesaid, the fact that the validity of the parliamentary legislation was not in issue in Tika Ramji's case, does not in any manner, affect the ratio of that decision. The point for determination in that case was substantially the same as in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that case that the process of acquiring raw materials was an integral part of the industrial process and was, therefore, included in the connotation of the word 'industry' and when the Central Legislature was invested with the power to legislate in regard to sugar industry on account of declaration as postulated by Entry 52 of List I, that legislative power included also the power to legislate in regard to the raw material of the sugar industry, that is sugarcane, and the production, supply and distribution of sugarcane was, by reason of its being the necessary ingredient in the process of manufacture or production of sugar, within the legislative competence of the Central Legislature. The petitioners in Tika Ramji's case in support of the wide construction to be placed upon the expression 'industry' also relied upon various decisions interpreting the said term in relation to the Industrial Disputes Act. Dealing with those cases in Tika Ramji's case this Court said: "What we are concerned with here is not the wide construction to be put on the term 'industry' as such but whether the raw materials of an industry which form an integral part of the process are within the topic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n would be comprised in Entry 24 of List II except where the industry was a controlled industry when it would fall within Entry 52 of List I and the products of the industry would also be comprised in Entry 27 of List II except where they were the products of the controlled industries when they would fall within Entry 33 of List III." The Court further held that "In no event could the legislation in regard to sugar and sugarcane be thus included within Entry 52 of List I". Thus, rejecting the contention that the expression 'industries' in Entry 52 of List I is wide enough to take into its compass the power to legislate in respect of raw material said to be an integral part of the industrial process, the Court repelled the plea of the State Act being ultra vires, the same being covered by the subject of sugar industry control whereof have been declared by the Parliament by law to be expedient in the public interest under the exclusive domain of Parliament. In The Calcutta Gas Company (Proprietary) Ltd. v. The State of West Bengal and Ors, the challenge was to the constitutional validity of the Oriental Gas Company Act, 1960. One of the ground of challenge was that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration is not given such interpretation, it would denude the Parliament of real object of control of such industry in public interest which is of paramount importance. As against this, the contention of the other side is that the acceptance of the viewpoint propounded by Mr. Shanti Bhushan would mean denuding the State Legislature the power to legislate in respect of fields covered under various entries under the State List which are not made subject to any other entry and that the acceptance of contention of Mr. Shanti Bhushan would have the effect of rewriting the Constitution. I agree. The intention of the Constitution makers was not to make Entries 14, 27, 28 and 66 subject to Entry 52 of the Union List. The acceptance of viewpoint propounded by Mr. Shanti Bhushan will have that effect. Therefore, the expression 'industries' cannot be interpreted in the manner suggested. True, the parliamentary legislation has supremacy as provided under Article 246(1) and (2). This is of relevance when field of legislation is on concurrent list. While maintaining parliamentary supremacy, one cannot give go by to the federalism which has been held to be a basic feature of the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceptance of that argument not negate the will of the Constitution makers. I think it would. Therefore, the argument cannot be accepted. The same argument would equally apply to Entry 14 of List II in respect of agriculture which is not subject to any List. It would so become if we accept the contention of Mr. Shanti Bhushan. Further, earlier when the Parliament felt the need to control raw material, it included "raw jute and raw cotton" in Entry 33, List III by Constitution Third Amendment Act, 1954. Even Article 369 indicates that agricultural raw material is in the State List for it refers to raw cotton, cotton seed and edible oil seeds and seeks to temporarily place it, by fiction, in the concurrent list to enable Parliament to make laws. The expression 'industries' in Entry 24, List II or Entry 52, List I, cannot be interpreted in a manner that would make other entries of List II of the Seventh Schedule subject to Union control, which in fact they are not. Wherever it was intended to be made subject to such control, whether of List I or that of List III, it was said so. A perusal of List II shows that whenever a particular entry was intended to be made subject to an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Mr. Shanti Bhushan, is not of any assistance while considering the constitutional meaning of the said term. There may not be any embargo to limitation on the power of the Parliament to enact the law in respect of activities other than manufacturing activities but that power is nonexistence in Entry 52 of List I. It may be elsewhere. Reference in this regard can be made to Entry 33 of List III including in its ambit food stuff and certain raw materials. Tobacco, however, is admittedly not a food stuff. The validity of certain other acts such as the Cardomom Act, 1965, The Central Silk Board Act, 1958, The Coffee Act, 1942, The Rubber Act, 1947, The Tea Act, 1953, The Coir Industry Act, 1953 and the Coconut Development Board Act, 1979 reference whereof was made by Mr. Shanti Bhushan need not be examined for purposes of considering the legislative competence of the impugned State legislations. The legislative competence of Parliament to legislate these statutes is not in issue before this Court and, therefore, we do not think it necessary to examine the question of legislative competence only from academic view point insofar as these legislations are concerned. However, prima faci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , melted or re-melted, wrought or unwrought), in any shape or form, of a purity of not less than nine carats and including primary gold, article and ornament [Section 2(j)]. Clause (r) of Section 2 defines 'primary gold' to mean gold in any unfinished or semi-finished form and includes ingots, bars, blocks, slabs, billets, shots, pellets, rods, sheets, foils and wires. Challenging the constitutional validity of the Gold (Control) Act, the contention urged was that the goldsmiths was a handicraft requiring application of skill and the art of making ornament was not an industry within the meaning of Entry 52 of List I of the Seventh Schedule of the Constitution. The Constitution Bench noticed the established principles that the widest aptitude should be taken of all the entries and the duty of the court to reconcile the entries and bring about a harmonious construction in case some entries in different list or in the same list may overlap or may appear to be in direct conflict with each other. In the present case, however, there is no question of any overlapping and in regard to conflict and harmonious construction, it is Mr. Shanti Bhushan's own submission that the two legislations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raw material of industry would come or not, within the concept of industry'. Further, the Court observed that it is not necessary to attempt to define the expression 'industry' precisely or to state exhaustively all its different aspects. On the facts of the case, the Constitution Bench held that the process or systematic production of gold ornament by goldsmiths for trade or manufacture falls within the connotation of the word 'industry' in the appropriate Legislative Entry. The decision in Tika Ramji's case was not departed from. In fact it was referred to. An attempt to adopt the definition of the word 'industry' in the Industrial Disputes Act was repelled. The contention accepted was that the manufacture of gold ornament was an 'industry' within the meaning of Entry 52, List I. This decision is not of any assistance for determining whether sale of tobacco process can come within the of the tobacco industry so as to fall within the ambit of the word 'industry' in Entry 52 of List I and Entry 24 of List II. The observation in Banthia's case that Entry 27 of List II was a general entry made in the context of manufacture of gold ornaments by goldsmiths falling within the ambit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and rules made thereunder were beyond the legislative Competence of the Central Legislature under the Government of India Act, 1935. The Court was examining the question whether the impugned Act is a law with respect to matters enumerated in item 45 of List I under the 1935 Act or to the matters enumerated in Items 27 and 29 of List II. Entries 27 and 29 have already been reproduced above. They dealt with the power of the State to legislate in respect of trade and commerce, markets and fairs, money lending and money-lenders. Item 29 dealt with power to legislate in respect of production, supply and distribution of goods, development of industries, subject to the provisions in List I with respect to the development of certain industries under the Federal control. The question was whether the impugned Act in pith and substance relate to duties of excise on tobacco as contained in Item 45 or it falls within the boundaries of Items 27 and 29 of the Provincial List. Referring to the decision of the Federal Court, it was held that in the interpretation of the scope of these items, widest possible amplitude must be given to the words used and each general word must be held to extend to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... U.P. and Ors. the constitutional validity of U.P. Sugarcane Purchase Act was challenged on the ground that it invades Entry 52 of List I with respect to sugar industry which is a controlled industry under the IDR Act, 1951. The question raised therein was this : "is the legislation ultra vires because the State enters the forbidden ground by enacting on controlled industry"? It was undisputed that sugar industry was a controlled industry within the meaning of Entry 52 of List I of the Seventh Schedule and, therefore, the legislative power of Parliament covered enactments with respect to industries having regard to Article 246(1) of the Constitution. The Court said that if the impugned Act invades Entry 52, it must be repulsed by the Court. The Court, however, expressed surprise at the argument of invalidity of the Act despite the decision of the Constitution Bench in Tika Ramji's case. The Court said that the Constitution Bench decision must be accepted as final unless the subject be of such fundamental importance to national life or the reasoning is so plainly erroneous in the light of later thought that it is wiser to be ultimately right rather than to be consistently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a mere appeal for reconsideration. Shri Shanti Bhushan candidly conceded that if Tika Ramji were good law, his submission was still-born. We agree." The Court further held that: " 'industry' as a legislative topic is of large and liberal import; true.But what peripherally affects cannot be confused with what goes to the heart. An acquisition of land for sugar mills or of sugar mills may affect the industry but is not an action in the legislative field forbidden for the States (See the Kannan Devan Hills Produce Company Ltd. case. Sales Tax on raw materials going to a factory may affect the costing process of the manufacture but is not legislation on industrial process or allied matters affect topics reserved for Parliament a situation of reductio ad absurdem may be reached." (emphasis supplied is ours) The effect of acceptance of the submission of Mr. Shanti Bhushan may also denude the State of its power to legislate even in respect of sales tax on tobacco. Such a contention was specifically rejected in Ganga Sugar Corporation's case. In the Kannan Devan Hills Produce v. The State of Kerala and Anr. challenge was laid to the constitutional validity of Kannan De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the High Court on the basis of series of decisions of this Court regarding scope of Entry 52 of List I in the Seventh Schedule of the Constitution had repelled the challenge, this Court expressed full agreement with the views of the High Court. It was held that the control of industry vested in Parliament was restricted to the aspect of production and manufacture of silk yarn or silk. It did not obviously take in the earlier stage of industry, namely, the supply of raw materials. For instance, even in regard to the silk industry, the reeling, production, development and distribution of silkworm seeds and cocoons was regulated by the State Act. These items can be perhaps legitimately described as raw materials of the silk industry. The control being vested in Parliament under Entry 52 of silk industry did not affect the control over these raw materials. It was held that the control, supply and distribution of the goods produced by the industry was the third aspect of industry which falls outside the purview of the control postulated under Entry 52. In other words, though the production and manufacture of raw silk cannot be legislated upon by the State Legislature in view of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Legislature stood denuded of power to legislate regulating supply, distribution and supplies of molasses -- a product of sugar industry and was consequently incompetent to enact Sections 7, 8 and 10 of the aforesaid State Act. The Full Bench tracing the history of legislation leading to framing of the Constitution held that if the argument about denuding of power of State Legislature is accepted, most of the entries in Lists II and III would be meaningless. Once the Parliament makes a declaration under Entry 52 of List I, for instance, Entries 20, 21, 22, 23 and 24 would be redundant. The High Court said that neither it was the intention of the framers of the Constitution nor the said contention is born out from the perusal of Entry 52 and the other Entries of Lists II and III of the Seventh Schedule. Noticing various decisions of this Court, the High Court concluded as under: "Applying the principles propounded by the apex Court in the cases mentioned above, it is apparent that the State Legislature is competent to make law in respect of the subject industries under Entry 24 of the List II subject to Entries 7 and 52 of List I of the Seventh Schedule and is further com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in SIEL Ltd. and Ors. v. Union of India and Ors. In Belsund Sugar Co. Ltd. v. State of Bihar and Ors. the Constitution Bench examined the question regarding the legality of levy of market fee under the provisions of Bihar Agricultural Produce Markets Act, 1960 pertaining to various commodities including sugarcane, sugar and molasses, wheat and tea. The Court first dealt with the transaction of purchase of sugarcane by the sugar factories functioning in the market areas falling within the jurisdiction of respective market committees constituted under the Market Act. It noticed that the Market Act had been enacted by the Bihar Legislature as per the legislative power vested in it by Entries 26, 27 and 28 of List II of the Seventh Schedule of the Constitution. The Court, however, noticed that the Market Act dealt with supply and distribution of the goods as well as the trade and commerce therein as it seeks to regulate the sale and purchase of agricultural produce to be carried on in the specified markets under the Act. To that extent, the Court said, the provisions of Entry 33 of List III override the legislative powers of the State Legislature in connection with legislations de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government had not promulgated any statutory order under Section 18G covering the field. The Court rejected the contention that mere existence of a statutory provision in the Act enabling the Central Government to issue such order would be sufficient to occupy the field contemplated by the provision. while examining the decision in Hingir-Rampur Coal Company's case on which reliance was placed by the appellants, the Constitution Bench held that it has to be kept in view that any legislation in exercise of legislative power under Entry 54 of List I would enable the Parliament to regulate mines and the minerals development by taking them under the control of the Union in Public interest. Thus, all aspects of the mining industry would be covered by the general sweep of such a declaration. But it was noticed that the IDR Act was enacted under Entry 52. It was held that the scheme of Entry 54 of the Union List read with Entry 23 of the State List was entirely different from the scheme of Entry 52 of List I read with Entry 24 of List II with which the Court was concerned in that case. On conjoint reading of these two entries, the ratio of the decision in Hingir-Rampur Coal Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Entry 24 of the State List. In that case the question was whether the U.P. Sheera Niyantran Adhiniyam, 1964 could be said to be repugnant to the Molasses (Control) Order issued by the Central Government under Section 18- G of the IDR Act imposing restrictions on the sale of molasses and fixing the maximum price of molasses. Answering the question in the negative, it was held that the term 'industry' in Entry 24 would not take within its ambit trade and commerce or production, supply and distribution of goods which are within the province of Entries 26 and 27 of List II. Similarly, Entry 52 in List I which deals with industry also would not cover trade and commerce in, or production, supply and distribution of the products of those industries which fall under Entry 52 of List I. For the industries falling in Entry 52 of List I, these subjects are carved out and expressly put in Entry 33 of List III. It was also held that since the Molasses (Control) Order of 1961 passed by the Central Government in exercise of powers conferred by Section 18-G was not extended at any point of time to the State of U.P. or the State of Bihar, the question of repugnancy between the Molasses Control O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding sale of raw tobacco as provided in the Tobacco Board Act cannot be regarded as 'industry'. 4. ITC's case [1985 Supp. SCC 476] is not correctly decided. Leave in special leave petitions granted. For the aforesaid reasons, the State legislations are held to be valid pieces of legislation. The appeals and the writ petition are disposed of accordingly. Parties to bear their own costs. Brijesh Kumar, J. I have the privilege of going through the judgments, separately prepared by my esteemed colleagues Brother G.B. Pattanaik, Brother Y.K. Sabharwal, and Mrs. Ruma Pal, J.J. In all the three judgments, the facts as well as the relevant provisions of the law and the decisions on the subject have been very elaborately and lucidly discussed. Hence, it would not be necessary to go into those matters all again. The main question, however, which has been considered is as to whether the case ITC Ltd. versus State of Karnataka 1985 Supp. 1 S.C.R. 145 has been correctly decided or not. In the above cited case, it has been held that once Tobacco Industry, in the public interest, was declared as such under Entry 52 of List 1 of VIIth Schedule of the Constitution, the State Legislatures ceas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in Tika Ramji versus State of UP (1956) SCR 393 holds good for the purposes of meaning to be assigned to the expression 'industry' occurring in Entry 52 of List I. The premanufacture activity relating to growing and sale of tobacco cannot be subject matter of legislation by the Parliament by virtue of declaration of tobacco industry under Entry 52 of List I of the VIIth Schedule. The power of State legislation to legislate on the subject in the List II of the VIIth Schedule e.g. Entry 14, 28 etc. remains unaffected. It has also been held that the State Act and the Central Act cannot operate simultaneously whereas Hon'ble Ruma Pal J. has also found that power of the State Legislature to make laws relating to tobacco as agricultural produce, its sale and levy of market fee was not affected since it cannot be said to be covered by the expression "industry" in Entry 52 of List-I of the VIIth Schedule. The I.T.C. case (supra) has been held to be wrongly decided. It has however been held that the Tobacco Board Act 1975 and the State Act can simultaneously operate without offending each other. In case it may not be possible, the provisions of Markets Act and not the Tob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in clauses (2) and (3), Parliament has been given the exclusive power to make laws with respect to any of the matters enumerated in List I or the Union List in the Seventh Schedule. Clause (2) empowers the Parliament, and State Legislatures subject to the power of Parliament under sub-clause (1), to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule described in the Constitution as the 'Concurrent List' notwithstanding anything contained in sub-clause (3). Under clause (3) the State Legislatures have been given exclusive powers to make laws in respect of matters enumerated in List II in the Seventh Schedule described as the 'State List' but subject to clauses (1) and (2). The three lists while enumerating in detail the legislative subjects carefully distribute the areas of legislative authority between Parliament (List I) and the State (List II). The supremacy of Parliament has been provided for by the non obstante clause in Article 246 (1) and the words 'subject to' in Art.246 (2) and (3). Therefore, under Article 246 (1) if any of the entries in the three Lists overlap, the entry in List I will prevail. Additionally some of the entries i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void." In other words where in due exercise of legislative powers in the Concurrent List there is an irreconcilable conflict in the legislations enacted, the Central Legislation will prevail. The doctrine of repugnancy has been developed in this context. [See: M/s Hoechst Pharmaceuticals Ltd. V. State of Bihar 1983 (4) SCC45, 89 ; Deep Chand v. The State of Uttar Pradesh [1959] Supp. SCR 8]. The controversy, in this case, is to be resolved keeping these broad principles in mind. The immediate question before us is whether the Tobacco Board Act, 1975 debars the States from levying market fee in respect of tobacco. In the several matters argued and heard, the main protagonists were the tobacco traders and dealers on the one hand who argue that the States cannot levy market f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omes within the exclusive legislative domain of the States. The Tobacco Board Act, 1975, on the other hand, is claimed by the appellants to be relatable solely to Entry 52 of List I which enables Parliament to legislate on "industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest". According to the appellants, the Markets Act seeks to regulate, inter-alia, the sale of various kinds of agricultural produce including tobacco. They contend that the provisions of the Markets Act could not be applied to tobacco because the Tobacco Act was enacted by Parliament under Entry 52 of List I to control and regulate everything relating to the tobacco industry from the growth of tobacco to its processing, storing, sale, manufacture, export and import. It had been initially argued by the appellants that once a declaration is made in terms of Entry 52 of the Union List, the industry in respect of which the declaration is made and the entire process relating thereto becomes part of the legislative head itself and within the exclusive domain of the Parliament, and the State legislature becomes incompetent to enact any provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the law made by Parliament was to prevail and the law made by the Legislatures of the State to the extent of the repugnancy with the Central Act, is void. The respondents on the other hand contended that the Tobacco Act did not and could not occupy the entire legislative field relating to tobacco. According to them, despite the declaration in Section 2 of the Tobacco Act under Entry 52 of List I, the word 'industry' in the context of the Tobacco Act could not include anything more than processing and manufacturing of tobacco. Reliance was placed primarily on the decision of the Constitution Bench in Tika Ramji & Ors. Vs. State of U.P. & Others 1956 SCR 393. It was further submitted on behalf of the respondents that the question of repugnancy between the Markets Act and the Tobacco Act would not arise since Parliament was not competent to enact provisions in respect of a legislative field specifically provided for in List II. It was submitted that the legislative field under Entry 52 of List I was derived from Entry 24 of List II and Entry 24 did not cover the legislative fields otherwise specially provided for in List II. It was stated that Entry 28 could not be rendered redundan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Markets Act granting Market Committees such right are repugnant to the provisions of the Tobacco Act and are therefore, unconstitutional. What has been placed before this Bench for its consideration is the correctness of the earlier decision in ITC Ltd & Others v. State of Karnataka 1985 (Suppl.) SCC 476. The question raised in that case was whether the provisions of the Karnataka Agricultural Produce Marketing (Regulation) Act, 1966 relating to the levy of market fee on tobacco were repugnant to the Tobacco Act. The majority held that it was. The minority view was that both Acts could co-exist. But the validity of the Tobacco Act itself was never in dispute. No doubt, the States have been given notice but the focus of the arguments has been on the levy of fees on the marketing of tobacco. As the Tobacco Act covers a much larger field, a pronouncement on the validity of all the provisions dealing with a variety of activities under the Act would not be appropriate as it would perhaps pre-empt a decision on aspects other than the marketing of tobacco without hearing those who might be interested in the outcome of a decision on those provisions. The starting point in any controve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 52 of List I allow Parliament to legislate in respect of particular 'industries' namely such industries which are declared by Parliament by law to be necessary for the defence or for the prosecution of war (Entry 7) and industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest (Entry 52). Trade and commerce in, and the production supply and distribution of the products of such controlled industry have been provided for in Entry 33 of the Concurrent List wherein both Parliament and the State Legislatures are competent to legislate. A Constitution Bench of this Court in The Calcutta Gas Company (Prop.) Ltd. V. the State of West Bengal has held that the expression 'industry' in all the three lists must be given the same meaning and that since ordinarily industry is in the field of State Legislation the word must be construed in the context of the other entries in List II in such a manner so that no entry in List II is deprived of its content. In other words, the meaning of the word 'industry' is to be determined with reference to Entry 24 of List II where the power to legislate generally in respect of industries has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Act enabled the Central Government to investigate into the affairs of an undertaking, to regulate its production, supply and distribution, and, if necessary to take over the management of the undertaking. The Court said that if the word 'industry' in Entry 24 of List II and, therefore, 52 of List I were interpreted to include 'gas and gas works' which were expressly covered by entry 25 List II, entry 25 may become redundant and it would amount to attributing to the authors of the Constitution "ineptitude, want of precision and tautology". As a result, the challenge to the State Act was negatived and the Central Act, insofar as it purported to deal with the gas industry, was held to be beyond the legislative competence of Parliament. Again in B. Viswanathiah and Company and others V. State of Karnataka 1991 (3) SCC 358, writ petitions were filed challenging the validity of the provisions of the Mysore Silkworm Seed and Cocoon (Regulation of Production, Supply and Distribution) Act, 1959 (Act 5 of 1960). It was contended that the impugned provisions lacked legislative competence after the enactment by Parliament of the Central Silk Boards Act (Act 61 of 1948) whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... List I. It was also urged that there was inconsistency between the Debt Act and the Gold Control Act and that the Debt Act could not be given effect to to the extent of such inconsistency. The Court noted that the Debt Act came squarely within Entry 33 of List II namely "money-lending and money-lenders; relief of agricultural indebtedness" and it was held that despite the fact that the Gold Act was referable to Entry 52 of List I: ". This does not mean that other entries in the State List become impotent even regarding 'gold'. The State Legislature can make laws regarding money-lending even where gold is involved under Entry 30, List II, even as it can regulate 'gambling in gold' under Entry 34, impose sales tax on gold sales under Entry 54 regulate by municipal laws under Entry 5 and by trade restrictions under Entry 26, the type of buildings for gold shops and the kind of receipts for purchase or sale of precious metal. To multiply instances is easy, but the core of the matter is that where under its power Parliament has made a law which overrides an entry in the State List, that area is abstracted from the State List. Nothing more." It is unnecessary to mul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that produce or supply technically substitutable goods, services or sources of income." It was said that if the word "industries" is construed in this wide sense, Entry 27 of List II will lose all meaning and content. It is not possible to accept this contention for, Entry 27 is a general Entry and it is a wellrecognised canon of construction that a general power should not be so interpreted as to nullify a particular power conferred by the same instrument. In Tika Ramji v.State of Uttar Pradesh 1956 SCR 393 the expression "industry" was defined to mean the process of manufacture or production and did not include raw materials used in the industry or the distribution of the products of the industry. It was contended that the word "industry" was a word of wide import and should be construed as including not only the process of manufacture or production but also activities antecedent thereto such as acquisition of raw materials and subsequent thereto such as disposal of the finished products of that industry. But this contention was not accepted. It was contended by Mr. Daphtary that if the process of production was to constitute "industry" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by law to be expedient in the public interest under Entries 7 or 52 of List I. It would not have been necessary to have especially provided for trade and commerce in, and the production, supply and distribution of the products of a controlled industry in Entry 33 of List III, had the word 'industry' in Entries 7 and 52 of List I covered the field. Similarly had the word 'industry' in Entry 24 of List II been sufficient, why have a separate head under Entry 27 of the same list dealing with the production supply and distribution of goods unless we concede that the framers of the Constitution were guilty of 'ineptitude, want of precision and tantology'? The concept of a 'general' and 'particular' term is necessarily relative depending upon the context in which the term is considered. Entry 27 of List II is certainly a general entry but only in relation to Entry 33 of List III which deals with trade, commerce etc. in particular kinds of products namely the products of a controlled industry. Finally, it is clear from the passage quoted, that Banthia held that the Gold Act was legislatively competent under Entry 52 of List I because it dealt with the process of manufacture or producti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f List III and the overriding powers of Parliament during a national emergency including those under Articles 249, 250, 251 and 252. To sum up: the word 'Industry' for the purposes of Entry 52 of List I has been firmly confined by Tika Ramji to the process of manufacture or production only. Subsequent decisions including those of other Constitution Benches have re-affirmed that Tika Ramji's case authoritatively defined the word 'industry'- to mean the process of manufacture or production and that it does not include the raw materials used in the industry or the distribution of the products of the industry. Given the constitutional framework, and the weight of judicial authority it is not possible to accept an argument canvassing a wider meaning of the word 'industry'. Whatever the word may mean in any other context, it must be understood in the Constitutional context as meaning 'manufacture or production'. Applying the negative test as evolved in Tika Ramji in this case it would follow that the word 'industry' in Entry 24 of List II and consequently Entry 52 of List I does not and cannot be read to include Entries 28 and 66 of List II which have been expressly marked out as field ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e when trade was not developed and when transactions took place at specified places. But with the development of commerce, bargains came to be concluded more often than not through correspondence and the connotation of the work 'market' underwent a corresponding expansion. In modern parlance the work 'market' has come to mean business as well as the place where business is carried on." The question then is does the Markets Act fall within this definition of the word 'markets'? The establishment of regulated markets had long been recognized as an imperative requirement of any ordered plan of agricultural development in this country. The objects and reasons for enacting the Bihar Markets Act, 1960 has been stated as: properly organising markets of agricultural and allied commodities to ensure that the agriculturist gets a fair share of the price paid by the consumer for his produce by attempting to do away or rigidly controlling the middle man. What was originally a source of private profit in common law, has by virtue of the Markets Act become a matter of municipal concern namely, setting up of regulated markets for the marketing of agricultural produce. The provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed rates. The remaining sections of the Markets Act are omitted from consideration as they are not at all relevant. We are really concerned with Section 15 and more particularly Section 27. The setting up of markets areas, markets yards and regulating use of the facilities within such area or yards by levy of market fee is a matter of local interest and would be covered by Entry 28 of List II and thus within the legislative competence of the State. If any portion of the market area or the market yards is used for the sale or purchase of tobacco, that too will be within the State's competence. To hold to the contrary would be to ignore the exclusive powers of the States to legislate in respect of markets and fairs under Entries 28 and 66 of List II. The Markets Act does not seek to regulate either the "manufacture or production" of tobacco (assuming that agricultural produce can be manufactured) and thus does not impinge upon the Tobacco Act in so far as it is at all relatable to Entry 52 of List I. All the provisions of the Markets Act, in my view, are clearly relatable to Entry 28 of List II given the scope of the entry as discussed earlier. The State in the circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (2) prescribes some specific measures which may be taken by the Board. Those which are of relevance are noted: "8(2) (a) (b) keeping a constant watch on the virginia tobacco market both in India and abroad, and ensuring that the growers get a fair and remunerative price for the same and that these are no wide fluctuations in the prices of the commodity; (c) maintenance and improvement of existing markets, and development of new markets outside India for Indian virginia tobacco and its products and devising of marketing strategy in consonance with demand for the commodity outside India, including group marketing under limited brand names; (cc) establishment by the Board of auction platform with the previous approval of the Central Government for the sale of virginia tobacco by registered grower or curers and functioning of the Board as an auctioneer at auction platform established by or registered with it subject to such conditions as may be specified by the Central Government. (e) regulating in other respects virginia tobacco marketing in India and export of virginia tobacco having due regard to the interests of growers, manufacturers and dealers and the nation; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the Act in respect of certain territories and Section 31 which reads: 31. The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force." The object of the Tobacco Act is to keep a control on the quality and quantity of tobacco grown in the country with an eye on the international markets. The location of domestic markets for sale of tobacco can hardly be described as a necessary concomitant to the achievement of this object. Assuming it is, fairly read, it is possible to reconcile the allegedly conflicting provisions of the two statutes by a reasonable and practical construction of their provisions. The use of the word "markets" and marketing in the Tobacco Act, including Section 8, does not mean a market in the sense the word has been used in the Markets Act. It is obvious from phrases such as 'the Virginia Tobacco market", 'development of new markets outside India' etc. that the word has been used in the sense of 'sale as controlled by supply and demand; especially a demand for a commodity or service" - in this case tobacco. The Tobacco Act is not concerned so much with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Tobacco Act are covered by Entry 52 of List I, nevertheless the Parliament did not intend to invalidate any portion of the Markets Act. It has consciously clarified by Section 31 that it does not intend to occupy the entire field and has 'made space' for the State legislation and made it clear that the provisions of the Central Act shall be in addition to and not in derogation of any other law. The Section assumes greater significance since most of the Markets Acts were in place when the Tobacco Act was enacted. There are two ways in which such a saving clause as is contained in Section 31 of the Tobacco Act may be understood. There is the way which found favour with this Court in M. Karunanidhi vs. Union of India : 1979 (3) SCC 431 which held that such a section clearly evinced the intention of the dominant legislature leaving "no room for any argument that the State Act was in any way repugnant to the Central Act". There is the other way of reading such a section in the dominant legislation as incorporating or taking under its legislative umbrella the allegedly conflicting provisions of the subservient statute. Either way, the express words in Section 31 coupled w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the following words: "mere possibility of issuance of any future order under Section 30(1) of the Tea Act by the Central Government in the absence of any existing express order to that effect, cannot be said to have occupied the field regarding purchase and sale of manufactured tea and fixation of maximum or minimum price thereof, or the location of such sales. These topics cannot be said to be legitimately covered by the Tea Act. Hence, the field is wide open for the State Legislature to exercise its concurrent legislative power under Entry 33 of List III for effectively dealing with these matters." Therefore, even if one were to concede that there is a conflict between the provision in the Markets Act prohibiting sale of tobacco otherwise than in a market area and the setting up of auction platforms under the Tobacco Act, and between the States power to levy market fee under the Markets Act and the levy of fee on the sale of tobacco under the Tobacco Act, at least in those States where Sections 13, 13A and 14A of the Tobacco Act are not operative, the provisions of the Markets Act must prevail. It now remains for me to answer the question which was referred to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectly that the Tobacco Act and Markets Act operated in their respective fields and that there was no repugnancy if both the Acts were considered in the light of their respective true nature and character. Tika Ramji and the other Constitution Bench decisions following it were not even referred to by the majority.. Fifth- In determining the impact of Entry 52 of List I vis a viz entry 28 of List II, the majority relied on decisions dealing with Entry 54 of List I, and Entry 23 of List II. The scope of the entries are different and I agree with the view expressed in the opinion of my learned Brother Pattanaik, J that the decisions relied upon by the majority viz the Hingir Rampur Coal Co. Ltd. v. State of Orissa; AIR 1961 SC 459, Baijnath Kedia v. State of Bihar: 1969 (3) SCC 838; Bharat Cooking Coal Ltd. v. State of Bihar 1990 4 SCC 557 and State of Orissa v. M.A. Tullock & Co. : 1964 (4) SCR 461 are inapposite. The final premise on which the majority based their view that the States could not levy any market fee on Tobacco, was that since the assent of the President was not taken, the Karnataka Markets Act 1980, was wholly incompetent. The view proceeds on a misinterpretation of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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