9911796707
TMI Blog1979 (10) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was applied for in August, 1974 and a declaration was made by the petitioner in Form XIII appended to the Rules in accordance with Rule 13-A of Chapter III of the Rules. Undisputably, the petitioner exercised the option envisaged by the proviso to sub-section (1) (b) of Section 3. The petitioner started its'Unit' on 12th December, 1974 and it has been found that the functioning of the 'Unit' was ceased with effect from 4th May, 1975. According to the petitioner, all the three power-crushers comprising its 'Unit' worked upto 31st December, 1974. On the 28th December, 1974, however, the petitioner intimated to the Khandsari Inspector concerned (Respondent No. 2) that due to shortage of sugarcane supply and labour problems, it would not run one of the crushers for the rest of the season. According to the petitioner in the months of January and February, 1975 it worked only two of the crushers. It is claimed that when on the 8th February, 1975 the Khandsari Inspector inspected the petitioner's 'Unit', he found and recorded a report to the effect that only two crushers were being used and the third one stood dismantled. It is further alleged that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this had already been done. The Assistant Sugarcane Commissioner rejected the contention. It was held that the declaration made by the petitioner in accordance with the requirements of the Act and the Rules was in respect of a 'Unit' comprised of three crushers. The view was taken that all the three power-crushers comprised a single 'Unit' and irrespective of the question as to whether any particular crusher functioned or was out of commission for any interim period or not, the liability of the petitioner for taxation for the entire assessment period was to be judged treating all the crushers as a single Unit. Aggrieved by the notice dated 12th May, 1975 and the appellate order passed by the Assistant Sugarcane Commissioner dated 7th February, 1979, the petitioner has invoked the jurisdiction of this Court under Article 226 of the Constitution and prays for a writ, order or direction in the nature of certiorari for quashing the notice as well as the appellate order. 3. It was urged by learned counsel for the petitioner at the time of the admission of this petition as well as before this Bench that the liability of the petitioner to pay tax under the Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngular will include the plural and vice versa. It may be noted here that even if one of the several crashers of which the petitioner's Unit was composed was out of commission while the remaining worked it was still engaged in the manufacture or production of gur, rab or khandsari sugar with the aid of a crusher driven by any mechanical power , and consequently continued to be a Unit . An examination of various sub-sections of Section 3 and of Rule 13-A to which we will refer to presently shows that in these provisions throughout the word used is Unit . and they nowhere mention crusher or crushers. A Unit in our view, has to be taken as an undivided whole and the crushers comprising it are mere components thereof. 6. Sub-section (1) of Section 3 of the Act which is the charging section makes the tax leviable basically on the purchase of sugarcane by the owner of a factory or a unit at the rates laid down therein. The taxable incident primarily is the purchase of sugarcane and not the utilisation or consumption thereof. When the owner of a 'unit' exercises the option available to him under the proviso to Section 3 (1) (b) he undertakes liability for payment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E Exceeding 13 18 Non-Hydraulic 16,800 Hydraulic 28,000 Notes. - (a) For every extra Meerut type bel add 800 quintals to the quantity shown in column 4 above. (b) For every extra Rohilkhand type bel add 1,6C0 quintals to the quantity shown in column 4 above. (c) The above specifications relate to a unit comprising one power- crusher only. (d) Where a unit comprise more than ore power-crusher of the same category the specification given in column 4 shall apply in such multiples thereof as there are power-crusher set up in the unit. (e) Where a unit comprises more than one power-crusher of different categories the quantity of assumed purchases of cane shall be worked out separately for each category according to column 4 above and the quantities thus worked out shall be totalled. An analysis of the Schedule clearly discloses that a Unit is not the same as a crusher. By merely working a crusher the owner of a Unit cannot engage himself in the manufacture or production of gur, rab or khandsari sugar... He cannot possibly do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible. 9. Further sub-section (1) of Section 4 of the Act prohibits any unit to carry on or undertake any process connected with the manufacture or production of gur or rab without obtaining a licence in the form prescribed. Rule 20 provides that an application for the grant or renewal of a licence under Section 4 shall be made to the Sugar Commissioner in Form XI by such date as is prescribed in Schedule IT. The heading of Item No. 5 of Form XI is location of the unit. Item No. 6 (a) of this form requires the disclosure of the number of power crushers for which licence is required with size and capacity. Item No. 6 (b) requires the applicant to set out the number of Bhatties (Furnaces) set up. Again under Item No. 8, the applicant for a licence has to disclose the number of power-crushers. In the application itself under Item No. 11, an applicant for a licence has to state as to whether he proposes to pay the purchase tax under the provisions of the Act according to Schedule I. The prescribed form for application for a licence also thus shows that the crushers are merely parts of the unit. Form XII in which licences are issued also uses both the words 'power-crusher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no provision in the Act or the Rules under which, as was done by the petitioner, the owner of such a unit may intimate that he would not work a component crusher of his unit for part of the period for which he has filed a declaration, obtained a licence and intimated his option. The fact that the petitioner had before closing down some of the crushers which formed component parts of its Unit and in fact did not work some of his crushers is wholly irrelevant as far as its liability to pay tax on the basis of assumed purchase made by it is concerned. In our judgment, the petitioner's unit has to be taken as an undivided whole and the three crushers which comprised it were merely component parts thereof. Its liability to pay tax rested on the functioning of the Unit which undisputably did continue to be engaged in handling sugarcane juice produced by sugarcane crushers driven by mechanical power. 12. The submission that our interpretation of the Act and the Rules will work hardship on owners of units who exercise an option according to the proviso to Section 3 (1) (b) and hence must be avoided has no substance. The owners of such units have made their own choice and must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 12th May, 1975. An attempt was made to contend that Section 18 of the U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 did not contemplate payment of commission on the basis of sugarcane assumed to have been purchased by a unit which has opted for payment of tax on that basis under that Act. There is nothing in the notice under challenge indicating that the commission claimed to be due from the petitioner as disclosed in the notice dated 12th May, 1975 has been computed on the basis of any sugarcane assumed to have been purchased by it. In the writ petition there is no averment to the effect that the commission of ₹ 5004.51 P. is not on the basis of actual sugarcane purchased by the petitioner. Even during the appeal preferred by the petitioner it did not challenge its liability to pay the commission as mentioned in notice dated 12th May, 1975. In any event the notice merely informs the petitioner that it had not deposited the tax and the commission as required by law and provided it an opportunity of either filing a written objection or appearing personally before respondent no. 2 in case it disputed its liability as also to show as to why legal steps be not t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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