JUDGMENT
P.K. Deb, J.
1. In all these writ petitions the notification issued by the State of Bihar through the Secretary, Sugar-can Development Department regarding fixing 2% fee on the actual price paid per quintal of sugar cane under Section 48(1) of the Bihar Sugar Cane (Regulations of Supply and Purchase) Act, 1981 being amended by Act No. 11 of 1994 has been challenged.
2. The petitioners are the existing companies within the meaning of Indian Companies Act, 1956 having its sugar factories in the district of Gopalganj within the State of Bihar. Their business is of manufacture and sale of sugar for which raw materials grown in the agricultural fields of the State are being purchased through the Co-opprative Societies. The subject of sugarcane is governed by the State enactments came in the year 1981 as Bihar Sugarcane (Regulation of Supply & , Purchase) .Act, 1981. The supply of sugarcane to the factories are being regulated by the State machinery as per the Act itself. The factories are to pay tax on purchase of sugarcane together with commission to the Zonal Development Council and Cooperative Society under the provisions of the Act. The rate of purchase tax is governed by Section 49 and previously it was Rs. 1.00 per quintal and the same had been enhanced retrospectively by the respondent authorities on 9.11.2000 fixing the same at Rs. 1.75 per quintal of sugarcane. The said enhancement of tax was challenged before this Court in CWJC No. 2271 of 2001. By an order dated 19.3.2001 a Bench of this Court had upheld the notification increasing the purchase tax holding that the same shall be implemented only prospectively and not retrospectively. Now by the present notification as contained in Annexure-2 the State Government is enhancing the commission payable to the Zonal Development Commission under the provisions of Section 48 of the Cane Act. The enhancement has been made from Rs. 0.15 paise per quintal to 2% of the actual price paid per quintal meaning thereby to a rate of Rs. 1.75 paise per quintal of sugarcane, and thus, enhancing the rate of commission eleven times at one stroke. The legality and validity of such enhancement has been challenged together with the pecuniary jurisdiction of the State Government in this respect. According to the petitioners such enhancement in the commission has cast an excessive financial burden wiping out its profit as a whole. When such enhancement has been done in absence of quid pro quo and without basis and jurisdiction itself.
3. The brief history of the Act and the Rules in the field of Manufacture of sugar Industries is required to be stated as follows:
Previously prevailing Bihar Sugarcane (Regulation of Supply and Purchase Ordinance, 1968 was replaced by the Bihar Sugar Factories (Control) Act, 1937 under the Bihar Sugarcane (Regulation of Supply and Purchase) Second Ordinance 1978. As per the rules and the ordinance the Commission payable to the Zonal Development Commission under Section 48 was to the tune of Rs. 15 paise per quintal: and out of that rate 8 paise was the share of the Zonal Development Council while rest to the Co-operative Societies through which the sugar canes are being purchased. In the year 1981 on amendment the rate of commission payable under Section 48 of the Act was enhanced from 13 paise to 15 paise of the purchase of cane and as per Rules framed therein the share of the Zonal Development Commission was 8 paise per quintal and 7 paise per quintal to the Co-operative Society. The regulation of Supply and Purchase Ordinance to the Sugar Cane after several validation came as an Act being the Bihar Sugar Cane (Supply and Purchase) Act, 1981. It should be mentioned here as per the Act itself the factories while purchasing sugar cane through the Societies are not only to pay purchase tax but also a commission fee for the Zonal Development Commission itself. In the year 2000 the purchase tax had been enhanced from Rs. 1 per quintal to Rs. 1.75 paise per quintal with retrospective effect from 1994-1995. As stated earlier such retrospective effect of enhancement has been turned down by this Court in CWJC No. 2271 of 2001 as notification was held to be valid prospectively only although it appears that from the order passed by this Court as contained in Annexure-A to the counter-affidavit the Senior Counsel Mr, Giri as is appearing in the present case although made various submissions for and on behalf of the writ petitioners in that writ petition regarding the validity of the notification itself but those submissions had been turned down as those were failed to be objected for formalities sake only. It is the contention of the petitioners being (sic) by the increase in the purchase tax being upheld by this Court the respondent authorities by the impugned notification dated 19.12.2001 has enhanced the rate of commission payable under the provisions of Section 48 of the Cane Act, 1981, 11 times more by fixing it 2% on the actual price paid per quintal of the purchase of sugar cane by the sugar factory. According to the petitioners such determination of 2% on the actual price paid by the Sugar Factory per quintal is devoid of all norms and without having any basis regarding the datas and start as being absent regarding the developmental work. It is also the contention of the petitioners that such notification has been made enhancing the commission fee is in total non-consideration of the preamble and the object of the Act itself vis-a-vis to the development activities regarding the Zonal Development Commission. The main grounds of challenge of the notification are (i) there being no publication in the official gazette as per Section 48(1) of the Act the implementation of the notification becomes an unenforceable and unworkable one. (ii) when Rule 35 of the Rules framed for the purpose of commission fee being not amended then the notification itself becomes an unworkable one. Hence no demand can be made from the factories on the basis of such notification, (iii) there being no quid pro quo i.e. no circumstances being available for the purpose of such enhancement of the commission fee, the same becomes an arbitrary one and cannot be enforced, (iv) the enhancement itself is confiscatory in nature as such enhancement would practically take away of profits and gains of the petitioners’ factories making shut down the doors of factories which is against the principle for a welfare State like that of Bihar which already is suffering from having no Industries that too after the bifurcation of the State, (v) The notification itself is bad as such fee has been notified to be charged on the actual price of cane sold when the price is governed by the Central Government itself and whatever price for a particular year being a notified one by the Central Government then no fee can be imposed on the actual price but can only be or, the notified price itself.
4. The Respondent Nos. 2 and 3 have filed detailed counter affidavit contending that the present writ petition is not maintainable as the same suffers from the proposition of law of res-judicata as the notification had been challenged before this Court by Sub-hash Singh and others in CWJC No. 4014 of 2002 and the validity of the notification as a whole not being challenged regarding the enhancement of fee etc. then the present writ petitions are barred by the principle of constructive res-judicata. It has also been held that the notification as contained in Annexure-2 has not been invalidated in that writ being CWJC No. 4014 of 2002 but only ordered that necessary notification should be issued regarding the share of the Zonal Development Council and the Co-operative Society within a period of four weeks from the date of the order i.e. 8.5.2002. In that way the maintainability of the writ petitions have been challenged as mentioned above. On other grounds of challenge regarding the Gazette notification it has been stated in the counter affidavit that to the knowledge of the petitioners Gazette notification has already been made and such ground is only a myth but such Gazette notification has not been included with the counter affidavit. On giving basis regarding enhancement of the fee the respondents tried to show quid pro quo by bringing analogies as has been done in the nearby State Uttar Pradesh. Regarding the confiscatory nature of the notification an attempt has been made from the side of the respondents to show that even if actual price is considered per quintal for the purpose of levying of fee then also it could not attack on the profits and gains of the factory, in any way whatsoever. Regarding the actual price and the price index being notified from time to time it has been stated that it is discretion the of the State being the legatee to raise/levy fee on the actual price being paid by the factories in purchase of sugar cane and the same cannot be questioned by the petitioners as it is an admitted fact that by giving advance to the sugar cane growers the factories purchase the sugar cane in higher price.
5. On such above contentions of both the parties it is now required to consider the points raised one by one.
6. As per the first point raised regarding jurisdiction, according to the petitioners until and unless the notification Annexure-2 is being published in the official Gazette it remains unworkable as Section 48(1) is very clear on this point. In the counter , affidavit it has been stated that Annexure-2 had already been notified in the official Gazette and it is also within the knowledge of the petitioners but rejoinder filed to the counter affidavit, it has been specifically stated that no such notification has ever been made in the official Gazette and the petitioners have got no such knowledge up-till-now. Very peculiarly although respondent’s claim that notification was made in the official Gazette but no such Gazette notification has been annexed with the counter affidavit so the matter remains as a disputed one So on this point it can only be observed that as required mandatory under Section 48(1) of the Act, until and unless the notification is published in the official Gazette Annexure-2 cannot be enforced or implemented. Regarding the second point raised, the amendment came in the year 1994 Section 48 provided commission fee at the rate of 15 paise per quintal on the purchase of cane made by the factory or on his behalf and Sub-section (2) provided that the commission payable as per Sub-section (1) shall be collected in the prescribed form/manner and the amount so collected shall be paid to the Cooperative Society and Council in such proportionate as may be prescribed and for such prescription Rule 35 had been there and in Rule 35 the Division of proportionate amount to be payable to the council and also to the Co-operative Society had been specifically prescribed. Section 48 has been amended by the Act No. 11 of 1994 and the amended provisions of Sub-section (1) and (2) had been substituted in the following manner:
48. (1) The State Government may, by notification in the official Gazette, determine the amount of Commission payable by the occupier of the factory on the purchase of sugarcane by such occupier or on his behalf and may by like notification exempt the occupier of a new factory to be specified in the notification from the payment of the amount of such commission for a prescribed period.
Sub-section (2) had also undergone a change in the following manner:
(2) The commission payable under Sub-section (1) shall be collected in the prescribed manner and the State Government shall determined the share of Zonal Development Council and Co-operative Society.
If we compare the unamended Section 48 with that of the amended provisions it could be found that by the new amendment the fixation of the commission has been withdrawn by giving a discretion to the authorities to determine the quantum of commission and similarly in Sub-section (2) when no quantum has been fixed as per the unamended Sub-section (1) the determination of shares of Zonal Development Council and the Co-operative Society has also been kept at the discretion of the authorities but the prescribed manner of collection remains the same as per Rule 35 of the Rules framed thereon. Until and unless Rule 35 is being amended by proper substitution the anomalous position remains that although under Section 48 now the quantum fixed earlier in the unamended Act had been withdrawn by amendment of 1994 but the division and determination under Rule 35 remained as it is. So until and unless Rule 35 is being amended definitely the notification made as per Section 48(1) as impugned as contained in Annexure-2 becomes unenforceable. On the other hand it has been submitted from the respondent authorities that as per Sub-section (2) the share is to be determined between the zonal Development Council and. Cooperative Society with the authorities concerned the same cannot be a matter of question by the owners of the factories as they are to pay the fees which have been fixed under Section 48(1) of the Act. Fixation of fee whether proper or unfair can be considered in the later paragraphs but the position remains that when prescription/implementation of such notification depends as per the ordinance “prescribed manner” in this Act and until and unless such prescribed manner is being properly introduced under Rule 35 then the whole notification under Section 48(1) of the Act becomes ineffective. More so when Sub-section (1) has got a corollary part under Sub-section (2) which has got direct in link with the Rule 35. In that way in my considered view notification (Annexure-2) becomes unenforceable till Rule 35 is being properly amended. This has also been considered by this Court while passing order in CWJC No. 4014 of 2002 wherein by consideration of Sub-section (2) of Section 48 order and direction’ had been given to the authorities for making necessary notification determining the share of the Zonal Development Council and the Co-operative Society and in my unless Rule 35 is being properly amended by making only a notification under Section 48(2) of the act would make the position more anomalous and chaotic giving rise to further litigation in the matter. In that way I hold and find that the notification Annexure-2 remains unenforceable even if Gazette notification has been made till further notification is made under Section 48(2) of the Act together with proper amend in Rule 35 of Bihar Sugarcane (Regulation of Supply and Purchase) Rules, 1978.
7. Coming to the third point raised from the side of the writ petitioners first of all it is required to be seen for what purpose the funds of the Board or the Council it necessary. This relates to the functioning of the Board itself. As per Section 4 of the Act of 1981 which has not been changed in the amended Act No. 11 of 1994. (a) The function of the Board relates to planning of development scheme connected with production, research, transport and sale of sugarcane (b) matters pertaining to Regulation of Supply, purchase and watchmen of cane etc., etc. (c) maintenance of healthy relations between the occupier and Manager of the factories on the one hand and the cane growers and Co-operative Society on the other hand. Zonal Development Council comes within the purview of the Board itself and its establishment has been contained in Section 7 of the Act and function of the Council has been regulated by Section 8. If those functions are considered in its proper perspective then the same is for the purpose of over all development of the sugarcane Industries and seeing the interest of all concerned involved in such industries within the zone itself and the funds of the Council are to be received from the State Government in the form of grant and also under Sections 48 and 49 of Act or otherwise. Under Section 49 of the Act the Council gets a share from the Tax being imposed on the factories and under Section 48 a further levey has been made on the factories towards fees for the Council. When an abrupt change has been made whatever was there earlier in the year 1981 towards the fees of the Council then such rise should be directly connected to quid pro quo i.e. the circumstances on which such fees was to be increased. It could be understood very well because of the change in increasing price of everything the fees of Zonal Development Council may also be raised but to what extent that should be considered on the circumstances available otherwise if no such circumstances could be shown i.e. being quid pro quo then the rise made in the Zonal Development Council fee would definitely be termed as an arbitrary one. in the counter affidavit it has only been stated that as the development work is to be one by the Zonal Development Council and for that reason higher money is required then it remains with the discretion of the authorities to increase in the commission fee. But no where in the counter affidavit anything could be shown that what development scheme has been drawn and the budget for such development scheme which required for more money which can only be collected through raising of fees. On one hand by rise of tax the Zonal Development Cr-Timission is getting a share of it as per Section 49oftheActandaisoasperAnnexure-1 because Sub-section (8) of Section 49 very well clarifies that a part of the tax should go to the Zonal Development Council. It has also not been stated as to how much from that rising of tax as per Section 49 has been fixed or determined to be debited to the account of Zonal Development Council, and if developmental budget has been made and then the same is lacking for want of money then definitely State Government has got right to impose higher fee on the Zonal Development Councils fee. But before that there should be a proper consideration of all affairs of the matter and then and then only such quantum of fee should be determined. Regarding the fourth point I am not going to consider that matter regarding confiscatory nature etc. because on both sides some accounts had been given. Moreover only because there is leaving of higher fees payable in the neighbouring State of U.P. the same cannot be only basis for increasing the fee in the State of Bihar. In the U.P. Developmental Scheme must be there which needed money and, as such, the fees have been increased but here nothing could be shown before this Court what developmental scheme has been taken by the authorities or the earlier developmental scheme which is going on had been shattered for want of money which can only be collected through increase of Council fees. It may also be stated here that this Court can take judicial notice of the fact that the sugar cane grown in the State of U.P. is of higher quality and thus fetching more money in the market then those of the State of Bihar. It could also be taken into account that most of the sugar factories in the State of Bihar has become defunct by this time for reason or the others. Only some are being run with Constraints. It is stated in the bar that if such sort of fees are being increased with ten times denomination then the previous one then perhaps the 4-5 factories which are now running in the State of Bihar shall have to shut down their factories also. The fifth point argued has got some substance on the face of it. Section 48(1) (amended)and also unamended one mentions about inflicting of Council fees on the purchase of suparcane by the occupier or on his behalf. It has never mentioned about actual purchase amount but in the notification it has been mentioned about actual purchase. There is difference of actual purchase and the rate of price as fixed by the Central Government from time to time. This has been held that when tax is to be imposed such as Sales Tax then such tax the higher price given by the occupier than the price fixed cannot be subjected to State sales tax unless there is an agreement between the grower and the purchaser for payment of higher price. Reference may be made in State of N.O. v. Kothari and Ors. In this respect another judgment which relates to the Bihar Sugar Mills may be referred as reported in 1997 (1) PUR 795 Bihar Sugar Mills Association v. State of Bihar.
8. Thus on consideration of all these matters as mentioned above I find and hold that the present notification as contained in Annexure-2 cannot be implemented as it is as the determination of the quantum of fee being an arbitrary one and for other defects as mentioned above. In that way Annexure-2 is hereby quashed and the matter is sent back to the authorities for reconsideration of the matter in its proper perspective as per discussions made above in the order and then come up with proper notification after consideration of all pros and cons in the matter so that there may not be any case for future litigation as is being done in the present cases. 9. The writ petitions are thus, allowed with the liberty as mentioned.