{"id":243540,"date":"2002-01-24T00:00:00","date_gmt":"2002-01-23T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/i-t-c-limited-vs-agricultural-produce-market-on-24-january-2002"},"modified":"2018-04-01T09:24:28","modified_gmt":"2018-04-01T03:54:28","slug":"i-t-c-limited-vs-agricultural-produce-market-on-24-january-2002","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/i-t-c-limited-vs-agricultural-produce-market-on-24-january-2002","title":{"rendered":"I. T. C. Limited vs Agricultural Produce Market … on 24 January, 2002"},"content":{"rendered":"
Supreme Court of India<\/div>\n
I. T. C. Limited vs Agricultural Produce Market … on 24 January, 2002<\/div>\n
Author: Pattanaik<\/div>\n
Bench: Cji, G.B. Pattanaik<\/div>\n
           CASE NO.:\nAppeal (civil) 6453  of  2001\n\n\n\nPETITIONER:\nI. T. C. LIMITED\n\n\tVs.\n\nRESPONDENT:\nAGRICULTURAL PRODUCE MARKET COMMITTEE & ORS.\n\nDATE OF JUDGMENT:\t24\/01\/2002\n\nBENCH:\nCJI & G.B. Pattanaik\n\n\n\n\nJUDGMENT:\n<\/pre>\n
With
\nCivil Appeal Nos. 540\/87, 541\/87, 3872\/90, 3024\/88,
\n3023\/88, 1535\/88, 1194\/88, 1394\/88, 1536\/88, 1980\/88,
\n1981\/88, 3715\/88, 2464\/88, 6619\/97, 2088-89\/99,\t  C.A. No.
\n 671 of 2002 @ S.L.P.(Civil) No. 892\/85, C.A. Nos. 673-
\n675\/2002 @  27568-27570\/95 and Writ Petition (Civil) No.
\n8614\/1982.\n<\/p>\n
JUDGMENT<\/p>\n
PATTANAIK, J.\n<\/p>\n
\tLeave granted in all the Special Leave Petitions.\n<\/p>\n
\tI.T.C. Limited filed a writ petition under Articles 226
\nand 227 of the Constitution of India before the Patna High
\nCourt against an order of assessment passed by the
\nAgricultural Produce Market Committee, Monghyr,
\ndemanding a sum of Rs.35,87,072\/-, inter alia on the ground
\nthat the purchase of unprocessed tobacco leaves from the
\ngrowers, being the subject matter of the levy,\tthe Market
\nCommittee has no power to levy and collect fee.\t    The stand
\ntaken before the High Court was that tobacco leaves neither
\nhaving been bought or sold within the market area and the
\npower to levy and collect market fee under Section 27 of the
\nBihar Agricultural Produce Markets Act, being on the
\nAgricultural produce  bought or sold in the market area, the
\nMarket Committee was not entitled to levy market fee.\tThe
\nDivision Bench however without entering into the aforesaid
\ncontroversy, came to the conclusion that no clear notice
\nappears to have been given to the company to produce the
\nrecords for the purpose of satisfying the Market Committee
\nthat the tobacco leaves in question were either not processed
\nor exported from the market area and, therefore, the company
\nmust be given a fresh opportunity of adducing all the relevant
\ndocuments before the Market Committee to escape the
\npresumption arising out of proviso to Section 27 of the Act.
\nThe High Court having remitted the matter to the Market
\nCommittee for passing a fresh assessment order, the company
\nhas approached this Court,  which is the subject matter in
\nCivil Appeal No. 6453 of 2001 arising out of SLP(Civil) No.
\n12374\/84.  When the Special Leave Petition was listed before
\na Bench of this Court in February, 1987, the judgment of this
\nCourt in I.T.C. Ltd. etc. vs. State of Karnataka, reported in
\n1985 Supp.(1) S.C.R. 145 had been placed.  The Bench
\ntentatively being of the view that the decision of this Court
\nrequires reconsideration directed that the matter be placed
\nbefore a Constitution Bench of five Judges and that is how
\nthe matter has been placed before the Constitution Bench.
\nSubsequent to the Bihar case, similar cases arising out of
\njudgment of other High Courts on being assailed before this
\nCourt, those cases also have been tagged on  to this case.
\nWhen this batch of cases had been earlier listed before a
\nConstitution Bench and arguments had been advanced on
\nbehalf of company, the Court felt that it would be appropriate
\nto issue notice to the Attorney General and the Advocate
\nGenerals of all the States, as most of the States have their
\nState Act called the Agricultural Produce Market Act and
\npursuant to the order of this Court dated 10th of April, 2001,
\nnotices were issued to\t Advocate Generals of all the States as
\nwell as to the Ld. Attorney General, whereafter this case has
\nbeen heard by this Bench.\n<\/p>\n
\tDifferent State Legislatures have enacted Agricultural
\nProduce and Markets Act for regulating sale and purchase of
\nthe agricultural produce within the market area and for levy
\nand collection of market-fee.  Parliament having declared that
\nit is expedient in the public interest that Union should take
\nunder its control the tobacco industry, enacted\t the Tobacco
\nBoard Act, 1975 which is an Act to provide for the
\ndevelopment of tobacco industry under the control of the
\nUnion Government.  Under the Agricultural Produce Markets
\nAct, the State Government having notified ‘tobacco’ as an
\nagricultural produce, the purchase and sale of tobacco is to be
\nregulated under the provisions of the State Act and the
\nMarket Committee has the right to levy and collect market-
\nfee on such sale and purchase of the notified agricultural
\nproduce viz. the tobacco.  In a case arising from the State of
\nKarnataka, this Court by a majority of\t2:1,  came to hold that
\nthe tobacco industry having been taken over by the Central
\nGovernment under Entry 52 of List I and having passed the
\nTobacco Board Act, the State Legislature ceases to have any
\njurisdiction to legislate in that field and, therefore, the
\nprovisions contained in the Karnataka Act, entitling the
\nMarket Committee to levy market-fee in respect of sale and
\npurchase of tobacco within the market area directly, collides
\nwith the Tobacco Board Act, 1975 and as such the State Act
\nso far as it relates to\t tobacco  was struck down.  The
\nminority view expressed by Justice Mukherjee was however
\nto the effect that both Acts can operate in their respective
\nfields and there is no repugnancy if both the Acts are
\nconsidered in the light of their respective true nature and
\ncharacter.  The majority view relied upon the decisions of
\nthis Court in State of Orissa vs. M.A. Tulloch and Co.,<\/a>
\n1964(4) S.C.R. 461  and Baij Nath Kedia vs. State of Bihar
\nand Ors., 1969(3) S.C.C. 838.\n<\/p>\n
\tThe other matter, arising out of the judgment of Patna
\nHigh Court is one filed by Agricultural Produce Market
\nCommittee, against a similar order as in Civil Appeal No.
\n6453 of\t 2001, remanding the matter for making a fresh
\nassessment order, after issuing notice to the ITC.   So far as
\nCivil Appeals arising out of the judgment of Allahabad High
\nCourt is concerned, the Division Bench of Allahabad High
\nCourt followed the judgment of this Court in ITC vs. The
\nState of Karnataka  1985 (Suppl.) Supreme Court Cases,
\n476, and held that Mandi Samiti cannot charge a market fee
\non sale and purchase of Tobacco, and consequently Krishi
\nUtpadan Mandi Samiti has preferred the appeals in question.
\nCivil Appeal No. 3872 of 1990 also arises out of a judgment
\nof Allahabad High Court and the Tobacco Merchants’
\nAssociation and Ors., are the appellants.  The Full Bench of
\nAllahabad High Court considered the constitutional validity
\nof U.P. Krishi Utpadan Mandi Adhiniyam, 1964, and came to
\nhold,  that the Adhiniyam permitting levy and collection of
\nfee under Section 17(iii), in so far as it applies to tobacco, is
\nnot repugnant to the provisions of Tobacco Board Act and
\nfurther held that the decision of the Supreme Court in Ram
\nChander Kailash Kumar vs. State of U.P.<\/a> is binding,
\nnotwithstanding the subsequent decision of the Supreme
\nCourt in the case of ITC vs. State of Karnataka (supra), and
\ntherefore, the Tobacco Merchants’ Association has assailed
\nthe legality of the aforesaid Full Bench decision.  So far as
\nthe State of Tamil Nadu is concerned, the Tamil Nadu
\nAgricultural Marketing Board has assailed the judgment of
\nthe Division Bench of the High Court as the High Court
\nfollowed the judgment of this Court in the ITC case and held
\nthat the State Legislature has no legislative power or
\ncompetence to notify tobacco for the purpose of control and
\nregulation and levy market fee under the provisions of\tTamil
\nNadu Regulation Act, 1959.  In fact the High Court held that
\nthe ratio of majority opinion in ITC case squerely applies
\nand, therefore, the State Legislature of Tamil Nadu has no
\nlegislative power to notify or provide for notifying tobacco
\nfor the purpose of control, regulation and levy of fee or other
\ncharges under the provisions of Tamil Nadu Agricultural
\nProduce Markets Act, 1959.\n<\/p>\n
\tJayalakshmi Tobacco Company filed a Civil Writ
\nPetition No. 8614 of 1982 under Article 32, challenging the
\nconstitutional validity of certain provisions of Karnataka
\nAgricultural Produce Marketing (Regulation) Act, 1966, on
\nthe ground that in view of Tobacco Board Act, 1975 and
\nTobacco Association Act, 1975, the entire field regarding the
\ndevelopment of tobacco industry including the marketing of
\ntobacco was occupied and the State legislation is repugnant
\nto the Central Act.\n<\/p>\n
\tSo far as 12 appeals arising out of the judgments of
\nMadhya Pradesh High Court are concerned, the High Court
\nof Madhya Pradesh followed the judgment of this Court in
\nthe ITC case and held that the Market Committee will not be
\nentitled to realise any market fee in relation to the trade with
\nregard to tobacco since the Market Committee Act is
\nrepugnant to the Tobacco Board Act.  It may be stated that
\nthough the Writ Petition had been filed challenging the
\nconstitutional validity of the State Act, the High Court held
\nthe M.P. Krishi Utpadan Mandi Adhiniyam 1972 as amended
\nby M.P. Krishi Utpadan Mandi Sanshodhan Adhiniyam,
\n1986 to be valid.\n<\/p>\n
\tMr. Shanti Bhushan, learned senior counsel appeared
\nfor ITC, and argued, that the majority view in the decision of
\nITC case is correct and once Parliament has made a law
\nrelating to tobacco industry, which provides for the manner
\nand place of sale as well as levy of fee on the sale, the Market
\nCommittee Act enacted by the State Legislature, providing
\nlevy of fee for sale of the tobacco within the market area will
\nbe repugnant to the Central law, and therefore, the State Act,
\nso far as it deals with tobacco, must be held to be ultra vires.\n<\/p>\n
\tMr. Rakesh Dwivedi, the learned senior counsel,
\nappearing for the State of  Bihar, on the other hand
\ncontended, that the majority decision in ITC case must be
\nheld to be contrary to several Constitution Bench decisions of
\nthis Court starting from Tika Ramji vs. State of U.P. (1956)
\nSCR 393, and the word ‘industry’ in Entry 52 of List I must
\nbe given a limited meaning.  So construed, according to Mr.
\nDwivedi, the Parliament cannot be said to have legislative
\ncompetence to make law in relation to growing of raw
\ntobacco,  or even sale thereof, and to that extent the Tobacco
\nBoard Act must be held to be invalid.  According to him the
\nState Legislature was fully competent to enact the
\nAgricultural Market Committee Act, and providing therein,
\nfor levy of fee for sale and purchase of agricultural produce
\nincluding tobacco.  Apart from the main arguments,
\nadvanced by these two learned senior counsel, several other
\ncounsel appearing for Market Committee, namely, Mr.
\nAshok Ganguli, appearing in Tamil Nadu case, Dr. A.M.
\nSinghvi, appearing for Market Committee, Monghyr , Mrs.
\nShobha Dikshit, appearing for Krishi Mandi of Farukkabad,
\nMr. Pramod Swarup appearing in the case arising out of the
\njudgment of Allahabad High Court, Mr. G.L. Sanghi
\nappearing for Krishi Mandi in the Madhya Pradesh batch of
\nappeals, supported the arguments advanced by Mr. Dwivedi.
\nMr. G.L. Sanghi, the learned senior counsel appearing for
\nMadhya Pradesh Krishi Mandi, in M.P. batch of appeals
\nsubmitted for re-conciliation of both the Acts, and contended
\nthat there exists no repugnancy and both Acts can be allowed
\nto operate.  Mr. Trivedi, the learned Additional Solicitor
\nGeneral, appearing for the Attorney General of India,
\nhowever, contended, that the constitutionality of Tobacco
\nAct, not having been assailed in any of these cases, the Court
\nneed not embark upon an enquiry with regard to the
\ncompetence of Parliament to enact the Tobacco Board Act
\nunder Entry 52 List I of the VIIth Schedule.  He also further
\ncontended, that the tobacco industry having been notified, as
\nan industry, the control of which the Parliament thought it
\nexpedient to be taken over in the public interest, and the
\nTobacco Board Act having been enacted, there cannot be any
\nlimitation for exercise of power of the Parliament even in
\nrelation to the growing of tobacco or sale of tobacco at
\nspecified place as well as levy of fee for such sale, and in that
\nview of the matter, the Market Committee Act providing levy
\nof market fee on sale and purchase of tobacco within the
\nmarket area must be struck down.  It is true, as contended by
\nthe learned Additional Solicitor General that the
\nconstitutional validity of the Tobacco Board Act had not been
\nassailed in any of these cases, and only in this Court, Mr.
\nRakesh Dwivedi, the learned senior counsel, appearing for
\nthe State of Bihar raised the contention in view of the
\njudgment of this Court in ITC case.  Ordinarily, this Court
\ndoes not embark upon an enquiry on the constitutionality of
\nthe legislation if that had not been assailed.\tBut taking into
\naccount the procedure, that had already been adopted, and
\nnoticing all the Advocate Generals and the Attorney General,
\nin view of the amplitude of arguments advanced by the
\ncounsel for the parties, we do not think it appropriate to
\ndispose of this batch of cases without examining the
\nconstitutional validity of the Tobacco Board Act, enacted by
\nthe Parliament under Entry 52 of List I.  In fact the main
\nthrust of the rival contention centers round the same.\n<\/p>\n
\tMr. Shanti Bhushan, learned senior counsel appearing
\nfor the ITC Ltd. Contended, that Entry 52 of List I of the
\nVIIth Schedule of the Constitution requires the Parliament to
\nmake a declaration by law identifying an industry, the control
\nof which is expedient to be taken over by the Union in the
\npublic interest.  Once such a declaration is made by the
\nParliament, the entire gamut  would be within the legislative
\ncompetence of Parliament to make law, and the very industry
\nhaving been made the subject of legislation, the Parliament
\ngets exclusive power under Article 246(1) of the
\nConstitution.  Article 246(1) itself being, notwithstanding
\nanything in Clauses 2 and 3 of such Article, once Parliament
\nmakes a law in relation to control of  an industry in respect of
\nwhich a declaration has been made, the State Legislature will
\nbe denuded of its power to make any law in respect of that
\nindustry.  Mr. Shanti Bhushan contends, that every Entry in
\nthe Legislative List has to be construed in its widest sense, as
\nwas held by this Court in Harakchand Ratanchand
\nBanthia & Ors. etc. vs. Union of India & Ors. (1970) 1
\nSCR 479, and even Privy Council has also laid down the said
\nproposition.  There is, therefore, no rational to give restrictive
\nmeaning to the expression ‘industry’ in Entry 52 of List I of
\nthe VIIth Schedule.  The learned counsel placed reliance on
\nthe meaning of the word ‘industry’ contained in
\nEncyclopedia of Britannica, which indeed is too wide and
\nsubmitted, the Court cannot and ought not give a restricted
\nmeaning\t to the expression so as to denude the legislative
\nauthority to make law on the subject.  The learned counsel
\nmade a reference to laws made by the Parliament,  on a
\ndeclaration being made in terms of Entry 52 of List I,
\nnamely, the Cardomon Act, 1965; The Central Silk Board
\nAct, 1958; The Coffee Act, 1942; The Rubber Act, 1947; The
\nTea Act, 1953; The Coir Industry Act, 1953; The Coconut
\nDevelopment Board Act, 1979 and The Tobacco Board Act,
\n1975.  The learned Counsel urged that the Industries
\n(Development & Regulation) Act, 1951, had declared only
\ncertain manufacturing industries, but that by itself will not
\ndenude the Parliament of its legislative competence to make
\nlaw over any industry once a declaration, in terms of Entry
\n52 of List I is made, vesting the entire control over the
\nindustry   with\t  the\tUnion\tGovernment.  According\t  to
\nMr. Shanti    Bhushan,\t  the\tConstitution\t Bench
\ndecision     in Harakchand’s case (1970) 1 SCR 479, fully
\nanswers this question.\tThe learned counsel contends that the
\nEntries in the three lists are only the heads or fields of
\nlegislation demarcating the area over which the appropriate
\nlegislalture can  operate.  The legislative entries must be
\ngiven  a large and liberal interpretation, reason being that the
\nallocation of subjects to the lists is not by way of scientific or
\nlogical definition but is a mere enumeration of broad and
\ncomprehensive categories. According to\tMr. Shanti
\nBhushan, in the Constitution Bench decision  of this Court in
\nHarakchand (supra) while construing the expression
\n‘industry’ in Entry 52 of List I the wider definition of the
\nIndustry in the Webster’s Dictionary has been approved and,
\ntherefore, there is no justification in giving the expression
\nany restrictive meaning.  The learned counsel also urged that
\nin the very same case, construing Entry 27 of List II, the
\nCourt observed that the Entry Indusry is a special Entry while
\nEntry 27 dealing with production, supply and distribution of
\ngoods is a general Entry.  Mr. Shanti Bhushan contends that
\nthe word ‘industry’, if has been held to be a special Entry,
\nwhether in Entry 24 of the List II or Entry 7 and Entry 52 of
\nList I, law made under that Entry must prevail over any law
\nwhich could be referrable to a general Entry.  According to
\nMr. Shanti Bhushan, applying the ratio in Harakchand
\n(supra), it must be held that the majority view in the ITC case
\nis correct.  Mr. Shanti Bhushan further urged, a particular
\nindustry, in respect of which a declaration is made by the
\nParliament in terms of Entry 52 of List I, the industry itself
\nhaving become a subject of Parliamentary Legislation, any
\nprovision contained therein, which have a reasonable nexus
\nwould be within the legislative competence of the Parliament
\nunder Article 246(1) of the Constitution and would be valid.
\nAccording to the learned counsel, a law dealing with the raw-
\nmaterial of a declared industry cannot be held to be having no
\nnexus with the industry itself and if the Parliament would be
\ndenuded of its power to make law, dealing with raw-material
\nof the declared industry then the very purpose of making a
\ndeclaration and taking over the control of the industry in the
\ninterest of the public would be frustrated.  If the Parliament
\ndoes not choose to cover all aspects of that industry and may
\nconfine the regulation of that industry only with regard to the
\nmanufacturing part,  as was done in the Industries
\n(Development & Regulation) Act, 1951, then certainly there
\nwould be no repugnancy even if the State Legislature makes
\na law dealing with the raw materials of the notified industry,
\nprovided the State law is referable to any of the Entries in
\nList II.  So far as the observations made by the Consntitution
\nBench in  Tikaramji’s case (supra), Mr. Shanti Bhushan
\ncontends that the articles relatable to the scheduled industry
\nwere finished products and not raw materials and therefore
\nthe Industries (Development & Regulation) Act, 1951 did not
\nat all purport to cover or have any provisions therein relating
\nto sugarcane.  It was in this context  the observations came to
\nbe made by this Court in Tikaramji’s case (supra) that\tthe
\nexpression ‘industry’ will have a limited meaning.  Mr.
\nShanti Bhushan also placed reliance on the Constitution
\nBench decision in Chaturbhai M. Patel vs. Union of India<\/a>
\n 1960 (2) SCR 362 which dealt with the legislative
\ncompetence under the Government of India Act, 1935.  The
\nCourt was, in that case examining the question, whether the
\nCentral Exicse Act was beyond the legislative competence
\nunder the Government  of India Act 1935.  On examining
\nEntry 45 of the Union List and Entries 27, 29 and 31 of the
\nState List, the Court held that the examination should be as to
\nwhether the Act in question, is a law with respect to matters
\nenumerated in item  45 of List I, or   to the matters
\nenumerated in items 27 and 29 of List II.  Quoting the
\nobservations of Federal Court to the effect ;\n<\/p>\n
\t“It must inevitably happen from time to time
\nthat legislation, though purporting to deal with a
\nsubject in one list, touches also on a subject in
\nanother list, and the different provisions of the
\nenactment may be so closely interwined that blind
\nadherence to a strictly verbal interpretation would
\nresult in a large number of statutes being declared
\ninvalid because the legislature enacting them may
\nappear to have legislated in a forbidden sphere”
\napproved the same and held that it was a correct method of
\ninterpreting the various items in different lists.  Mr. Shanti
\nBhushan also pointed out that in the aforesaid judgment the
\nConstitution Bench followed the earlier observation of
\nHon’ble Hidaytullah, J. in the case of State of Rajasthan vs.
\nG. Chawla (AIR<\/a> 1959 SC 544)  to the effect ;\n<\/p>\n
“It is equally well settled that the power to
\nlegislate on a topic of legislation carries with it the
\npower to legislate on an ancillary matter which
\ncan be said to be reasonably included in the power
\ngiven”.\n<\/p>\n
According to the learned counsel, it would be within the
\ncompetence of the Central Legislature to provide for matters
\nwhich may otherwise fall within the competence of the State
\nlegislature if\tthey are necessarily incidental to effective
\nlegislation by the Central legislation on a subject of
\nlegislation expressly within its power.\t According to Mr.
\nShanti Bhushan, if the expression ‘industry’ is construed in
\nthe wide sense, in which it was construed by this Court in the
\nConstitution Bench judgment of Harakchand(supra)  then
\nthe provisions of Tobacco Board Act of 1975 would certainly
\nbe within the legislative competence of Parliament,
\nnotwithstanding the fact that some of those provisions may
\ntouch upon subjects contained in the State Lists.  The learned
\ncounsel, in this connection also placed reliance on a recent
\ndecision of this Court in the case of State Bank of India vs.
\nYasangi Venkateswar Rao<\/a> (1999) 2 SCC 375.  With
\nreference  to the decisions of this Court in Calcutta Gas
\n(1962) Supp. SCR 1, the Mcdowell (1996) 3 SCC 709and
\nTikkaramji (supra), the learned counsel contended, that in
\nnone of these cases, the competence of Parliament to make
\nany law was under consideration.  On the other hand, both in
\nCalcutta Gas (supra) case and in Mcdowell (supra) case,
\nwhat was under consideration is as between the two entries, if
\none is general and the other is special then which law would
\nprevail, and the Court held that the special law would prevail
\nover the general law.  In Calcutta Gas\tcase the word
\n‘industry’   in Entry 24 was held to be a general entry,
\nwhereas word ‘gas and gas works’ in Entry 27 was held to be
\na special entry and applying the principle of harmonious
\ninterpretation the Court held that the expression ‘industry’
\nwill be given a limited scope so as to exclude from its ambit
\ngas and gas works,  and it is in this sense, it was held that
\nfrom the expression ‘industry’ in Entry 24 in List II the gas
\nand gas\t works must be excluded.  In Mcdowell’s case
\n(supra) also the Court applied the same principle of special
\nexcluding general and held that the production and
\nmanufacturing of liquor would not fall under Entry 24 of List
\nII but under Entry 8 of List II, which relates to intoxicating
\nliquor that is to say that the production, manufacture,
\npossession, transport, purchase and sale of intoxicating
\nliquors.  According to the learned counsel, these decisions
\nwill have no relevance in the context of the present case,
\nwhere the competence of the Parliament to make any law
\nwithin the ambit of Entry 52 of List I is the subject matter of
\nscrutiny.  Mr. Shanti Bhushan also urged, that Entry 27 of the
\nState List relating to production, supply and distribution of
\ngoods cannot be held to be a special Entry so as to be
\nexcluded from the purview of Entry 52 of List I.  According
\nto him the two entries do not form the part of the same genus
\nso as to apply in the same field, and if the ratio in the
\njudgment in Harakchand(supra)  case is applied then Entry
\n27 cannot be held to be a special Entry.  He also relied upon
\nthe Constitution Bench judgment in Waverly Jute Mills
\nCase (1963) 3 SCR 209, where the Court was required to
\nexamine the competence of the Parliament to enact Forward
\nContract Regulation Act, 1952 , and whether it encroached
\nupon the subject matter falling under Entry 26 and Entry 28
\nof List II.  The Court upheld the validity of the law by
\nholding that the Parliament has legislative competence under
\nEntry 48 of List I relating to stock exchanges and future
\nmarkets, and in fact it has the exclusive competence.  Mr.
\nShanti Bhushan contended, that apart from the fact that in
\nTikaramji (supra), in Calcutta Gas (supra), in Mcdowell
\n(supra) the competence of the Parliament to make law had
\nnot been assailed, and on the other hand, what was under
\nconsideration  is whether the Central Act and the State Act
\ncould be held to cover different fields so that there was no
\nrepugnancy between the two.  It was further contended that
\nthe State Acts would be ultra vires as they related to subject
\nwhich were brought to the Union List by a declaration in
\nterms of Entry 52.  Mr. Shanti Bhushan contends, that all the
\ndecisions in which constitutional validity of Parliamentary
\nenactment was questioned on the ground of ambit of Entry 52
\nof List I, the Court has upheld the validity of the same as in
\nHarakchand(supra).  Any incidental observation where the
\ncompetence of Parliament to make law was not under assail,
\ncannot be relied upon for the proposition that the expression
\n‘industry’ in Entry 52 of List I must have a restricted
\nmeaning.  With special reference to Tikaramji’s case (supra)
\nthe learned  counsel contended that the Court was not
\nexamining the scope of word ‘industry’, as contained in
\nEntry 52 of List I, as is apparent from the discussions at page
\n414 of the SCR, but was examining the question,\t whether
\nraw-materials of an industry which form an integral part of
\nthe process are within the topic of ‘industry’ which forms the
\nsubject-matter of item 52 of List I as ancillary or subsidiary
\nmatters which can fairly or reasonably be said to be
\ncomprehended in that topic and whether the Central
\nLegislature while legislating upon sugarcane industry could
\nact within the scope of Entry 52 of List I, and would as well
\nlegislate upon sugarcane.  The observations of the learned
\nJudges at page 420 of the report, according to Mr. Shanti
\nBhushan, are only in that context and when the Court did not
\ngo into the question as to whether the word ‘industry’ could
\nor could not have a wide meaning which could be applied
\nwhen Parliament purported to cover other aspects apart from
\nthe manufacturing processes, it would not be appropriate to
\nhold that the word ‘industry’ in’ Entry 52 of List I must be
\ngiven a restricted meaning.  According to the learned counsel
\nin Tikaramjis (supra) the Court was considering the question
\nof repugnancy and it answered by comparing the provisions
\nof Industries (Development and Regulation) Act with the
\nprovisions of  UP Regulation of Sugarcane Act and found
\nthat there was no repugnancy and two were covering two
\ndifferent fields and could therefore co-exist.\tIt is urged that a
\nrestricted meaning, being given to the expression ‘industry’
\nin Entry 7 and 52 of List I or Entry 24 of List I will have
\ndisastrous consequences, inasmuch as the Parliament would
\ndeclare by law a particular industry to be necessary for the
\npurposes of defence or for the prosecution of war  under
\nEntry 7, and yet in such law, cannot make any provision in
\nrespect of raw-materials or growth of any item, which may be
\nabsolutely necessary for the industry in question.\n<\/p>\n
\tAccording to Mr. Shanti Bhushan, the learned senior
\ncounsel, the majority judgment in ITC case, no doubt, relied
\nupon the decisions of this Court in State of Orissa vs. M.A.
\nTulloch<\/a>\t  (1964) 4 SCR 461 and Baijnath Kedia vs. State
\nof Bihar<\/a> – (1969) 3 SCC 838, for the proposition  that, when
\nthe Central Government takes over an industry under Entry
\n52 of List I and passes an Act to regulate the legislation, the
\nState Legislature ceases to have the jurisdiction to legislate in
\nthat field, and if it does so, then it would be ultra vires of the
\npowers of the State Legislature as the entire field is occupied
\nby the Central Legislation.  The case of Tulloch (supra) as
\nwell as the case of Baijnath (supra) deal with the laws made
\nby the Parliament under Entry 54 of List I of the VIIth
\nSchedule and the Court was examining those laws and the
\nlegislative competence vis-\u00e0-vis Entry 23 of List II, but those
\nprinciples laid down in Tulloch’s case\t(supra) as well as in
\nBaijnath’s case (supra) would equally apply to the
\nlegislation made under Entry 52 of List I, as has been held by
\nthis Court in paragraph 11 of  Ishwari Khetan Sugar Mills
\nvs. State of U.P. (1980) 4 SCC 136 judgment. The learned
\ncounsel stated that what has been stated therein,  that on a
\nlaw being made by the Parliament in respect of a particular
\nindustry the State’s legislative power would stand denuded
\nonly to the extent that any aspect related to that industry is
\nactually covered by the Parliamentary legislation.  In other
\nwords, it is necessary to examine the extent of coverage by
\nthe Parliament enactment, as has been held in Ganga Sugar,
\nand the extreme argument advanced in the case that the
\nindustry as a subject by itself goes out of the competence of
\nthe State Legislature, was not accepted.  According to Mr.
\nShanti Bhushan, it is a well settled principle, once a
\nParliamentary Legislation is enacted, whether in exercise of
\nits competence under Entry in List I or List III, or there is an
\nincidental or anciliary coverage over some Entries in the
\nState List, and there is any repugnancy between the law made
\nby the Parliament and law made by the State Legislature,
\nthen it is only the Parliamentary law to the extent of
\nrepugnancy which has to prevail and not the State legislation.
\nOn the question of the re-conciliation between the Tobacco
\nBoard Act and the Agricultural Market Committee Act, and
\nin relation to the provisions contained in Section 31 of the
\nTobacco Board Act to the effect, – “provisions of this Act
\nshall be in addition to, and not in derogation of, the
\nprovisions of any other law for the time being in force”, the
\nlearned counsel contends, the aforesaid provision by no
\nstretch of imagination can be construed to mean, that
\nnotwithstanding the State Legislation being repugnant to the
\nParliamentary law, yet the State legislation will be permitted
\nto operate.  According to the learned counsel, Section 31 of
\nthe Tobacco Board Act purports to declare that if a law which
\nwas consistent with the Tobacco Board Act and made
\nadditional requirement of some kind, laid down under any
\nother Act, it should not be taken as if in respect of any matter
\nrelating to Tobacco, all other acts whether consistent or
\ninconsistent with the Tobacco Act  will cease to prevail.  In
\nother words, if there is any field which is not covered by the
\nTobacco Board Act, and if there was some other valid
\nprovision, then the Tobacco Board Act would not come in the
\nway.  In support of this contention Mr. Shanti Bhushan relied
\nupon the decision in M. Karunanidhi vs. Union of India<\/a>
\n(1979) 3 SCC 431,  wherein in paragraph 57 this Court in
\nunequivocal terms expressed the intention that the State Act
\nwhich was undoubtedly the dominant legislation would only
\nbe in addition to and not in derogation of any other law for
\nthe time being in force,  which manifestly includes the
\nCentral Acts, namely the Indian Penal Code, the Corruption
\nAct and the Criminal Law (Amendment) Act.  In analysing
\nthe provisions of the Tobacco Board Act, the counsel
\ncontends, that the intention of the Parliament is to cover the
\nfield of trade in Tobacco.  Relying upon the Constitution
\nBench decision in Belsund Sugar Company\t (1999) 9 SCC
\n620, the learned counsel contends that if a special Act deals
\nwith regulating trade in an Article, it has to go out of the
\nsweep of the Agricultural Markets Act.\tIn this view of the
\nmatter,\t the Tobacco Board Act having been a special Act
\nregulating the sale and purchase of the agricultural produce,
\nnamely, Tobacco and the Marketing Act, being of a general
\nnature, the Marketing Act will cease to operate in respect of
\nTobacco.  Analysing different provisions of the Tobacco
\nBoard Act, 1975 and the Bihar Agricultural Produce
\nMarketing Act the counsel urged, that the provisions cannot
\nco-exist and, therefore, the majority view in ITC case\trightly
\nheld that the Agricultural Market Committee Act, framed by
\nthe State Legislature is ultra vires.\n<\/p>\n
\tMr. Nageshwar Rao, learned senior counsel appearing
\nfor the Tobacco Merchants’ Association, reiterated all that
\nhad been argued by Mr. Shanti Bhushan, and placing reliance
\nupon several authorities submitted, that the Tobacco Board
\nAct being a special Act, enacted by Parliament for
\ncontrolling the tobacco industry and making provision
\ntherein, relating to growing of tobacco and purchase or sale
\nof tobacco, which have direct nexus with the tobacco
\nindustry, the general provisions of the Agricultural Produce
\nMarket Act will have to give way to the Tobacco Board Act,
\nand therefore, the Market Committee would have no power
\nto levy market fee by taking recourse to the provisions of the
\nMarket Committee Act on the purchase and sale of tobacco
\nwithin a market area.\n<\/p>\n
\tMr. Rakesh Dwivedi, learned senior counsel, who led
\nthe main argument by contending that the Parliament had no
\ncompetence to make the Tobacco Board Act in its entirety,
\nparticularly in relation to growing and raw-materials of the
\ntobacco industry, appearing for the State of Bihar contended,
\nthat the subject matter ‘industry’ in Entry 52 of List 1 of the
\nVIIth Schedule cannot be construed to be all pervasive and
\nthe Constitution Bench of this Court in Tikaramji (supra)
\nconclusively held that the raw-materials which are integral
\npart of the industrial process cannot be included in the
\nprocess of manufacture or production.  According to Mr.
\nDwivedi, the Court should construe a particular entry in the
\nSchedule in a manner so that the other Entries in the
\nSchedule will not be otiose.  Consequently, the raw-materials
\nwould be goods which would comprised in Entry 27 of List II
\nand the manufacturing process or production would come
\nwithin the ambit of expression ‘industry’ in Entry 24 of List
\nII.  Entry 24 of List II being subject to Entry 52 of List I,
\nwhen Parliament makes a law in respect of an industry in
\nexercise of its power referable to Entry 52 of List I then that
\nexpression cannot be wider than the word ‘industry’ in Entry
\n24 of List 2.  It would, therefore, be given a restricted
\nmeaning to the expression ‘industry’, as was done by this
\nCourt in Tikaramji’s  case, which was followed in Calcutta
\nGas, Kannan Devan Hills and Ganga Sugar Corporation.
\nAccording to Mr. Dwivedi, even in the case of B.
\nViswanathaiah & Co. vs. State of Karnataka (1991) 3
\nSCC 358, a three Judge Bench of this Court construed the
\ndeclaration made in terms of Entry 52 of List I in relation to
\nsilk industry and held that  taking over the control of raw silk
\nindustry must be restricted to the aspect of production and
\nmanufacture of silk yarn or silk and did not take in the earlier
\nstages of the industry, namely the supply of raw-materials.
\nAccording to Mr. Dwivedi, in the aforesaid case the Court
\nunequivocally held that the declaration in Section 2, which is
\nunder Entry 52 of List I, do not in any way, limit the powers
\nof the State Legislature to legislate in respect of goods
\nproduced by the silk industry.\tThe Court so held being of the
\nopinion that any wider interpretation to the expression
\n‘industry’ in Entry 52 of List 1 would render Entry 33 in List
\n3 to be otiose and meaningless.\t Mr. Dwivedi also further
\ncontended that both in Indian Aluminium Company (1992)
\n3 SCC 580 as well as Siel Ltd. And Others vs. Union of
\nIndia and Others<\/a> (1998) 7 SCC 26, Tikaramji and Calcutta
\nGas have been followed and it has been held that the term
\n‘industry’ in Entry 24 of List II and Entry 52 of List 1 could
\nhave the same meaning and it would not take within its ambit
\nTrade and Commerce or production, supply and distribution
\nof goods coming within the province of Entry 26 and 27 of
\nList II.  Referring to the Constitution Bench decision of this
\nCourt in Belsund Sugar Mills (1999) 9 SCC 620, Mr.
\nDwivedi submits that in the aforesaid case the Court was
\nconstruing the provisions in Entry 28 of List II as well as
\nEntry 33 of List III and sugar and sugar cane having been
\nheld as food stuff coming within the ambit of Entry 33 of List
\nIII, the Market Committee Act referable to Entries 26, 27 and
\n28 of List II was held to be subject to the Sugar Cane Act.
\nThus industry in Entry 24 of List II and Entry 52 of List I
\nwould not cover the subject matter coming within the ambit
\nof Entries 26 and 27 of List II or Entry 33 of List III.  It is
\ntherefore urged, that the raw tobacco which would be a
\nproduce of agriculture and thus the raw-material for the
\ntobacco industry, which required to be cured and processed
\nand for such a raw-material for the tobacco industry, the
\nParliament cannot make any legislation by making a
\ndeclaration and taking over the control of tobacco industry
\nunder Entry 52 of List I.  Tobacco, not being a food stuff, the
\nsame will also not come within the ambit of Entry 33 of List
\nIII, and therefore, the raw-tobacco would continue to be
\nwithin the exclusive domain of the State Legislature and
\nState Legislature would have power to make law in relation
\nto the raw-tobacco which would be referable to Entry 14
\n(Agriculture), Entries 26, 27 and 28 of List II, as has been
\nheld by this Court in the Constitution Bench decision in the
\ncase of\t Belsund Sugar (supra). Mr. Dwivedi contends that
\njudged from this angle to the extent the Tobacco Board Act
\nseeks to regulate the market by providing for auction
\nplatform and by seeking to regulate growing of raw-tobacco,
\nmust be held to be beyond the competence of Parliament, and
\non the other hand, is within the exclusive domain of the State
\nLegislature.  State Legislature having provided for a market
\nwhere alone the trade and commerce in and the production
\nsupply and distribution of tobacco can take place, the
\nTobacco Board Act would cease to operate and it is the State
\nlaw which would prevail.  With reference to the judgments in
\nM.A. Tulloch and Baij Nath Kedia relied upon in the
\nmajority judgment of ITC’s case, Mr. Dwivedi contends that
\nthose decisions will have no application, inasmuch as a
\ncomparison of Entry 23 of List II and Entry 54 of List I
\nwould indicate that the head of the Legislation is one and the
\nsame, and Entry 23 of List II itself is subject to Entry 54 of
\nList I.\t Necessarily, therefore, the entire field, which was
\nthere available for the State Legislature to make law under
\nEntry 23 of List II, once assumed by the Parliament under
\nEntry 54 of List I, then the State Legislature is denuded of its
\npower.\tQuestion of giving narrow  meaning or wider
\nmeaning to the legislative Entry does not arise for
\nconsideration in those cases.  Accordingly the majority
\njudgment of this Court committed error in construing the
\nmeaning to be given to the word ‘industry’ under Entry 52 of
\nList I by relying upon the decision under Mining Legislation,
\nwhich was wholly unwarranted.  Mr. Dwivedi urged that
\neven the Tobacco Board Act has not been made operative in
\nthe State of Bihar and several other States, for instance,
\nSection 13, 13A and 14A.  This being the position, in the
\nStates where aforesaid provision had not been brought into
\nforce, there cannot be any difficulty in allowing the State
\nAct, namely, the Agricultural Market Committee Act to
\noperate.  With reference to legislative history for the
\nexpression ‘industry’ in Entry 52 of List I, Mr. Dwivedi
\ncontends that the fact that a separate entry was made for
\nregulating trade and commerce, production, supply and
\ndistribution of the products of controlled industry would
\nsuggest that the expression ‘industry’ in Entry 52 of List I
\nwill have a restricted meaning.\t Mr. Dwivedi urged that if the
\ncontention of the appellant, that the word ‘industry’ in Entry
\n52 of List I should be given a wider interpretation is correct,
\nthen the same would be destructive of the scheme pertaining
\nto distribution of powers.  Mr. Dwivedi refers to the
\njudgment of this Court in Tikaramji as well as the judgment
\nof  Full Bench of Allahabad High Court in SIEL case and
\npoints out as to how the law relating to trade and commerce
\nand production, supply and distribution of goods has been
\ntraced in these two cases and how after the end of the second
\nworld war when emergency was lifted, the power to enact on
\nthe subject was given to the Central Legislature by India
\n(Central Government & Legislature) Act, 1946.  Mr. Dwivedi
\nurged, even though under Government of India Act 1935, the
\nsubject of trade, commerce, production, supply and
\ndistribution of goods was within the competence of the
\nprovincial legislature, the law was  made temporarily by the
\nCentral Legislature.  Under the Constitution of India, Article
\n369 was included which empowers the Parliament to make
\nlaws for 5 years with respect to trade and commerce in and
\nthe production, supply and distribution of certain specified
\nproducts.  That very Article 369 shows that the subject
\nmatters of raw-cotton, raw-jute, cotton seed etc. would be
\ncovered by the Entries in List II and even the marginal note
\nof Article 369 throws sufficient light on the subject.\tBy
\nreferring to Articles 249, 250, 252 and 253, the learned
\ncounsel urged that they are special provisions which provide
\nthat in the national interest, during proclamation of
\nemergency with the consent of two or more states Parliament
\ncan make law with respect of any of the matters coming
\nwithin the State List.\tIn fact in the Constituent Assembly
\nthere was a heated debate in relation to  Article 249 and there
\nwas a strong objection to wide power being given by that
\nArticle for legislation in the national interest with respect to
\nthe State List.\t The Founding Fathers apprehended that in the
\nname of national interest the federal character of the Indian
\npolity could be completely destroyed and India could be
\nconverted  into a unitary state, therefore, Article 249 was re-
\ntailored and was provided for a shorter duration of operation
\nof parliamentary law so made.  Mr. Dwivedi urged that the
\nterm ‘industry’ in Entry 7 of List I as well as Entry 52 of List
\nI  should be confined to the process of manufacture of the
\nindustries which are declared to be necessary for the purposes
\nof defence or for prosecution of war.  According to Mr.
\nDwivedi there is no necessity or compulsion to give this
\nentry a wider meaning merely because  the war situation\t is
\nbeing dealt with in the State Entry.  In such a situation Entry
\n33 of List III is always available to Parliament for controlling
\nproducts and Article 250 gives over riding power to the
\nParliament to legislate with respect to any matter enumerated
\nin the State List during the period of proclamation of
\nemergency.  Even Articles 352 to 354 also confer sufficient
\npower on the President to declare by proclamation that a
\ngrave emergency exists which can be kept alive as long as the
\nwar situation or need of defence is required.  By virtue of
\nArticle 353 the power of Parliament would extend to making
\nof laws with respect to a matter not enumerated in the Union
\nList, therefore the Constitution makers have well thought of
\nand designed the Constitution in such a manner in the matter
\nof distribution of power that there would be no difficulty at
\nall for the Parliament to enact any law when the country is in
\nwar, and therefore, in normal times there should be no
\njustification to give the expression ‘industry’ a wider
\nmeaning and thereby denuding the State Legislatures to make
\nlaw on several heads of legislation enumerated in List II.
\nAccording to Mr. Dwivedi, reference to Entry 5 of List I, in
\nthis context was wholly mis-conceived as that is a specific
\nEntry in List I with regard to arms, and as such, would not be
\ncovered under Entry 27 of List II and Entry 33 of List III.
\nMr. Dwivedi also contended that reference to Article 254(1),
\nin this context is mis-conceived as the said Article can be
\ninvoked both by the Parliament and the State Legislatures to
\nmake law with respect to one of the matters enumerated in
\nthe Concurrent List.  The expression ‘repugnant’ in Article
\n254(1) refers to matter only in the Concurrent List, and it is
\nin this connection, he placed reliance on the decision of this
\nCourt in the case Deep Chand (1959) Suppl.(2) SCR 8 and
\nHoechst Chemicals (1983) 4 SCC 45 .  According to Mr.
\nDwivedi Federalism having been accepted as one of the basic
\nfeatures of our Constitution, as was held by this Court in S.R.
\nBommai (1994) 3 SCC 1, a construction of a particular
\nlegislative Entry which would denude another legislative
\nbody  from exercising its power in respect of several heads of
\nlegislation could be held to be contrary to the basic feature of
\nthe Constitution, and therefore, the Court should avoid giving
\na wider meaning to the expression ‘industry’  Entry 7 and
\nEntry 52 of List I as well as Entry 24 of List II.  With
\nreference to different Articles of the Constitution, Mr
\nDwivedi contends that the State Legislatures have exclusive
\npower to make laws with respect to Entries in the State List
\nand only in specified contingencies Parliament can legislate
\nwith respect to them.  In this view of the matter counsel
\ncontends, entries in List I ought not to be construed very
\nwidely as construed by this Court in ITC case.\tThe counsel
\nsays that in the State of Bihar, Market Act in relation to
\ntobacco is relatable to Entries 26 and 27 of List II whereas
\nTobacco Board Act, enacted by the Parliament includes
\nwithin its fold the entire process of growing, curing and
\nmarketing of tobacco and unlike the sugar industry and
\npurchase of sugar cane by it which was dealt with by the
\nConstitution Bench in the case of Tika Ram ji  the tobacco
\nindustry cannot be split up with reference to the raw-material.
\nAccording to learned counsel growing of tobacco, its curing
\nand marketing being one integrated industrial process the
\nsame  would be\tembedded into Tobacco Industry.\t The very
\nobject of the Tobacco Board Act, being to encourage export
\nof good quality tobacco and to augment the foreign exchange
\nreserves,  the same does not seek to regulate and control the
\nsale and purchase of tobacco in normal markets in different
\nStates. Therefore trade and commerce, production, supply
\nand distribution of tobacco in different markets in India could
\nnot be regulated by the Tobacco Board Act.  He also urged
\nthat the Act in question may not be solely to the field of
\nLegislation in Entry 52 of List I inasmuch as foreign
\nexchange comes within Entry 36 of List I, whereas law
\nensuring fair and remunerative prices for the growers and
\nminimum prices for export of tobacco could be referable to
\nEntry 34 of List III.  This being the position, it is not possible
\nto define the ‘industry’ in its widest form.  Further the
\nTobacco Board Act being an Act to regulate the sale of
\ntobacco at auction platform, the raw-material which is
\nproduced by the growers in so far as the growing of raw-
\nmaterial is concerned, the same would be the matter
\npertaining to exclusive domain of ‘agriculture’ covered by
\nEntry 14 of List II and the Parliament cannot be permitted to
\nencroach upon the domain of the State Legislature.  The
\nlearned counsel places reliance on the decision of this Court
\nin A.S. Krishna (1957) SCR 399.\t Mr. Dwivedi does not
\nagree with the submission of the counsel appearing for the
\ncompany that the tobacco industry is one comprehensive
\nintegrated industry covering within its expanse the growing
\nof tobacco, curing, marketing and export.  According to him,
\ngrowing of tobacco is pure and simple agriculture and the
\nindustrial aspect begins after the industries purchase raw
\ntobacco from the growers and begin curing the same.
\nConsequently the Market Acts enacted by the State
\nLegislature would be fully competent, legal and valid
\ngoverning the sale and purchase of tobacco within the local
\nmarket area.  Referring to the provisions of the  Bihar Act,
\nthe counsel urged that the same had been enacted by the State
\nLegislature under Entry 28 of List II, the object being to
\nprovide for better regulation of buying and selling of
\nagricultural product and the establishment of markets for
\nagricultural produce.  The comparison of the provisions of
\nthe Market Act and the Tobacco Board Act would show that
\nboth the Acts can operate, particularly when the Tobacco
\nBoard has not set up any auction platform or any kind of
\nmarket centre in Bihar and in fact several relevant provisions
\nlike Section 13, 13A and 14 have not been enforced in the
\nState of Bihar.\t If the provision of the Tobacco Board Act is
\nconstrued in its wide meaning then the Parliament must be
\nheld to have no competence to make laws in respect of
\nanything prior to the curing of tobacco.  According to the
\nlearned counsel, when this Court in ITC case held the State
\nAct to be invalid, it so held on the conclusion that the entire
\nfield is covered by the Central Legislation. But no steps
\nhaving been taken by the Tobacco Board\tin the State of
\nBihar under Sections 8, 20 and 20A and other provisions not
\nhaving been applied, it is difficult to subscribe that the entire
\nfield is covered by the Tobacco Act.  Mr. Dwivedi also very
\nseriously contended that the Parliament by enacting the law
\nunder Entry 52 of List I in relation to the Tobacco Industry
\nand having enacted Tobacco Board Act included the
\nprovisions of Section 31, which unequivocally indicates that
\nthe Act is in addition and not in derogation of any other law
\nfor the time being in force. This being the position, the
\nMarket Act must be allowed to operate.Therefore, the Market
\nCommittee would be entitled to levy market fee on the sale
\nand purchase of Tobacco within\tthe market area.  Reliance
\nwas placed on the decisions of this Court in M. Karunanidhi
\n(1979) 3 SCC-431, Chanan Mal (1977) 1 SCC-340 and
\nIshwari Khaitan (1980) 4 SCC 136.  With special reference
\nto the majority judgment of this Court in ITC’s case the
\ncounsel urged that the aforesaid decision has not noticed
\nseveral decisions of this Court starting from Tikaramji,
\nCalcutta Gas —–etc.\tMr. Dwivedi also contended that, as
\nhas been held by this Court in several decisions, in the event
\nof any conflict between the law made by the Parliament with
\nreference to some Entry in List I and  the law made by the
\nState Legislature with reference to any Entry in List II, the
\nCourts must try to harmonise and re-concile, which is well
\nknown method of construction.  The majority view, however,
\ndid not examine the provisions of two Acts for its conclusion
\nas to whether both Acts could be allowed to operate,
\nwhereas the judgment of Hon’ble Mukherjee, J proceeds on
\nthe basis that both the Acts could operate in its own field.
\nAccording to Mr. Dwivedi, the principle of occupation of
\nfield by a particular legislature is a concept relevant for
\ninterpreting an entry in the Concurrent List and it will have
\nno application when the legislation in question is under a
\nparticular Entry in List I.  According to Mr. Dwivedi, where
\na particular legislation made by the Parliament is found to be
\noccupying the entire field then the extent of occupation of the
\nfield would have to be examined with reference to
\nEntry 33 of List III to find out which field remains available
\nto the State Legislature, and if, there is any repugnancy then
\nsame has to be dealt with, with reference to Article 254. But
\nthe Act in question not having been made (Tobacco Board
\nAct ) with reference to Entry 33 of List III, conclusion with
\nreference to Article 254 was wholly erroneous.\tIt is lastly
\nurged, that the majority view in ITC case not having noticed
\nthe earlier Constitution Bench decisions in Tikaramji,
\nCalcutta Gas as well as other cases following the same, the
\nconclusion is unsustainable in law, and therefore, this
\nConstitution Bench  must hold that the ITC case has not been
\ncorrectly decided.  While interpreting and considering the
\nword ‘industry’ occurring in different Entries of List I and
\nList II, it would be wholly inappropriate to refer to the
\nmeaning of the word given in Encyclopaedia of Britannica,
\nas was held by this Court in Tikaramji.\t It is also urged that
\nthe scope of Constitutional Entry in the 7th Schedule can
\nnever be left to be determined on a case to case basis
\ndepending upon how much field the Parliament deems fit to
\ncover.\tThe scope of the word ‘industry’ in Entry 52 of List I
\nwill not expand or restrict depending upon what the
\nParliament does in its legislation.  The competence of
\nParliamentary law can never be adjudged with reference to
\nthe nature of the law which is being enacted.  The scope of
\nthe Entries in List II also cannot be determined with respect
\nto Parliamentary enactment made from time to time.  On the
\nother hand, the scope of entries have to be determined by
\nreference to each other and by modifying one with respect to
\nthe other on the basis of the context without making any of
\nthe entries otiose.  It was so held by this Court in the case of
\nMcDowell (1996) 3 SCC 709.  Since a law made by a
\nlegislature, be it Parliament or be  it the State, has to be tested
\non the anvil of the entries in the 7th Schedule of the
\nConstitution when a question of legislative competence
\narises, the head of the\t Legislation in any entry cannot be
\ndifferently construed. In other words, the word ‘industry’
\noccurring   in Entry 24 of List II as well as Entry 7  and Entry
\n52 of List I must have the same meaning. That being the
\nposition, Parliament cannot be permitted to amend Industry
\nDevelopment Regulation Act by including Sugarcane,  as has
\nbeen held by this Court in  Belsund Sugar.  Mr. Dwivedi
\nrepelled the argument of Mr. Shanti Bhushan that the
\nobservations in Tikaramji must be confined to the fact from
\nthat case   on the ground that, it is no doubt true, that in
\nTikaramji the validity of the Parliamentary enactment had
\nnot been questioned, and on the other hand, it is the power of
\nthe State Legislature to enact the Sugarcane Act, was the
\nsubject matter of consideration.  But the Court did examine
\nthe provisions of the State Act to find out whether it
\nencroached upon Entry 52 of List I as sugar industry was a
\ncontrolled industry under the provisions of IDR Act, 1951.
\nThat apart, the Constitution Bench having thoroughly gone
\ninto the constitutional history including the corresponding
\nentries in the Government of India Act, and then considering
\na particular provision, and ultimately holding that it would
\nnot bring within its sweep the raw-materials which is  the
\nstage prior to the manufacture of industry, it is not
\npermissible for another Constitution Bench to by pass the
\nearlier Constitution Bench decision by limiting the ratio
\ntherein to the fact of that case,  more so when the said
\ndecision had been followed later on in several other
\nConstitution Bench  decisions  and has stood the test for last
\ntwo decades.  With reference to Banthia’s case Mr. Dwivedi
\ncontends that in the very same judgment the only question
\nthat cropped  up for consideration is whether  the
\nGoldsmith’s work was a handi-craft requiring application of
\nskill and the art of making gold ornaments and was not an
\n‘industry’, within the meaning of Entry 52 of List I or Entry
\n33 of List III of the 7th Schedule, the Court never examined
\nwith reference to Entry 14 dealing with agricultural raw-
\nmaterial and in fact the Court observed that it is not necessary
\nfor the purposes of this case to attempt to define the
\nexpression ‘industry’ precisely or to state exhaustively all the
\ndifferent aspects.  The Court was however, satisfied that the
\nmanufacture of gold ornaments by the Goldsmith is a process
\nof systematic production for trade or manufacture and, would
\ntherefore fall within the connotation of the word ‘industry’ in
\nthe appropriate legislative entries.  Thus Harakchand also
\nfollows the ratio in Tikaramji and not departed from the
\nview taken in Tikaramji.  In HR Banthia, the Supreme
\nCourt rejected the submission to adopt the definition of
\n‘industry’, as given in the Industrial Disputes Act.  According
\nto Mr. Dwivedi, the observations of this Court in
\nHarakchand and Banthia cannot be utilised for the purposes
\nof the agricultural raw-material and its production within the
\nword ‘industry’ in Entry 52 of List I, how so ever wide the
\nsame word may be construed.  With reference to the
\njudgment of this Court in Ishwari Khaitan Mr. Dwivedi
\ncontends that the enunciation of law made therein would
\nindicate that the Court was examining to find out  by virtue
\nof law made under Entry 52 of\tList I to what extent there
\nhas been denudation of the State Legislature’s power to
\nlegislate under Entry 24 of List II.  The Court did find that
\nthe extent of erosion is not absolute but only to the extent the
\ncontrol is spelled out by the parliamentary legislation.  The
\nextent of parliamentary legislation is seen only to determine
\nhow much is taken out from Entry 24 of List II and nothing
\nmore.  Though in this case the Court relied upon the earlier
\ndecision of this Court in State of West Bengal vs. Union of
\nIndia<\/a> (1964) 1 SCC 371, but unfortunately in the West
\nBengal case the scope of ‘industry’ did not fall for
\nconsideration, and that is why even Tikaramji had not been
\nreferred to.  But it  cannot be concluded that the Constitution
\nBench was departing from Tikaramji and laying down some
\nnew principles without even discussing Tikaramji.  Mr.
\nDwivedi submitted that in Ishwari Khaitan, no doubt the
\njudgment of this Court in Baijnath has been relied upon but
\nthe said reference and reliance was for a different purpose
\nand not to equate the structure of Entry 52 of List I with
\nEntry 54 of List I.  The Court referred Baijnath Kedia for
\nthe limited purpose as in both cases the denudation of States’
\npower is only to the extent of control, while Baijnath
\ndealtwith Entry 23 of List II, Ishwari Khaitan dealt with
\nEntry 24 of  List II.  The subject matter of other entries was
\nnot in issue.  It would, therefore, be a fallacy to contend that
\nIshwari Khaitan relied upon Baijnath Kedia to hold that
\nthe entire field is occupied by the Central Legislation though
\nthe majority view in ITC  case holds so, and that must be
\nheld to be not correctly decided in view of the series of
\ndecisions starting from Tikaramji, already referred to.\t Mr.
\nDwivedi, in this connection relies upon the Constitution
\nBench decision in Belsund Sugar Company (1999) 9 SCC
\n620 wherein in paragraphs 117 and 118 the cases under
\nMines and Mineral Regulation and Development Act had
\nbeen noticed and the Court ultimately held that this scheme
\nof the legislative entries is entirely different from the scheme
\nof Entry 52 of List I read with Entry 24 of List II with which
\nthe Court was concerned in Belsund Sugar.  According to
\nMr.  Dwivedi  the ratio in Belsund Sugar would support the
\ncontention on the question of competence of Parliament to
\nenact Tobacco Board Act covering the field of growing and
\nraw-material prior to any manufacturing process.  Mr.
\nDwivedi strongly relied\t upon the Full Bench decision of
\nAllahabad High Court in SIEL’s case (AIR 1996 All. 135)
\nand submitted that the Full Bench had considered all the
\nrelevant decisions and has come to the right conclusion.
\nAccording to Mr. Dwivedi, Tikaramji   principles
\nenunciated  therein    having been approved in the subsequent
\ncases, and even\t in Ganga Sugar case Hon’ble Krishna Iyer,
\nJ. having negatived a similar contention, as was urged in the
\npresent appeal as a desperate  plea and Belsund’s case have
\napproved     Tikaramji,\t       irresistible\t conclusion
\nwould\t  be   that    the   majority\t view\t in    ITC
\njudgment is incorrect and necessarily, therefore, the
\nParliament did not have the legislative competence  while
\nenacting the Tobacco Board Act after declaring Tobacco
\nindustry to be taken over as a controlled industry   to make
\nany provision therein relating to growing of tobacco or sale
\nof tobacco within the market area prior to its curing or any
\nsubsequent process of manufacturing.\n<\/p>\n
\tDr. A.M. Singhvi, appearing for the Agricultural
\nProduce Market Committee, Munger,  on an analysis of
\ndifferent entries made in List I,  List II and List III of the
\nSeventh Schedule submitted that there are as many as nine
\nentries in List II out of 66 entries which are specifically made
\nsubject to List I.  3 of the  entries in List II are subject to list
\nIII.  Entry 24 of list II  however is subject to entry 52 of list I.
\nAccording to the learned counsel, wherever the Constitution
\nintended that the entries in list II were to be made subject to
\nentries in list I, it was specifically and clearly so provided.
\nWhere however an entry in list II  is not subject to list I or list
\nIII,  then the power of the State legislature to legislate with
\nregard to that matter is supreme.  The Bihar Agriculture
\nMarkets Act, being relatable to entries 14 and 28 of list II,
\nwhich is not subject to any entry  either in List I or List III,
\nthe same must be held to be supreme and there would be no
\nfetter on the power of the State Legislature to make the
\nAgricultural Produce Markets Act.  With reference to the
\nexpression “subject to List I” in McDowell’s case, 1996(3)
\nS.C.C.709, Supreme Court had  itself observed that the power
\nto make a law with respect to ‘industries’ lies with the States
\nunder Entry 24 of List II but the said entry is made expressly
\nsubject\t to the provisions of Entries 7 and 52 in List I. If the
\nParliament declares by law that it is expedient in the public
\ninterest to take over the control of a particular industry, then
\nsuch industry gets transplanted to List I.  According to the
\nlearned counsel, the industry in respect of which Parliament
\nmakes a declaration  contemplated under Entry 52 of  List I,
\nthe States are denuded of the power to make any law with
\nrespect to them under Entry 24 of List II.  But making of a
\ndeclaration by Parliament does not have the effect of
\ntransplanting the industry from the State List to the Union
\nList.  Entry 52 of List I  since governs only  Entry 24 of List
\nII but not other Entry like Entry 8, as was the case for
\ndiscussion in Mc.Dowell’s case, the power of the State
\nLegislature cannot be denuded to make a law referable to
\nEntry 8.  This being the correct position, as enunciated  by
\nthis  Court and the founding fathers of the Constitution
\nhaving taken due care by expressly stating, when a particular
\nEntry in  List II is subject to an Entry in List I or List III,
\nthereby demarcation being made, in respect of other entries
\nin List II, the power of the State Legislature is exclusive and,
\ntherefore, it would be prohibited field for the Union to make
\nany law.  Reiterating the argument advanced by Mr.
\nDwivedi, Dr. Singhvi also contends that the question of
\noccupied field is only relevant in the case of laws made with
\nreference to entries in List III.  Consequently, neither Entry
\n14 nor Entry 28 being subject to any of the entries in List I,
\nthe Bihar Legislature was fully competent to enact the
\nAgriculture Produce Markets Act and once in exercise of the
\nprovisions contained in the Act, tobacco is notified to be one
\nof the agricultural produce, then the power to levy fee for
\nsale or purchase of tobacco within the market area cannot be
\nwhittled down by the Central Legislation.  According to Dr.
\nSinghvi, the Central Legislation to that extent must be held to
\nbe invalid.  The learned counsel further urged that in case of
\na seeming conflict of entries of two lists, the entries should
\nbe read together without giving a narrow or restrictive sense
\nto either of them and every attempt should be made to see
\nwhether the two entries can be reconciled or harmonized .
\nThis approach to the interpretation is necessary to uphold and
\npromote the “Federal Structure” of the Constitution which is
\na basic structure, as held by this Court in S.R. Bommai vs.
\nUnion of India,<\/a> 1994(3) SCC 1.\tThe fundamental feature of
\nfederalism being that within each list each legislature is
\nsupreme.  There can be no repugnancy between the matters in
\nlist I and list II and repugnancy can only be a concept
\npeculiar  to list III.\tIt is no doubt true that Entry 52 of  List I
\nover rides only Entry 24 of List II and no other entry under
\nList II.  It has been held by this Court in Bihar Distillery,
\n1999(2) SCC 727 and Dalmia Industry 1994(2) SCC 583
\nthat Trade, Commerce, production, distribution of products
\nof alcohol industry can be regulated both by the Centre and
\nthe State.  Bihar Agriculture Produce Markets Act being
\nrelatable to entry 14 and 28 of List II, that Act must operate
\non  its own and not being affected by law made by
\nParliament under Entry 52 of List I.  In this connection, the
\nlearned counsel refers to the Judgment of this court in
\nBelsund 1999(9) SCC 620 para 70.   According to Dr.
\nSinghvi, the Tobacco Act by providing Section 31 indicates
\nthe intention of the Parliament that the Act would not govern
\nthe entire field in exclusion to all other Acts in existence.  In
\nthis view of the matter, there cannot be any justification in
\ndenying the market Committee to levy market fee in respect
\nof the sale and purchase of tobacco within the market area as
\nthe Market Committee Act is a duly enacted law by the State
\nLegislature within its competence to legislate under Entry 14
\nand 28. Dr. Singhvi also urged that mere declaration under
\nEntry 52 is not enough but the law in question must be found
\nwhich actually occupied the field. Dr. Singhvi urged that
\nmere existence of power is not enough but the power must be
\nexercised and on account of such exercise, the field must be
\noccupied so as to hold that the central law would collide with
\nthe State law.\tIt was so held\tin Belsund 1999(9) SCC 620
\nwith regard to tea.  To the same effect is the ratio in the case
\nof Western Coal Fields 1982(1) SCC 125 and Fateh Chand
\n1977(2) SCC 677.  According to the learned counsel in the
\ncase in hand, there is no question of conflict or repugnancy
\nbetween the Tobacco Act and the Bihar Act since both Acts
\noperate in mutually exclusive and different field and
\ntherefore, the majority judgment in ITC case would not apply
\nto the Bihar Agricultural Produce Act.\tDr. Singhvi also
\nmade an extreme argument to the effect that even if the
\nCentral legislation is construed to occupy the entire field
\nunder list I, yet the State Act can still be operative and market
\nfee could be levied by the Market Committee under the State
\nAct for services provided by it on the principle of quid pro
\nquo.  It is in this connection, he placed reliance on the
\ndecision in Synthetics and Chemicals JT 1989(4)SC 467.
\nAccording to Dr. Singhvi, the expression “industry” both
\nunder Entry 24 of List II and Entry 52 of List I would not
\ncover subject matters which are mentioned sui generis in
\ndifferent entries and separately from Entry 24 of List II.  If a
\nwide meaning to the expression is given, it would run counter
\nto the scheme of distribution of powers and the structural
\ninter-relationship between  Entry 52 of List I and Entries 24,
\n26 and 27 of List II and Entry 33 of List III and would make
\nthe State List redundant qua that industry.  In this view of the
\nmatter, the counsel urged that the decisions relating to mines
\nand minerals would not be relevant because of inter-
\nrelationship of Entry 23 of List II and Entry 54 of List I.
\nOnce the declaration is made by Parliament in terms of Entry
\n54 of List I, then both mines and its product minerals get
\nextracted from the State list and get submerged in the Entry
\n54 of List I but that would not be the case when the power
\nunder Entry 52 of List I and Entry 24 of List II as well as
\nother relevant entry in List II are considered.\t Consequently,
\nthe majority view in ITC case must be over-ruled.\n<\/p>\n
\tMr. G.L. Sanghi, the learned  senior counsel, appearing
\nfor Mandi Samiti in Madhya Pradesh batch of appeals,
\nsubmitted that in the case in hand, relevant enquiry should be
\nwhether the State Act is within the exclusive subject matter
\nof the State Legislature under Entry 28 of List II.  According
\nto him, there is no irreconcilable clash between the two Acts,
\nwhich is also apparent from the mandate of Section 31 of the
\nCentral Act.  The object and purpose of the State Act being
\nestablishment of market places and the same object having
\nbeen achieved by the various provisions providing for large
\nscale infrastructural establishment and provision of a large
\nvariety of services, the State Act rightly requires those who
\navail these services to pay the requisite market fee and also in
\norder to provide for appropriate control, to take licenses
\nwherever a market functionary desires to function within the
\nmarket yard or market area.  The provisions of Tobacco
\nBoard Act, more specifically Section 8 however mandates
\nthat the Board has to apply its mind to provide appropriate
\nmeasures including the measure of setting up an auction
\nplatform and since the auction platform has to have a
\nlocation, the Board cannot but think it fit to establish such
\nplatform within the market area.  Such a step will be
\nconsistent with the mandate of Section 31 and, therefore, it
\nwill not be in derogation of the State Act.  The   amendment
\nintroduced in Tobacco Board Act, according to Mr. Sanghi is
\nachieved by the enforcement of the amending Act which
\nexhausts itself by merely introducing the amending
\nprovisions into the parent Act so that the requirement of sub-
\nsection (1) of Section 3 of the Parent Act, namely bringing
\ninto force the newly added Sections will have to be complied
\nwith.  Thus the amended sections as well as Section 13 of the
\nAct having not been enforced within the State of Madhya
\nPradesh, there cannot be any inconsistency or repugnancy
\nbetween the two Acts assuming that bringing into force all
\nthe said Sections may create some inconsistency.  According
\nto Mr. Sanghi, the objects of the Tobacco Board Act being
\ndevelopment of Tobacco Industry, more particularly in
\nrespect of virginia tobacco, is not in any manner defeated by
\nthe provisions of the State Act and the object of the State Act
\nare not defeated by the existing or even non-enforced
\nprovisions of the Tobacco Board Act.  In this view of the
\nmatter, according to Mr. Sanghi, the minority view in ITC
\ncase must be held to be correct and both the Central Act and
\nthe State Act should be permitted to operate in their own
\nsphere.\n<\/p>\n
\tMr. A.K. Ganguli, the learned senior counsel, appearing
\nfor the Tamil Nadu Agricultural Marketing Board,  analysed
\nthe provisions of Article 246(3)  of the Constitution and
\ncontended that the expression “subject to” appearing in
\nArticle 246(3) has reference to those entries in List II which
\nprovides that the subject matter of said entries are subject to
\nthe provisions contained in certain specified entries appearing
\nin either List I or List III as for example Entry 2 in List II
\nprovides Police (including railways and village police)
\nsubject to the provisions of Entry 2A of List I.  Similar
\nprovisions are found in several entries.  In List II like Entry
\n17, 22, 24, 26, 27, 32, 33, 37, 54, 57 and 63 but only three
\nentries in List II namely Entries 13, 23 and 50\t do not specify
\nany entry in List I or List III subject to which the said entries
\nwould remain operative but restrict the scope of these entries
\nby a general reference to the provisions contained in List I or
\nList III.  Therefore, in respect of all other entries in List II,
\nthe State Legislature enjoys the exclusive power to enact
\nlaws and consequently, if the State Act has been enacted
\nunder Entry 28 of List II, the State Act must be allowed to
\noperate.  The contention that Parliament  enjoys superior
\nlegislative powers with regard to subject matters enumerated
\nin List II, according to Mr. Ganguli,  would hold good only in
\nrespect of those entries in List II which expressly provide that
\nthe subject matter thereof are subject to the matters dealt with
\nin various entries in List I.\tBut that principle cannot be
\nextended to the subject matters covered by other entries in
\nList II.  Placing reliance on the provision of Section 100 of
\nthe Government of India Act, 1935 which corresponds to
\nArticle 246 of the Constitution which was interpreted by
\nSulaiman, J in Subrahmanyam Chettiyar vs. Muttuswamy
\nGounder, reported in 1940 FCR 188, which  has been
\napproved by the Constitution Bench in the case of KSEB vs.
\nIndal, 1976(1) SCC 466, the counsel urged that the State
\nLegislature enjoys exclusive legislative power under Article
\n246(3)\tto make laws with respect to the subject matter
\nenumerated in Entry 28 of List II i.e. “Market and Fairs”.
\nThis power has not been conditioned by any restrictions in so
\nfar as the distribution of legislative power between the
\nParliament and the State Legislature is concerned and
\nconsequently, this power cannot be curtailed or restricted by
\nthe exercise of legislative power of the Parliament with
\nreference to any of the entries either in List I or List III.  Mr.
\nGanguli further contends that the entry in three lists\tof the
\nconstitution are not powers but fields of legislation.\tThe
\npower to legislate is given by Article 246.   The entries in
\ndifferent lists demarcate the area over which the appropriate
\nlegislature can operate.  According to him, the concept of
\nfederal supremacy can not be invoked to deny the state
\nlegislature the power to  make laws with respect to such
\nsubject matters, which are exclusively assigned to it under
\nthe State list.\t If a law made by the State Legislature is
\nimpugned on the ground of incompetency and on
\nexamination of the law, it is found that the law in substance is
\nwith respect to a matter in List II, then the law would be valid
\nin its entirety.  It is only in case of a seeming conflict
\nbetween the law made under any of the entries in List I and
\nII, then the principle of federal supremacy could be invoked
\nin view of the opening words in Article 246(1).\t So far as the
\nmeaning of the expression “industry” in Entry 52 of List I ,
\nthe counsel urged that the said word must have the same
\nmeaning as would be ascribed to the word in Entry 24 of List
\nII.  So far as the raw materials are concerned, it has been held
\nto be goods and would fall within the subject matter
\ncomprised in Entry 27 of List II.  The products of the
\nindustry would also be comprised in Entry 27 of List II
\nexcept that in the case of controlled industry, they would fall
\nunder Entry 33 of List III and only the process of
\nmanufacture and production would fall under Entry 24 of List
\nII and if the concerned industry is a declared industry, then
\nthe process of manufacture and production would fall under
\nEntry 52 of List I.  It is, therefore, logical to hold that the
\nactivities relating to production and manufacture which
\nwould otherwise come within the purview of the expression
\n“industry” in Entry  24 of List II becomes a subject matter of
\nlegislation under Entry 52 of List I, where the industry is a
\ndeclared industry.  Therefore, such legislative competence of
\nthe Parliament would not confer power in relation to raw
\nmaterials which may be an integral part of the industrial
\nprocess and thereby denuding the State Legislature of its
\npower to make laws with respect to subject matters covered
\nby either entries in List II.  Mr. Ganguli contends that this
\nCourt has consistently taken the view that the subject matter
\nof Entry 52 of List I pertains to manufacture and production
\nactivities and therefore, it would not be appropriate that the
\nword “industry” should have a wider meaning so as to
\ninclude also the raw materials within the same.\t With
\nreference to the decisions of this Court in relation to law
\nmade by the Parliament, regulating the Mines and Minerals
\nDevelopment, Mr. Ganguli contends that the subject matter
\nof entry 54  of List I is the same as in Entry 23 of List II and
\nEntry 23 of List II further provides that it should be further
\nsubject to the provisions of List I with respect to regulation
\nand development under the control of the Union.\t In such a
\ncase, therefore, once the Parliament makes a declaration in
\nSection 2 of the Mines and Minerals Development and
\nRegulation Act, then all aspects of Regulations and Minerals
\nDevelopment even including taxes on minerals are covered
\nby the said declaration and, therefore, the State Legislature is
\ndenuded of its power to make laws with reference to the
\nsubject matter.\t This has been so held in Baij Nath Kedia vs.
\nState of Bihar , 1969 (3) SCC 838, State of Orissa vs.
\nM.A.Tulloch<\/a> 1964(4) SCR 461,  India Cement vs. State of
\nTamil Nadu,<\/a> 1990(1) SCC 12 and Orissa Cement Ltd. vs.
\nState of Orissa & Ors.,<\/a> 1991 Supp.(1) SCC 430.\tBut the
\nsubject matter of Entry 52 of List I and the subject matter
\ncomprised in Entry 2 4 of List II both relate to Industry and
\nentry 24 of List II is subject to Entry 7 and 52 of List I.  The
\nState legislature could not have made a law in exercise of
\npower under Entry 24 of List II so as to make other entries
\nredundant.  According to Mr. Ganguli, the expression
\n“Industry” cannot have a wider meaning.\t  On the question of
\nrepugnancy, Mr. Ganguli contends that the said question
\narises only when both legislatures are competent to enact the
\nrespective laws\t and the two laws cover the same field.\t If the
\ntwo laws are found to be operating in the same field and are
\nalso found to be inconsistent with each other, only then the
\nlaw made by the Parliament would prevail.  But that would
\napply only when the law made by the Parliament and State
\nLegislature are both in respect of the same subject matter,
\nenumerated in the concurrent list, as was held in Hoechest
\nPharmaceuticals 1983(4) SCC 45.\t Even in Deep Chand’s
\ncase the two sets of laws made by the State Legislature and
\nthe Parliament with respect to the same subject matter
\nenumerated in Entry 35 of List III, was under consideration
\nand  the Court was examining the question of repugnancy.
\nBut that will have no application to the question  involved in
\nthe present case  inasmuch as the State Act falls within the
\nsubject matter comprised under Entry 28 of List II in respect
\nof which the State Legislature enjoys the exclusive power to
\nmake laws.  On\tan analysis of the provisions of Tobacco
\nBoard Act and Section 31 thereof, Mr. Ganguli contends that
\nthe provisions of Tobacco Act would operate only in addition
\nto other laws and, therefore that Act cannot be pressed into
\nservice to give an over-riding effect over other legislation
\nincluding the Agricultural Produce Markets Act, which has
\nbeen enacted by the competent State Legislature.   According
\nto the learned counsel the two Act over-lap only as regards
\nsale and purchase of Tobacco within the notified area and if
\nauction platform registered with Board are held within the
\nmarket area, then the so called conflict in the two Acts can be
\neasily avoided and both Acts would be allowed to operate.
\nWhile Market Committee\twould be entitled to levy fees in
\nrespect of sale and purchase of tobacco in the market area for
\nthe services rendered including the entire infrastructure, the
\ntobacco Board Act can yet levy fee as provided under
\nTobacco Board Act, which would be a separate fee for
\nspecial services rendered by it, as determined by the Central
\nGovernment under Section 14A and according to the learned
\ncounsel, this is the only harmonious construction which
\nshould be and ought to be made of the two provisions.
\nAccording to Mr. Ganguli, the majority decisions in ITC
\ncase are in conflict with  Tika Ram vs. State of U.P.1956
\nSCR 393,  Calcutta Gas 1962 Supp. SCR 1, Kannan Devan
\nHills, 1972(2) SCC 218,\t  Ganga Sugar 1980(1) SCC 223,
\nB. Viswanathan\t1991(3 ) SCC 358,  and therefore,  the said
\ndecisions must be held to be erroneous.\t In fact the minority
\nview expressed by Justice Mukherjee, looking at the object of
\ntwo Act, allowing both the Act to operate in their respective
\nfields should be upheld.  Mr. Ganguli contended that though
\nthe competence of the Parliament to make Tobacco Board
\nAct covering the field exclusively within the competence of
\nthe State Legislature, had not been assailed in any of these
\nwrit petitions, but in\tview of the nature of controversy that
\nhas arisen and the arguments advanced in the case leaves no
\nroom for doubt that each of the parties including the Central
\nGovernment as well as the Tobacco Board\t had the
\nopportunity of placing its case and, therefore there should be
\nno fetter on the power of the Court to\tdecide the legislative
\ncompetence of the Parliament in the case in hand.\n<\/p>\n
\tMr. Malhotra, the learned senior counsel, appearing for
\nthe Tobacco Board  though initially proceeded with  the
\narguments that\tboth Acts could be reconciled but later on
\ncategorically submitted that the Central Legislation must
\nprevail.  According to him the Tobacco Industry got lifted
\nfrom Entry 24 of List II to Entry 52 of List I and the same
\nmust be held to be a special Act dealing with tobacco
\nindustry right from the stage of growing till it is exported.
\nThis being a special Act and the Market and Fairs under
\nEntry 28 being a general entry and Agriculture under Entry
\n14 of List II being a general entry, the special Act enacted by
\nthe parliament must prevail and there is no question of lack
\nof competence of the Parliament to enact the law.  In support
\nof this contention reliance was placed on the Constitution
\nBench decision of this Curt in Belsund Sugar Company
\nLimited 1999(9) SCC 620.   Mr. Malhotra relied upon
\nseveral decisions of the Federal Court and this Court  and
\ncontended that entries in the schedule must be given its
\nwidest meaning and it would not be a correct approach to
\ngive a restricted meaning to the subject matter of legislation
\ndescribed in an Entry.\tIn support of this contention, he
\nplaced reliance on the decision of the Federal Court in The
\nUnited Provinces vs. Mst. Atiqa Begum & Ors. – 1940(2)
\nFederal Court Reports 110, The First Additional Income-
\nTax Officer, Mysore vs. H.N.S. Iyengar<\/a> -1962 Supp. SCR
\n1, Chaturbhai M. Patel vs. The Union of India & Ors.<\/a>
\n1960(2) SCR 362, Navinchandra Mafatlal\tvs. The
\nCommissioner of Income Tax, Bombay City<\/a> – 1955(1)
\nSCR 829 and Zaverbhai Amaidas vs. The State of Bombay<\/a>\n<\/p>\n
– 1955(1) SCR 799.  The learned counsel also contended that
\nit is a cardinal rule of interpretation that words in an entry
\nshould be given their ordinary, natural and grammatical
\nmeaning subject to the rider that legislative entries are
\nrequired to be interpreted  broadly and widely so as to give
\npowers to the legislatures to enact the law with respect to the
\nmatters enumerated in the legislative entries.\tHe places
\nreliance on the decision of this Court in R.S. Rekhchand
\nMohota, 1997(6) SCC 12, Rai Ramkrishna & Ors. vs. The
\nState of Bihar<\/a> -1964(1) SCR 897 and Indian Aluminium
\nCompany & Others vs. State of Kerala & Ors. 1996(7)
\nSCC 637.  He also referred to the case of Harakchand
\nRatanchand Banthia 1969(2) SCC 166, which had been
\nrelied upon by Mr. Shanti Bhushan in his arguments.  Mr.
\nMalhotra  contends that the majority decision in ITC case,
\ntherefore, must be held to be correct.\n<\/p>\n
\tThe learned Additional Solicitor General Mr. Trivedi
\nappearing for the Attorney General of India placed before us
\nthe process of manufacture of tobacco and indicated how
\ntobacco is grown commercially. To emphasise on the issue
\nhe contended that the tobacco industry having been notified
\nto be a ‘controlled industry’ it will be a disaster if the
\nParliament  is held to have no competence to make law in
\nrelation to growing of tobacco or processing of raw tobacco.
\nAccording to the learned Additional Solicitor General the
\ntrade and commerce in product of controlled industry being
\ncovered by Entry 33 of List I, the legislative power of the
\nState is subordinate to the power of the Parliament in respect
\nof List III.  He further contended that the constitution itself
\nhas specifically put down entries in List II in which the
\npower is expressed in general terms but is made subject to the
\nprovisions of entries in either list I or list III.  Consequently,
\nno anomaly will arise in holding exclusive power with the
\nParliament in respect of the subject coming under any entry
\nin List I.  He further contended that Tobacco Board Act
\ncovers the entire field of tobacco industry and is within the
\ncompetence of Parliament under Entry 52 of List I.
\nTikaramji was a case which concerned only with a  part of
\nthe industry namely manufacture of sugar.  The observations
\nmade in Tikaramji 1956 SCR 393 were in the background of
\nthat case, as in that case the Court was never concerned with
\nthe entire process as in the present case.  According to the
\nlearned Additional Solicitor General, it was not necessary for
\nthe Court to examine the ambit of the expression “industry”
\nin Entry 52 of List I.\tIf the ordinary principle of construction
\nof an entry in the legislative list is that the entry should be
\ngiven wide meaning as has been held in several cases of this
\nCourt,\tthere is no reason why on the basis of the said
\nobservations made in Tikaramji, the Court would give a
\nlimited meaning to the expression “industry” in Entry 24 of
\nList II and Entry 52 of List I.\t  With reference to the
\njudgment of this Court in H.R. Banthia 1969(2) SCC 166, the
\nlearned Additional Solicitor General stated that for the
\npurpose of that case, it was not necessary for the Court to
\nmake an attempt to define the expression  “industry”.  The
\nCourt was merely concerned with the question whether
\nmanufacture of gold ornaments would be a process of
\nsystematic product,  so as to fall within the expression
\n“industry” in the appropriate legislative entry.  The Court did
\ncome to that conclusion. The learned Additional Solicitor
\nGeneral also contended the case of Harakchand 1971(2)
\nSCC 779 is in consonance with the principle of interpretation
\nof an entry and should be applied to the case in hand.\t  The
\nlearned\t  Addl. Solicitor General contends that the
\nConstitution being an organic document, has to be interpreted
\nin its widest amplitude. According to the learned Addl.
\nSolicitor General the majority decision in ITC case must be
\nheld to be the correct law.  The counsel states that the validity
\nof the Tobacco Board Act was also not under challenge in the
\nITC case which stood disposed of by the judgment of this
\nCourt since reported in 1985 (Supp.) SCC 476 and, therefore,
\nit would not be appropriate  for this Court  to examine the
\nlegislative competence of the Parliament in relation to the
\nenactment of the Tobacco Board Act.\n<\/p>\n
\tThough several counsel have raised contentions in
\ndifferent forms as indicated earlier, but essentially the
\nfollowing questions arise for our determination:-\n<\/p>\n
1.\tWhether the Tobacco Board Act enacted by the
\nParliament under Entry 52 of List I can be held to be
\nconstitutionally valid and within the legislative
\ncompetence of the Parliament, so far as the
\nprovisions contained in the same in relation to the
\ngrowing of tobacco and sale of raw-materials, and
\nthis in turn would depend upon the question whether
\nthe word ‘industry’ used in Entry 52 of List I should
\nbe given a restricted meaning ;\n<\/p>\n
2.\tEven if the Tobacco Board Act is held to be
\nconstitutionally valid and the Agricultural Produce
\nMarket Act is also  held to be constitutionally valid
\nand within the powers of the State Legislature, so far
\nas purchase and sale of tobacco within the market
\narea is concerned, whether both the Acts can be
\nallowed to operate, as was held by the minority
\njudgment in ITC case;\n<\/p>\n
3.\tIf there is a repugnancy between the two then
\nwhether the Central Act would prevail, as was held
\nby the majority judgment in ITC case.\n<\/p>\n
But before considering several elaborate arguments advanced
\non these issues, it may be noticed that the Constitution of
\nIndia itself defines the political authority, locates the sources
\nof political power and also indicates how the power has to be
\nexercised setting out the limits on its own use.  The rules
\nrelating to the distribution of legislative power by providing
\nthe legislative heads for the Parliament to make law in
\nrespect of subjects enumerated in List I, and similarly
\nenumerating the subjects in List II with respect to which the
\nState Legislature can frame law, in fact constitutes the heart
\nof the federal scheme of the Constitution.  But the
\nConstitution Makers having found that the need for power
\nsharing devices between the Central and the State must be
\nsubordinated to the imperatives of the State’s security and
\nstability propelled the thrust towards centralisation and by
\nusing non obstante clause under Article 246 the federal
\nsupermacy is achieved.\tArticle 246 of the Constitution deals
\nwith the distribution of legislative powers as between the
\nUnion and the State Legislature, with reference to the
\ndifferent Lists in the 7th Schedule.  The various entries in 3
\nLists of the 7th Schedule   are not powers of legislation but
\nthe fields of legislation.  The entry in the List are legislative
\nheads and are of enabling character.  They are designed to
\ndefine and limit the respective areas of legislative
\ncompetence of the Union and the State Legislature.  It is a
\nwell recognised principle that the language of Entry should
\nbe given a widest scope and each general word should be
\ninterpreted to\textend to all ancillary or subsidiary matters
\nwhich can fairly and reasonably be comprehended in it.\tThe
\nEntries in the Lists should be read together without giving a
\nnarrow or restricted  meaning to any of them.  Powers of the
\nUnion and the State Legislatures are both expressed in
\nprecise and in definite terms and, therefore, there can be no
\nreason in such a case in giving broader interpretation to one
\nrather than to the other.  It is only when an apparent
\noverlapping occurs the doctrine of ‘pith and substance’ has to
\nbe applied to find out the true nature of legislation and the
\nEntry within which it would fall.  When different entries in
\nthe same List crop up for consideration the usual principle
\nfollowed is that each particular entry should relate to a
\nseparate subject or group of subjects and  every attempt
\nshould be made to harmonise different entries and to discard
\na construction which will render any of the entries
\nineffective.\n<\/p>\n
\tComing to the case in hand, the relevant entries which
\narise for our consideration are Entries 52 of List I, Entry 24
\nof List II and Entry 28 of List 2.  Under Entry 52 of List 1
\nTobacco Board Act  has been enacted by Parliament  and
\nunder Entry 28 of List II the Agricultural Produce Market
\nAct has been framed by the State Legislature.  Incidentally,
\nalso Entry 7 of List 1 and Entries 14 and 27 of List 2 crop up
\nfor consideration.  It would, therefore, be appropriate to
\nindicate those Entries hereunder :\n<\/p>\n
”\tLIST – I<\/p>\n
\tEntry 7\t Industries declared by Parliament
\nby law to be necessary for the purpose of defence
\nor for the prosecution of war.\n<\/p>\n
\t\tEntry 52 –  Industries, the control of
\nwhich by the Union is declared by Parliament by
\nlaw to be expedient in the public interest.\n<\/p>\n
\t\t\tLIST –\tII<\/p>\n
\tEntry 24  Industries subject to the
\nprovisions of (entries 7 and 52) of List I.\n<\/p>\n
\tEntry 27  Production, supply and
\ndistribution of goods subject to the provisions of
\nentry 33 of List III; and<\/p>\n
\tEntry 28  Markets and fairs.”\n<\/p>\n
Though the State Legislature has power to make law in
\nrelation to any industry under Entry 24 of List II, but the said
\nEntry itself being subject to the provisions of Entries 7 and
\n52 of List I, once Parliament makes a declaration by law
\nidentifying an industry, the control of which is taken over by
\nthe Union in the public interest, then the State Legislature is
\ndenuded of its competence to make any law in respect of that
\nindustry, notwithstanding its competence under Entry 24 of
\nList II.  The industry in question having been identified and
\nnecessary declaration to that effect being made in terms of
\nEntry 52 of List I then over that subject the Parliament gets
\nexclusive power to make laws under Article 246(1) of the
\nConstitution.  The Tobacco Board Act having been enacted
\nby the Parliament under Article 246(1) of the Constitution
\nand the law in question being referable to Entry 52 of List I,
\nthe moot question that arises for adjudication is, what is the
\nextent and ambit of the expression ‘industry’ used in Entry\n<\/p>\n
52.  As has been stated earlier, the expression ‘industry’ has
\nbeen used in Entry 24 of List II and Entry 7 and Entry 52 of
\nList I.\t In deciding the legislative competence of the
\nParliament in enacting Tobacco Board Act and in making
\nprovision therein in relation to the growing of tobacco as well
\nas sale of tobacco in the places specified therein, and on
\nterms and conditions mentioned therein, the moot question is
\nwhether the word ‘industry’ would be given a wide meaning
\nso as to bring within its ambit all that is necessary for the
\nindustry, including the raw material as well as the growing of
\nthe raw material, as contended by Mr. Shanti Bhushan, or a
\nrestricted meaning would be given to the same on the basis of
\nthe observations made by this Court in Tikaramji’s case and
\nfollowed in several other authorities,\tas contended by Mr.
\nDwivedi.  In the majority judgment of this Court in ITC case
\n(1985) Suppl. 1 SCR 145, the majority view expressed by
\nHon’ble Fazal Ali, J. came to hold that the Centre having
\ntaken over an industry under Entry 52 of List I and having
\npassed the Act to regulate the legislation, and the said
\nlegislation  having covered the entire field,  the State
\nLegislatures ceases to have any jurisdiction to legislate in that
\nfield, and if it does so, then the State Legislation would be
\nultra vires of the powers of the State Legislature.  Even the
\nminority view expressed by Hon’ble Justice Sabyasachi
\nMukherjee also accepts the recognised principle of
\nParliamentary supermacy in the field of legislation engrafted
\nin Article 246.\t The learned Judge also held that the words in
\na constitutional document conferring legislative powers
\nshould be construed most liberally and in their widest
\namplitude, following the judgment of this Court in Navin
\nChandra vs. CIT, Bombay (1955) 1 SCR 829.  The
\nminority view also was not to the effect that the Tobacco
\nBoard Act was beyond the legislative competence of the
\nParliament.  On the other hand having held the Tobacco
\nBoard Act to be constitutionally valid and the Agricultural
\nMarket Act enacted by the State Legislature to be a valid
\npiece of legislation, the learned Judge came to hold that the
\nsaid Act essentially dealing with the object to regulate
\nmarketing of agricultural produce and the control of coffee
\n(for tobacco) industry would not be defeated if the marketing
\nof coffee (for tobacco) is done within the provisions of
\nMarketing Act, the State Legislatures’ power to make
\nMarketing Act ought not to be denuded and one must avoid
\ncorroding the State’s ambit of power of legislation which will
\nultimately lead to erosion of India being a union of States.
\nThe minority view appears to have been influenced by the
\nfact that the States must have the power to raise and mobilise
\nresources in their exclusive fields.  Thus all the three learned
\njudges did not doubt the competence of the Parliament to
\nenact Tobacco Board Act.  While the majority view was to
\nthe effect that the Marketing Act will not operate so far as
\ndealing with the sale and purchase of tobacco within the
\nmarket area, as the field is fully occupied by the Central Act,
\nnamely, the Tobacco Board Act, the minority view proceeded
\non a finding that both Acts can be permitted  to operate in
\ntheir respective sphere.\n<\/p>\n
\tIn the Constitution Bench decision of this Court in
\nHarakchand Ratanchand Banthia & ors. etc. vs. Union of
\nIndia and Ors., 1970(1) S.C.R. 479,  the legislative
\ncompetence of the Parliament under Entry 52 of List I came
\nup for consideration, while dealing with validity of the
\nprovisions of the Gold\tControl Act, which Act included
\nwithin its ambit the gold ornaments.  One of the contention
\nthat had been advanced was that the goldsmith’s work was
\nhandicraft, requiring application of skills and the art of
\nmaking gold ornaments was not an ‘industry’ within the
\nmeaning of Entry 52 of List I.\tIt had been contended on
\nbehalf of the Union Government that the legislative entry
\nmust be construed in a large and liberal sense and
\ngoldsmith’s craft was an industry within the meaning of
\nEntry 24 of List II as well as Entry 52 of List I and therefore,
\nParliament was competent to legislate in regard to the
\nmanufacture of gold ornaments.\tHaving considered the
\nrelevant entries namely Entry 52 of List I and Entry 24 and
\n27 of List II, the Constitution Bench had observed that –  “It
\nis well established that the widest amplitude should be given
\nto the language of the entries”.  The Court in that case did not
\nthink it necessary to attempt to define the  expression
\n“industry” precisely or to state exhaustively of its different
\naspects but considered the question whether the manufacture
\nof gold ornaments by goldsmith in India falls within the
\nconnotation of the word “industry” in the appropriate
\nlegislative Entries.  The Court unequivocally rejected the
\ncontention raised by Mr. Daphtary that if the process of
\nproduction was to constitute “industry” a process of
\nmachinery or mechanical contrivance was essential, as in the
\nopinion of the Court there is no reason why such a limitation
\nshould be imposed on the meaning of the word “industry” in
\nthe legislative lists.\tThe Court also rejected the argument
\nadvanced on behalf of Mr. Palkhivala that manufacture of
\ngold ornaments was not an industry because it required
\napplication of individual art and craftsmanship, as in the
\nopinion of the Court mere use of the skill or art is not a
\ndecisive factor and it\twas  held that the said factor will not
\ntake the manufacture of gold ornaments out of the ambit of
\nthe relevant legislative entries.  It is in this connection, the
\nCourt observed\t:\n<\/p>\n
“It is well settled  that the entries in the three lists
\nare only legislative heads or fields of legislation
\nand they demarcate the area over which the
\nappropriate legislature can operate.  The
\nlegislative entries must be given a large and
\nliberal interpretation, the reason being that the
\nallocation of subjects to the lists is not by way of
\nscientific or logical definition but is a mere
\nenumeration of broad and comprehensive
\ncategories.”\n<\/p>\n
The Court ultimately came to the conclusion that the
\nmanufacture of gold ornaments by goldsmith in India is a
\nprocess of systematic production for trade or manufacture
\nand so falls within the connotation of the word “industry” in
\nthe appropriate legislative Entries.  At Page 490 of the
\naforesaid Judgment, while construing as to what is the
\nmeaning of the word “Industry” in Entry 52 of List I and
\nEntry 24 of List II,  it referred to the definition of “industry”
\nin Shorter Oxford English Dictionary as well as the meaning
\nof the said word in Webster’s Third New International
\nDictionary and the contention raised on behalf of the
\napplicant that if the word “industry” is construed in this wide
\nsense, then Entry 27 of List II will lose all meanings and
\ncontents, was not accepted by the Court.  It is, thus clear that
\nthe Court did apply the theory that widest amplitude and
\nmeaning should be given to the entries in the legislative lists.
\nFurther the contention of the applicant that the legislation in
\nfact is a legislation under Entry 27 of List II, dealing with
\n“Production, supply and distribution of goods” and being a
\nspecial entry, the contents of Entry should be excluded from
\nthe expression “industry” in Entry 52, was not accepted and
\nrejected.\n<\/p>\n
\tIn Chaturbhai M. Patel vs. Union of India,<\/a> 1960(2)
\nS.C.R. 362, a Constitution Bench of this Court was
\nconstruing the Entries under the Government of India Act,
\n1935 and one of the contention raised in that case was
\nSections 6 and 8 of the Central Excise & Salt Act, 1944 and
\nthe Rules made thereunder were beyond the legislative
\ncompetence of the central legislature.\tThe relevant entries
\nwhich came up for consideration in that case were Entry 45
\nof List I and Entries 27 and 29 of the State List, which are as
\nunder:-\n<\/p>\n
“45.  Duties of Excise on Tobacco and other
\ngoods manufactured or produced in India except:-\n<\/p>\n
(a)alcoholic liquors for human consumption\n<\/p>\n
(b)opium, Indian hemp and other narcotic drugs
\nand narcotics, non-narcotic drugs;\n<\/p>\n
\u00a9 medical and toilet preparations containing
\nalcohol or any substance included in sub-\n<\/p>\n
paragraph (b) of this entry.\n<\/p>\n
Item 27.  Trade and commerce within the
\nprovince; markets and fairs, money lending and
\nmoney lenders.”\n<\/p>\n
Item 29.  Production, supply and distribution of
\ngoods; development of industries, subject to the
\nprovisions in List I with respect to the
\ndevelopment of certain industries under Federal
\ncontrol.”\n<\/p>\n
    A bare look at those  Entries and on being compared with
\nthe Entries in list II of  the Seventh Schedule of the
\nConstitution of India,\tit appears that Entry 27 of the State
\nList under the Government of India Act now comprises of
\nEntries 26 and 28 of List II of the Seventh Schedule and
\nEntry 29 of the State List in the Government of India Act is
\nnow combined in Entry 27 of the State List relating to
\nproduction, supply and distribution of goods and also Entry
\n24 of List II namely development of Industries.\t In the
\naforesaid Constitution Bench decision, a passage from the
\njudgment of the Federal Court reported in (1940) F.C.R.
\n188, 201 was quoted, which may be extracted hereunder:\n<\/p>\n
“It must inevitably happen from time to time that
\nlegislation, though purporting to deal with a
\nsubject in one list, touches also on a subject in
\nanother list, and the different provisions of the
\nenactment may be  so closely interwined that
\nblind adherence to a strictly verbal interpretation
\nwould result in a large number of statutes being
\ndeclared invalid because the legislature enacting
\nthem may appear to have legislated in a forbidden
\nsphere.”\n<\/p>\n
The Constitution Bench approved the aforesaid Judgment of
\nthe Federal Court and referring to the judgment of this Court
\nin the State of Rajasthan vs. G. Chawla<\/a> [AIR 1959 SC
\n544], the Court held :\n<\/p>\n
“It is equally well-settled that the power to
\nlegislate on a topic of legislation carries with it the
\npower to legislate on an ancillary matter which
\ncan be said to be reasonably included in the power
\ngiven.”\n<\/p>\n
The Court ultimately held that the Federal Legislature did
\nhave the competence to make provisions in Sections 6 and 8
\nof the Central Excise & Salt Act under Entry 45 of List I of
\nthe Government of India Act, 1935 and observed thus:\n<\/p>\n
“It is within the competence of the Central
\nlegislation to provide for matters which may
\notherwise fall within the competence of the
\nProvincial legislature if they are necessarily
\nincidental to effective legislation by the Central
\nlegislature on a subject of legislation expressly
\nwithin its power.”\n<\/p>\n
This indicates that the Court has all along been construing a
\nparticular legislative Entry to give wide connotation possible
\nand in that case, it was held while legislating upon an
\nindustry,  Parliament would be entitled to legislate also on the
\nraw materials of that industry which is an ancillary to the
\nindustry and there should not be any limitation in interpreting
\nthe expression “industry” to denude the power of the
\nParliament and thereby make the law ineffective.  In the
\naforesaid judgment of this Court, it has been held:\n<\/p>\n
“Looking at the scheme of the Act, its object and
\npurpose, its true nature and character and the pith
\nand substance the conclusion is inevitable that the
\nAct was within the legislative competence of the
\nCentral legislature and although there may be
\ncertain matters otherwise within the legislative
\ncompetence of the provincial legislature they are
\nnecessarily incidental to effective legislation by
\nthe Central legislature.  The various provisions of
\nthe Act and the Rules made thereunder were, in
\nour opinion, essentially connected with the
\nlevying & collection of excise duty  and in its true
\nnature and character the Act remains one that falls
\nunder item 45 of List I and the incidental
\ntrenching  upon the provincial field of items 27 or
\n29 would not affect its constitutionality because
\nthe extent of invasion of the provincial field may
\nbe a circumstance to determine the true pith and
\nsubstance but once that question is determined the
\nAct, in our opinion, would fall on the side of the
\nCentral field and not that of  the provincial field.”\n<\/p>\n
 In Synthetics and Chemicals Ltd. And Ors. vs. State of
\nU.P. and Ors.,<\/a> 1990(1) SCC 109, it was held that the
\nConstitution must not be construed in any narrow or pedantic
\nsense and that construction which is most beneficial to the
\nwidest possible amplitude of its power must be adopted.\t In
\nthe said case, after noticing the principle of construction in
\nrelation to a constitutional provision, providing division of
\npower and jurisdiction in a federal constitutional scheme, it
\nwas held:\n<\/p>\n
“It is well settled that widest amplitude should be
\ngiven to the language of the entries in three Lists
\nbut some of these entries in different lists or in the
\nsame list may override and sometimes may appear
\nto be in direct conflict with each other, then and
\nthen only comes the duty of the court to find the
\ntrue intent and purpose and to examine the
\nparticular legislation in question.  Each general
\nword should be held to extend to all ancillary or
\nsubsidiary matters which can fairly and
\nreasonably be comprehended in it.  In interpreting
\nan entry it would not be reasonable to import any
\nlimitation by comparing or contrasting that entry
\nwith any other in the same list.”\n<\/p>\n
In  Express Hotels Private Ltd. Vs. State of Gujarat and
\nAnr., 1989 (3) SCC 677, the Court was no doubt
\ninterpreting some entries providing for taxes on luxuries but
\ndealing with the general principles of an Entry in a
\nlegislative list, the Court held :\n<\/p>\n
“We are dealing with an entry in a Legislative
\nList.  The entries should not be read in a narrow
\nor pedantic sense but must be given their fullest
\nmeaning and the widest amplitude and be held to
\nextend to all ancillary and subsidiary matters,
\nwhich can fairly and reasonably be said to be
\ncomprehended in them.”\n<\/p>\n
As has been stated earlier, even in his minority judgment in
\nITC case, Justice Mukherjee had observed:\n<\/p>\n
“It is well settled that the cardinal rule of
\ninterpretation is that the words should be read in
\ntheir ordinary natural and grammatical meaning.
\nBut words in a constitutional document conferring
\nlegislative powers should also be construed most
\nliberally and in their widest amplitude.”\n<\/p>\n
In view of the aforesaid rules of interpretation as well as the
\nConstitution Bench decision referred to above,\tit is difficult
\nfor us to accept the contention of Mr. Dwivedi that the word
\n“industry” in Entry 52 of List I should be given a restricted
\nmeaning, so as to exclude from its purview the subject of
\nlegislation coming within entry 27 or Entry 14 of List II.
\nBearing in mind the constitutional scheme of supremacy of
\nParliament, the normal rule of interpretation of an Entry in
\nany of the list in the Seventh Schedule of the Constitution,
\nthe object of taking over the control of the tobacco industry
\nby the Parliament, on making a declaration as required under
\nEntry 52 of List I and on examining the different provisions
\nof the Tobacco Board Act, we see no justification for giving
\na restricted meaning to the expression “industry” in Entry 52
\nof List I, nor do we find any justification in the contention of
\nthe counsel appearing for the States and also different Market
\nCommittees that the provisions contained in Tobacco Board
\nAct dealing with the growing of tobacco as well as making
\nprovision for sale and purchase of tobacco, must be held to
\nbe beyond the legislative competence of the Parliament, as it
\ndoes not come within the so-called narrow meaning of the
\nexpression “industry” on the ground that otherwise it would
\ndenude the State Legislature of its power to make law dealing
\nwith market under Entry 28, dealing with agriculture under
\nEntry 14 and dealing with goods under Entry27 of List II.
\nSuch an approach of interpretation, in our considered opinion
\nwould be against the very scheme of the constitution and
\nsupremacy of the Parliament and such an approach towards
\ninterpreting the power sharing devices in relation to entries in
\nList I and List II would be against the thrust towards
\ncentralisation.\t  In our considered opinion, therefore, the
\nword “industry” in Entry 52 of List I should not be given any
\nrestricted meaning and should be interpreted in a manner so
\nas to enabling the Parliament to make law in relation to
\nsubject matter which is declared and whose control has been
\ntaken over to bring within its sweep any ancillary matter,
\nwhich can be said to be reasonably included within the power
\nand which may be incidental to the subject of legislation, so
\nthat the Parliament would be able to make an effective law.
\nSo construed and on examining different provisions of the
\nTobacco Board Act, we do not find any lack of legislative
\ncompetence with the Parliament so as to enact any of the
\nprovisions contained in the said Act,  the Act in question
\nhaving been enacted by the Parliament on a declaration being
\nmade of taking over of the control of the Tobacco industry by
\nthe Union and the Act being intended for the development of
\nthe said industry.\n<\/p>\n
\tThe main prop of the argument advanced by Mr. Dwivedi
\nis the decision of this Court in Tikaramji, which was
\nfollowed in Calcutta Gas, Kanandevan  and Ganga Sugar
\nCorporation,  all of which are Constitution Bench decisions.
\nIn Tikaramji, no doubt the Constitution Bench of this Court
\nheld that the raw materials which are integral part of the
\nindustrial process, cannot be included in the process of
\nmanufacture or production and thus “industry” within the
\nmeaning of Entry 52 of List I under which the Parliament
\nmakes a law, would not bring within its sweep the raw
\nmaterials.  The aforesaid observations had been made in
\nconnection with sugar industry and sugar-cane.\tAccording to
\nMr. Dwivedi, the majority decision in ITC case, cannot be
\nsustained, since the earlier constitution Bench decision of this
\nCourt in Tikaramji,  Calcutta Gas,  Kanandevan\tand Ganga
\nSugar Corporation have not been noticed.  Mr. Dwivedi’s
\nfurther contention is that a legislative Entry in any List
\nshould be so interpreted so as not to denude another entry in
\nthe same list or  in any other list and, therefore, it is necessary
\nto give a restricted meaning to the expression “industry”
\noccurring in Entry 24 of List 2 as well as Entry 52 of List\n<\/p>\n
1.According to Mr. Dwivedi, while examining the
\nconstitutionality of the Market Committee Act referable to
\nEntries 26, 27 and 28 of List II vis-\u00e0-vis the Sugar-cane Act
\nreferable to Entry 33 of List III in Belsund Sugar, this Court
\nhas held that the Market Committee Act should be subject to
\nSugarcane Act.\tApplying the same principle, it would be
\nlogical to hold that the raw tobacco, which would be a
\nproduce of agriculture and consequently a raw material for
\nthe tobacco industry would continue to be within the
\nexclusive domain of the State legislature and the Parliament
\nis incompetent to make any legislation in relation to either
\ngrowing of tobacco  or sale and purchase of tobacco.   It
\nwould,\ttherefore, be  necessary to examine what really this
\nCourt in Tikaramji has held.  At the outset, it may be noticed
\nthat in none of these cases, relied upon by Mr. Dwivedi,
\nnamely Tikaramji, Calcutta Gas, Kanandevan and Ganga
\nSugar, the competence of Parliament to make any law
\nreferable to Entry 52 of List I had not been questioned.  In
\nTikaramji, the question for consideration was whether the
\nAct passed by the State Legislature and notification issued
\nthereunder is repugnant to the Parliament Act and
\nnotification issued thereunder.\t On examining the provisions
\nof the State Act namely the Sugarcane Act, the Court held
\nthat the said law concerns solely with the regulation of
\nsupply and purchase of sugarcane and in no way trenched
\nupon the jurisdiction of the Centre with regard to sugar and
\non scrutiny of Section 18-G of the Industries (Development
\nand Regulation)Act, the Court held that the Act, more
\nspecifically Section 18-G did not cover sugarcane nor even
\nthe Parliament’s intention to cover the entire field could be
\ninferred.  The Court was required to find out the meaning of
\nthe expression “any article or class of articles relatable to any
\nscheduled industry”  used in Section 18-G and it held that it
\ndid not refer to the raw materials but only to the finished
\nproducts. The Court went into the object of the Central Act
\nwhich was equitable distribution and availability of
\nmanufactured articles at fair prices.  The argument that had
\nbeen advanced in that case was that the Sugarcane Act
\nenacted by the State Legislature though appears to be a
\nlegislation in regard to sugarcane required for use in sugar
\nfactory but in pith and substance and its true nature is a
\nlegislation in regard to sugar industry which had been
\ndeclared under the Industries(Development and Regulation)
\nAct and control of the industry has been taken over by the
\nUnion.\tNegativing that contention and on examining the
\ncontents of Entry 24 of List II and Entry 27 of the said List II,
\nthe Court observed that the controlled industries were
\nrelegated to  Entry 52 of List I which was the exclusive
\nprovince of Parliament leaving the other industries  within
\nEntry 24 of List II.  In that case, the Court was not required
\nto examine the content and scope of the expression
\n“industry” in Entry  52 of List I and in fact the Court
\nobserved that it was concerned with as to whether the raw
\nmaterials of an industry which form an integral part of the
\nprocess are within the topic of “industry” which form the
\nsubject matter of Item 52 of List I.  The Central legislation
\nwhich was under consideration in that case as well as the
\nnotifications issued by the Central Government were held to
\nhave been enacted by the Parliament in exercise of the
\nlegislative power conferred upon it by Entry 33 of List III
\nand was an exercise of concurrent jurisdiction and once the
\nlaw is made by the Parliament in exercise of its concurrent
\njurisdiction, then it would not deprive the Provincial
\nLegislatures of similar powers which they had under the
\nProvincial Legislative List.  It is important to notice the
\nfindings of the Court in that case :\n<\/p>\n
“It follows as a necessary corollary that even
\nthough sugar industry was a controlled industry,
\nnone of these Acts enacted by the Centre was in
\nexercise of its jurisdiction under Entry 52 of List
\nI.”\n<\/p>\n
Whatever observations the Court made on which Mr.
\nDwivedi placed strong reliance, therefore, cannot be made
\nuse of\tindicating the ambit and contents of the expression
\n“industry” under Entry 52 of List I.  When the Court
\nobserved that the term “industry” which would be capable of
\ncomprising three different aspects: (i) raw materials which
\nare an\tintegral part of the industrial process, (ii) the process
\nof manufacture or production and (iii) the distribution of the
\nproducts of the industry, and held that\t raw materials should
\nbe goods which would be comprised of Entry 27 of List II
\nand the process of manufacture or production would be
\ncomprised in Entry 24 of List II, except where the industry
\nwas a controlled industry when it would fall under Entry 52
\nof List I, the Court was obviously not examining the
\ncontents of the expression “industry” under Entry 52 of List
\nI and that is why the Court observed that the legislation
\nwhich was enacted by the centre in regard to sugar and
\nsugarcane could fall within Entry 52 of List I.\t When the
\nlegislation in question that was under consideration was held
\nnot to be legislation under Entry 52 of List I, the question of
\napplying the ratio in the case of Tikaramji,  in the context of
\nParliament’s power to make a law under Entry 52 of List I
\nand the content and scope of such law or the scope and
\ncontent of the expression “industry” under Entry 52 of List I
\ncannot have any application and consequently, on the basis
\nof the judgment of this Court in Tikaramji, it cannot be
\ncontended that the expression “industry” in Entry 52 of List
\nI must have a restricted meaning.  It is further apparent from
\nthe conclusion of the Court in that case when it refused to
\nimport the pith and substance argument, holding that the
\nsame cannot be imported for the simple reason that both the
\ncentre as well as the State Legislatures were operating in the
\nconcurrent field and, therefore there was no question of any
\ntrespass upon the exclusive jurisdiction vested in the Centre
\nunder Entry 52 of List I.   In other words in Tikaramji,
\nneither this Court was called upon to examine the content of
\nthe expression “industry” under Entry 52 of List I nor the
\nrelevant Central law which was under consideration had
\nbeen enacted with reference to power under Entry 52 of List
\nI.  This being the position, we do not find much force in the
\nsubmission of Mr. Dwivedi that the conclusion recorded by
\nthe majority view in ITC case is vitiated, as it had not
\nnoticed observations of the Constitution Bench decision in
\nTikaramji.  In our opinion, it would be wholly inappropriate
\nfor this Court to apply the observations made in Tikaramji’s
\ncase with regard to raw materials of “industry”.  The Court
\nin Tikaramji’s case having not been called upon to
\ndetermine the question whether the expression “industry” in
\nEntry 52 of List I should be given a restricted meaning at all
\nis contended by Mr. Dwivedi, it would be wholly
\ninappropriate to import the observations in Tikaramji for
\nconstruing the ambit and content of the subject head of
\nlegislation “industry” under Entry 52 of List I.  Since the
\nCourt was examining the provisions of Industries
\n(Development and Regulation) Act, which regulated the
\nmanufacturing process until Section 18-G was brought in
\namendment in the year 1953 and the Industries(Development
\nand Regulation) Act did not purport to regulate the trade and
\ncommerce in the raw materials namely sugarcane and the
\nCourt in fact was scrutinizing whether the State Act enacted
\nby the State Legislature could be held to be repugnant to the
\nCentral Legislation, it found that there exist no repugnancy
\nand the two Acts cover two different fields and would co-
\nexist.\tIn this view of the matter any observations or
\nconclusion of the Court in Tikaramji will be of no
\nassistance to us for arriving at a decision  as to whether the
\nterm “industry” in Entry 52 of List I would have a restricted
\nmeaning or would have a wide meaning, which is the normal
\ninterpretation of every entry in the respective lists. In
\nCalcutta Gas case, no doubt Tikaramji, had been followed
\nand the Court was examining the two competing entries in
\nlist II itself of the Seventh Schedule of the Constitution
\nnamely Entry 24 and 25.\t While Entry 24 of List II is
\n“industry”, Entry 25 is ‘Gas and Gas works’ and the
\nquestion, therefore was whether law made by the State
\nlegislature on the subject head ‘Gas and gas works’ would
\nprevail over a law made by the State legislature over the
\nsubject “industry” and the Court held that ‘Gas and gas
\nworks’ being a special subject head,  law made thereunder
\nwould prevail over any law made under the general head
\n“industries”.  It may be observed that in the Calcutta Gas
\ncase (1962 Supp. S.C.R.1) at page 17, it has been held “It is
\nnot necessary in this case to attempt to define the expression
\n“industry” precisely or to state exhaustively all its
\ningredients.”\t In view of the aforesaid observations, we fail
\nto understand how this decision can be pressed into service
\nfor ascertaining the true import and content of the expression
\n“industry” which is the subject head under consideration in
\nthe case in hand.  Coming to the decision of this Court in
\nKanandevan Hills Produce vs. State of Kerala 1972(2)
\nSCC 218, as has been stated earlier, it is the validity of State
\nlegislation namely Resumption of Lands Act, 1971, which
\nwas under challenge on the ground of lack of legislative
\ncompetence of the State Legislature. The validity of the Act
\nwas upheld on a conclusion that the law was referable to the
\nlegislative head under Entry 18 of List II relating to land and
\nlegislative Entry 42 of List III relating to acquisition and
\nrequisitioning of property.  It is in that context, it was
\nobserved that the power of the State legislature to make the
\nlaw under the aforesaid two entries could not be denied
\nmerely on the ground that it had some effect on the industry,
\nthe control of which has been taken over under Entry 52 of
\nList I.\t But the Court was careful to hold that the effect was
\nnot the same thing as subject matter.  In other words, the
\nsubject matter of “industry” under Entry 52 of List I really
\nwas not under consideration.  In paragraph 29 of the said
\njudgment, referring to the case of  Baijnath Kedia vs. State
\nof Bihar,<\/a> where the Court had construed Entry 23 of List I
\nand Entry 52 of List I, it was observed\t that the scope of
\nEntry 52 of the Union List is slightly different and once it is
\ndeclared by Parliament by law to be expedient in public
\ninterest to control an industry, Parliament can legislate on
\nthat particular industry and the States would lose their power
\nto legislate on that industry.\t Necessarily, therefore, if the
\nlaw made by the Parliament in relation to a controlled
\nindustry, the control of which has been taken over by a
\ndeclaration in the law, then there cannot be any limitation on
\nthe power of the Parliament to make any provision having a
\nreasonable and direct nexus with the industry.\tBut at the
\nsame time, the Parliament cannot make a law, which would
\nhave no connection at all with the concerned industry.\tThis,
\nin our opinion is what has been expressed in paragraph 29 of
\nthe aforesaid judgment, but by no stretch of imagination, the
\naforesaid judgment of the Court in Kanan Devan, can be
\nconstrued to be an  authority for interpreting the expression
\n“industry” in Entry 52 of List I by giving it a restricted
\nmeaning, as contended by Mr. Dwivedi.  In Kanan Devan,
\nthe petitioner therein had assailed the competence of the
\nState Legislature to enact the legislation in question and had
\nrelied upon  Tikaramji, which has been referred to in
\nparagraph 30 of the judgment.  But the Court in paragraph
\n33 holds that none of these cases assist the petitioners.   In
\nthe aforesaid premises, we fail to understand how the
\ndecision in Kanan Devan will be of any assistance to the
\nrespondent  State of Bihar in support of the contention that
\nthe Parliament had no legislative competence to enact the
\nTobacco Board Act under Entry 52 of List I, so as to include
\nwithin the same\t the provisions relating to growth of tobacco
\nas well as sale and purchase of raw tobacco within the
\nmarket area.   The observations of this Court in the
\nConstitution Bench decision of Ganga Sugar Corpn. Case,
\n1980(1) SCC 223, on which Mr. Dwivedi strongly relied
\nupon , though ex facie appears to be supporting the
\ncontention of the learned counsel for the  State of  Bihar, but
\na deeper scrutiny of the same would make it crystal clear
\nthat the said observation is of no consequence either in the
\nmatter of deciding the ambit of the expression “industry” in
\nEntry 52 of List I or in deciding the legislative competence
\nof Parliament to make law like the Tobacco Board  Act  in
\nrelation to a controlled industry and making provision
\ntherein in respect of the growing of tobacco and purchase
\nand sale of raw tobacco.  In Ganga Sugar’s case, the levy of
\npurchase tax on sugar-cane purchased by a factory owner
\nunder Section 3 of the U.P. Sugarcane (Purchase Tax) Act,
\n1961, was under challenge on the ground that the legislation
\nin question being in respect of a controlled industry, the
\npower belongs exclusively to Parliament under Entry 52 of
\nList I.\t The Court repelled this contention on the ground that
\nEntry 54 in List II of the Seventh Schedule empowers the
\nState to legislate for taxes on purchase of goods and
\ntherefore, it cannot be said to have invaded Entry 52 of List
\nI.  The Court posed the question as to whether the Purchase
\nTax Act is bad because it is a legislation with respect to a
\ncontrolled industry namely the Sugar industry and answered
\nthe same in the negative, following the observations of the
\nearlier Constitution Bench decision in Tikaramji’s case.
\nThus the extreme argument that the State Legislature is
\nincompetent to make any law with regard to a controlled
\nindustry, the control of which has been taken over by  the
\nUnion Government by making a declaration, was negatived
\nand it is in that context, the observations on which Mr.
\nDwivedi relied upon  had been made.  We are unable to
\naccept the submission  of Mr. Dwivedi to hold that the
\ndecision of this Court in Ganga Sugar, can be pressed into
\nservice for a contention that the Parliament had no
\nlegislative competence to make a legislation in respect of a
\ncontrolled industry like tobacco and enacting the Tobacco
\nAct and making provision therein in relation to growing of
\ntobacco as well as sale and purchase of raw tobacco.  In our
\nconsidered opinion, this decision is of no assistance to
\nsupport the contention of Mr. Dwivedi, appearing for the
\nState of Bihar that the expression “industry” in Entry 52 of
\nList I must be given a narrow meaning so as to include only
\nthe process of manufacture or production and nothing
\nfurther.  We also reiterate that in none of these aforesaid
\nConstitution Bench decisions of this Court relied upon by
\nMr. Dwivedi, appearing for the State of Bihar, the true
\nimport and meaning of the expression “industry” under
\nEntry 52 of List I was for consideration, nor the competence
\nof the Parliament to make a legislation in respect of a
\ncontrolled industry, so as to include within itself the
\nprovisions relating to the stage prior to manufacture or
\nproduction was an issue and consequently these decisions
\nwill be of no assistance so as to strike down the provisions
\nof the Tobacco Board Act, so far as the provisions contained
\ntherein relating to growing of tobacco\/or sale and purchase
\nof raw tobacco.\n<\/p>\n
\tIt is no doubt true that in Ishwari Khetan’s case [1980(4)
\nSCC 136], while construing Entry 52 of List I and the effect
\nof the declaration made thereunder by the Parliament, the
\nCourt has relied upon also the legislation made under Entry
\n54 of List I, which was held to be in pari materia with Entry
\n52 of List I and the earlier decision of this Court in Baij
\nNath Kedia’s case, has been followed, as contended by Mr.
\nShanti Bhushan, but we need not embark upon an inquiry in
\nthat respect, in view of our conclusion on the question as to
\nwhat would be the ambit and extent of the expression
\n“industry” occurring in Entry 52 of List I.  In Ishwari
\nKhetan’s case, the Court was construing the scope and
\nambit of Entry 54 of List II and Entry 52 of List I and had
\nobserved that the State’s power under Entry 24 of List II
\nwould get eroded only to the extent the control is assumed
\nby the Union pursuant to a declaration made by the
\nParliament in respect of declared industry as spelt out by
\nlegislative enactment and the field occupied by such
\nenactment is the measure of erosion and subject to such
\nerosion, on the remainder the State legislature will have
\npower to legislate in respect of declared industry without in
\nany way trenching upon the occupied field.  Applying the
\naforesaid ratio to the case in hand and having examined the
\nprovisions of the Tobacco Board Act, the answer is
\nirresistible that the State legislature is denuded of its power
\nto make any law in relation to growing of tobacco or sale
\nand purchase of raw tobacco when such a\t provision has
\nalready been made in the Tobacco Board Act.\n<\/p>\n
The two other decisions which require to be noticed by us
\nare the case of Viswanathiah & Co. vs. State of
\nKarnataka (1991) 3 SCC 358 and Belsund Sugar (1999) 9
\nSCC 620.  So far as Viswanathiah’s case is concerned, Mr.
\nDwivedi relied upon the observations made in paragraph 8
\nof the said judgment wherein the Court had observed :-\n<\/p>\n
“It is true that the Silk Board Act purports to
\ncontrol the raw silk industry  in the territory of
\nIndia.\tBut, as pointed out by the High Court in
\nthe light of the earlier decisions of this Court
\ntherein referred to, the control of the industry
\nvested in Parliament was only restricted to the
\naspect of production and manufacture of silk yarn
\nor silk.  It did not obviously take in the earlier
\nstages of the industry, namely, the supply of raw
\nmaterials.”\n<\/p>\n
According to Mr. Dwivedi this decision lends support to
\nhis contention that the Industry in Entry 52 of List I will
\nhave to be given a restricted meaning, and as such, it
\nwould not cover either the growing of tobacco or dealing
\nwith sale and purchase of raw tobacco.\tAs has been held
\nby us earlier, the power of the State Legislature gets
\ndenuded to the extent the Central Legislation occupies the
\nfield in respect of the controlled industry, the control of
\nwhich has been taken over by the Parliament on a
\ndeclaration being made.\t If after  taking over the control
\nof the industry in exercise of its legislative competence
\nunder Entry 52 of List I, the Parliament while making a
\nlaw did not make any provision in relation to the supply
\nof raw material, then merely because the control of the
\nindustry has been taken over, the State’s  power to make
\nlegislation in relation to the supply of raw-material would
\nnot get denuded. But that does not mean that the
\nParliament cannot make any law in relation to any other
\naspect other than the aspect of production and
\nmanufacture of the industry.  In other words, the
\ncontention of Mr. Dwivedi that the Parliament’s
\ncompetence to make any law in respect of the legislative
\nhead ‘industry’ in Entry 52 of List I would entitle the
\nParliament to make a law only with respect to the
\nproduction and manufacture and not any earlier stage
\ncannot be accepted to be correct, and the aforesaid
\ndecision of this Court cannot be held to have laid down
\nthe law in that way.  So far as Belsund Sugar Company’s
\ncase is concerned,  the question for consideration was,
\nwhether the provisions of the Bihar Agricultural Produce
\nMarkets Act would at all be applicable for levy of market
\nfee in respect of sale and purchase of sugar cane, in view
\nof the special provisions contained in the Bihar Sugar
\ncane Regulation of Supply and Purchase Act, 1981.  The
\nMarket Committee Act was also a State Legislation
\npurported to have been enacted under Entries 26, 27 and
\n28 of List II.\tThe Sugar cane Regulation of Supply and
\nPurchase Act purported to be a legislation enacted in
\nEntry 33 of List III.  The Court held that in view of the
\nspecial Act dealing with sale and purchase of sugar cane
\nthe general Act, namely, the Market Committee Act will
\nhave no application at all, and therefore, the levy of
\nmarket fee by the Market Committee was held to be
\ninvalid.  On examining different provisions of the two
\nActs the Court also held that there consists direct conflict
\nbetween the two Acts and that conflict could be avoided
\nonly if it is held that the Market Act being a general Act
\ncovering all types of the agricultural produce and the
\nSugar Cane Act, which also deals with an agricultural
\nproduce like sugar, being a special enactment laying
\ndown an independent exclusive machinery for regulating
\nsale, purchase and storage of such a commodity under a
\nspecial Act, then the special Act would prevail over the
\ngeneral Act for that commodity and by necessary
\nimplication will take the said commodity out of the
\nsweep of the general Act.This decision, in our considered
\nopinion is not an authority for the proposition that the
\nexpression ‘industry’ in Entry 52 of List I should be given
\na  restricted\tmeaning,    as\t   contended\tby Mr.
\nDwivedi.  In  that    case    also  the\t  extreme contention
\nthat   there   exists\t possibility   of    issuance\t  of
\ncontrol\t  order\t   by  the Central Government would
\ndenude\t  the\t State\t  Legislature\tof   its    authority\t to
\nmake a law in respect of any matter coming under any of
\nthe Entries in List II was not accepted.  But at the same
\ntime it is difficult for us to construe the aforesaid decision
\nof having laid down a ratio that in dealing with a Central
\nLegislation in relation to a controlled industry, the control
\nof which has been taken over by a declaration made by
\nlaw, enacted by Parliament would not clothe the Central
\nLegislature to make any law other than production or
\nmanufacture of the industry in question.  Belsund Sugar
\n(supra) by no stretch of imagination can be construed to
\nhave even remotely held that the word ‘industry’ ought to
\nreceive a restricted meaning.The said decision, therefore
\ndoes not support the contention of Mr. Dwivedi,
\nappearing for the State of Bihar as well as for the State of
\nKarnataka.  Mr. Shanti Bhushan, learned senior counsel,
\nno  doubt argued with vehemence that the principle
\nenunciated in Hingir-Rampur Coal Co. Ltd. & Ors. vs.
\nThe State of Orissa & Ors.<\/a> (1961) 2 SCR 537, Belsund
\nSugar (1970) 2 SCR 100 and State of Orissa vs. M.A.
\nTulloch & Co.<\/a>  (1964) 4 SCR 461, should equally apply
\nto the case in hand while interpreting the scope and extent
\nof the legislative competence of the Parliament under
\nEntry 52 of List I, but we do not think it necessary to
\napply the ratio in the aforesaid three cases, inasmuch as in
\nall those cases the Court was considering the competing
\npower of the State legislature under Entry 23 of List II
\nand the power of the Central legislature under Entry 54 of
\nList I.\t Both the Entries are on the subject ‘Regulation of
\nMines and Minerals Development’.  Entry 23 of List 2
\nitself is subject to the provisions of List I with respect to
\nthe Regulation and Development under control of the
\nUnion, and necessarily therefore, when Union takes over
\nthe control of the Mines and Minerals Development by
\nlegislation under Entry 54 of List I the State Legislature
\nwould be denuded to make any law in relation to the
\nMines and Minerals Development under Entry 23 of List
\nII.  But in the case in hand, we are concerned with the
\nlegislation made by the Parliament under Entry 52 of List
\nI which is the Tobacco Board Act and the legislation
\nmade by the State legislature under Entry 28 or any other
\nancillary Entry like Entry 14 or Entry 27 of List II,
\nnamely the Bihar Agricultural Produce  Market Act.  In
\nsuch a case the focus for consideration of the Court would
\nbe as to what is the scope and content of Entry 52 of List I
\nand once it is held that the expression ‘industry’ cannot be
\ngiven any restricted meaning and the law enacted by the
\nParliament, the Tobacco Board Act, is held to be intra
\nvires then the State legislation, namely, the Bihar
\nAgricultural Produce Market Act, so far as it deals with
\nthe commodity tobacco will go out of the general sweep
\nof all agricultural produce notified under the State Act, as
\nthe provisions in respect thereof have been made by the
\nCentral legislation and by application of Article 246 of
\nthe Constitution the Central Act would prevail.\n<\/p>\n
\tMr. Dwivedi placed reliance on the Full Bench decision
\nof Allahabad High Court in SIEL’s case (supra), but in
\nview of our conclusions already arrived at, the aforesaid
\nFull Bench decision must be held not to have been
\ncorrectly decided.  It is also difficult for us to accept the
\nsubmission of Dr. Singhvi, learned senior counsel
\nappearing for the Market Committee of Monghyr, that if
\nthe subject head of legislation in List II is not subject to
\nthe corresponding Entry in List I then the power of State
\nLegislature to legislate with regard to that matter is
\nparamount and supreme, and therefore, the Market
\nCommittee Act being relatable to Entries 14 and 28 of
\nList II,  which are not subject to any of the Entries of List
\nI, the Market Committee Act must be allowed to prevail.
\nIn our considered opinion, the aforesaid approach to
\nconsider the validity of a law made by the Parliament or a
\nlaw made by the State legislature is not a correct
\napproach. The Entries merely being the subject head of
\nthe legislation and the power to make law having
\nemanated from Article 246, if a particular law made by
\nParliament comes within the legislative competence of
\nthe Parliament with reference to any of the Entries in List
\nI  then the State legislature would not have the
\ncompetence to make law with respect to that subject with
\nreference to some other Entries in List II.  It is of course
\ntrue, that Courts while examining the competing
\nlegislations would make\t  an attempt and see whether
\nboth the legislations could operate, and that question we
\nwill deal later.  But the contention that Entries 14 and 28
\nof List II not\tbeing subject to any Entry under List I and
\nthe Market Committee Act being relatable to Entries 14
\nand 28 of List II the same should be allowed to operate
\nnotwithstanding the wide meaning  to the word ‘industry’
\nin Entry 52 of List I and the Parliament has already taken
\nover the control of the\t industry and has made law in that
\nrespect.  In the context of our conclusions on the question
\nof the import and extent  of expression ‘industry’ in Entry
\n52 of List I it is not necessary to examine the other
\ncontentions of Dr. Singhvi that whether the theory of
\noccupied field is relevant only in case of law made with
\nreference to Entries in List III.  We are also not persuaded
\nto agree with the submission of Dr. Singhvi that the
\nMarket Committee Act can still be operative and the
\nMarket fee could be levied by the Market Committee
\nunder the State Act for services provided by it on the
\nprinciple of quid pro quo even if the Court comes to the
\nconclusion that the Tobacco Board Act is a valid piece of
\nlegislation enacted by the Parliament and that Act also
\nhas made necessary provision for growing of tobacco as
\nwell as purchase and sale of tobacco.  We are also unable
\nto sustain the argument of Mr. Sanghi, learned senior
\ncounsel appearing for Krishi Mandi in the Madhya
\nPradesh batch of appeals,  that the enquiry in the case
\nshould be whether the State legislature had the legislative
\ncompetence to enact the Market Committee Act under 28
\nof List II.  His other submission on the question that there
\nis no irreconciable  clash between the two Acts and the
\nmeaning of Section 31 of Tobacco Board Act will be
\nconsidered while considering the different provisions of
\nthe two Acts.  Mr. Ganguli, learned senior counsel
\nappearing for the Tamil Nadu Agricultural Marketing
\nBoard also submitted in the same manner as Dr. Singhvi
\nand relied upon Article 246(3) of the Constitution.  But in
\nour considered opinion Article 246(1) itself being
\nnotwithstanding anything in clauses 2 and 3 of the said
\nArticle the submission of Mr. Ganguli is devoid of any
\nforce.\tThe elaborate submissions of Mr. Ganguli in
\nrelation to the decisions of this Court in Baij Nath Kedia,
\nM.A. Tulloch, India Cement and Orissa Cement, all of
\nwhich dealt with mining legislations are not necessary to
\nbe dealt with inasmuch as we have not relied upon the
\nprinciples enunciated  in those decisions, even though Mr.
\nShanti Bhushan pressed those decisions in support of his
\ncontention.\n<\/p>\n
In the aforesaid premises, we are of the considered
\nopinion that the Tobacco Board Act enacted by the
\nParliament under Entry 52 of List I is constitutionally
\nvalid and all the provisions therein, including the
\nprovisions relating to growing of Tobacco and sale and
\npurchase of tobacco are within the legislative
\ncompetence of the Parliament.  We are also further of the
\nopinion that the word ‘industry’ in Entry 52 of List I
\ncannot be given a restricted meaning, particularly when a
\nconspectus of all  the decisions interpreting Entry in any
\nof the Lists of the Constitution including the minority
\nview of Mukherjee, J. in ITC case is to the effect that the
\nEntries in the List should be given liberal and generous
\nconstruction and it is well accepted cardinal rule of
\ninterpretation that the words in constitutional document,
\nconferring legislative powers should be construed most
\nliberally and in their widest amplitude.\n<\/p>\n
Coming to the second question, it is no doubt true as
\na matter of principle of construction that in the event there
\nare two competing legislations, one by the Parliament and
\none by the State, the Court would make an endeavour if
\nboth  the legislations could be allowed to be operated
\nupon.  But on examining the provisions of the two Acts, if
\nit is found that the Central legislation and the State
\nlegislation come in collision with each, then question of
\nallowing both of them to operate would not arise.  In such
\nan event, the Central legislation would prevail, provided
\nthe said legislation is otherwise constitutionally valid
\nnamely the Parliament had the legislative competence to
\nenact the legislation in question.  From the aforesaid stand
\npoint, if we examine the different provisions of the
\nTobacco Board Act, more particularly Sections 3, 8 and
\n32 and the provisions of the Agricultural Produce Markets
\nAct, more particularly Section 4(2) thereof as well as
\nSection 15, which is said to be the heart and soul of the
\nMarkets Act in Belsund’s case, the conclusion is
\nirresistible that the two Acts come in direct collision with
\neach other and it is difficult to reconcile the provisions of
\nboth the Acts.\tNecessarily, therefore, the Tobacco Board
\nAct having been enacted by the Parliament and making
\nall provisions in relation to the tobacco industry including
\nthe provisions for growing of tobacco as well as sale and
\npurchase of raw tobacco, in accordance with the
\nprocedure prescribed under the said Act, the provisions of
\nthe Agricultural Produce Markets Act, entitling the
\nMarket Committee to levy fee for sale and purchase of
\nraw tobacco within the market area will not be operative,
\nso far as the produce ‘tobacco’ is concerned.  In other
\nwords, Central Act would prevail and would govern the
\nentire gamut of tobacco industry.  It is also important to
\nbear in mind that when parliament decides to take over
\nthe control of a particular industry in the interest of the
\nsaid industry as well as in the national interest, the control
\nshould be effective and should be in such a manner that
\nthe desired object can be achieved.  Necessarily therefore,
\nlegislation ought to be made providing control over the
\ngrowing of tobacco as well as on its sale and purchase,
\nwhich alone would subserve the very purpose for which
\nthe control of the industry has been taken over by the
\nParliament.  In this view of the matter, we hold that the
\nTobacco Board Act and the Agricultural Produce Markets
\nAct, collide with each other and cannot be allowed to be
\noperated simultaneously.  Necessarily, therefore, the
\nTobacco Board Act would prevail and the Agricultural
\nProduce Markets Act, so far as it relates to levy of fee for
\nsale and purchase of tobacco within the\t market area must
\nbe held to go out  of  the purview  of the said Act.\n<\/p>\n
Coming to the third question posed by us in view of
\nthe inconsistency and repugnancy between the two Acts,
\nas already stated, it is the Central Act  that would prevail
\nand in our opinion, the majority judgment in the ITC case
\nhas been correctly decided, though the reasons for the
\nsame given by us may be slightly different than the
\nreasons which persuaded the learned Judges to have the
\nconclusion in the ITC case.\n<\/p>\n
In view of our conclusion on the three issues, the
\nimpugned judgment of the Patna High Court,  remitting
\nthe matter to the Market Committee for passing a fresh
\nassessment order is set aside and it is held that the sale
\nand purchase of tobacco within the market area of any
\nMarket Committee would not be subjected to the
\nprovisions of the Bihar Agricultural Produce Markets Act.
\nCivil Appeal No. 6453 of 2001 is accordingly allowed.\n<\/p>\n
Civil Appeal No. 3872 of 1990, filed by the Krishi
\nUtpadan Mandi Samiti against the Division Bench
\nJudgment of Allahabad High Court stands dismissed.\n<\/p>\n
We also set aside the Full Bench decision of the
\nAllahabad High Court and the appeal filed by the
\nTobacco Merchants’ Association, assailing the legality of
\nthe Full Bench decision of the\tAllahabad High Court is
\nallowed.   Similarly, the Judgment of the Division Bench
\nof the High Court of Madras, which follows the majority
\nview of this Court in ITC case,\t is upheld and the appeals
\nfiled by the State of Tamil Nadu as well as the Tamil
\nNadu Agricultural Marketing Board  are dismissed.\n<\/p>\n
\t    Civil Writ Petition filed by the Jayalakshmi
\nTobacco Company under Article 32, registered as Civil
\nWrit Petition No. 8614 of 1982, challenging the validity
\nof the provisions of Karnataka Agricultural Produce
\nMarketing (Regulation) Act, stands disposed of and the
\nsaid Act,  enacted by the State legislation of Karnataka
\nmust be held to be invalid, so far as the provisions
\nauthorising levy of fee on  sale and purchase of tobacco
\nwithin the market area is concerned.\n<\/p>\n
The twelve appeals filed against the Judgment of
\nMadhya Pradesh High Court are dismissed and the
\nJudgment of the Division Bench of Madhya Pradesh High
\nCourt is upheld.\n<\/p>\n
In different appeals arising out of the judgment of
\nthe Madhya Pradesh High Court,\tinterim stay had been
\ngranted by different Benches on 27.4.88,  2.5.88,  17.8.88
\nand 5.10.88.   By these orders, the Court had stayed the
\noperation of the judgment, without any condition.  All
\nthese orders stood modified by order dated 27.2.89, when
\nthe Court passed the following order:\n<\/p>\n
“.. There will be no recovery of arrears
\ndue.  There will also be no stay of the refund
\ncollected if any.  The amount collected may be
\nrefunded within four months from this date.
\nIn future there will be no stay of recovery of
\nmarket-fee found due and payable from the
\ndate of the High Court’s judgment.  It is,
\nhowever, made clear that if the parties have
\nfiled objection against the levy, the objection
\nshall be disposed of in accordance with law
\nbefore the recovery is restored.  In case,
\nultimately if the respondents succeed then the
\namount collected will be refunded by the
\nappellants along with the interest @ 12% per
\nannum.\tIn case the appellants succeed\tthen
\nthe respondents undertake to pay the arrears of
\nmarket-fee along with the interest @ 12% per
\nannum from the date of the payment.”\n<\/p>\n
Now that the judgment of the High Court is being upheld and
\nthe appeals are being dismissed, the question for
\nconsideration would be as to  whether the said order of stay
\ndated 27.2.1989 should be modified or  the order should be
\nallowed to operate and the collected market-fee would be
\nrequired to be refunded with interest @ 12% per annum in
\naccordance with the order dated 27.2.1989.  Having regard to
\nthe facts and circumstances and the resources of the Market
\nCommittee, we think it appropriate to modify the said order
\ndated 27.2.1989 and direct that the Market-fee already
\ncollected from the sale and purchase of tobacco within the
\nmarket area by the Mandi Samiti, need not be refunded.\tBut
\nat the same time, the Market Committee will not be entitled
\nto collect the same, even for any past period, if the same has
\nnot already been collected.\n<\/p>\n
………………………………….C.J. I.\n<\/p>\n
…………………………………….J.\n<\/p>\n
\t\t\t    (G.B. PATTANAIK)<\/p>\n
January\t  24, 2002.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India I. T. C. Limited vs Agricultural Produce Market … on 24 January, 2002 Author: Pattanaik Bench: Cji, G.B. Pattanaik CASE NO.: Appeal (civil) 6453 of 2001 PETITIONER: I. T. C. LIMITED Vs. RESPONDENT: AGRICULTURAL PRODUCE MARKET COMMITTEE & ORS. DATE OF JUDGMENT: 24\/01\/2002 BENCH: CJI & G.B. Pattanaik JUDGMENT: With Civil […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-243540","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nI. T. C. 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