{"id":46943,"date":"1972-07-06T00:00:00","date_gmt":"1972-07-05T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-gwalior-sugar-co-limited-vs-the-state-of-madhya-pradesh-and-on-6-july-1972"},"modified":"2015-06-10T06:43:51","modified_gmt":"2015-06-10T01:13:51","slug":"the-gwalior-sugar-co-limited-vs-the-state-of-madhya-pradesh-and-on-6-july-1972","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-gwalior-sugar-co-limited-vs-the-state-of-madhya-pradesh-and-on-6-july-1972","title":{"rendered":"The Gwalior Sugar Co. Limited vs The State Of Madhya Pradesh And &#8230; on 6 July, 1972"},"content":{"rendered":"<div class=\"docsource_main\">Madhya Pradesh High Court<\/div>\n<div class=\"doc_title\">The Gwalior Sugar Co. Limited vs The State Of Madhya Pradesh And &#8230; on 6 July, 1972<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1973 30 STC 487 MP<\/div>\n<div class=\"doc_author\">Author: S Raina<\/div>\n<div class=\"doc_bench\">Bench: B Dayal, S Raina<\/div>\n<\/p>\n<pre><\/pre>\n<p>ORDER <\/p>\n<p> S.M.N. Raina, J.<\/p>\n<p>1. This is a petition under Article 226 of the Constitution of India.\n<\/p>\n<p>2.     The petitioner, the Gwalior Sugar Co. Ltd., Dabra,  runs a sugar factory at Dabra for  the manufacture  and sale of  sugar since 1941.    It obtains supply of sugarcane for manufacture of sugar from various sugarcane growers.    The company was assessed to sales tax under the Madhya Pradesh General Sales Tax Act, 1958 (hereinafter referred to as &#8220;the Sales Tax Act&#8221;), as well as to purchase  tax under the Madhya Pradesh Sugarcane (Purchase Tax) Act, 1961   (hereinafter referred to as  &#8220;the Purchase Tax Act&#8221;)  and the total demand for the period from 1st April,   1959, to 19th  June,   1967,  amounts to  Rs. 13,16,899.90  as per details given in annexure T. As the company was running into loss it applied to the State Government for remitting  the purchase tax in respect of the assessment year 1964-65 and for 2 subsequent years under Section 16 of the Purchase Tax Act but the remission was not granted.    The petitioner has filed this petition challenging the demand for sales tax as well as the purchase tax on, various grounds.    It has been urged that the provisions of the Purchase Tax Act are ultra vires and, therefore, the tax is not leviable.    As regards sales tax, it has been urged that the transactions regarding the purchase of sugarcane were not of a voluntary nature and as such did not amount to sale and, therefore, sales tax could not be levied in respect thereof.    The petitioner also prayed for a writ of mandamus directing the State Government to consider the case of the petitioner for remission of tax under the Purchase Tax Act.\n<\/p>\n<p>3.     The contention that the provisions of the Purchase Tax Act are ultra vires and as such void was not pressed before us by the learned counsel for the petitioner in view of the decision of the  Supreme  Court in <a href=\"\/doc\/1432872\/\">The Andhra Sugars Ltd. and Anr. v. The State of Andhra Pradesh and Ors.<\/a> [1968] 21 S.T.C. 212 (S.C.). Similarly, the contention that the supply of sugarcane by the cane-growers to the company did not amount  to sale because it was regulated by the provisions of the Madhya Pradesh Sugarcane (Regulation  of Supply and Purchase)  Act, 1958, and as  such was  not of a voluntary nature and, therefore,  sales tax was not  leviable in  respect   thereof  was also   not pressed before us in  view of the decision  of the Supreme Court in  <a href=\"\/doc\/526651\/\">Salar Jung Sugar Mills Ltd. v. State of Mysore and Ors. A.I.R.<\/a> 1972 S.C. 87.\n<\/p>\n<p>4.     Thus,  the only  point that was pressed before us was that the action  of   the Government in rejecting the petitioner&#8217;s application for remission of purchase tax was arbitrary and illegal and was, therefore, liable to be quashed.    From paragraph 16 of the return filed by the State Government, it would appear that the application for remission in respect of the year  1964-65 was rejected because the loss during the previous year  was attributable to the fact  that the factory remained closed for renovation while the application for subsequent years is still pending for consideration. As the application for 1966-67 and for subsequent years is still pending before the Government, there is no question of granting any relief to the petitioner in respect thereof. The proper course for him would be to pursue it and place necessary material before the Government to justify his claim for remission.\n<\/p>\n<p>5.     As for the rejection of the application for the year 1964-65, the position is as follows :    Under Section 16  of  the  Purchase Tax Act, the State Government has been empowered to remit the tax under the Act in any assessment year if it is satisfied that it is necessary to do so in public interest with a view to assisting factories which are continuously running into loss due  to under-crushing or purchase of cane yielding low sugar recovery.    The function of the Government in exercise of this power is purely administrative and it can be challenged only when it is mala fide, discriminatory or for reasons not  germane to the exercise of the power. The   only ground   on  which   the  learned   counsel  for    the  petitioner impeached  the action of the  Government was that it had not recorded reasons for rejecting the application of the petitioner for remission.    We do not think that it is necessary for the Government to state the reasons in the order rejecting  the application.    It is sufficient for the Government to satisfy this  court   that the application  was  rejected after Due consideration for reasons which were germane to the exercise of the power. From the return it appears that the petitioner was unable to satisfy the Government that  it  was continuously running into loss due to under-crushing or purchase  of cane yielding low sugar recovery.    The case of the petitioner admittedly does not fall under any other clause of Section 16 of the Purchase Tax Act.     In  these circumstances,  the rejection of  the application appears to be justified.\n<\/p>\n<pre>6.     No other point was pressed before us.    The petition, therefore, fails and is hereby dismissed.    Since this petition was filed in  the year 1967, before some of the important questions raised in this petition were finally settled by the, decisions of  the Supreme  Court  referred to above, we hereby direct that the parties shall bear their own costs.\n \n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"<p>Madhya Pradesh High Court The Gwalior Sugar Co. Limited vs The State Of Madhya Pradesh And &#8230; on 6 July, 1972 Equivalent citations: 1973 30 STC 487 MP Author: S Raina Bench: B Dayal, S Raina ORDER S.M.N. Raina, J. 1. This is a petition under Article 226 of the Constitution of India. 2. The [&hellip;]<\/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":[8,24],"tags":[],"class_list":["post-46943","post","type-post","status-publish","format-standard","hentry","category-high-court","category-madhya-pradesh-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Gwalior Sugar Co. 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