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Constitution of India, 1950-Articles 246 and 254-Seventh Schedule -List I, Entries 7, 48 and 52-List II, Entries 24, 28 and 66-List III, Entry 33:Tobacco Industry-Power to legislate in respect of-Tobacco Board Act, 1975-ITC Ltd. v. State of Karnataka, [1985] Supp. 1 SCR 145 holding that once in the public interest Tobacco industry, was declared as industry under Entry 52 of-List I of VII Schedule of Constitution of India, the State Legislatures ceased to be competent to legislate on the subject-Held : not correctly decidedExpression "industry "-Scope of-Held, it has to be given a restricted meaning-In the Constitutional context it has to be understood as meaning "manufacture or production"-Activity regarding sale of raw tobacco as provided in Tobacco Board Act cannot be regarded as "industry"-Tobacco Board Act, 1975. Agricultural Produce Market Fee-Legislative competence of States- Held, State Legislatures are competent to enact legislation providing for the levy and collection of market fee on the sale of tobacco in a market area - Tobacco Board Act, 1975.Agricultural Produce Marketing Acts-Enactment by State Legislatures viz-a-viz. Tobacco Board Act, 1975, a Parliamentary legislation-To the extent the State Acts relate to sale of tobacco in market areas-Held, cannot co-exist and the State Acts prevail over the Parliamentary Act.Different State legislatures have enacted Agricultural Produce and Markets Acts for regulating the sale and purchase of agricultural produce within the market area and for levy and collection of market fee. Having declared that it is expedient in the public interest that Union of India should take under its control the Tobacco industry, Parliament enacted Tobacco Board Act, 1975 which is an Act providing for the development of tobacco industry under the control of the Union Government. Under the Agricultural Produce Markets Act, the State Government having notified tobacco as an agricultural produce, the purchase and sale of tobacco is to be regulated under the provisions of the State Act and the Market Committee has the right to levy and collect market fee on such sale and purchase of the notified agricultural produce viz. tobacco. In ITC Ltd. v. State of Karnataka, [1985] Supp. 1 SCR 145, this Court held by majority that the tobacco industry having been taken over by the Central Government under Entry 52 of List I and having passed the Tobacco Board Act, the State Legislature seized to have any jurisdiction to legislate in that field and therefore, the provisions contained in the Karnataka Act, entitling the Market Committee to levy market fee in respect of sale and purchase of tobacco within the market area directly, collides with the Tobacco Board Act, 1975 and as such the said Act so far as it relates to tobacco was struck down. In similar matter arising from the Bihar State, the High Court remanded the matter for making a fresh assessment order after notice to ITC. In respect of matters arising from the State of U.P., the Division Bench of the Allahabad High Court followed the judgment of this Court in ITC case and held that Mandi Samiti cannot charge market fee on sale and purchase of tobacco and consequently Krishi Utpadan Mandi Samiti has preferred appeals to this Court. In an another appeal from U.P., the Full Bench of the Allahabad High Court considered the constitutional validity of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 and held that the Adhiniyam permitting levy and collection of fee under section 17(iii) in so far as it applies to tobacco is not repugnant to the provisions of the Tobacco Board Act. The Tobacco Merchants Association has come in appeal challenging the validity of the said Full Bench decision of the Allahabad High Court. The Tamil Nadu Agricultural Marketing Board has challenged the judgment of the Madras High Court which followed the judgment of this Court in ITC v. State of Karnataka and held that the State legislature has no legislative competence to notify tobacco for the purpose of control and regulation and levy market fee under the provisions of Tamil Nadu Regulation Act, 1959. In respect of M.P. matters, the High Court followed the judgment of this Court in ITC v. State of Karnataka and held that Market Committee would not be entitled to realize any market fee in relation to the trade with regard to tobacco since the Market Committee Act is repugnant to the Tobacco Board Act. However, the High Court held that the M.P. Krishi Utpadan Mandi Samiti Adhiniyam, 1972 as amended by 1986 Act to be valid. Hence these appeals arising from the decisions of various High Courts. The writ petition filed under Article 32 challenged the constitutional validity of certain provisions of the Karnataka Agricultural Produce Marketing (Regulation) Act, 1966 on the ground that in view of Tobacco Board Act, 1975 and the Tobacco Association Act, 1975, the entire field regarding the development of tobacco industry including the marketing of tobacco was occupied and the State legislation is repugnant to the Central Act. In all these matters, the issue involved relates to the validity and applicability of various Agricultural Produce Markets Act enacted by State Governments to the extent they deal with the sale of tobacco in market areas with particular reference to the levy of market fee after enactment of Tobacco Board Act, 1975, a parliamentary legislation. These issues were subject matter of the decision in ITC v. State of Karnataka and the majority decided in favour of ITC. Later, a Bench of two Judges expressed a tentative view that decision in ITC requires reconsideration. Thus these matters came before the Constitution Bench.On behalf of the appellant-ITC, the Union of India, the States concerned, various Marketing Committees, the Tobacco Board, various contentions were advanced mainly relating to the supremacy of Parliamentary legislation, legislative competence of Parliament and State Governments, repugnancy between State and Central Acts, and the correctness of the decision in ITC case.In view of the various contentions put forth, the following questions arose for determination :1. Whether the Tobacco Board Act enacted by the Parliament under Entry 52 of List I can be held to be constitutionally valid and within the legislative competence of the Parliament, so far as the provisions contained in the same in relation to the growing of tobacco and sale of raw materials, and this in turn would depend upon the question whether the word "industry" used in Entry 52 of List I should be given a restricted meaning;2. Even if the Tobacco Board Act is held to be constitutionally valid and the Agricultural Produce Market Act is also held to be constitutionally valid and within the powers of the State Legislature, so far as purchase and sale of tobacco within the market area is concerned, whether both the Acts can be allowed to operate, as was held by the minority judgment in ITC case;3. If there is a repugnancy between the two then whether the Central Act would prevail, as was held by the majority judgment in ITC case. |
