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1992 DIGILAW 175 (ALL)

Goyal Drinks v. State Of Uttar Pradesh

1992-02-10

S.K.DHAON, VIJAY BAHUGUNA

body1992
JUDGMENT : Vijay Bahuguna, J. The Petitioner is manufacturing non-aerated soft drinks under brand name 'Shaka' at Noida, district Ghaziabad. The Petitioner is a bulk consumer of sugar and requires 24 tonnes of sugar per day and a stock of 600 tonnes of sugar for one month's consumption. The Petitioner was granted licence on 14th September, 1987 which was valid upto 31st December, 1987 for storage of sugar upto 120 metric tonnes at a time, by Additional District Magistrate (Civil Supplies) Ghaziabad. After the expiry of the licence period, the Petitioner applied for renewal of its licence. Vide letter dated 16th January, 1988 the Petitioner's licence was renewed, but the storage capacity was reduced to 100 quintals sugar at a time. 2. In the counter-affidavit filed by the Supply Inspector of Ghaziabad, it has been stated that the Petitioner is a licensee under Clause 2(e) of the Uttar Pradesh Sugar and Gur Dealers Licensing Order, 1962 and further that [it was due to clerical error that the storage capacity of sugar was wrongly mentioned in the licence as 120 metric tonnes and the said mistake was rectified vide letter dated 15th January, 1988 and the storage capacity of sugar was fixed at 100 quintals at a time in the licence. This error in the licence was detected by the Joint Secretary, Food and Civil Supplies, Uttar Pradesh Lucknow and the storage capacity was re-fixed, as per guidelines and direction, issued by the Government of India Notification No. GSR 391 (E)/E65 Com -Sugar dated May 22, 1984 published in the Gazette of India Extra Ordinary, Part II, dated 22nd May, 1984. 3. From the stand taken by the State in the counter-affidavit, it is apparent that the storage capacity of the Petitioner was reduced to 100 Quintals of sugar at a time by virtue of the notification of the Government of India, referred to above. This notification of the Central Government has been issued under Clause 5 of Sugar Control Order, 1966. The relevant portion of the notification is being reproduced below: In exercise of the powers conferred by Clause 5 of the Sugar (Control) Order, 1966, and in suppression of the Order of the Government of India in the Ministry of Agriculture (Department of Food) No. G.S.R. 362 (E), Ess. The relevant portion of the notification is being reproduced below: In exercise of the powers conferred by Clause 5 of the Sugar (Control) Order, 1966, and in suppression of the Order of the Government of India in the Ministry of Agriculture (Department of Food) No. G.S.R. 362 (E), Ess. Com/Sugar dated the 29th April, 1982, the Central Government hereby directs that no recognised dealer shall keep in stock at any time. (1) Vacuum Pan sugar, in the places mentioned below, in excess of the quantities mentioned against each; (i) in Calcutta and extended area- (a) recognised dealers who import sugar from outside West Bengal-3,500 quintals; (b) other recognised dealers-250 quintals; (ii) in other places- (a) in cities and towns with a population of one lakh or more-250 quintals; (b) in other towns with a population of less than one lakh-100 quintals. (2) Khandsari (open pan sugar) in excess of 250 quintals provided that no recognised dealer shall hold any stock of vacuum pan sugar or khandsari (open pan sugar) for a period exceeding ten days from the date of receipt by him of such stock of sugar or Khandsari; Provided further that nothing in this Order shall apply to the holding of stocks of sugar (i) on Government account; or (ii) by the recognised dealers nominated by a State Government or an officer authorised by it to hold such stock for distribution through fair price shops; or (iii) by the Food Corporation of India. Explanation--For, the purposes of this Order, "Calcutta and extended area "means the areas specified in the Schedule to the notification of the Government of West Bengal No. 7752 F.S./F.S./14R 92/61, dated the 16th December, 1964 4. The counsel for the Petitioner has contended that the aforesaid notification of the Government of India is not enforceable against him and that the order of the District Supply Officer dated 15th January, 1988 reducing the storage capacity of sugar to 10 quintals is bad in law. Clause 2(a) of Sugar (Control) Order, 1966 defines the bulk consumer, which reads as follows: (a) means meaos a Halwai, sweetmeat seller or a confectioner." Clause 3(1) of Uttar Pradesh Sugar and Gur Dealers Licensing Order, 1962 reads as tinder: 3. Clause 2(a) of Sugar (Control) Order, 1966 defines the bulk consumer, which reads as follows: (a) means meaos a Halwai, sweetmeat seller or a confectioner." Clause 3(1) of Uttar Pradesh Sugar and Gur Dealers Licensing Order, 1962 reads as tinder: 3. Licensing dealers (1) No person shall carry on business as a dealer except under and in accordance with the terms and conditions of a licence issued in this behalf by the licensing authority. 5. It is not disputed in the counter-affidavit that the Petitioner is a confectioner engaged in the manufacture of non-aerated flavored soft drinks and as such is not engaged in the business of purchasing, selling, or distribution of sugar. Sugar is a raw material which is required for the manufacture of non-aerated soft drinks and as such by no stretch of imagination it can be contended that the Petitioner is engaged in the business of purchase and sale of sugar. The storage of the Petitioner is dependant upon its requirement of consumption and as such the reduction of storage of 100 quintals of sugar at a time would be an arbitrary and illegal restriction on its right to carry on its trade and business. 6. In this context it is pertinent to refer to Sub-clause (2) of Clause 1 of the Notification of the Central Government dated 22nd May, 1984 issued under Clause 5 of Sugar Control Order, 1966. Clause (II) reads as under: (a) in cities and towns where the population of one lak or more-250 quintals; (b) in other towns where the population of less than one lakh-100 quintals. This goes a long way to support the contention of the Petitioner that the aforesaid notification is not applicable to industries which are bulk consumers of sugar and are not engaged in the business of purchasing and selling of sugar, but are consuming it as a raw material for the manufacture of its product. Sub-clause (2) of Clause 1 of the aforesaid notification establishes a link between the population of a place and the permissible storage of sugar of a dealer. In cities where the population is one lakh or more, a dealer is permitted to keep 250 quintals sugar and in other towns where the population is less than one lakh-100 quintals. Sub-clause (2) of Clause 1 of the aforesaid notification establishes a link between the population of a place and the permissible storage of sugar of a dealer. In cities where the population is one lakh or more, a dealer is permitted to keep 250 quintals sugar and in other towns where the population is less than one lakh-100 quintals. In the counter-affidavit filed on behalf of the State it has been specifically mentioned that as the population of Noida, where the Petitioner has set up its industry, is less than one lakh, it was entitled to store only 100 quintals and the same endorsement has been made in its licence for the year 1989-90 and thereafter. 7. The Petitioner being industry would not be covered under the terms of the aforesaid notification of the Central Government as the storage of sugar by the dealers can be fixed on population basis as the dealer is engaged in the business of purchase and sale of sugar, It is not denied that the Petitioner is not selling sugar, but is consuming it for manufacture of non-aerated soft drinks. 8. In view of the reasons given above, we hold that the Petitioner cannot be said to be engaged in the business of purchase and sale of sugar and as it is consuming sugar for the manufacture of non-aerated soft drinks, the notification of the Central Government dated 22nd May, 1984 issued under Clause 5 of the Sugar (Control) Order, 1966 is not enforceable against the Petitioner. We further hold that it was not due to clerical error that the storage capacity of sugar was reduced in the licence for the year 1989-90, but on account of the direction of the Joint Secretary, Ministry of Food and Civil Supplies dated 15th January, 1988, which was issued on the basis of the aforesaid notification of he Central Government dated 22nd May, 1984 The order dated 15-1-1988 of the District Food and Civil Supplies Officer is set aside 9. The petition succeeds and is allowed. There shall be no order as to costs.