Holding

Section 3 of the Sugarcane Cess (Validation) Act, 1961 re‑enacts the cess provisions, thereby authorising assessment and recovery of the cess (including retrospectively) and rendering the levy constitutionally valid.

Summary

The Supreme Court examined five appeals filed by cooperative sugar factories challenging the levy of a sugarcane cess imposed under the Bombay Sugarcane Cess Act, 1948, which had been declared unconstitutional, and the subsequent Sugarcane Cess (Validation) Act, 1961. The appellants argued that the Central Act merely validated cess already imposed and could not authorize new assessment or recovery, and that Parliament could not retrospectively validate assessments made under an invalid State law. The Court held that Section 3 of the Validation Act re‑enacted the cess provisions, giving Parliament authority under Entry 97 of List I to assess and recover the cess, including retrospectively, and that the cess could be recovered from the factory owners, not just managing agents. It further affirmed Parliament’s competence to enact such a law despite the earlier invalidity of the State Acts. Consequently, all five appeals were dismissed.

Issues considered

The scope of Section 3 of the Sugarcane Cess (Validation) Act, 1961 – whether it only validates previously imposed cess or also authorises assessment and recovery after its commencement.
Whether Parliament may retrospectively validate assessments made under State Acts that were unconstitutional by converting them into assessments under a Central Act.
Whether the levy of cess under the Bombay Sugarcane Cess Act, 1948 is ultra vires and if the Central Act cures that defect.
Whether liability for the cess falls solely on the occupier or also on the owner of the factory.
Whether the Central Act falls within Parliament’s legislative competence under Entry 97, List I of the Seventh Schedule.

Legislation cited

Bombay Sugarcane Cess Act, 1948s. 2(1), s. 2(2), s. 2(3), s. 2(4), s. 3, s. 4, s. 5, s. 6, s. 7, s. 8
Sugarcane Cess (Validation) Act, 1961s. 2(a), s. 2(b), s. 3

Subjects

sugarcane cessvalidation actretrospective legislationconstitutional validitylegislative competenceEntry 97 List IEntry 52 List IItax lawcooperative societiesoccupier liability

Judgment

\
982

A SHETKARI SAHAKARI SAKHAR KARKHANA LTD.,
SANGLI, MAHARASHTRA STATE ETC.
v.
THE COLLECTOR OF SANGLI AND OTHERS
October 22, 1979
B
[Y. V. CHANDRACHUD, CJ., V. R. KRISHNA IYER. N.T L.
•
UNTWALIA,
P. N. SHINGHAL AND A. D. KOSHAL, J.J.j
Bo1nbay Sugarcane Cess Act, 1948, Ss, 4, 7 ancf 8 & Sugarcan1' l'css (Valida-
tion) Act 1961, Ss. 2(li) and 3(1)(c)--State Act levying .<;ugarcune cess found
to be ultra-vires--Central Act enacted adopting provisions of St11tc· Act and vali-
G dating assessm-ents nlade thereunder--Central Act whether ralidates or re·t'nacts
the State. Act-Cess whether recoverable fronz owner of factory.

The Bombay Surgacane Cess Act, 1948 empowers the State Government to
specify a·nY factory the area comprised in which shall be a local area for the
purposes of the Act and to levy cess on the entry of sugarcane into a local
area for consun1ption or use therein. A duty is cast on every 'occupier' to
D furnish to the prescribed authority a return stating· the total quantity in tons of
sugarcane \Vbich enters the local area comprised in his factory for consumption
01 use therein ~uring the preceding month.

In Diamond Sugar Mills Limited v. State of Uttar Pradesh & another
[1961] 3 S.C.R. 242 this Court struck.down the U.P. Sugarcane Cess Act, 1956,
which contained provisions similar to those of the Bombay Act on the ground
E that the proper meaning to be attached to the \Vords 'local area' under Entry
52 in List II of the Seventh Schedule to the Constitution was an area adminis-
te:n~d by a local body such as municipality, district board, or the like and that
the. premises of a factory were not a 'local area' within the meaning of the
said Entry. Since prior to this decision, several State Legislatures had passed
similar enactments, all of which became unconstitutional by reason of that
decision, Parlian1ent passed the Sugarcane Cess (Valida.tion) Act, 1961, section
F 3 sub-section (1), Clause (c) whereof provides that any cess imposed or
assessed under any State Act before the commencement of the Central Act,
but not collected before SU.ch enactment may 6e recovered (after assessment of
the cess where necessary).

The appellant's petitions impugning the levy and demand of cess imposed
under the Bombay Act supplemented by the Central Act were dismissed by the
G Bombay High Court.

In appeals to this Court it was contended ( 1) that the Central Act nierely
authorised the collection of amounts which had already been imposed, assessed
or coUected and that no assessment, recovery or collection could be made under
section 3 of the Central Act read with the relevant provisions of the State Act
after the enforcen1ent of the Central Act; a.Ild (2) that Parliament could not
H pass a law retrospectively validating invalid assessments by converting their
character from assessments under the State Acts to those under its on statute
operating retrospectively.
SAKHAR KARKHANA v. COLLECTOR (Koshal, J.)
\
983

Dismissing the appeals, A
JlELD : l(i) In two earlier decisions this Court has repelled an idenliCal

' . a,rgument on the ground that what Section 3 of the Central Act provides is
that by its order and force, the respective cesses \vould be· deemed to have
been recovered, because the provisions in relation to the recovery of this cess
have been incorpc.rated in that Act iLo;cJf so that the command under which the
cesses would be deemed to have been recovered \vould be the con1n1and of B
Parliament because all the relevant sections, notifications, qrder and iulcs had
been adopted by the Parliarnent'1ry statute itself. It is, therefore, plain that
Section 3 of the Central Act did not n1erely validate ·what the State authorities
had ·already done under the Bon1bay Act but rewenacted the provision of the
Homba-y Act by virtue of the authority vested in, Parlian1ent under Entry 97
in IJ~t I of the. Seyenth Schedule to the Constitution so that the Bon1bay Act
brcaine fully alive and operative as an enactment of Par!iarnent all soon as the· C'.
Central Act wa" pro1nufgated and the authorities named in tho Act \Vere investe.d
with full powers to a1Ssess and recover the cess not under the Bombay Act but
under the. Central 1\ct into \Vhich the provisions of the Bombay Act and the
rules franl.ed as well as the notifications issued thereunder became incorporated.
[988 D. 989 B-C, 990 B-Cj

Jaora Sugar A/ills 1.P) I.td. v. State of Madhyci Pradesh [1966] 1 S.C.R. 523: J)
Bhopal Sugar Industries v. State of Madhya Pradesh and others [1979] 2 S.C.R·.
605; referred to.

(ii) Clause (c) of Section 3 of the Central Act specifically authorises both
assessment and recovery of any cess imposed under any State Act before the
comn1encement of the Central Act. [998 A, CJ

2. Jn Jaora Srq:ar lY!ill's case, this Court held that if collections \\'ere made
E
under statutory provisions which were invalid, Parliament could_ pass a la\v re-
trospectively validating the collections by converting their character fron1 collec-
tions made under the State statutes to that of collections made under its own
statute operating retrospectively, because to hold other\visc \\lOuld be to cut
down the width and a1nplitude of the legislative competence conferred on Parlia-
1ncnt by Article 248 read with Entry 97 in List I of the Seventh Schedule to
the Con,titution. [990 F-H]
F
\

3. It cannot be said tha~ there is lack of authorit~r in Parlian1ent to pass the
Central Act incorporating into it-provisions of the State Act. Entry 97 in List
I of the Seventh Schedule to the COnstitution, provides full legislative compew
tcnce to Parliament in relation to the Central Act inasmuch as it vests' all resi-
duary po\vers oi legislation in Parliament. [991 B-C] G

·- 4. There is no substance in the .contention that the n1anaging agents alone
would be liable and that the cess could not be recovered fro1n the OV.iners of
1he factories. The definition of 'occupier' has nothing to say about the person
on whom thei cess is to be imposed or from wh9m it is to be recovered. The
relevant provisions indicate that the authorities rissessing or recovering the tax
.' should deal with the 'occupier', and \Vere enacted as a n1atter of convcniencr
H
both for the authorities and the assessees, so that an absent owner may not
be unduly harrassed nor proceedings dclr1yed by reason of his absence. and not
for Iin1iting to the occupier a-lone the liability to pay the cess. r991 I='-992 A]
984 SUPREME COURT REPORTS [1980) 1 s.c.R.

' A CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2470 of 1968. .J.-
From the Judgment and Order dated 17-1-68 of the Bombay High
Court in Special Civil Application No. 6/68.
AND •
CIVIL APPEAL NOS. 39-40 OF 1969
B
From the Judgment and Order dated 17-1-68 of the Bombay High
Court in S.C.A. Nos. 4 and 5 of 1968.
AND
CIVIL APPEAL NOS. 1925-1926 OF 1972

·- C From the Judgment and Order dated 7 /8-3-1972 of the Bombay
High Court in Civil Application Nos. 3077/67 and 570/68.
A .K. Sen, Shanti Bhusan, B. Dutta, K. K. Manchanda and A. K.
Srivastaia for the Appellants iu CA 2470/68 and CA Nos. 39-40/69.
D. V. Patel, P. H. Parakh, C. B. Singh, Miss Vineeta Caprihan and
D B. L. Verma for the Appellants in CA i925-1926/72.
J. L. Nain, S. P. Nayar and M. N. Shtoff for the Respondents.
The Judgment of the Court was delivered by
KosHAL, J. By this Judgment we shall dispose of five civil appeals
E in each one of which the appellant who is a registered co-operative
society, challenges a judgment of the High Court of Bombay dismissing
its petition for the issuance of an appropriate writ striking down the
levy and demand of the cess imposed on it under the Bombay
Sugarcane Cess Act, 1948 (hereinafter referred to as the 'Bombay
Act') supplemented by the Sugarcane Cess (Validation) Act, 1961
F (for short, the 'Central Act').
2. The following table indicates the name of the appellant and the
amount of cess impugned in each of the appeals as also other relevant
particulars :
No.of Name of Amount of Period to Date of Authority
G appeal appellant · Cess which the the order passing
(Rs.) amount
relates
of assess-
ment
the Order _...
1 2 3 4 5 6
Civil The Shetkari 1.7.1959· Sugarcane
Appeal Sahakari to Cess
H No. 39 Sakhar Kar- 370072 ·50 30-6-1960 21-12-1960 Officer,
of 1969. khana Ltd., Sangli.
Sangli.
SAKHAR KARKllANA v. COLLECTOR (Koshal, ]. ) 985

2 3 4 5 6 A
Civil The Shetkari 1-7-1960 Sugarcane
appeal Saha,kari to Cess
• No.40 Sokhar Kar- 801131 ·24 30-6-1961 24-5-1966 Officer
of 1969 khana Ltd., Sang]i.
.. CTvil
Sangli .
1-7-1961 B
Appeal to
No. 2470 Do. 324610 ·35 31-12-1961 24-5-1966 Do.
of 1968
Civil Ashok Saha- 1-7-1961 Sugarcane
Appeal kari Sakhar 373640·56 to 12-4-1962 Cess
No. 1925
of 1972.
Karkhana
Ltd., Ashok-
31-12-1961 Officer,
Ahmed-
c
nagar. nagar,
Civil Gima (i) 577329 ·65 1-7-1960 18-7-1962 Sugarcane
Appeal Sabakari to Cess Olli-
No. 1926 Sakhar 30-6-1961 cer, Nasik
of!972. Karkhana (ii) 191409 ·53 1-7-1961 18-7-}962 Do.
Ltd., Dabhadi. to D
31-12-1961

3. It may be of advantage to reprodnce here the relevant provisions
of the Bombay Act, Clause (1), (2), (3) and (4) of section 2 thereof
read thus :
E
'2. In this Act, unJo~ss ~here is anything repugnant i'n the subject
or context,-
( 1) "factory" means any premises, including the precincts
thereof, wherein twenty or more workers are working
or were working on any day of the preceding twelve F
months and in any part of which any manufacturing
process connected with the production of sugar by
means of vacuum pans is being carri<'...d on, or is
ordinarily carried on, with the aid of power;
(2) "local area" means any area comprised in such factori-
G
es as may be specified in the notification under
section 3;
( 3) "notified factory" means a factory specified in the
notification under section 3;
( 4). "occupier" means the perso'n who has ultimate contt'ol H
over the affairs of a notified factory; provided that
where the affairs of such factory are entrusted to a
"'
986 SUPREME COURT REPORTS [1980] 1 S.C.R.

A managing agent, such agent shall be deemed to be the
occupier;
Section 3 empowers the State Governm~nt to specify, by notifi-
cation in the official gazette, any factory the area comprised in which •
shall be a local area for the purposes of the Act. Section 4 minus
B the proviso states :
"4. A cess at such rate not exceeding ten rupees per
ton as may be specified by the State Government in a notifi-
cation in the Official Gazette shall be levied on the entry of
sugarcane into a local area for consumption or use therein : "
Section 5 provides for licences to be taken out by consumers or •
users of sugarcane in notified factories while section 6 lays down that
every occupier shall furnish to the prescribed authority before the
seventh day of each month a return in the pr~scribed form stating the
total quantity in tons of sugarcane which entered lhe local area com-
prised in his factory for consumption of or use therein during the
D preceding month. Section 7 and 8 provide for the assessment, re-
covery and collection of the sugarcane cess. The rest of the Act
consists of miscellaneous provisions which need not be referred to
here.
4. Now we may detail the circumstances in which the Central Act
E was made part of .the statute book. In 1956 the U.P. legislature
passed the U .P. Sugarcane Cess Act (hereinafter rekrred to as the
'U.P. Act') the provisions of which were similar to that of the Bombay
Act. Section 3 of the U.P. Act authorised the State Government to
impose, by notification in tho~ official gazette, a cess not exceeding four
annas per maund on the entry of sugarcane into the premises of a
I' factory for use, consumption or sale therein. The constitutiobal
validity of that section was chalienged in Diamond Sugar Mills Ltd. &
Another v. The State of Uttar Pradesh & Another.(') Reliance on
behalf of the State was plac-;:d on Entry 52 in List II forming part of
the Seventh Schedule to the Constitution of India in support of the
argument that the cess was validly levied. That Entry reads thus :
G
"52. Taxes on the entry of goods into a local area for
consumption use or sale therein-'.'
1

The counsel for the appellant in that case however cont·~nded that
the premises of a factory were not a local area within the meaning of
the Entry and that the Act was therefore b·~yond the competence of
B the Slate iegislature. Out of the five Judges of this Court who decided
(I) [1961] 3 S.C.R. 242.
SAK!TAR KARKHANA v. COLLECTOR (Koslwl, J.1) 987'

the case, four (Jafar Imam, J. L. Kapur, K. C. Das Gupta and A
Raghubar Dayal, JJ.) accepted the contention and struck down the
Act as a whole, boing of the opinion that the proper meaning to be
attached to the words 'local area' in Entry 52 was an area adminis-
• tered by a local body like a municipality, a district board, a local board,
a union board, a Panchayat or the like and that the premises of a
B
factory were therefore not a 'local area' within the meaning of the
Entry.
J3y the time the Diamond Sugar Mills' case was decided, enactments
similar in content and effect to the Bombay Act had been passed by
lcgisla:ures of various States a"nd Parliament considered it advisable
a
to make the cess imposed by these enactments constitutionally valid c
c0ss and that was the reason for the passa~ of the Central Act.
Clause (a) of section 2 of the Central Act defined 'cess' thus :
" 'ces:s' meanS' the cess payable under any State Act and
includes any sum recowrable under any such Act by way
of interest or penalty;•· D
Clause (b) of the section defined 'State Act' as any of the Acts
mentioned in the latter portion of the clause as in force in any State
from time to time. The Acts mentioned included the Bombay Act.
Sub-section ( 1) of section 3 of the Central Act may be set out
in extenso as it is mainly that provision which has been attacked E
before 1,1s on behalf of the appellants :_
"3. (I) Notwithstanding any judgment, decree or ardor
of any court, all cesses imposed, assessed or collected or
purporting to have been imposed, assessed or collected under,
any Stak Act before the commencement of this Act shall F
be deemed to have been validily imposed, assessed or collect-
ed in accordance with law, as if the provisions of the State
Acts a'nd of all notifications, ord·ors and rules issued or made
thereunder, in so far as such provisions relate to the imposi-
tion, as1sessment and collection of such cess had been includ-
ed in and formed part of this section and !liis section had G
been in force at all material times when such cess was impos-

·. ed, assessed or collected; and accordingly,-
( a) 'no suit or other proceeding shall be maintained or
continued in any conrt for the refund of any cess paid
under any State Act;
H
( b) no court shall enforce a decree o;r order directing the
refund of any cess paid under any State Act; and
988 SUPREME COUJl.T REPORTS [1980] 1 S.C.R.

( c) any cess imposed or assessed under any State Act
before the commencement of this Act but not collected
before such commencement may be recovered (after
assessment of the cess, where necessary) in the manner
provided under that Act." •
B 5. ·we may now take np for consideration the contentions raised
at the hearing before us. Mr. A. K. Sen representing the appel-
lant in Civil Appeal No. 2470 of 1968 argned in "the first instance
that the Central Act merely authorized the collection of amounts ~-
which had already been imposed, assessed or collected and that no
assessment, recovery or collection could be made under section 3 of
c the Central Act read with the relevant provisions of the Bombay Act .
after the enforcement of the Central Act. The co,ntention is without
force and in this connection we need do no more than refer to the
langnage of clause ( c) above extracted which specifically authorizes
both assessment and recovery of the cess after the commencement of
the Central Act, and to two earlier decisions of this Court in which an
D identical argnment was made and repelled. The first of those deci-
sions is reported as Jaora Sugar Mills (P) Ltd. v. State of Madhya
Pradesh and Others('). The follo;ving observations made therein by
Gajendragadkar, C.J., who delivered the judgment of the Court, are
pertinent :
"Section 3 does not purport to validate the invalid State
statutes. Wbat Parliament has done by enacting the said
section is not to validate the invalid State statutes, but to
make. a law concerning the cess covered by the said statutes
and to provide that the said law shall come into operation
retrospectively. Tl1ere is a radical difference between the
F two positions. Where the legislature wants to validate an
earlier Act which bas been declared to be invalid for one
reason or another, it proceeds to remove the infirmity from
the said Act and validates its provisions which are free from
any infirmity. That is not what Parliament has done in
enacting the pr.,..ent Act. Parliament knew that the relevant
G
State Acts were invalid, because the State Legislatures did
not possess legislative competence to enact them. Parlia-
ment also knew tba:t it was fully compe~ont to make an Act
in respect of the subject-matter covered by the said invalid
State statutes. Parliament, however, decided that rather
II than make elaborate and long provisions in respect of the
recovery of cess, it would be more convenient to make a
(l) 11966] I S.C.R. 521.
SAK!!AI( KARKJIANA I'. COLLECTOR (Koshal, .I.) 98 9

compendious provision such as is contained in s. 3. The A
plain meaning of s. 3 is that the material and relevant pro-
visions of the State Acts as wzll as the provisions of notifica-.
tions, orders and rules issued or made thereunder are includ-
ed ih s. 3 and shall be deemed to have been included at
all material times in it. In other words, what s. 3 provides
is that by its order and force, the respective ccsses wm be B
deemed to have been recovered, becaus•e the provisions in
relation to the recovery of the said cesses have been incorp0-
rated in the Act itself. The command under which the cesses
would be dremed to have been recovered would, therefore,
• be the command of Parliament, because all the rcleva:nt
sections, notifications, orders, a'nd rules have been adopted
c
by the Parliamentary statute itself. We are, therefore satis-
fied that the sole basis on which Mr. Pathak's argument
rests is invalid, because foe said basis is inconsistent with the
plain and clear meaning of s. 3. As we have already indicated.
Mr. Pathak does not dispute-and rightly-that it is compe-
tent to Parliament to make a law in respect of the cesses ih
questioq, to apply the provision of such a law to the different
States, and to make them retrospective in operation ... "
The second case on the point is reported as Bhopal Sugar Indus-
tries Ltd., v. State of Madhya Pradesh and Others('') in which
Shinghal and Desai, JJ., followed the Jaora Sugar Mills' case and E
Shinghal, J., who delivered the judgme'nt of tho Court spoke th\J\<> in
connection therewith :
"The decision in Diamond Sugar Mills' case came up
for consideration in this Court in 1aora Sugar Mills (P)
Ltd. v. State of Madhya Pradesh and Others with a speci- F
fic referenc-o to the provisions of the State Act, and it was
once again hdd, following that decisioh, that the imposition
of the cess was outside the legislative competence of the State.
,/ While examining that asp~ct of the controversy, this Court
t made it clear that what Parliament had done by enacting
sec:ion 3 of the Validation Act was not to validate the invalid G
State statutes, but to make a law concerning the cess cover-
ed by the said statuks a'nd to provide that the said law shall
come into operation retrospectively. This Court clarified
that by virtue of section 3 of the Validation Act, the com-
mand under which the cess would be deemed to have been
recovered would be the command of the Parliament, because H

(I) [197912 S.C.R. 605.
990 SUPREME COURT REPORTS [1980] I S.C.R.

A the relevant sections, no:ifications, orders and rules had been
adopted by the Parliamentary statute itself.';

With respect, we also fully agree with. the view expresscJ in •
Jaora Sugar Mills' case (supra). It is thus plain that sec:ioh 3 of
the Central Act did not merely validate what the State autheritics
B had aiready done under the Bombay Act but ac'.ually re-enacted the
provisions of th~ Bombay Act by virtue of the authority vested in
P,arliament under Entry 97 in List I of the Seventh Schedule to the
Constitution of India so that the Bombay Act became. fully alive and
operative as an enactment of Parliament as soon as the Central Act
was promulgated and the authorities named in the Act were invested
c with full power to assess and recover the cess not under the Bombay
Act but under the Central Act into which the provisions of the Bombay
Act and the rules framed as well as the notifications issued thereunder
became incorporated. r
6. The only other contention put forward by Mr. Sen (which was
D reiterated by Mr. Shanti Bhushan on behalf of the appellant in Civil
Appeal No. 39 of 1969) was that the assessments having been made
under statutory provisions which were invalid because of lack of legis-
lative competence on the part of the Bombay Legislature, Parliament
could not pass a law retrospectively validating those assessments by
E converting their .character from assessmllllts under the State statutes
to those made under its own statute <4perating retrospectively. This
contention also was repelled by this Court in Jaora Sugar Mills' case
(supra) with the following observations :
"So, the crucial question is : if collections are made
under statutory provisions which are invalid because they deal
'F with a topic outside the legislative competence of the State
legislatures, call Parliament, in exercise of its undoubt-
ed legislative competence, pass a Jaw retrospectively validat-
ing the said collections by converting their character from
collections made under the State statutes to that of collec-
G tions made under its own statute operating vestrospectively ?
In our opinion, the answer to this question has to be in the
affirmative, because to hold otherwise would be to cut down
the width and amplitude of the legislative comp~tence con-
ferred on Parliament by Art. 248 read with Entry 97 in List
I of the Seventh Schedule. Whether or not retrospective
H operation .of such a law is reasonable; may fall to be consider-
ed in certain cases; but that consideration has not be~n rais-
ed before us and ill the circumstances of this case, it cannot
SAKHAR KARKHANA v. COLLECTOR (Koshal, J.) 991

validity be raised either. We must, therefore, hold that the A
High Court was right in rejecting the appellant's case that
the Act was invalid, and hence no demands could be made
under its provisions either for a cess or for commission."
With the greatest respect, we find no reason at all to differ.
B
• 7. Article 265 of the Constitution of India was pressed into
service by :\fr. Sha'nti Bhnshan in support of the proposition that no
tax could be levied or collected except by authority of Jaw. The pro-
position is unexceptionable but we fail to see in what manner Parlia-
ment lacked the authority of Jaw while enacting the Central Act and
incorporating into it the provisions of the Bombay Act. As pointed
out above, Entry 97 in List I of the Seventh Schedule to the Consti-
c
tution of India provides full legislative competence to Parliament in
relation to the Central Act inasmuch as it vests all residuary powers
of legislation in Parliament. The contention b,ased on alleged Jack
of authority of 'Jaw in Parliamtnt is therefore repelled.
8. The submissions made by Mr. Patel appearing for the appel- D
lants in Civil Appeals No. 1925 and 1926 of 1972 alone now remain
to be considered. He put forward two points. The first one was
that section 4 of the Bombay Act was discriminatory, that the power
confnPcd by it was unguided and uncanalised and that therefore it
was hit by article 14 of the Constitution of India. When asked as to
E
whether the point had been rais•cd before the High Court, Mr. Patel's
answer was in the negative and it transpired that no foundation for
the point had b~en laid even in the pleadings submitted to the High
Court. It was therefore not allowed to be raised by us at this late
stage.
Mr. Patel's second point was that in view of the proviso to clause F
( 4) of section 2 of the Bombay Act, the managing agents of the
factories in question would alone be JiableJ and that the assessed cess
could not be recovered from his clients who were owners of the con-
cerned factories. The point is wholly without substance and that
for two reasons. For one thing, no managing agent is involved in
G
the two appeals in which Mr. Patel has. put in appearance. Secondly,
clause ( 4) of section 2 merely defines the term 'occupier' and has
.... 'nothing to say about the person on whom the cess is to be imposed
or from whom it is to be recovered. Them are no doubt other
provisions in the Bombay Act [section 6, sub-section (1) of section
7 and section 8] which indicate that the authorities assessing or H
recovering the tax are primarily to deal with the occupi•or but those
provisions have obviously been enacted as a matter of convenience
992 SUPREME COURT REPORTS [1980] 1 S.C.R,

A. both for the said authorities and the assessees so that an absent owner
may not be unduly harassed nor proceedings delayed by reason of
his absence and not for limiting to the occupier alone the liability
to pay the cess. In fact sub-section (2) of section 7 which is in the
following terms would indicate that the liability. of the owner of the
concerned factory is not excluded :
B ••
"7. (1) ...................... ..
(2) If the occupier fails to furnish in due time the return
referred to in section 6 or furnishes a r~turn which in the
opinion of the prescribed authority is incorrect 9r defective,
the prescribed authority shall assess the amount payable by
c him in such manner as may be prescrib~d and the provisions
of sub-rection ( 1) shall apply as if such assessment has been
made on the basis of a return furnished by the owner .... "
Both the submissions made by Mr. Patel are therefore, repelled.
r
9. In the result all the five app~als fail and are dismissed with
D
costs, one set.

N.V.K.
Appeals dismissed.

t

)