Holding

The levy is a tax on despatches of tea that directly restricts trade, lacks presidential sanction, and is beyond State legislative competence, thus unconstitutional and void.

Summary

The petitioners, tea companies, challenged the levy of a rural employment cess on tea estates under the West Bengal Rural Employment and Production Act, 1976, as amended in 1981 and 1982. They argued that the levy, which was imposed on the despatches of tea rather than on the land, directly impeded the free flow of trade across India, violating Article 301 of the Constitution, and that it was not saved by Article 304(b) because the amendments lacked presidential sanction. The Court examined the nature of the levy, finding no nexus between the tax and the tea estates and concluding that it was a tax on goods. It held that the amendments were unconstitutional, void, and beyond the legislative competence of the State, also conflicting with the Parliament's Tea Act, 1953. Consequently, the writ petitions were allowed, the impugned provisions declared void, and the petitioners were ordered a refund of the cess paid.

Issues considered

The levy of the rural employment cess on tea despatches is a tax on goods that directly impedes trade under Article 301.
Whether the levy falls within the exception of Article 304(b) requiring presidential sanction.
Whether the State has legislative competence to impose such a cess under List II Entry 49 or any other entry.
Whether the Parliament's Tea Act, 1953 precludes State legislation on tea trade.

Legislation cited

Constitution of Indias. Article 14, s. Article 301, s. Article 304(b), s. Seventh Schedule List II Entry 49
Tea Act, 1953s. 25
West Bengal Rural Employment and Production Act, 1976s. 4(1), s. 4(2)(aa), s. 4(4)
West Bengal Taxation Laws (Amendment) Act, 1981
West Bengal Taxation Laws (Amendment) Act, 1982

Subjects

Constitutional lawArticle 301Article 304(b)State taxationLegislative competenceTea industryRural employment cessFreedom of tradeRefund

Judgment

BUXA DOOARS TEA COMPANY LTD. ETC. A
v.
STATE OF WEST BENGAL AND OTHERS

MAY 12, 1989
B
[R.S. PATHAK, CJ AND M.H. KANIA, J.)

West Bengal Rural Employment and Production Act, 1976:
ss. 4(2)(aa) & 4(4)-Rural employment cess-Levy of in respect of tea
estates on despatches of tea grown 1herein-Constitutional validity of-
Whether beyond legislative competence.
c
Constitution of India: Articles 301, 304(b) & Seventh Schedule
List II Entry 49-West Bengal Rural Employment and Production Act,
1976-Whether constitutionally valid.

Statutory Interpretation: True nature of legislation imposing
D
levy-Determination of.

Section 4(1) of the West Bengal Rural Employment-and Produc-
tion Act, 1976 provided for levy of rural employment_cess on immov-
able properties. Clause (aa) of s. 4(2) as amended bys. 7(b) of the West
Bengal Taxation Laws (Amendment) Act, 1981 provided for l•vy of
E
rural employment cess in respect of tea estates on the despatches of tea
grown therein. The first proviso thereto provided for exclusion of
despatches of tea for sale made at recognised c-entres . .The second pro-
viso thereto empowered the State Government to fix different rates of
cess on despatches of different classes of tea. Sub-section (4) of the
amended s. 4 provided for exemption of certain categories of despatches
F
from the liability to pay the-whole or part of the cess or to reduce the
rate of the cess payable thereon. The first proviso to s. 4(2)(aa) was,
however, omitted by the West Bengal Taxation Laws (Amendment)
Act, 1982. Article 304(b) of the Constitution permits the legislature of a
State to impose reasonable restrictions on the freedom of trade, com-
merce or intercourse with or within that State provided the Bill or G
amendment for that purpose is introduced with the. previous sanction of
the President.

It was contended for the petitioners that the levy of the cess under
s. 4(1) read with s. 4(2)(aa) of the Act, as amended in 1981 and 1982,
was violative of the freedom guaranteed by Article 301 of the Constitu- H

293
294 SUPREME COURT REPORTS [1989] 3 S.C.R.

A lion and also lay outside the legislative competence of the State
Government. y
Allowing the writ petitions,

B HELD: l. l If the levy of a tax on goods has direct and
immediate effect of impeding the movement of goods throughout the
territory of India, there is a violation of Article 301 of the Constitution. y
If, however, the impact of the levy is indirect or remote, no valid
complaint can be made in relation to Article 301. There is also no
violation of Article 30 I if the case falls under Article 304(b) and its
proviso. [299F, 300D-E]
c
l.2 Therefore, if the legislature of a State enacts a law which
imposes such reasonable restrictions on the freedom of trade, com-
merce or intercourse with or within that State as may be required in the
public interest and further that the Bill or amendment for the pur·poses
of clause (b) has been introduced or moved in the Legislature of a State
0
with the previous sanction of the President, such enactment will not
offend Article 30 I. The rural employment cess in the instant case was a
tax. [300F, 299F]

Atiabari Tea Co., Ltd. v. The State of Assam & Ors., [1961] I
E S.C.R. 809; The Automobile Transport (Rajasthan) Ltd. v. The State of
Rajasthan & Ors., [1963] I S.C.R. 491; Firm A. T.B. Mehtab Majid and
Company v. State of Madras & Anr., [1963] Suppl. 2 S.C.R. 435;
Kalyani Stores v. The State of Orissa & Ors., [1966] I S.C.R. 865; State
of Mysore v. H. Sanjeeviah, [1967] 2 S.C.R. 361 and Andhra Sugars
Ltd. & Anr. etc. v. State of Andhra Pradesh & Ors., [1968] I S.C.R.
705, referred to.
F
2.1 To determine whether the levy was in respect of tea estates,
and, therefore, ofland thus making an indirect impact or was a levy on
despatches of tea thereby directly impeding movement of goods, the
substance of the legislation must be ascertained from the relevant provi-
sions of the statute. [301B]
G
2.2 The subject of the levy, the nature of which defines the
quality of the levy, however, must not be confused with the measure of
liability, that is to say, the quantum of the tax. Furthermore, the
standards laid down for measuring the liability under the levy must
H bear a relationship to the nature of levy. [301B-C, 302D-E]
..

BUXA TEA CO. v. STATE OF WEST BENGAL 295

Union of India & Ors. v. Bombay Tyre International Ltd. & A
Ors., [1984] 1S.C.R.347, referred to.

2.3 If the levy is regarded as one in respect of tea estates and the
measure of the liability is defined in terms of the weight of tea de-
spatched from the tea estate there must be a nexus between the two
indicating a relationship between the levy on the tea estate and the B
criteria for determining the measure of liability. If there is no nexus at
all it can conceivably be inferred that the levy is not what it purports to
be . {30IH, 302A]

2.4 In the instant case, the nexus with the tea estate is lost
altogether in the provisions for exemption or red_uction of the l_evy and C
throughout the nexus is confined to despatches of tea rather than
related to the tea estate. There is nothing to suggest that a particular
-tea estate produces only one class of tea , and when reference is made to
a certain cl.ass of tea the reference identifies a certain class of tea
estates. [302E-F]
D
2.5 While there must always be a .,exus between the subject of the
levy and the mea.s ure of the levy that nexus extends into different
dimensions. Variations considered appropriate for the purpose of
determining the measure must correspond to variations in the subject of
the levy. If the measure of levy is to vary with the despatches of diffe·
rent classes of tea, there must be something in the class of tea concerned E
which points to a reason located in the particular tea estate or classes of
tea estates which are made the subject of the levy. So also, if the
measure varies with the centre of sale of tea, the variation must relate \
to a reason to be found in the nature of the tea estate concerned. Ulti·
mately' the benefit of exemption or reduced levy must be related to the
~ need for exempting the tea estate from that levy or relieving it from part F '
~ of the normaHevy. [302F, 303A)

2.6 In the instant case the relevant statutory provisions, includ-
. ir1g s. 4(2)(aa) and s. 4(4), indicate no such relationship or nexus bet-
. ween the ted estate and the varied treatment accorded in respect of the
· despatche of different kinds of tea. The .levy of rural employment cess G
: was, therefore, a levy in respect of despatches of tea and not in respect
;_ of tea estates. It must, thus, be regarded as co~stituting a ·direct and
•: immediate restriction on the flow of trade and commerce in tea
throughout the territory oflndia. [303B-C]

2. 7 Such a levy could avoid the injunction decJared in Article 301 H
296 SUPREME COURT REPORTS [19891 3 S.C.R.

A only if it satisfied the provisions of Article 304(b) and the proviso
thereto. The amendments made to the West Bengal Act in 1981 and
1982 had not been moved in the Legislature of the State with the previ·
ous sanction of the President. The provisions brought into the Act by
the said amendments were, therefore, unconstitutional and void and
could not be given effect to. [303C-D, F, GI
B
3. Under the Tea Act, 1953 Parliament had assumed control of
the tea industry including the tea trade and control of tea prices. Under
s. 25 of that Act a cess on tea produced in India had also been imposed.
The State legislation imposing a cess on despatches of tea was, there·
fore, also void for want of legislative competence as it pertained to a
covered field. [304B]
c
4. The petitioners are entitled to the refund of~ paid by them. [304D]

CIVIL ORIGINAL JURISDICTION: Writ Petitions Nos.
2687, 5822 of 1983 etc.
D
(Under Article 32 of the Constitution of India).

Dr. Shankar Ghosh, T.S.K. Iyer, M.L. Lahoty, P.S. Jha, D.D.
Gupta, S.K. Jain, D.P. Mukherjee, S.R. Srivastava, P.N. Tewari and
Parijat Sinha for the petitioners.
E
Tapas Ray, Anil B. Dewan, T._C. Roy, G.S. Chatterjee, Dalip
Sinha and H.K. Puri for the respondents.

The judgment of the Court was delivered by

F PATHAK, CJ. By these writ petitions and transferred cases the
petitioners challenge the validity of the levy of cess in respect of tea
estates under the West Bengal Rural Employment and Production
Act, 1976.

The West Bengal Rural Employment and Production Act, 1976,
G (shortly referred to as the "West Bengal Act") is intended to provide
the additional resources for the promotion of employment in rural
areas and for implementing rural production programmes . The addi-
tional resources are sought to be raised from two sources, a surcharge
on land revenue under s. 3 of the Act and a rural employment cess
under s. 4 ofthe Act. We a:-e concerned here with the levy of the rural
H employment cess.
BUXA TEA CO. v. STATE OF WEST BENGAL [PATHAK, CJ.I 297

Originally s. 4 of the West Bengal Act provided as follows: A

"4.(1) On and from the commencement of this Act, all
immovable properties on which road and public work- ces-
ses are assessed according to the provisions of the Cess
Act, 1880, shall be liable to the payment of rural employ-
ment cess: B

Provided that no raiyat who is exempted from paying
revenue in respect of his holding under clause (a) of sub-
section (1) of section 23B of the West Bengal Land
Reforms Act, 1955, shall be liable to pay rural employment
cess.
c
).!
J . (2) The rural employment cess shall be levied
\. , annually-
(a) in respect of lands, at the rate of six paise on
each rupee of development value thereof;
D
(b) in respect of coal mines, at the rate of fifty paise
on each tonne of coal on the annual despatches
...
>-.,-
therefrom;

(c) in respect of mines other than coal mines and
E
quarries, at the rate of six paise on each rupee of
annual net profits thereof."
The West Bengal Taxation Laws (Amendment) Act, 1981
amended the West Bengal Act and by s. 7(b) thereof amendments
were made in s_ 4(2) of the West Bengal Act with effect from 1 April,
1981. As a result, as from that date, s. 4(2) in so far as it is material F
read as follows:
4(2). The rural employment cess shall be levied annually-
( a) in respect of lands, other than a tea estate, at the
rate of six paise on each rupee of development
value thereof; G
(aa) in respect of a tea estate at such rate, not
exceeding rupees six on each kilogram of tea on
the despatch~s from such tea estate of tea
grown therein, as !he State Government may,
by notification in the Official Gazette, fix in this H
behalf:
298 SUPREME COURT REPORTS [1989) 3 S.C.R. I '

A Provided that in calculating the despatches of tea for
the purpose of levy of rural employment cess, such des-
patches for sale made at such tea auction centres as may be
recognised by the State Government by notification in the
Official Gazette shall be excluded.
B
Provided further that the State Government may fix
different rates on despatches of different classes of tea.

Explanation-For the purpose of this section, "tea"
means the plant Camellia Sinensis (L) 0. Kuntze as well as
all varieties of the product known commercially as tea
c made from the leaves of the plant Camellia Sinensis (L) 0.
Kuntze, including green tea and green tea leaves, proces-
sed or unprocessed;"

Section 4 was also amended further by the insertion of sub-s. (4)
which provided:
0
"(4) The State Government may, if it considers necessary
so to do, by notification in the Official Gazette, exempt
such categories of despatches or such percentage of des-
patches from the liability to pay the whole or any part of
the rural employment cess, or reduce the rate of the rural
E employment cess payable thereon, under clause (aa) of
sub-section (2), on such terms and conditions as may be
specified in the notification.
'F
Provided that the State Government may, at any
time, add to, amend, vary of rescind any such notifica-
F tion."

Thereafter the West Bengal Taxation Laws (Amendment) Act, 1982
was enacted with effect from 1 October, 1982. S. 4(2) of the West
Bengal Act was amended and under clause (aa) thereof the first pro-
viso was or '.~ted.
G
Pursuant to the amendments in the West Bengal Act in 1981 and
1982, various notifications were issued by the State Government,
which for our purpose broadly cover these different periods:

(a) First Period: I April, 198lto 30 September, 1982-
H
BUXA TEA CO. v. STATE OP WEST BENGAL [PATHAK, CJ.) 299
'
'( Rural employment cess was levied at the rate of Rs.5 per Kg.
A
on all despatches of tea, but in respect of despatches
/
to two
tea auction centres within West Bengal the rate of duty was
nil, and in respect of tea sold in West Bengal through re-
gistered dealers otherwise than through the two tea auction
centres the rate of tax was Rs.2.50 per Kg.
B
(b) Second Period: 1 October, 1982 to 28 March, 1984-

-
..,,,,
Rural employment cess was levied at the rate of Rs.1.50 per
Kg. on all despatches of tea except that for despatches to the
said two tea auction centres the rate of levy was 30 paise per
Kg.
c
~
, (c) Third Period: 29 March, 1984 onwards-

Rural employment cess was levied at the rate of Rs.3 per Kg.
on all despatches of tea except that for despatches to the said
two tea auction centres in West Bengal the rate of tax was D
only 30 paise per Kg.

Learned counsel for the petitioners contend that the levy of the
I cess under s. 4(1) read with s. 4(2)(aa) of the West Bengal Act as
> amended in 1981 and 1982 is ultra vires inasmuch as the statutory
provisions violate Article 14 and Article 301 of the Constitution and E

-
also lie outside the legislative competence of the State Government. It
seems to us that these cases can be disposed of on the short ground
based on Article 301 of the Constitution and want of legislative
competence .

\
. There can be no dispute that the rural employment cess is a tax. F
It cannot also be disputed that if the levy of a tax on goods has the
direct and immediate effect of impeding the movement of goods
throughout the territory of India, there is a violation of Article 301 of
the Constitution. If, however,. the impact of the levy is indirect or
remote, no valid complaint can be made in relation to Article 301. In
Atiabari Tea Co., Ltd. v. The State of Assam and Others, [1961] 1 G
S.C.R. 809, Gajendragadkar, J. (as he then was) speaking for the
majority in that case held that tax laws would effect trade and com-
merce and could be violative of the freedom guaranteed by Article
30 l, provided they directly or immediately affect the freedom of trade
and commerce and not indirectly or in a remote manner. This principle
was affirmed by this Court in The Automobile Transport (Rajasthan) H
300 SUPREME COURT REPORTS [1989] 3 S.C.R.

A Ltd. v. The Stare of Rajasthan and Others, [1963] 1 S.C.R. 491 and
again in Firm A. T.B. Mehtab Majid and Company v. State of Madras
and Another, [1963] Suppl. 2 S.C.R. 435. But the declaration in Arti-
cle 301 that trade, commerce and intercourse throughout the territory
of India shall be free is subject to Article 304(b) which provides:

B "304. Restrictions on trade, commerce and intercourse
among States. Notwithstanding anything in Article 301 or
Article 303, the Legislature of a State may by law-

(a)

(b) impose such reasonable restrictions on the freedom of
c trade, commerce or intercourse with or within that
State as may be required in the public interest.

Provided that no Bill or amendment for the
purposes of clause (b) shall be introduced or moved in
D the Legislature of a State without the previous sanction
of the President."

Therefore, there is no violation of Article 301 if the case falls under
Article 304(b) and its proviso. In Kalyani Stores v. The State of Orissa
and Others, [1966] 1 S.C.R. 865 this Court held that a restriction on
E the freedom of trade and commerce which is guaranteed by Article 301
cannot be justified unless the procedure provided in Article 304 is
followed. That was also the view taken in State of Mysore v. H.
Sanjeeviah, [1967] 2 S.C.R. 361 and Andhra Sugars Ltd. & Anr. Etc. •
v. State of Andhra Pradesh & Ors., [ 1968] 1 S.C.R. 705. In other
words, if the Legislature of a State enacts a law which imposes such
F reasonable restrictions on the freedom of trade, commerce or inter-
course with or within that State as may be required in the public
interest and further that the Bill or amendment for the purposes of
clause (b) has been introduced. or moved in the Legislature of a State
with the previous sanction of the President, such enactment will not
offend the Article 301.
G
The question then is whether the impugned levy impedes the free
flow of trade and commerce throughout the territory of India, and if it
does, whether it falls within the exception carved out in Article 304(b ).
r
If the levy imposes a cess in respect of tea estates, it may well be said
that even though the free flow of tea is impeded in its movement
H throughout the territory of India it is in consequence of an indirect or
BUXA TEA CO. 1·. STATE OF WEST BENGAL [PATHAK, CJ.] 301

' remote effect of the levy and that it cannot be said that Article 301 is A
'"'(
contravened. The contention of the petitioners is, however, that it is
ostensibly only in respect of tea estates but in fact it is a levy on des-
patches of tea. If that contention is sound, there can be no doubt that
it constitutes a violation of Article 301 unless the legislation is brought
within the scope of Article 304(b). To determine whether the levy is in
respect of tea estates or is a levy on despatches of tea, the substance oi B

I'
• "'
the legislation must be ascertained from the relevant provisions of the
statute. It cannot be disputed that the subject of the levy, the·nature uf
which defines the quality of the levy, must not be confused with the
measure of liability, that is to say, the quantum of the tax. There is a
•c-~ plenitude of case law supporting that principle, among the cases being
Union of India and Others v. Bombay Tyre Inte!national Ltd. and
Others, [1984) 1 S.C.R. 347.
c
r But what 1s the position here? The statute speaks of a levy "in
.respect of a tea estate", and it says that the levy will not exceed Rs.6
on each Kilogram of tea on the despatches from such tea estate of tea
grown therein. The statute also provides that in calculating the D
despatches of tea for the purpose of levy of rural employment cess, the
despatches for sale made at such tea auction centres as may be recog-
nised by the State Government shall be excluded. And there is a
proviso which empowers the State Government to fix different rates
'
~
on despatches of different classes of tea. There is also s. 4(4) which
empowers the State Government to exempt such categories of des- E
patches or such percentage of despatches from the liability to pay the
whole or any part of the rural employment cess, or to reduce the rate
of the rural employment cess payable thereon under clause (aa) of
sub-s. (2) on such terms and conditions as it may specify by notifica-
tion. As .from 1 October, 1982 the position remained the same except
x that the first proviso to s. 4(2)(aa) excluding the despatches for sale
made at recognised tea auction centres was deleted. The remaining
F

provisions continued as before. Now, for determining the true nature
of the legislation, whether it is a legislation in respect of tea estates.
and therefore of land, or in respect of despatches of tea, we must, as
we have said, take all the relevant provisions of the legislation into
account and ascertain the essential substance of it. It seems to us that G
although the impugned provisions speak of a levy of ce~s in respect of
tea estates, what is really contemplated is a levy on despatches of tea
~ instead. The entire structure of the levy points to that conclusion. If
the levy is regarded as one in respect of tea estates and the measure of
the liability is defined in terms of the weight of tea despatched from
the tea estate there must be a nexus between the ·two indicating a H
302 SUPREME COURT REPORTS [1989) 3 S.C.R.

relationship between the levy on the tea estate and the criteria for
A y
determining the measure of liability. If there is no nexus at all it can
conceivably be inferred that the levy is not what it purports to be. The
statutory provisions for measuring the liability on account of the levy
throws light on the general character of the tax as observed by the
Privy Council in Re: A Reference under the Government of Ireland Act,
B I920 and Section 3 of the Finance Act (Northern Ireland), 1934, [ 1936] 2
All E.R. 111. In R.R. Engineering Co. v. Zita Parishad, Bareilly &
Anr., [1980) 3 S.C.R. I, this Court observed that the standard on
'r
which the tax is levied was a relevant consideration for determining the
nature of the tax, although it could not be regarded as conctusive in the
matter. Again in The Hingir-Rampur Coal Co. Ltd. and Others. v. The ~,-
State of Orissa and Others, [1961] 2 S.C.R. 537, this Court observed
c that the method of determining the rate of levy would be relevant in
considering the character of the levy. All these cases were referred to
in B.ombay Tyre International Ltd. (supra) where in the discussion on
'-{
the point at page 367 this Court said:

D "Any standard which maintains a nexus with the essential
character of the levy can be regarded as a valid basis for
assessing the measure of the levy."

It is apparent that the standards laid down for measuring the
liability under the levy must bear a relationship to the nature of the
E levy. In the case before us, however, we find that the nexus with the J.
tea estate is lost altogether in the provisions for exemption or reduc-
tion of the levy and that throughout the nexus is confined to des-
patches of tea rather than related to the tea estate. There is nothing to
suggest that a particular tea estate produces only one class of tea, and
when reference is made to a certain class of tea the reference identifies
F a certain class of tea estates. We may presume that a tea estate pro-
duces different classes of tea and not one class of tea only. While there ~
must always be a nexus between the subject of the levy and the
measure of the levy that nexus extends into different dimensions.
Variations considered appropriate for the purpose of determining the
measure must correspond to variations in the subject of the levy. If the
G measure of levy is to vary with the despatches of different classes of tea
there must be something in the class of tea concerned which points to a
reason located in the particular tea estate or classes of tea estates
which are made the subject of the levy. So also if the measure varies -.,..,
with the centre of sale of tea, the variation must relate to a reason to
be found in the nature of the tea estate or classes of tea estates. In
H other words, there must be a reason why one class of tea is treated
BUXA TEA CO. v. STATE OF WEST BENGAL [PATHAK, CJ.] 303

differently from another class of tea when deciding upon the rate to be
'Y applied to different classes of tea and that reason must be found in the
nature of the tea estate concerned. Ultimately the benefit of exemp-
A

tion or reduced levy must be related to the need for exempting the tea
estate from that levy or relieving it from part of the normal levy. When
the provisions before us are examined in their totality, we find no such
" '{ relationship or nexus between the t.ea estate and the varied treatment
accorded in respect of despatches of different kinds of tea. It seems to
B

us that _having regard to all the relevant provisions of the statute,
including s. 4(2)(aa) and s. 4(4), in substance the impugned levy is a
levy in respect of despatches of tea and not in respect of tea estates.
--·.a Treating it as a levy on despatches of tea it is evident that the levy
must be regarded as constituting a direct and immediate restriction on
c
y the flow of trade and commerce in tea throughout the territory of
India, and the levy can avoid. the injunction declared in Article 301
only if it satisfies the provisions of Article 304(b) and the proviso
thereto. For bringing the legislation within the saving provisions of
Article 304(b) it is necessary that the Bill or amendment should have D
been introduced or moved in the Legislature of the State with the
previous sanction of the President. It is not disputed that the amend-
ments to the West Bengal Act made in 1981 and 1982 did not satisfy
that requirement. Indeed, it appears that the West Bengal Govern-
~ ment had sent an earlier Bill to the President with the object of levying
a tax on the income from tea but the Presidential assent was not E
granted. It appears further that the Finance Minister of West Bengal
made a statement in the West Bengal Legislature on 27 February, 1981
stating that he would introduce the rural employment cess on des-
patches of tea. He referred to a Bill for amending the West Bengal
Marketing (Regulation) Act, 1972 having been -sent to the President
,t and the President not having signified his consent to the amendment. F

In our opinion, the impugned provisions brought into the West
Bengal Act by the amendments in 1981 and 1982 so far as they purport
to relate to tea estates are unconstitutional and void and cannot be
given effect to.
G
Another aspect of the matter may be considered, and that relates
to legislative competence. If the impugned legislation were to be re-
~ garrled as a levy in respect of tea estates, it would be referable to Entry
49 in List II of the Seventh Schedule of the Constitution which speaks
of "taxes on lands and buildings". But if the legislation is in substance
legislation in respect of despa_tches of tea, legislative authority must be H
304 SUPREME COURT REPORTS [1989] 3 S.C.R.

A found for it with reference to some other Entry. We have not been
shown any Entry in List II or in List III of the Seventh Schedule which y
would be pertinent. It may be noted that Parliament had made a
declaration in s. 2 of the Tea Act, 1953 that it was expedient in the public
interest that the Union should take under its control the tea industry.
Under the Tea Act, Parliament has assumed control of the tea industry
B
including the tea trade and control of tea prices. Under s. 25 of the Act
a cess on tea produced in India has also been imposed. It appears to us
that the impugned legislation is also void for want of legislative compe-
tence as it pertains to a covered field.

We do not consider it necessary to express our opinion on the i---
c other points raised between the parties in this case. ''

In the result, the writ petitions filed in this Court and the peti- ~
lions in the Transferred Cases are allowed, the impugned amendments
effected in the West Bengal Rural Employment and Production Act,
1976 by the amending Acts of 1981 and 1982 so far as they purport to
0
relate to tea estates are declared void and the petitioners are held
entitled to the refund of cess paid by them under the impugned statu-
tory provisions. The petitioners are entitled to their costs.

P.S.S. Petitions allowed.
I
A.