Supreme Court Issues Notice OnPlea Challenging Constitutional Validity Of Goa Cess On Fluid Milk (Control) Act, 2000

A Bench comprising Justices M.R. Shah and Krishna Murari issued notice in the petition only to the extent that it assails the relevant provisions of the 2000 Act and the competence of the State legislature to enact it. The notice has been made returnable on 15.11.2022.

The petition challenges Rule 3 of the Goa Cess on Fluid Milk (Control) Rules, 2001 on the ground that it is ultra vires the provisions in its parent legislation, i.e., 2000 Act, as well as the Article 304(a) of the Constitution of India, 1950. It also indicates that the levy of cess under the said Rule is prohibited as per Articles 286 and 246A of the Constitution. Relying on two judgment of High Court of Bombay, wherein it has been held that Rule 3 is discriminatory, the petition argues that the petitioner organisation is entitled to the refund of cess paid for the period from 2001-2003. Section 4 of 2000 Act contemplates that cess be levied on fluid upon the use of facilities, infrastructure, or any other amenities belonging to or provided by the State for consumption. However, Rule 3 goes beyond the ambit of Section 4 and levies cess on fluid milk brought into the State of Goa for sale.

Pursuant to the Constitution (101st Amendment) Act, whereby Article 246A was inserted, the petition was amended and now it also impugns the constitutional validity of the provisions of the 2000 Act. The petition submits that, in view of the amendment to the Constitution, the State legislature lacks competence to enact and levy cess on the sale of milk; the Parliament has the exclusive competence in this regard.

The provisions of the 2000 Act are also assailed on the ground that they are repugnant to the Essential Commodities Act, which has enlisted fluid milk as an essential commodity. The petition argues that levying cess on fluid milk does neither amount to reasonable restriction nor is in public interest.

The petitioner is a registered cooperative society of milk producers in the State of Goa, which also procures milk from neighbouring States. It is contended that they have been paying the cess on fluid milk from June 2001 till July, 2003. In 2005 when the petitioners had applied for cancellation of cess on its procurement of milk from outside Goa the same was rejected. Aggrieved, it approached the Bombay High Court, which had rejected their writ petition challenging provisions of the 2001 Rules. Thereafter, a review was filed, which had also been dismissed. The petition argues that the dismissal is in the teeth of the judgment of the Bombay High Court in Belgaum District Co-operative Milk Procedures Union Ltd. And Ors. v. State of Goa And Anr., wherein the Court had held that until its amendment in 2003, Rule 3 of the Goa Cess on Fluid Milk (Control) Rules, 2001 was indeed discriminatory.

The petitioner was represented by Advocate-on-Record, Mr. Salvador Santosh Rebello and Advocates, Mr. Raghav Sharma, Ms. Nidhi Vardhan, Mr. Kanishk Arora and Mr. Rahul Kapoor.

[Case Title: Goa State Co-Op Milk Producers Union Ltd. v. State of Goa SLP(C) 14789-99/2022]

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