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PETITIONER: STATE OF U.P. & ORS. ETC.

       Vs.

RESPONDENT: SRI LAXMAN RICE MILLS & ORS. ETC.

DATE OF JUDGMENT:       17/01/1997

BENCH: K. RAMASWAMY, S. SAGHIR AHMAD

ACT:

HEADNOTE:

JUDGMENT:                             WITH              CIVIL APPEAL NOS.  447-449 OF 1997    (Arising out of SLP (C) Nos. 17287,19671 and 17355/96                          O R D E R      Leave granted.      We have heard learned counsel on both sides.      These appeals  by  special  leave  arise  from  various orders of  the Division  bench of  the Allahabad High Court, made on  February 27,1996 etc. in writ Petition No. 31392/95 etc.      The only  controversy is; whether the existing stock of rice on  the intervening  night of  30th September  and  1st October 1995  was liable  to levy  under the  U.P. Rice  and Paddy (Levy and Regulation of Trade) Order, 1985. Exercising the power under Section  3 of the Essential commodities Act, with  the   concurrence  of   the  Central  Government,  the appellant had  issued the  said order  imposing levy on rice effective from  the intervening  night of  September 30,1995 and October 1, 1995. This is in furtherance of clause (3) of the Levy  Order. It  is contended by the learned counsel for the appellant  that since  the levy  was effective  from the aforesaid period within the areas specified under the order, all  the  rice  mills  covered  are  subject  to  the  above notification. The High Court was not right in directing that the Order will be effective from October 1,1995 and that the direction that  the existing  stock as  on  the  intervening night of the said dates is not liable to levy is vitiated by error of law. We find no force in the contention.      Clause 24 of the Order gives power to exempt as under:      "(1) With  the concurrence  of  the      Central   Government,   the   State      Government may--      (a) in the public interest increase      or reduce the percentage of levy;      (b) in  the public  interest exempt      any area  from levy  or reduce  per      cent;      (c) in  the public  interest reduce      the percentage  of  levy  from  any      type of rice mill in any area;

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    (d) exempt  wholly or  partly  from      levy  and   variety  of  paddy  and      rice."      It is  seen that the proceedings dated May 31, 1996 the Principal Secretary  to the  Government had  conveyed to all the authorities  concerned the  decision of  the Government, namely, "  I am  directed to say that levy is lifted in U.P. from rice for rest of the Kharif 1994-95 till 30.9.1995 with immediate effect."      Thus, it  would be  seen that  the rice  stock existing with rice  millers as  on September 30,1995, in other words, all purchases  made/rice produced  by the  rice millers upto that date,  i.e., September  30,1995 stood  exempted.  While issuing the  levy  order,  the  exemption    order  was  not withdrawn. Consequently  levy order  issued in  exercise  of clause (3)  of the  Order  for  the  kharif  Season  1995-96 effective from  midnight of  September 30,1995 including the stock on hand as on that date, is not legal for the stock on hand as  on that date, is not legal for the limited stock on hand,   namely, the  stock existing with the rice millers as on the  intervening night   of September 30,1995 and October 1,1995. To  that extent only the exemption would operate and the levy  order would  become effective  in respect  of  all purchases made/rice  produced on  and from  the day break of October 1, 1995.      The appeals are accordingly dispose of No costs.