I.T.C. LTD. ETC. versus STATE OF KARNATAKA & ORS.

I.T.C. LTD. ETC. versus STATE OF KARNATAKA & ORS.

The Karnataka Act is repugnant and unconstitutional to the extent it levies market fee on tobacco or its products after the field is fully occupied by the Tobacco Board Act, 1975, a central enactment under Entry 52 of List I. Any State law in that field is ultra vires. Fees collected for services unrelated to market committees and not rendering a direct benefit (such as for rural roads) are invalid.

Parties
Appellant: I.T.C. Ltd. etc.; Respondent: State of Karnataka & Ors.
Jurisdiction
India
Judgment Date
03 May 1985
Procedural Posture
Civil Appeal and Writ Petition / Supreme Court of India Final Decision
Outcome
Appeals, special leave petitions, and writ petitions (except C.A. No. 629 of 1983) dismissed; C.A. No. 629 of 1983 allowed.
Legal Topics
Legislative Competence, Repugnancy Between Central and State Legislation, Market Fees, Doctrine of Pith and Substance, Quid Pro Quo in Levy of Fees
Constitutional Law Tax Law Agricultural Marketing Law Legislative Competence Repugnancy Between Central and State Legislation Market Fees Doctrine of Pith and Substance Quid Pro Quo in Levy of Fees

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Parties

I.T.C. Ltd. etc.

Appellant

State of Karnataka & Ors.

Respondent

Procedural Posture

Civil Appeal and Writ Petition / Supreme Court of India Final Decision

Legal Issues

  1. 1 Whether the Karnataka Agricultural Produce Marketing (Regulation) Act, as amended, is repugnant to the Tobacco Board Act, 1975, in so far as it levies and collects market fee on tobacco and its products.
  2. 2 Whether enhancement and collection of market fee under s.65 should have a direct nexus between services rendered and amount collected (quid pro quo).
  3. 3 Whether the State Legislature is competent to validate levy declared by Court as bad in law.

Ratio Decidendi

The Karnataka Act is repugnant and unconstitutional to the extent it levies market fee on tobacco or its products after the field is fully occupied by the Tobacco Board Act, 1975, a central enactment under Entry 52 of List I. Any State law in that field is ultra vires. Fees collected for services unrelated to market committees and not rendering a direct benefit (such as for rural roads) are invalid.

Court Disposition

Appeals, special leave petitions, and writ petitions (except C.A. No. 629 of 1983) dismissed; C.A. No. 629 of 1983 allowed.

Orders

  • That part of the Karnataka Act levying market fee on tobacco struck down.
  • No refund of fee already realised; no order as to costs in C.A. No. 629 of 1983.