DIAMOND SUGAR MILLS LTD., ANDANOTHER vs THE STATE OF UTTAR PRADESH ANDANOTHER

The Supreme Court held that the U.P. Sugarcane Cess Act, 1956, which imposed a cess on the entry of sugarcane into factory premises, was beyond the legislative competence of the U.P. Legislature as the premises of a factory do not constitute a 'local area' under Entry 52 of List II of the Seventh Schedule of the Constitution. The Court clarified that 'local area' refers to areas administered by local bodies. The Act was deemed invalid in its entirety, as it exceeded constitutional limits.