A. VENKATA SUBBA RAO vs STATE OF ANDHRA PRADESH(With Connected Appeals)

The Supreme Court held that the appellants, who were procuring agents under the Essential Supplies (Temporary Powers) Act, 1946, were not agents of the Government and thus not liable to account for profits derived from increased sale prices of rice. The Court found that the surcharges imposed by the Government were unlawful as they constituted an unauthorized tax by the executive. The appeals were allowed, overturning the High Court's decision which had favored the State.