BHOPAL SUGAR INDUSTRIES LTD. vs STATE OF MADHYA PRADESH & ORS.

The Supreme Court held that Section 23 of the Madhya Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1958 is ultra vires the Constitution, as the term 'an area' does not equate to 'local area' as defined in Entry 52 of List II of the Seventh Schedule. The Court clarified that 'local area' refers to regions administered by local bodies, not factory premises. Consequently, the imposition of cess under the State Act was invalid, and the appeal was dismissed, upholding the High Court's decision to reduce the cess amount to Rs. 5,44,835.69.