GUPTA SUGAR WORKS vs STATE OF U.P. & ORS.

The Supreme Court upheld the validity of the U.P. Khandsari Sugar (Levy) Order, 1981, which mandated Khandsari manufacturers to surrender 50% of their production, stating that the price fixation under Section 3 of the Essential Commodities Act, 1955, was reasonable and aimed at consumer interest. The Court clarified that the fixation of price must consider both consumer and producer interests, but consumer welfare should take precedence. The petitioner's claims of unreasonable restriction under Articles 19(1)(g) and 14 were dismissed, affirming that there was no colourable exercise of power by the State Government in the levy process.