The Bombay High Court has temporarily halted a directive from the Maharashtra government, which required sugar mills to pay levies to various relief funds in order to obtain crushing licenses. The court ruled that the state does not have the legal authority to impose such charges, reported Hindustan Times.
A division bench consisting of Justices Revati Mohite Dere and Sandesh D Patil noted that if the petitions challenging the levy are successful, the government would need to refund the amounts collected, along with interest. The court also instructed the state not to deny crushing licenses to sugar mills that have not paid the levy and asked the government to file its response within four weeks. The next hearing is scheduled for January 14.
The petitions were filed earlier this year by Baramati Agro Limited, led by NCP (SP) MLA Rohit Pawar, along with other sugar mills. They challenged a letter issued by the Commissioner of Sugar on October 27, 2025, which mandated that all sugar mills pay a levy of ₹10 per metric tonne of sugarcane crushed each season towards the Chief Minister’s Relief Fund (CMRF), ₹5 per metric tonne for the Flood Relief Fund, and ₹10 per metric tonne for the Gopinath Munde Sugarcane Workers Welfare Corporation.
According to the petitioners, the state government had made these payments a compulsory requirement for securing a crushing license for the 2025–26 season. Senior counsel Girish Godbole, representing the petitioners, argued that the levy was illegal and violated the Maharashtra Sugar Factories (Reservation of Areas and Regulation of Crushing and Sugar Supply) Order, 1984. He claimed that the move represented “clear executive overreach” without any legal foundation.
Godbole informed the court that the sugar mills had paid the required amounts under protest, but emphasized that the issue needed to be resolved as the levy had been imposed without statutory backing and could not be enforced as a mandatory condition. The petitioners argued that they were effectively forced to make the payments, as failing to do so would result in the denial of crushing licenses for the season.
In its interim observations on December 24, the court stated that the amounts being collected through the government’s directive lacked legal authority. The court ruled that the state “has no right to impose the levy upon the petitioners,” especially since contributions to the CMRF and the Flood Relief Fund are voluntary. The court emphasized that the government cannot withhold licenses to pressure sugar mills into making contributions, particularly without a legal framework to justify such a levy.
The bench also highlighted that an executive order cannot replace the constitutional requirement for imposing a tax or levy. Referring to Article 265 of the Constitution, the court pointed out that no tax or levy can be collected unless authorized by law, and the powers claimed by the state did not arise from any law or constitutional provisions. Based on these grounds, the court stayed and set aside the October 27 letter issued by the Commissioner of Sugar.
