According to official sources, other mills are also in the process of filing their returns, failing which action would be taken under the Essential Commodities Act, 1955 which includes seizure of undisclosed stock. The government had issued show cause notices to 250 sugar mills across the country on August 17 for failing to file monthly returns regarding dismantling of sugar buffer stocks. It had also threatened to take action against them under the Essential Commodities Act, 1955, and if they failed to file monthly returns on the dismantled buffer stock of 20 lakh tonne for the months of May, June and July, by August 25.
The largest number of erring mills are in Indias largest sugar growing province Uttar Pradesh followed by Maharashtra. The central government, by a order in July, dismantled a sugar buffer stock of 20 lakh tonne that it had asked mills to create in 2007 and allowed them to sell it in the domestic market at any point of time during the 2007-08 sugar season that ends in October. The stocks are allowed to be sold without the requirement of release orders from the directorate of sugar.
Later, the government also allowed dismantling of a second lot of buffer stocks of 30 lakh tonne and allowed mills to sell 25% of the stock in August and September, while the remaining 75% could be sold at any point of time during the 2008-09 sugar season.
Sugar mills were required to submit monthly returns by July 31 for the 20 lakh tonne of buffer sold in the open market.