Gujarat High Court
State Of Gujarat vs Agriculture Produce Market Committee, ... on 26 November, 2024
Author: Biren Vaishnav
Bench: Biren Vaishnav
NEUTRAL CITATION
C/LPA/1616/2024 ORDER DATED: 26/11/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 1616 of 2024
In R/SPECIAL CIVIL APPLICATION NO. 1504 of 2021
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2024
In R/LETTERS PATENT APPEAL NO. 1616 of 2024
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STATE OF GUJARAT & ANR.
Versus
AGRICULTURE PRODUCE MARKET COMMITTEE, VISAVADAR & ORS.
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Appearance:
MR RAJ TANNA, ASSISTANT GOVERNMENT PLEADER for the
Appellant(s) No. 1,2
MR CP CHAMPANERI(5920) for the Respondent(s) No. 3,4
MR DIPAN DESAI(2481) for the Respondent(s) No. 1
MR. BHARGAV V PANDYA(7103) for the Respondent(s) No. 5
N R MEHTA(7794) for the Respondent(s) No. 3,5
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CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MR. JUSTICE MAULIK J.SHELAT
Date : 26/11/2024
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV)
1. This appeal is filed under Clause 15 of the Letters Patent arising out of the decision of the learned Single Judge in a CAV judgment dated 29.09.2023. The State is in appeal against the judgment in as much as the learned Single Judge, while allowing the petition of the respondent -Agriculture Produce Market Committee Visavadar, has directed the State to pay the market fees at the rate of 0.5% on groundnut procurement made from the respondent - APMC by the Gujarat State Cooperative Cotton Federation Limited and others for the year 2016-17 within a period of 12 weeks from the date of receipt of the copy of the order.
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2. The facts before the learned Single Judge are not in dispute and therefore, as set out in the order of the learned Single Judge, need to be reproduced and reads as under:-
2.1 The petitioner is Agriculture Produce Market Committee ['APMC' for short] constituted under the provisions of the Gujarat Agriculture Produce Markets Act,1963 [For short 'the Act']. The petitioner-APMC is deemed to be a legal authority within the meaning of section 3(26) of the Bombay General Clauses Act,1904.
2.2 As per section 28 of the Act, the Market Committee is entitled to levy and collect fees which are called market fees/ market cess on the agriculture produce bought and sold in the market area. As per section 28(2)(c) of the Act, market fee/market cess is payable by the buyer of the agricultural produce.
2.3 Rule 48 of the Gujarat Agriculture Produce Markets Rules,1965 (For short 'the Rules') provides that the Market Committee shall levy and collect market fees on the agricultural produce bought and sold in the market area at such rates as may be specified. Earlier market fee leviable was at 0.5 paisa per 100 rupees of purchase or sale. Thereafter, by circular dated 16.10.2003 issued by respondent No.2, Director, Agriculture Marketing and Rural Finance Department, Gujarat State, the said rate of levy of market fees was increased to Rs. 1 per Rs. 100 for purchase or sale and accordingly, all the market committees were instructed to amend their respective by-laws. However, the petitioner-Market Committee continued to levy the market fees @ 0.5 paisa for Rs. 100 of purchase or sale.
2.4 The Groundnut, Pigeon Pea, Gram, Green Gram and Black Gram etc. are the main agricultural produce bought and sold in the petitioner - APMC and the main income of the petitioner is from the cess received from the purchase and sale of such agricultural Page 2 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined produce.
2.5 It is the case of the petitioner that Central Government introduced Price Support Scheme i.e. Minimum Support Price Scheme with a view to ensure that farmers get minimum basic return of their agricultural produces as the market price of the agricultural produces many times tends to be unstable or volatile.
As per the said Scheme, Central Government has appointed respondent No.3-National Agricultural Cooperative Marketing Committee Federation of India [hereinafter to be referred to as 'NAFED'] as its agents which purchases the agricultural produces through the State level agencies which are appointed as the State agents, directly from farmers at a price fixed by the Central Government. Such mechanism is provided because many times the production of a particular agricultural produce is very high and thereby the supply of agricultural produce is more than the local demand because of which, price that may be offered in the market reduces and the farmers do not even recover their cost and suffer losses. The Central Government, therefore, depending on the study and on the survey introduces Minimum Support Price Scheme of a particular agricultural produce for a particular year.
2.6 The State Government, vide notification dated 01.02.2017, exempted the payment of tax duties in respect of Groundnuts procured in the Gujarat State under the Minimum Support Price Scheme and further undertook to bear the market cess @ 0.50 paisa for Rs. 100 for purchase and sale. The State Government also agreed to exempt payment of Value Added Tax [VAT] on such produces/procurement of groundnut under the Scheme. Thereby on the groundnut procured under the Scheme in the market area of the petitioner-APMC, the petitioner is not required to levy market cess from the purchaser as contemplated under section 28 of the Page 3 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined Act read with Rule 48 of the Rules. However, the State Government undertook to bear the market cess/fees @ 0.50 paisa per Rs. 100 of purchase or sale in the market area. Details of the agricultural produce purchased or procured under the Minimum Support Price Scheme from respondent No.4 to 6 for the years 2016-17 to 2019-20 are produced in the tabular form as under: ] "Agency wise details of purchased agricultural produce at Price Support Scheme (I) Gujarat State Cooperative Marketing Federation Limited (Respondent No.4) Name of Crop Year Quantity Purchase Market Cess (Met. Ton) Price Leviable (Lacs) (Lacs) Groundnut 2016-17 5800.65 Rs. 2447.88 Rs.12.24 Pigeon Pea 2016-17 2632.40 Rs.1329.36 Rs.6.65 Gram 2016-17 1148.20 Rs.505.21 Rs.2.53 Total Rs.21.42 Deposited Rs.1.38 Total Outstanding Market Cess Rs. 20.04 (2) Gujarat State Cooperative Cotton Federation Limited (Respondent No.5) Name of Crop Year Quantity Purchase Market Cess (Met. Ton) Price Leviable (Lacs) (Lacs) Groundnut 2016-17 15024.34 Rs.6760.95 Rs.33.80 Total Rs.33.80 (3) Gujarat State Civil Supplies Corporation Limited (Respondent No.6) Page 4 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined Name of Crop Year Quantity Purchase Market Cess (Met. Ton) Price Leviable (Lacs) (Lacs) Groundnut 2018-19 6547.77 Rs. 3273.88 Rs.16.37 Black Gram 2018-19 829.80 Rs.464.69 Rs.2.32 Green Gram 2018-19 126.05 Rs.87.92 Rs.0.44 Pigeon Gram 2018-19 2647.05 Rs.1502.19 Rs.7.51 Groundnut 2018-19 7143.00 Rs.3635.78 Rs.18.71 Total Rs.44.81 Total (1)+(2)+ (3) Rs. 98.65 2.7 As per the above data, the total amount of market cess payable to the petitioner comes to Rs. 98.65 lakh.
2.8 It is the case of the petitioner that various representations were made to the authorities and also to respondent Nos. 4, 5 and 6 for payment of the outstanding cess. However, respondent Nos. 3, 4 and 5 did not pay the amount of cess stating that it is the State Government who has to bear the market cess. Other Agriculture Produce Market Committees who were also claiming payment of market cess approached this Court by preferring various petitions being Special Civil Application Nos. 9664/2018 and allied matters. This Court issued notice and recorded the stand of the State Government that it has principally agreed to bear the market cess as per the averments made in the affidavit filed in those petitions admitting liability to pay market cess.
2.9 The State Government by, Resolution dated 04.10.2019, resolved to make the payment of market cess to 44 APMCs and some of them, whom were even Class-A APMCs, earning profits. However, the name of the petitioner was not included in the said list and the petitioner was not paid any market cess. Thus, the petitioner was treated differently though the petitioner is having Page 5 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined audit class 'D'. In this context, the prayer in the petition, which has also been set out by the learned Single Judge, was to the effect that the resolution dated 04-10-2019 passed by the State Government, insofar as it does not include the respondent - market committee herein for payment of market cess for the purchase of groundnuts, pigeon pea, gram, green gram and black gram, etc., under the price support scheme, be quashed.
3. Mr. Raj Tanna, learned Assistant Government Pleader for the State, would make the following submissions:-
3.1 Taking us to the resolution dated 01.02.2017, Mr. Tanna, learned advocate would submit that the resolution of 01.02.2017 was issued by the State Government for procurement of groundnut in the year 2016-2017 as per the guidelines of the Government of India, the notification regarding bearing / exempt State duties/Taxes in respect of PSS (Price Support Scheme) groundnut procurement in the Gujarat State.
3.2 That the State - Government agreed to bear APMC cess of Rs.0.5% as a mechanism for procuring of grains by the agencies, who represented the collection of such grains for support price mechanism. This was for groundnut. The subsequent notification dated 04.10.2019 was a notification that was for the years 2016-17, 2017-18 and 2018-19, which restricted the applicability of groundnut market cess only to the 44 loss making APMCs listed in the government resolution.
3.3 Relying on the resolution dated 24.08.2020 passed by the State Government, he would submit that this was a resolution for the years 2017-18, 2018-19 and 2019-20 for market cess to be paid only for groundnut; however, it applied to all APMCs. This was submitted particularly in light of the fact that the resolution of 2019 applied to groundnut and other oil seeds and to loss making Page 6 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined APMCs only then resolution of 27.01.2021 by which, though it was for the year 2017-18, 2018-19 and 2019-20, it applied to only groundnut whereas it directed that the cess paid to loss making APMCs as far as other oil seeds are concerned, be recovered.
3.4 Mr Tanna, learned AGP would submit that the resolution dated 14.10.2019 would indicate that for the purpose of being entitled to market cess, a relevant APMC has to be a loss making unit for three consecutive years and not entitled to market cess as of right. He would submit that as far as the present respondent -
APMC is concerned as per the resolution dated 04.10.2019, it should be loss making for a continuous period of 3 years i.e. 2016- 17, 2017-18 and 2018-19, whereas, the respondent - market committee had a profit for the year 2016-17 and was loss-making only for the years 2017-18 and 2018-19.
3.5 Mr. Tanna, learned AGP would invite our attention to the provisions of the Act and submit that though, the provision of Section 28 grants the power to levy cess, Section 28(A) of the APMC Act indicates that the State has the power to grant exemption from payment of market fee by an appropriate publication of a notification. Reliance was also placed on Section 59 of the APMC Act to indicate that in the exercise of rule-making powers, especially, Sections 59 (iv - cc) and (iv -dd), the State is empowered to make rules regarding the form, manner, and the fee for making an application, for prescribing terms and conditions for the renewal of a license, and for the rate of market fee and the levy and collection thereof.
3.6 Mr. Tanna would assail the judgment of learned Single Judge on the ground that when a policy decision was taken in the year 2019 by resolution dated 04.10.2019 restricting the applicability and entitlement of market cess only to loss-making Page 7 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined APMCs, the original petitioner was not entitled to market cess pursuant to the notification of 01.02.2017. He would submit that when the learned Single Judge had in the judgment under challenge accepted the fact that the decision itself was a policy decision, on the very same policy, the benefit of granting collection of Cess for the year 2016-17 could not have been granted. He would also submit that this notification was not issued under the provisions of APMC Act but it was under the guidelines of the support price mechanism.
3.7 In support of his submission that the Court in exercise of powers under Article 226 of the Constitution of India should be loathe in interfering in the matter of a policy decision, he would rely on the following decisions of the Hon'ble Supreme Court of India.
(a) In the case of Directorate of Film Festivals Versus Gaurav Ashwin Jain, reported in 2007 (4) SCC 737, wherein, the Hon'ble Supreme Court has held in Para 15 as under:-
"15. The scope of judicial review of governmental policy is now well defined. Courts do not and cannot act as Appellate Authorities examining the correctness, suitability and appropriateness of a policy. Nor are courts Advisors to the executive on matters of policy which the executive is entitled to formulate. The scope of judicial review when examining a policy of the government is to check whether it violates the fundamental rights of the citizens or is opposed to the provisions of the Constitution, or opposed to any statutory provision or manifestly arbitrary. Courts cannot interfere with policy either on the ground that it is erroneous or on the ground that a better, fairer or wiser alternative is available. Legality of the policy, and not the wisdom or soundness of the policy, is the subject of judicial review [vide Asif Hameed v. State of J&K - 1989 Supp (2) SCC 364; Shri Sitaram Sugar Co. Ltd., v. Union of India - 1990 (3) SCC 223; Khoday Distilleries v. State of Karnataka - 1996 (10) SCC 304, Balco Employees Union v. Union of India - 2002 (2) SCC 333), State of Orissa vs. Gopinath Dash - 2005 (13) SCC 495 and Akhil Bharat Goseva Sangh vs. State of Andhra Pradesh - 2006 (4) SCC 162]."Page 8 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024
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(b) In the case of Ugar Sugar Works Limited Versus Delhi Administration, reported in 2001 (3) SCC 635, in which, the Court held thus :-
"18. The challenge, thus, in effect, is to the executive policy regulating trade in liquor in Delhi. It is well settled that the courts, in exercise of their power of judicial review, do not ordinarily interfere with the policy decisions of the executive unless the policy can be faulted on grounds of mala fide, unreasonableness, arbitrariness or unfairness etc. Indeed, arbitrariness, irrationality, perversity and mala fide will render the policy unconstitutional. However, if the policy cannot be faulted on any of these grounds, the mere fact that it would hurt business interests of a party, does not justify invalidating the policy. In tax and economic regulation cases, there are good reasons for judicial restraint, if not judicial deference, to judgment of the executive. The courts are not expected to express their opinion as to whether at a particular point of time or in a particular situation any such policy should have been adopted or not. It is best left to the discretion of the State.
19. In T.N. Education Deptt. Ministerial and General Subordinate Services Assn. v.State of T.N. [(1980) 3 SCC 97 :
1980 SCC (L&S) 294] noticing the jurisdictional limitations to analyse and fault a policy, this Court opined that: (SCC p. 102, para 16) "The court cannot strike down a GO, or a policy merely because there is a variation or contradiction. Life is sometimes contradiction and even consistency is not always a virtue. What is important is to know whether mala fides vitiates or irrational and extraneous factor fouls.
20. It would also be prudent to recall the following observations of Lord Justice Lawton in Laker Airways [Laker Airways Ltd. v. Deptt. of Trade, (1977) 2 WLR 234 : (1977) 2 All ER 182 : 1977 QB 643] , WLR at p. 267, while considering the parameters of judicial review in matters involving policy decisions of the executive: (All ER p. 208 a - c) Page 9 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined "In the United Kingdom aviation policy is determined by ministers within the legal framework set out by Parliament. Judges have nothing to do with either policy-making or the carrying out of policy. Their function is to decide whether a minister has acted within the powers given to him by statute or the common law. If he is declared by a court, after due process of law, to have acted outside his powers, he must stop doing what he has done until such time as Parliament gives him the powers he wants. In a case such as this I regard myself as a referee. I can blow my judicial whistle when the ball goes out of play; but when the game restarts I must neither take part in it nor tell the players how to play."
21. In the present case the executive policy regulating the sale of liquor in the territory of Delhi is sought to be challenged by the petitioner on the ground that it is "unfair" and "unreasonable" besides being "arbitrary" and has no nexus with the object sought to be achieved. We are unable to agree.
22. The State has every right to regulate the supply of liquor within its territorial jurisdiction to ensure that what is supplied is "liquor of good quality" in the interest of health, morals and welfare of the people. One of the modes for determining that the quality of liquor is "good" is to ascertain whether that particular brand of liquor has been tested and tried extensively elsewhere and has found its acceptability in other States. The manner in which the Government chooses to ascertain the factor of higher acceptability, must in the very nature of things, fall within the discretion of the Government so long as the discretion is not exercised mala fide, unreasonably or arbitrarily. The allegations of mala fide made in the writ petition are totally bereft of any factual matrix and we, therefore, do not detain ourselves at all to consider challenge on that ground. In fairness to the learned counsel for the petitioner we may record that challenge to notification on grounds of mala fide was not pressed during arguments. Laying down requirement of achieving Minimum Sales Figures of a particular brand of liquor in other States, as a mode for Page 10 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined determination of the "acceptability" of that brand of liquor, is neither irrelevant, nor irrational nor unreasonable. It appears that prescription of MSF requirement is aimed at allowing sale of only such brands of liquor which have been tested, tried and found acceptable at large in other parts of the country.
23. The policy objective as reflected in the impugned notification is to provide liquor of good quality in Delhi. The executive policy to determine whether a particular brand of liquor is of good quality or not, on the basis of larger acceptability of the particular brand in other parts of the country, appears to us to be a fair and relevant mode. The manner for determining whether a particular brand of liquor has acquired larger acceptability or not so as to qualify for it being "liquor of good quality" has to be decided by the State in its discretion so long as the manner adopted by the State is "just, fair and reasonable". It is not in dispute that the criteria of MSF is being uniformly applied and no pick-and-choose policy has been adopted by the State in that behalf. Learned counsel for the petitioners has been unable to convince us that fixation of MSF requirements as a criteria for such determination is in any manner "unfair, irrational or unreasonable".
24. The argument that since MSF laid down for the year 1994-1995 were not changed till 1998-99, there was no need to increase MSF requirements in 1999-2000 or to further increase the same in the year 2000-2001 for the lowest price tag brand of liquor from 60,000 cases (7.2 lakh bottles) to 75,000 cases (9 lakh bottles) for the current year, suffers from the basic infirmity that it invites the court to enter into an area of testing the executive policy, not on grounds whether it is "just, fair and reasonable", but whether the object could not have been achieved by fixing a lower MSF requirement. In other words the court is being invited to prescribe MSF requirements in exercise of its power of judicial review. That is not permissible Page 11 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined and we must decline the invitation to enter that area. It is not within the province of this Court to lay down that the executive policy must always remain static, even if its revision is "just, fair and reasonable". What is relevant is to find out whether the executive action is mala fide, unreasonable or irrational as a criterion. As already observed the court in exercise of its power of judicial review cannot sit in judgment over the policy of administration except on the limited grounds already noted.
Each State is empowered to formulate its own liquor policy keeping in view the interest of its citizens. Determination of wide-scale acceptability of a particular brand of liquor, on the basis of National Sales Figures, does not strike us as being unreasonable, much less irrational. The basis for determination is not only relevant but also fair. No direction can be given or expected from the court regarding the "correctness" of an executive policy unless while implementing such policies, there is infringement or violation of any constitutional or statutory provision. In the present case, not only is there no such violation but on the other hand, the State in formulating its policy has exercised its statutory powers and applied them uniformly."
(c) In the case of Federation of Railway Officers Association Versus Union of India, reported in 2003 (4) SCC 289, in which, the Court held thus:-
"12. In examining a question of this nature where a policy is evolved by the Government judicial review thereof is limited. When policy according to which or the purpose for which discretion is to be exercised is clearly expressed in the statute, it cannot be said to be an unrestricted discretion. On matters affecting policy and requiring technical expertise the court would leave the matter for decision of those who are qualified to address the issues. Unless the policy or action is inconsistent with the Constitution and the laws or arbitrary or irrational or abuse of power, the court will not Page 12 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined interfere with such matters.
13. Tested in this background set forth above, what we have to see is whether the Government has acted within the parameters of Section 3 of the Act or not. Section 3 of the Act mentions constitution of the railway zones for the purpose of efficient administration. Therefore, to find out what would constitute efficient administration we have to look to various matters on the basis of which the railway zones have been constituted and have been working. In this context, a committee had been constituted by the Government known as the Railway Reforms Committee which submitted its report in July 1984 after exhaustive consideration of various aspects. The Committee, after taking into consideration the workload and manpower along with the concepts of modernisation, computerisation and updating of technology, traffic pattern, evolved certain formula for the formation of zones. And the Committee further stated that "as for the criterion of geographical spread and the time taken to reach the remotest point of a zone or division from its headquarters, each case would have to be examined individually. This is so because the headquarters of the various zones and divisions are not always centrally located".
Ultimately, the Committee concluded that the immediate requirement of additional zones is three if one goes by the criterion of workload and four if one goes by the criterion of manpower and as far as divisions were concerned, immediate requirement for additional divisions would appear to be fifteen by the criterion of workload and six by the criterion of manpower. The requirement of zones and divisions on the basis of the workload by the year 2000 would be even higher. But they did not finally suggest that the zones and divisions should be formed at that rate but indicated their interest for examining all those aspects of the matter.
14. Thereafter a Study Group was constituted consisting of several officers to critically analyse the impact of major developmental projects, to review or define criteria to be adopted while considering issues/demands relating to creation or reorganisation of zones and divisions amongst other aspects. They suggested that for addressing the issues relating to rationalisation of geographical distribution and reorganisation of zones and divisions, it was essential that there should be broad quantitative norms in consonance with the Railway Page 13 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined Reforms Committee's recommendations made earlier. The workload index is now redefined as total transportation effort of a zone/division which is also adequately weighted for the financial performance of these units and should therefore be the overriding criterion. It was also taken note of that the norm of 200 units by 2000 AD is the optimum value of the workload index both in the case of zones as well as divisions and this interpolated to 1992-93, that is, the last year for which estimated workload indices are presently available. Besides workload, a major decision variable is accessibility. They suggested that zones/divisions which have workload indices in excess of criticality norm and also poor accessibility deserve immediate relief. Heavily worked zones/divisions which are compact, that is, where accessibility of the remote points/activity centres is good and, therefore, does not pose any administrative problem on this account, need not necessarily be truncated for providing relief. Further, in the case of lightly worked zones/divisions, accessibility alone will not be considered as a necessary and sufficient criterion for providing relief through reorganisation. They are also of the view that the average travelling time between zonal and divisional headquarters and its remote activity centres by a representative mail/express train should be about 6 hours in either case. High workload with poor accessibility is the only necessary as well as sufficient condition for providing relief to such zones/divisions through the setting up of new zones and divisions which would arise only after full scope of territorial readjustments between existing, adjoining zones/divisions are fully explored or exhausted. They recommended formation of zones -- North-Western, South-Western, East-Central and North-Central. Adopting the same criteria as was done by RRC, to which we have adverted already, this Study Group summed up in its report as follows:
"The identification of zones/divisions which deserve attention/relief has been done on the basis of their workload. For computing a zonal/divisional workload index both physical as well as financial output indicators are taken into account. The norm of 200 workload units in 2000 AD (as had also been suggested by RRC) is defined as the optimum value of the workload index. Besides workload the accessibility of activity centres/remote points from its respective zonal/divisional headquarters is the other important criterion. The norm in this case is defined as an average travelling time (between the zonal and the divisional headquarters and, also, between the divisional headquarters and its remote activity centres) of about six (6) hours.
Based on the workload and accessibility norms defined above, zones/divisions which have workload indices in excess of the criticality norm and also poor accessibility have been identified for the purposes of providing relief through reorganisation/creation of new zones and Page 14 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined divisions. Ethnic, linguistic and/or territorial (i.e. State boundaries etc.) considerations do not form the basis for evaluating issues pertaining to railway reorganisation.
The highlights of the Study Group are given in Annexure
1. MR in his Budget speech (1995-96) on 14-3-1995 had, inter alia conveyed that the Committee's recommendations had been accepted by this Ministry and were being processed further."
15. The credibility of the said report is questioned and its bona fides are doubted on behalf of the petitioners. The various factors considered by them are also certainly relevant for the efficient administration of the Railways. None of these factors taken note of by the Study Group can be stated to be irrelevant in this context. But what is to be seen is whether the report made by them would, in essence, be not worthy of credit and not merely on imaginary basis such as they are officers of the Government and they would have worked under pressure of the Minister concerned to draw up a report to suit his whims. Therefore, we do not think we can accept the attack made by the petitioners on the report of the Study Group.
16. Cabinet notes were prepared, inter alia, after referring to the RRC report, report of the Study Group, extracts of previous Cabinet proceedings on the subject, views of the Parliamentary Standing Committee on RCC, views of Railway Federations, reports of the Comptroller and Auditor-General of India, comments of the Rakesh Mohan Committee and proposal was made to set up six new zones: (1) North-Western Railway, Headquarters Jaipur; (2) South-Western Railway, Headquarters Bangalore; (3) West-Central Railway, Headquarters Jabalpur; (4) North-Central Railway, Headquarters Allahabad; (5) East- Central Railway, Headquarters Hajipur; and (6) East Coast Railway, Headquarters Bhubaneshwar and various details regarding the workload, route kilometres and information regarding the accessibility and other criteria were fully furnished to the Cabinet. It is indicated that with the criterion of six new zones the accessibility of the divisional headquarters with railway headquarter will increase and the Indian Railway average will improve to 6.2 hours from the existing 8.9 hours. As regards the cost implication and strategy adopted, detailed consideration was made. The impact of information technology was also taken into account. Various views that had been expressed at different levels and in public both opposing and supporting the formation of new zones were also set forth. On 12-7-1996 the Cabinet authorised the Ministry of Railways to make suitable readjustments in the territorial jurisdiction of the zones.
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17. It has been contended that with the objective of developing backward areas or to meet public demand new zones have been formed and such a step will not be consistent with efficiency in administration. These two factors are noticed not in isolation but along with other criteria as to increase in traffic load and accessibility. Therefore, the contention ignores all the factors taken into consideration and is not tenable. Even otherwise, to meet the demands of backward areas cannot by itself be inconsistent with efficiency. When the Railways is a public utility service it has to take care of all areas including backward areas. In doing so, providing service, efficient supervision and keeping the equipment and other material in good and workable condition are all important factors. Such services can be appropriately extended if there is an exclusive zone to cater to such areas. If more facilities become available in those zones naturally efficiency would go up. Therefore, the concept of "efficiency" should not be approached in a doctrinaire or pedantic manner. Thus formation of zones in backward areas for providing proper facilities and services will improve the efficiency and not retard it. Merely setting up of a new zone in a backward area cannot be condemned only on the basis that it is being formed in a backward area, particularly when it fulfils other criteria to which we have already adverted.
18. Even if we assume that there is force in the material placed by the petitioners that by forming new railway zones efficiency in the Railway Administration would not enhance, the reasons given by the Government and material placed by them in support of forming new railway zones is no less or even more forceful. Further, when technical questions arise and experts in the field have expressed various views and all those aspects have been taken into consideration by the Government in deciding the matter, could it still be said that this Court should re-examine to interfere with the same. The wholesome rule in regard to judicial interference in administrative decisions is that if the Government takes into consideration all relevant factors, eschews from considering irrelevant factors and acts reasonably within the parameters of the law, courts would keep off the same. Even on the test suggested by Dr Pal, we cannot travel outside this principle to sit in appeal on the decision of the Government.
(d) Learned advocate for the Appellant - State has also relied upon the decision of Hon'ble Supreme Court in the case of Balco Employees Union versus Union of India, reported in 2002 (2) SCC 333, in which, the Court held as under :-
"91. In a democracy, it is the prerogative of each elected Government to follow its own policy. Often a change in Page 16 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined Government may result in the shift in focus or change in economic policies. Any such change may result in adversely affecting some vested interests. Unless any illegality is committed in the execution of the policy or the same is contrary to law or mala fide, a decision bringing about change cannot per se be interfered with by the court
96. Judicial interference by way of PIL is available if there is injury to public because of dereliction of constitutional or statutory obligations on the part of the Government. Here it is not so and in the sphere of economic policy or reform the court is not the appropriate forum. Every matter of public interest or curiosity cannot be the subject-matter of PIL. Courts are not intended to and nor should they conduct the administration of the country. Courts will interfere only if there is a clear violation of constitutional or statutory provisions or non- compliance by the State with its constitutional or statutory duties. None of these contingencies arise in this present case.
97. In the case of a policy decision on economic matters, the courts should be very circumspect in conducting any enquiry or investigation and must be most reluctant to impugn the judgment of the experts who may have arrived at a conclusion unless the court is satisfied that there is illegality in the decision itself."
4. Mr. Dipan Desai, learned Advocate appearing for the original petitioner, would take us initially through the provisions of Section 28 of the APMC Act. He would submit that in accordance with the provisions of Section 28 of the Act, irrespective of a market committee being a loss-making or otherwise, the power to levy cess is a statutory right and therefore, it cannot be restricted by virtue of a resolution dated 04.10.2019. He would further submit that Section 28A of the APMC Act provides for exemption of cess on a notification, which section is not applicable to the facts of the case Page 17 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined as there is no blanket exemption of cess that is sought, and the notification does not deal with such exemption notification. Mr.Desai would take us through the notification dated 01.02.2017 issued by the State Government and would submit that apart from the fact that the notification was issued with the concurrence of the Finance Department, reading of the notification would indicate that the notification applied to procurement of groundnut for the year 2016-17 where the government had agreed to bear APMC cess. The only modification is that by this notification, it canceled the notification dated 03.11.2016. He would, therefore, submit that the only difference was that the provision with regard to bearing of APMC cess and VAT, which was earlier to be reimbursed was cancelled inasmuch as the reimbursement of the APMC cess continued whereas that of VAT was removed.
4.1 Mr.Desai would submit that the learned Single Judge committed no error inasmuch as the prayer in the petition was for granting the benefit of cess for the year 2016-17 to 2019-20, the relief was only restricted to the year 2016-17 by the learned Single Judge.
4.2 Mr. Desai would also submit that once having agreed to pay APMC cess by virtue of the notification of 2017, 2 years down the line, the resolution could not restrict the same to the 44 loss- making APMCs only. He would also submit that once having acted on the promise of the State by virtue of the agreed principle in the notification of 2017 and having let go the cess amount and having not charged the cess amount on the promise that the State would reimburse the same, after 2 years passing another resolution, which did not apply to the petitioners and not granting the cess benefit to petitioner for the year, 2016-17 was contrary to the principles of legitimate expectation as well as promissory estoppel.
Page 18 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined 4.3 He would also submit that a specific assurance was given by the State by way of affidavit in an earlier litigation that the
State had agreed inasmuch as a proposal dated 04.07.2017 was made for paying market cess for the year 2016-17 to all APMCs and the department had also moved the Finance Department to grant permission for paying market cess of Rs. 18,00,00,000 (Rs.18.00 Crore) in the year 2017-18.
5. Having considered the submissions made by learned counsels for the respective parties and having perused the order of the learned Single Judge, we find that the provisions of Section 28 of the Act have been set out by the learned Single Judge, which is not being reproduced to avoid duplicity. However, reading the same would indicate that the market committee, subject to the provisions of rules and the maxima and the minima from time to time prescribe, levy and collect fees on the agricultural produce, bought or sold in the principal market area.
6. In this context, we need to appreciate the controversy at hand. Reading of the notification of 01.02.2017 issued by the State through the Agriculture and Cooperation Department indicates that in the scheme for procurement of groundnuts in the year 2016-17 as per the guidelines of the Government of India, the notification regarding bearing/ exempt State duties/taxes in respect of PSS of groundnut procurement in Gujarat State is required to be issued. The notification further reads that the government agrees for bearing APMC cess, i.e., 0.5%.
7. Therefore, when the notification of 2017 was issued, the State, in its wisdom, thought it fit, in spirit of the statutory provision under Section 28 of the Act, to reimburse the APMC market fee of 0.5%.
8. Subsequently, it appears that the State government, on Page 19 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined 04.10.2019, brought out a government resolution restricting the benefit of reimbursement of APMC cess for the years in question, i.e., the 2016-17, 2017-18 and 2018-19 only to the 44 loss-making APMCs listed with the resolution. It was this discrimination or deprivation of a promise made by the notification of 01.02.2017, which aggrieved the petitioner and compelled him to come to the court.
9. Perusal of the order of the learned Single Judge would indicate that reading of Section 28 of the Act together with the notification of 01.02.2017, the learned Single Judge found that it cannot be said that the government resolution dated 04.10.2019 issued by the State Government would in any manner restrict or limit the scope of the original petitioners' entitlement to the APMC cess, which the government had otherwise agreed to pay as far back in the year 2017.
10. Obviously, when entitlement to APMC cess was a statutory right governed under the provisions of Section 28 of the Act, it was not open for the State to make artificial distinction or draw a line to restrict the payment of APMC cess only to loss-making APMCs, i.e. 44 in number, two years after having so agreed in the year 2017 for APMC cess to be paid to all irrespective of a disqualification.
11. Learned counsel for the State would want us to agree with the submission that since this notification was under minimum support price system and was not one under the provisions of the APMC Act, the distinction made by the learned Single Judge was erroneous. We only note that this argument has to be noted and rejected.
12. Well recognized it is that the issuance of a notification for expressly empowering collection of APMC cess is a statutory right recognized under Section 28 of the APMC Act. Once that statutory Page 20 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024 NEUTRAL CITATION C/LPA/1616/2024 ORDER DATED: 26/11/2024 undefined right was available to the original petitioner, depriving him of the market cess, which it was entitled to, after the State having agreed to pay the same, especially, in light of an affidavit filed in the earlier round of litigation that a proposal had been moved and permission was taken to pay the market cess, was clearly a case where the State was bound not only by virtue of the principle of the promissory estoppel but also, the petitioner was entitled to the same on the grounds of legitimate expectation.
13. We have also further noted that the learned Single Judge has not entertained the relief qua the petitioner for the subsequent years, keeping in mind the fact that the notification dated 01.02.2017 applied was only for the year 2016-17 and that was the only basis of its entitlement.
14. For the reasons aforesaid, therefore, we find no reason to interfere with the order of the learned Single Judge, and the appeal is accordingly dismissed. The civil application is also disposed of accordingly.
(BIREN VAISHNAV, J) (MAULIK J.SHELAT,J) MOHD MONIS Page 21 of 21 Uploaded by MOHD MONIS(HC01900) on Wed Dec 04 2024 Downloaded on : Fri Dec 06 22:42:01 IST 2024