Gujarat High Court
Agriculture Produce Market Committee, ... vs State Of Gujarat on 29 September, 2023
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 1504 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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AGRICULTURE PRODUCE MARKET COMMITTEE, VISAVADAR
Versus
STATE OF GUJARAT
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Appearance:
MR DIPEN DESAI(2481) for the Petitioner(s) No. 1
MR CP CHAMPANERI(5920) for the Respondent(s) No. 5
MR. BHARGAV V PANDYA(7103) for the Respondent(s) No. 6
N R MEHTA(7794) for the Respondent(s) No. 4
NOTICE SERVED BY DS for the Respondent(s) No. 1,2
SERVED BY RPAD (N) for the Respondent(s) No. 3
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 29/09/2023
CAV JUDGMENT
1. Heard learned advocate Mr. Dipen Desai for the petitioner, learned Assistant Page 1 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined Government Pleader Mr. Dhawan Jayswal for respondent Nos. 1 and 2-State, learned advocate Mr. Anand M. Ranpara for learned advocate Mr.C.P.Champaneri for respondent No.5 and learned advocate Mr.Bhargav Pandya for respondent No.6.
2. By this petition under Articles 226 of the Constitution of India, the petitioner has prayed for the following reliefs:
"A. This Hon'ble Court be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ, order or directions, quashing and setting aside the Resolution dated 04.10.2019 in so far as it does not include the petitioner market committee for payment of market cess for purchase of Groundnut (મગફળી), Pigeon Pea (તુવેર), Gram (ચણા), Green Gram (મગ), and Black Gram (અડદ) etc. under the price support scheme.Page 2 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023
NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined B. This Hon'ble Court be pleased to issue a writ of mandamus writ in the nature of mandamus or any other appropriate writ, order or directions, directing the respondent No.1-State Government to make payment of market cess to the tune of Rs. 98.65 Lacs payable to the petitioner for purchase of Groundnut (મગફળી), Pigeon Pea (તુવેર), Gram (ચણા), Green Gram (મગ), and Black Gram (અડદ) etc under the price support scheme for the year 2016-2017 to 2019-2020.
C. Pending admission, hearing and final disposal of the petition, this Hon'ble Court be pleased to direct the respondent No.1-State Government to make payment of market fees to the petitioner for purchase of Groundnut (મગફળી), Pigeon Pea (તુવેર), Gram (ચણા), Green Gram (મગ), and Black Gram(અડદ) etc. under the price support scheme for the year 2016-2017 to 2019-2020."
3. Brief facts of the case are as under:
3.1 The petitioner is Agriculture Produce Market Committee ['APMC' for Page 3 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined 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.
3.2 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.
3.3 Rule 48 of the Gujarat Agriculture Produce Markets Rules,1965 (For short 'the Page 4 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined 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.
3.4 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 bylaws. However, the petitioner-Market Committee continued to levy the market fees @ 0.5 paisa for Rs. 100 of purchase or sale.Page 5 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023
NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined 3.5 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 produce. 3.6 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 Page 6 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined Committee Federation of India [hereinafter to be referred to as 'NAFED'] as his agents who 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. Page 7 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023
NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined 3.7 The State Government, vide notification dated 01.02.2017, exempted the payment of tax of which/State 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.
3.8 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 purchased/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 Act read with Rule 48 of the Rules. However, the State Page 8 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined 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 the 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 Page 9 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined (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) 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 3.9 As per the above data, the total amount of market cess payable to the petitioner comes to Rs. 98.65 lakh.Page 10 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023
NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined 3.10 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.
3.11 Other Agriculture Produce Market Committees 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 Page 11 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined as per the averments made in the affidavit filed in those petitions admitting liability to pay market cess. 3.11 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 audit class 'D'.
3.12 The petitioner has therefore, preferred this petition with a prayer to quash and set aside the resolution dated Page 12 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined 04.10.2019 so far as it does not include the name of the petitioner-APMC for payment of market cess for purchase of agricultural produce under the Minimum Support Price Scheme.
4. Learned advocate Mr. Dipan Desai for the petitioner submitted that under section 28 of the Act read with Rule 48 of the Rule empowers the petitioner to collect the market cess and because of the Scheme of the Government for purchase of the market produce under the Minimum Support Price Scheme, the petitioner was not in position to collect the market cess from the buyer since the State Government agreed to bear the burden of payment of market cess by way of reimbursement @ 0.50 paisa per Rs. 100 for purchase and sale. Page 13 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023
NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined 4.1 It was submitted that as the State Government did not pay the market cess inspite of having purchased huge quantities of agricultural produce from the market areas of the petitioner-APMC, huge loss was caused to the petitioner which is the main income of the petitioner-APMC and petitioner was not able to pay salary of its staff and bear day-to-day expenses.
4.3 Learned advocate Mr. Desai referred to identical cases of other APMCs of Deodar to challenge resolution dated 04.10.2019 by way of Special Civil Application No. 20376/2019 wherein, this Court has also issued notice. It was further submitted that as per the notification dated 01.02.2007, the State Page 14 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined Government agreed to reimburse the market cess @ 0.5% for purchase of groundnut in the Price Support Scheme for the year 2016-17 and thereafter, vide Government Resolution dated 04.10.2019, the State Government agreed to pay market cess to 44 Market Committees enlisted in the table attached to the said resolution on all kinds of agricultural produce and not restricted to groundnut for the years 2016-17, 2017-2018 and 2018-2019. It was pointed out that the notification dated 01.02.2017 was not cancelled and continued to operate as far as the ground nut is concerned.
4.4 Learned advocate Mr. Desai submitted that thereafter, by Resolution dated 24.08.2020, the State Government Page 15 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined decided to pay market cess of all the market committees whether earning profit or not for groundnut for the years 2017- 18, 2018-19 and 2019-20. It was therefore, pointed out that the State Government resolution intentionally does not include the year 2016-17 because for the year 2016-17 notification dated 01.02.2017 was already issued and was in operation whereby the State Government agreed to bear the market cess for 2016-17. 4.5 Learned advocate Mr. Desai submitted that by Government Resolution dated 27.01.2021 it was decided by the State Government to recover the market cess paid to the APMC by State Government which were earning profits as in pursuance Page 16 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined to the decision taken by the State Government dated 04.10.2019 whereby the decision was taken to pay market cess by the State Government only for those APMCs, who were not earning profits. 4.6 Learned advocate Mr. Desai therefore, submitted so far as ground nut is concerned, the State Government is bound to pay the cess @ 0.5%. It was pointed out that the petitioner has been paid the amount of Rs. 72.90 lakh pursuant to the Resolution dated 24.08.2020 for purchase of the groundnut under the Minimum Support Price Scheme. However, payment of Rs. 12.24 lakh for purchase of groundnut for the year 2016-2017 and the amount of Rs. 9.48 lakh for purchase of groundnut for the year 2020-21 is still Page 17 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined outstanding and so far as the other agricultural products purchased on Minimum Support Price Scheme, an amount of approximate Rs. 24 lakh is outstanding to be paid by the State Government. 4.7 Learned advocate Mr. Desai submitted that the State Government has already taken the decision in concurrence with the Finance Department and thereafter, the notification dated 01.02.2017 was issued to bear the market cess @ 0.5% but the State Government is not complying with the notification dated 01.02.2017 by wrongly taking a stand that only the loss making or non-earning profits APMC would be entitled to market cess.
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NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined 4.8 Learned advocate Mr. Desai submitted that section 48 of the Act read with Rule 48 of the Rules entitles the Market Committee to recover the market fees from the buyer irrespective of whether the Market Committee is earning profit or not and because of the promise given by the State Government by notification dated 01.02.2017 prevented the petitioner-APMC did not charge market fees from the buyer. It was therefore submitted that the petitioner has suffered huge loss on account of non-reimbursement market fees by the State Government. 4.9 Learned advocate Mr. Desai relied upon the affidavit filed on behalf of the State Government before this Court in Special Civil Application No. 9664/2018 Page 19 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined wherein it is admitted that the State Government is liable to pay market fees to the APMCs and there was no reference to profit making or loss making APMCs. 4.10 It was therefore, submitted that the State Government is required to be directed to pay market cess to the petitioner as per the notification dated 01.02.2017 and 24.08.2020 at least on the purchase of the groundnut on Price Support Scheme and as far as remaining agricultural produces are concerned, if the State Government is not willing to make the payment of market fees to the petitioner, then appropriate direction may be issued to the respondent Nos. 3 to 6 to make the payment of market cess as per section 28 of the Act.
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5. On the other hand, learned AGP Mr. Dhwan Jayswal submitted that notification dated 01.02.2017 was issued by the Agriculture, Farmers Welfare and Cooperation Department, after cancellation of the earlier notification dated 03.11.2016 and after considering the guidelines issued by the Government of India in connection with bearing/exempt the state duties/taxes in respect of Price Support Scheme of groundnut in the State of Gujarat. It was submitted that by Government Resolution dated 04.10.2019, the State Government through Agriculture, Farmers Welfare and Cooperation Department resolved to pay market cess to 44 loss making APMCs of the State of Gujarat for purchase of groundnut and other pulses and while taking the policy decision vide Government Resolution Page 21 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined dated 04.10.2019, State Government had considered the proposal dated 20.03.2018 submitted by Director of Agriculture, Gujarat State for payment of market cess for purchase of groundnut and other pulses. It was therefore, submitted that the State Government has taken a policy decision in connection for bearing /exempt the state duties/tax in respect of Price Support Scheme in the State of Gujarat and after considering the factual possession, Government Resolution dated 04.10.2019 was issued wherein it is resolved to pay market cess for purchase of groundnut and other pulses for the years 2016-17 to 2018-19 to only 44 loss making APMCs of 'A', 'B', 'C' and 'D' category and apart from that no other APMC in the State of Gujarat was given such benefit. It was Page 22 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined submitted that the petitioner-APMC does not fall under the category of loss making APMC and therefore, benefit provided through GR dated 04.10.2019 was not extended to the petitioner-APMC. 5.1 It was submitted that the petitioner has been paid the market cess on grounding @ 0.5% in view of the Government Resolution dated 24.08.2020 for the years 2017-18 to 2019-20. It was also submitted that thereafter, vide Government Resolution dated 27.01.2021, the State Government had resolved that not to grant payment of market cess for other pulses other than groundnut which were covered under the previous Government Resolution dated 04.10.2019 and further resolved to recover the amount of payment of market Page 23 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined cess made other than groundnut to those 44-loss making APMCs.
5.3 It was further submitted that as per Government Resolution dated 24.08.2020 all the APMCs in the State of Gujarat were considered as equal so far as the payment of market cess @ 0.5% in respect of purchase of groundnut is concerned and benefit is extended for the years 2017-18 to 2019-20.
5.4 It was therefore submitted that the petitioner is not entitled to get the payment of the market cess @0.5% in respect of purchase of groundnut is concerned and the benefit is extended for the years 2017-18 to 2019-2020. Page 24 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023
NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined 5.5 It was therefore submitted that the petitioner is not entitled to get the payment of the market cess for the year 2016-17 in view of the policy decision taken by the State Government as the same is to be granted only qua the loss making APMC.
5.6 It was therefore submitted that the petition is not required to be entertained as the petitioner is not a loss making APMC and therefore, not entitled to the payment of market cess by the State Government in view of the Government Resolution dated 04.10.2019 which is a policy decision of the State Government.
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6. Learned advocate Mr. N.R.Mehta for Marketing Federation Limited [GUJCOMASOL], respondent No.4 has filed affidavit in reply through its Chief Executive Officer wherein it is stated as under:
"6. I say and submit that the Central Govt. introduced the policy of Price Support Scheme (PSS). The very purpose of introducing this Scheme was to protect the interest of the farmers. For the said Purpose, NAFED, i.e. the Respondent no. 3, has been appointed as the Central Nodal Agency.
7. The State Govt. has appointed the answering Respondent as the State Agency/State Level Supporter for implementing the Price Support Scheme Strictly, as per the PSS guidelines of the Government of India. Accordingly, Agreements have been entered into by and between NAFED, i.e. the Respondent no. 3 and the answering Respondent through which, the answering Respondent has agreed to act as a State Level Supporter for NAFED in the State of Gujarat on the terms and conditions as Page 26 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined mentioned in the said Agreement. The Copy of Such Agreement is annexed hereto and is marked as "ANNEXURE - RR1".
8. It is pertinent 9 note at this juncture that as per the said Agreements that have been executed between the parties wherein, the answering Respondent has agreed to act as a State Level Supporter for the Respondent No.3 for implementation of the Price Support Scheme, it has been specifically stated that there shall be an exemption from Mandli Tax/Levy etc. It has been agreed and mentioned in the Agreement that the SLS i.e. the answering Respondent will not pay and raise any bill on account of the state duties including mandli tax for procurement made under the PSS and in the event such taxes, if charges by the State/UT Govt, the same shall not be admissible/reimbursable to the State/UT Govt, the same shall not be admissible/reimbursable to the State/UT Govt and State/Procuring Agency.
9.I say that the "Price Support Scheme (PSS) Guidelines: The Operational Guidelines" also mention that the State/UT Govt. shall exempt all the state duties in respect to PSS operations in the interest of Page 27 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined its farmers and reduce the procurement cost and that these taxes, if charged by the State/UT Government, the same shall not be admissible/reimbursable by the DAC(Department of Agriculture and Cooperation of India) to the State/UT government and State/Procuring Agency. A copy of is marked as "ANNEXURE the said Policy is annexed hereto an ~RR2".
10. It is further submitted that In order to ensure implementation of the Price Support Scheme for which the answering Respondent has been appointed as the State Level Agency it enters into Agreement with the respective Mandali wherein also, the answering Respondent clearly states that it is acting as a Nodal Agency/ State Level Supporter for implementation of the price support scheme and that the payment of Market Cess etc. is not to be made by the answering respondent and the same is subject to the decision that may be taken by the Govt and/or NAFED, i.e. the Respondent No. 3. The copy of Such Agreement is annexed hereto and is marked as "ANNEXURE ~ RR3".
11. I say and submit that in view of such Agreement being Page 28 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined entered into by the answering Respondent and in view of the fact that the answering Respondent is merely acting as a State Level Agency for NAFED, i.e. the Respondent No. 3, to ensure the implementation of the Price Support Scheme introduced by the Central Govt, the answering Respondent is not liable or under obligation to pay any amounts towards cess/taxes, etc, to the petitioner.
12. I say and submit that in the Petition, the Petitioner at Pg No. 11, the Petitioner has mentioned the details of the agricultural produce purchased or procured under the Price Support Scheme from the Respondents No. 4 to 6, for the year 2016-2017 to 2019-2020 and has produced a Agency wise detailed table of the purchased agricultural produce at price support scheme. In the said Table, the petitioner has mentioned that for the year 2016- 2017, the petitioner has purchased Ground-Nut, Pigeon Pea & Gram. I say that the same is not true and is denied by me. In fact, from the answering Respondent, for the year 2016-17, the Petitioner has only purchased Gram and no Ground-Nut and Pigeon Pea has been purchased by the petitioner from the answering Respondent for the year 2016- 17, as mentioned in the said table and paragraph. The answering respondent Page 29 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined does not admit to pay any such alleged amount to the petitioner.
13. It is further submitted that the applicability of relevant section of the Act, as sought to be made by the Petitioner would at be strictly made applicable, inasmuch as, the transactions that has taken place between the parties Is with regard to the implementation and execution of the Price Support Scheme introduced by the Government and it is not the case that the Agriculture produce are bought or sold in the principle market yard for commercial transactions. Even otherwise, the state government is empowered by the Act to exempt in whole or in part any agricultural produce brought for sale or bought or sold in the market area specified, from the payment of market fee for such period as may be specified."
7. Company Secretary of respondent No.6 Gujarat State Civil Supply Corporation Limited has also filed affidavit-in-reply with following averments:
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NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined "6. I say and submit that, vide Government Resolution dated 04.10.2019 the State Government had taken a policy decision to pay market cess to 44 loss making APMC of the State of Gujarat for purchase of groundnut and other pulses and that decision was taken by considering the core issue of granting payment on the market cess. The very issue was reflected in the Notification dated 01.02.2017 and while taking policy decision on the aspect of said issue itself it was decided that the benefit of market cess at the rate of 0.5% is to be extended on purchase of groundnut and other pulses only to the loss making APMC's of the State of Gujarat.
7. I say and submit that, para 2.28 of the draft amendment of the petitioner wherein the petitioner submits that as far as groundnut is concerned, the State Government has specifically vide resolution dated 01.02.2017 and 24.08.2020 agreed to bear the market cess of all APMCs.
Therefore, the State Government be directed to make payment of market fees for the purchase of groundnut on price support scheme and as far as the remaining agriculture produces are concerned, if State Government is not willing to make the payment of market cess to the petitioner, then appropriate directions be issued that the respondent Nos. 3 to 6 shall make Page 31 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined the payment of market cess since as per Section 28 purchaser is liable to pay the market cess.
8.I say and submit that, the Price Support Scheme is of the Central Government and State Government, which is not in the purview of the office of the answering respondent. The Agriculture, Farmer Welfare and Cooperative Department had appointed the office of the answering respondent only as "Nodal Agency"
from last four years j.e. 2018-19 to 2021-22 where office of the answering respondent has directed to purchase groundnut and other pulses on price support scheme. It is further submitted that each year the State Government issues Government Resolution to appoint deponent office as a "Nodal Agency." The copies of government resolution are annexed herewith and marked as ANNEXURE R-I (Colly..}
9. I say and submit that, as per the Government Resolution process of purchase has been carried out by the office of the deponent with a co-
ordination of Director of
Agriculture, Respondent no.1 and
NAFED.
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10. I say and submit .that, -the central government introduced the policy of Price Support Scheme (PSS). The very purpose of introducing this scheme was to protect the interest of the farmers. For the said purpose, NAFED has been appointed as the central Nodal Agency. It is further submitted that every year Central Government fixed the price support scheme as per various commodities, and accordingly different commodities has been purchased from the farmers of the State of Gujarat. The respondent no.1 has always been provided the list of purchase centers, the quantity which is to be purchased from the farmers etc. and after getting such details/ direction by respondent no.1, according to the prescribed/ provided limits the answering respondent have to make a purchase.
11. I say and submit that, the "Price Support Scheme (PSS) introduced by Agriculture and Farmer Welfare Department, Central Government, New Delhi in October, 2018 the central government has been issued PM-AASHA Guidelines. Point No. B (ii) of the said guideline is to be looked in to, Hence same is mentioned as follows:
State/UT Govt. shall be exempt all State duties in respect of PSS Page 33 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined operations (Procurement/ Transportation/ Warehousing/ Sale etc.) in the interest of its farmers and to reduce the procurement costs. Further these taxes, if charged by the State/UT Government, shall not be admissible/ reimbursable to the State/ UT Government and State/ Procuring agency."
A copy of the said policy is annexed herewith and marked as ANNEXURE R-II.
12. I say and submit that, answering respondent has been appointed and acting as the Nodal Agency for implementation of the price support scheme and that the payment of Market Cess etc. is not to be made by the answering respondent and same is subject to the decision that may be taken by Government and/ or NAFED. Since the implementation of Price Support Scheme introduced by the Central Government, the office of the deponent is not at all liable or under an obligation to pay any amounts towards cess/ taxes, etc. to the petitioner.
13. I say and submit that, the applicability of Section 28 of the Act, as sought to be made by the petitioner would not be strictly made applicable, in as much as, the transaction (if any) that has taken Page 34 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined place between the parties is with regard to the implementation and execution of the Price Support Scheme introduced by the Government and it is not the case that Agriculture produce are brought or sold in the principle market yard for commercial transactions. Even otherwise, the State government is empowered by the Act to exempt in whole or in part any agricultural produce brought for sale or bought or sold in the market area specified, from the payment of market fee for such period as may be specified.
14. I say and submit that, as per above mentioned facts and circumstances, I humbly request to this Hon'ble court that the Hon'ble Court may not direct to the answering respondent to pay the cess and/or other taxes because the answering respondent has been appointed to work as Nodal Agency who has to only implement the Price Support Scheme as per the direction of the State Government. Therefore, Government and/or NAFED is the final authority who has to pay the market cess and/or other taxes."
8. Having heard learned advocate for the respective parties and having considered Page 35 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined the documents produced on record comprising of the notification dated 01.02.2017 and Government Resolution dated 04.10.2019, it appears that so far as procurement of groundnut is concerned, for the year 2016-17 as per the guidelines of Government of India, the State Government issued the notification dated 01.02.2017 bearing/exempt the state duties/taxes in respect of Price Support Scheme of the groundnut procurement in the Gujarat State and the Government agreed for bearing of APMC cess @ 0.5%. As per the said notification, the Government also agreed for exempt of VAT of 0.5% of purchase/procurement of groundnut under Price Support Scheme.
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9. The said notification dated 01.02.2017 was issued with concurrence of Finance Department and Government dated 26.01.2017 by the Agriculture, Farmers Welfare and Cooperation Department of the State of Gujarat.
10. As per the said notification, the petitioner is entitled to market cess @ 0.5% for the year 2016-17 for the procurement of the groundnut by the State Government under Price Support Scheme. The Government Resolution dated 04.10.2019, issued pursuant to the order passed in Special Civil Application No. 9664/2018 to pay the market cess on groundnut and all pulses to 44 loss-making APMCs is concerned, cannot be considered as policy decision of the State Government as the Page 37 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined notification dated 01.02.2017 is neither cancelled or modified and the same has remained in existence till date.
11. It also appears that the State Government, by notification dated 24.08.2020, has paid the market cess for procurement of the groundnut for the years 2017-18 to 2019-20 and therefore the denial of payment of market cess @ 0.5% for the procurement of the groundnut for the year 2016-17 is in violation of the notification dated 01.02.2017. The Government Resolution dated 04.10.2019 also covers the period from 2016-17 to 2018-19 for payment of market cess on groundnut and other pulses to 44 loss making APMCs but at the same time, previous notification dated 01.02.2017 and Government Resolution dated Page 38 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined 24.08.2020 applies to all APMCs so far as the market cess payable on the procurement of the groundnut under Price Support Scheme.
12. Section 28 of the Act provides for power of levy fees read as under:
"28. Power to levy fees.-[(1)]The market committee shall, subject to the provisions of the rules and the maxima and minima from time to time prescribe, levy and collect fees on the agricultural produce bought or sold in the principal market area:
Provided that the fees so levied may be collected by the market committee through such agents as it may appoint.
[(2) (a) The market fee specified in sub-section (1) shall not be levied for the second time in any market area from the buyer who is a processor, grader, packer, value addition centre or exporter of an agriculture produce and market fee has already been paid on that agricultural produce in any market and the information in this context has been furnished, as prescribed, by the person concerned that the Page 39 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined payment of market fee has already been paid on that agricultural produce in any market provided such proof as may be prescribed is furnished to the Director by the buyer who is doing processing, grading, packing, value addition or export within such period as may be prescribed by the Government.
(b) On the agricultural produce brought in the market area for commercial transaction or for processing, if the permit issued under clause (e) has not been submitted, the market fee shall be deposited by the buyer or processor, as the case may be, in the office of the market committee, within fourteen days but before sale or resale or processing or export outside the market area:
[Provided that in case any agricultural produce is found to have been processed, sold or resold or dispatched outside the principal market area without payment of market fee payable on such produce, the market fee or user charges shall be levied and recovered on five times the market value of the processed produce or value of the agricultural produce, as the case may be.Page 40 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023
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(c) The market fee shall be payable by the buyer of the agricultural produce and shall not be deducted from the price payable to the agriculturist seller:
Provided that where the buyer of a agricultural produce cannot be identified, all the fees shall be payable by the person who may have sold or brought the produce for sale in the market area:
Provided further that in case of commercial transactions between traders in the market area, the market fee shall be collected and paid by the seller.
(d) The market functionaries, as the market committee may by bye-
laws specify and in the case of market established under Chapter IVA of this Act as the Director may specify, shall maintain accounts relating to sale and purchase or processing or value addition in such manner as may be prescribed and submit to the market committee, the periodical returns, as may be prescribed.
(e) Any agricultural produce shall be removed out of the market area only in the manner and in accordance with the permit issued Page 41 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined in such form, as may be prescribed. The vehicle carrying agricultural produce shall be accompanied by such proofs as may be prescribed. Provided that the producer of the agricultural produce himself may remove the agricultural produce from one place to another without such permit.]"
13. Rule 48 provides for market fees and reads as under:
"48. Market fees (1) The market committee shall levy and collect fees on agricultural produce bought or sold In the market area at such areas as may be specified in the bye-laws subject to the following minima and maxima, viz.
(1) rates when levied advalorem shall not be less than (30] paise and shall not exceed (Rs. 2] per hundred rupees.
(2) rates when levied in respect of cattle, sheep or goat shall not be fess than [25] paise per animal and shall not exceed Rs. [4] per animal.Page 42 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023
NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined Explanation.-For the purposes of this rule a sale of agricultural produce shall be deemed to have taken place In a market area If It has been weighed or measured or surveyed or delivered in case of cattle In the market area for the purpose of sale; notwithstanding the fact that the property In the agricultural produce has by reason of such sale passed to a person in a place outside the market area."
14. On conjoint reading of both the provisions, it is clear that the petitioner-APMC is entitled to levy the market fees on the agricultural produce bought and sold in the market area at the rates specified in Rule 48 of the Rules. Hence, the State Government, by way of policy decision, cannot refuse to pay the market fees on the ground that the petitioner-APMC is not a loss making APMC. It also emerges from the record that as per the Government Resolution dated Page 43 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined 24.08.2020, the petitioner was paid the market fees on procurement of groundnut. Therefore, even if it is considered that the Government Resolution dated 04.10.2019 is a policy decision then also, as per the notification dated 01.02.2017, the petitioner is entitled to get market fees @ 0.5% on the groundnut procurement for the year 2016-17. The notification dated 01.02.2017 reads as under:
"NOTIFICATION GOVERNMENT OF GUJARAT AGRICULTURE AND COOPERATION DEPARTMENT SACHIVALAYA, GANDHINAGAR dated the 1st February,2017 Bearing/Exempt the State duties/taxes in respect of PSS of Groundnut in Gujarat State.
Assurance of a remunerative and stable price environment for growers/ farmers is the State very important for increasing agricultural production and productivity. The market price for agricultural produce many times tends to be unstable and volatile which may result into undue Page 44 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined losses to the growers and discourage adoption of the modern technology and required inputs.
The Government's price policy for agricultural commodities seeks to ensure "remunerative prices to the growers for their produce with a view to encourage higher investment and production and to safeguard the interest of consumers by making available supplies at reasonable prices with low cost of intermediation. The price policy also seeks to evolve a balanced and integrated price structure in the perspective of the overall needs of the economy.
Towards this end, the Government of India announces Minimum Support Prices (MSP) for major agricultural commodities each year in both Crop seasons after taking into account the recommendations of the Commission for Agricultural Costs and Prices (CACP).
In the scheme for the procurement of groundnut in the year of 2016-17 as per the guideline of GOI, the notification regarding bearing/exempt State duties/taxes in respect of PSS of Groundnut procurement in Gujarat State is required to be issued. Government agree for the bearing of APMC Cess i.e., 0.5%.
Government also agree for the exempt of VAT that i.e.5% (4% + 1%) on purchase Page 45 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined /procurement of Groundnuts under PSS. This should be reimbursed by NAFED to Government of Gujarat after selling the procured commodity.
This issue with the concurrence of Finance Department dated 7th January, 2017 and Government dated 26th January, 2017.
The Notification No, GH/KH/107/2016/C1S/ 102016/4015/K-7 dated 3rd November, 2016 is cancelled hereby.
By order and in the name of Governor of Gujarat, (Y.C.Pandya) Under Secretary Department of Agriculture and Cooperation Sachivalaya, Gandhinagar, Gujarat State"
15. From the above notification it is clear that the Government has agreed to bear the market fees for groundnut procurement @ 0.5% for the year 2016-17.
16. In view of the above facts emerging from the record and on application of the Page 46 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined notification dated 01.02.2017 read with Government Resolution dated 24.08.2020, the petitioner is entitled to receive the market fees @ 0.5% on the procurement of groundnut in the year 2016-17 to be paid by the respondent-State Government. The petition is accordingly partly allowed as so far as other pulses are concerned, the Government Resolution dated 04.10.2019 is made applicable to only loss making APMCs, which is policy decision and accordingly, the petitioner would not be entitled to get the market fees @ 0.5% on other pulses.
17. The respondents are accordingly directed to pay the market fees @0.5% on the groundnut procurement made from the petitioner-APMC by the respondent Nos. 4 Page 47 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023 NEUTRAL CITATION C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023 undefined to 6 for the year 2016-17 within a period of twelve weeks from the date of receipt of copy of this order. Rule is made absolute to the aforesaid extent.
(BHARGAV D. KARIA, J) JYOTI V. JANI Page 48 of 48 Downloaded on : Fri Sep 29 20:45:13 IST 2023