Bombay High Court
Kirana Grains And Edible Oils, ... vs State Of Maharashtra And Anr. on 19 December, 1985
Equivalent citations: 1986(2)BOMCR499
JUDGMENT V.A. Mohta, J.
1. Agriculture Produce Market Committee, Chandrapur, constituted under the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 (The Act) for the first time in the year 1981, started levying market fees on the goods imported within the area of the Market Committee on the importer at the point of their entry in the Market Committee. A registered association of the wholesale ad retail merchants carrying on business of grains and edible oil within the area of the Market Committee has by this petition challenged the validity of levy in its manner in respect of produce brought in the market area for sale. The only point that is pressed before us is whether such levy has any sanction in the provisions of the Act. Our answer is "No' for the following reasons.
2. Section 31 of the Act which gives the power to the Marketing Committee to levy fees reads as under :
"It shall be competent to a Market Committee to levy and collect fees in the prescribed manner at such rates as may be decided by it (but subject to the minimum and maximum rates which may be fixed by the State Government by notification in the Official Gazette in that behalf), from every purchaser of agricultural produce marketed in the market area :
Provided that, when any agricultural produce brought in any market area for the purpose of processing only or for export is not processing or exported there from within thirty days from the date of its arrival therein, it shall, until the contrary is proved, be presumed to have been marketed in the market area, and shall be liable for the levy of fees under this section, as if it had been so marketed.
Provided further that, no such fees shall be levied and collected in the same market area in relation to agricultural produce in respect of which fees under this section have already been levied and collected there in or in relation to declared agricultural produce purchased by persons engaged in industries carried on without the aid of any machinery or labour in any market area."
The Maharashtra Agricultural Produce Marketing (Regulation) Rules, 1967 (The Rules) framed under section 60 of the Act govern the manner of charging and recovering market fees and other charges. The relevant Rule 32 reads as under:
"32. Market fees---(1) A Market Committee may levy and collect fees on declared agricultural produce marketed in the market area on an ad valorem basis from the purchaser at such rates as may be specified in the bye-laws of the Committee, so, however, that such rates shall not be less than the minimum and more than the maximum rates notified by the State Government under section 31.
(2) The market fees---shall be paid by the purchaser immediately after weighment or measurement of the declared agricultural produce is done.
(3) A trader, commission agent, processor shall immediately on bringing any declared agricultural produce in any market area for the purpose processing or for export, as the case may be, make a declaration in Form 8.
(4) The fees on declared agricultural produce in respect of which a declaration has been made under sub-rule (3) and which becomes liable for the levy of fees under section 31 shall be calculated at the average market rate of the produce on the day on which the fees become due."
These provisions make it clear that the incidence of levy is the completed transaction of sale in the Market Committee and the liability is fastened on a purchaser of the produce and thus there is no warrant for charging levy on the importer and that too before the sale takes place.
3. Our attention is invited to the first proviso to section 31 in support of a proposition that the term 'purchaser' in the said section includes an importer who has purchased the produce from the area outside the Market Committee. It is difficult to accept this submission. Admittedly, we are not concerned with a situation contemplated under the first proviso namely, of a trader importing the produce for the purposes of processing only or for export and the processing or export is not done within 30 days. In such a situation presumption in favour of marketing arises and the fees can be levied on the basis of that presumption unless contrary is proved. Rule 32 prescribes a procedure a meet the situation contemplated under the first proviso. A trader, commission agent, or a processor is obliged to make a declaration in Form 8 immediately on bringing any declared agricultural produce in a market area. After a period of 30 days, the presumption is that the goods have been sold are neither exported nor processed. In a situation like this, quite obviously the purchaser cannot be located and hence statutory liability is filed on the person making the declaration. It is difficult to see how the said analogy can be applied to the main charging section in the face of the clarity of the language. It is difficult to accept the submissions that a trader is a purchaser of the goods though in the area outside the market area and hence as soon as such goods are imported in the area for purposes of marketing within the area, the levy is attracted. The manner of acquisition of the produce by an importer is a wholly irrelevant factor. Interpretation put forth for acceptance on behalf of the Committee misses the basis difference between levy of market fees and octroi duty. What the Committee is in fact doing is recovery of octroi duty in the name of market fees. Any genuine doubt about legislative intention is removed, on reading Rule 32(2). It is made amply clear that the incidence of levy is after the weighment or measurement of the produce. Rule reiterates that liability is of the purchaser.
4. In the case of Devendra Trading Company v. State of Maharashtra, 1974 Mh.L.J. 463 this very section fell for consideration. The following observations are to the point :
"The substantive part of section 31 of the Marketing Act lays down two things. It empowers the Committee to levy and collect fees from every purchaser and that purchaser must be a purchaser of agricultural produce marketed in the market area. Unless these two conditions are fulfilled no fees can be levied or collected by the market committee even though the goods may be marketed in the area. The fees are leviable only on the sale transaction of agricultural produce as defined in the Act read with schedule marketed in the market area and the liability for the payment of such fees is on the purchaser and not on the seller."
5. The case of Kewal Krishan v. State of Punjab, considered section 23 of the Punjab Agricultural Produce Markets Act which reads as under :
"A Committee shall, subject to such rules as may be made by the State Government in this behalf levy on ad valorem basis fees on the agricultural produce bought or sold by licensees in the notified market area at a rate not exceeding three rupees for every one hundred rupees:---
Provided that---
(a) no fee shall be leviable in respect of any transaction in which delivery of the agricultural produce bought or sold is not actually made; and
(b) a fee shall be leviable only on the parties to a transaction in which delivery is actually made."
Rule 29 of the Rules under the Punjab Act reads:
"Levy and collection of fees on the sale and purchase of agricultural produce.
(1) Under section 23 a Committee shall levy fees on the agricultural produce bought or sold by licensees in the notified market area at the rate to be fixed by the Board from time to time.
Provided that no such fees shall be levied on the same agricultural produce more than once in the same notified market area. A list of such fees shall be exhibited in some conspicuous place at the office of the Committee concerned----------------------
(2) The responsibility of paying the fees prescribed under sub-rule (1) shall be of the buyer and if he is not a licensee then of the seller, who may realise the same from the buyer. Such fees shall be leviable as soon as an agricultural produce is bought or sold by a licensee.
The above provisions seem to be in pari materia with the Act and Rules in paragraph ---, this is what Supreme Court has to say :
"It is further to be pointed our that the fee levied is not on the agricultural produce in the sense of imposing any kind of tax or duty on the agricultural produce. Nor is it a tax on the transaction of purchase or sale. The levy is an impost on the buyer of the agricultural produce in the market in relation to transactions of his purchase. The agriculturists are not required to share any portion of the burden of this fee. In case the buyer is not a licensee then the responsibility of paying the fees is of the seller who may realise the same from the buyer. But such a contingency, cannot arise in respect of the transactions of sale by an agriculturist of his agricultural produce in the market to a dealer who must be a licensee. Nor was any such eventuality occurring in any of the cases before us was brought to our notice, Probably such an alternative provision was meant to be made for outside buyers who are not licensees when they buy the agricultural produce from or through the licensees. Anyway we are not concerned with that question."
6. We now turn to the case of Ram Chandra Kailash Kumar & Co. v. State of U.P., . This case deals with the U.P. Krishi Utpadan Mandi Adhiniyam (25 of 1964). Rule 66 framed under the said Act read as under :---
"66 Market fees---Section 17(iii)-(1) The Market Committee shall have the power to levy and collect fees on the specified agricultural produce brought and sold in the Market Yards at such rates as may be specified in the bye-laws but not exceeding one-half of one percentage of the price of the specified agricultural produce:
Provided that the market fee shall be payable by the seller."
Here also though the liability is of the seller, the incidence of levy is the completed transaction of sale in the market area and not mere entry within the market area.
7. Our attention was invited to certain observations on the Subject of 'marketing" in the case of Chaware Oil Industries v. State of Maharashtra, Writ Petition No. 913 of 1983 and other connected matters, decided on 22nd and 23rd February, 1984 by the Court. We are unable to see how those observations can render any assistance in favour of the construction which the respondents want us to put on section 31.
8. The petition thus succeeds. The procedure adapted by respondent No. 2 in levying the market fees is struck down as null and void. Rule made absolute accordingly, however, with no order as to costs.
9. Necessary consequence of making the Rule absolute will be the direction to refund the market fees recovered from the members of petitioner---Association listed in Annexes A as per the undertaking given on behalf of respondent No. 2 to this Court dated 10th June, 1961. Refund be made within 2 months from today with interest at 9% per annum. Very fairly, the petitioner has stated that its members will have no objection to supply to the second respondent the details of the transactions after 1st April, 1981 to enable it to examine on which transaction levy as per law can be made and from whom.