Bombay High Court
Chhotabhai Jethabhai Patel And Company vs Agricultural Produce Market Committee ... on 18 July, 1991
Equivalent citations: (1991)93BOMLR337
JUDGMENT M.M. Qazi, J.
1. Since common question of fact and law is involved in all these petitions. they are being disposed of by this common judgment.
2. The petitioner is a firm carrying on its business in manufacturing Bidis and has its branches throughout India, including Maharashtra as also the district of Bhandara. For the purposes of its business of manufacturing Bidis the petitioner requires raw materials including tobacco and bidi leaves which are purchased by the petitioner mostly from outside the Maharashtra and mainly from Gujarat and Karnataka. The tobacco is purchased from different merchants from Gujarat and Karnataka and for the purposes of transporting the tobacco from various places in different States to Gondia and other branches and also for consuming the same, the petitioner obtained permits from the Excise Department from time to time as and when required. The petitioner has one of its branch offices at Gondia and tobacco is purchased by the petitioner from places outside the jurisdiction of respondent No. 1 Agricultural Produce Market Committee. Gondia (hereinafter referred to as 'the A.P.M.C., Gondia').
2A. Section 31 of the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 (hereinafter referred to as 'the A.P.M.C. Act') deals with the power of Market Committee to levy fees. It reads as under:
31 (1) 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 purposes of processing only or for export is not processed or exported therefrom 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 has 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 therein or in relation to declared agricultural produce purchased by person engaged in industries carried on without the aid of any machinery or labour in any market area.
xx xx xx xx xx Section 2(1)(a) of the A.P.M.C. Act defines agricultural produce as under:
(a) 'agricultural produce' means all produce whether processed or not of agriculture, horticulture, animal husbandry, agriculture, pisciculture and forest specified in the Schedule.
The Schedule to A.P.M.C. Act under Section 2(1)(a) and Section 62 gives the items of agricultural produce which attracts the levy of fees by the Market Committee under Section 31. Tobacco is listed as an item in category V of the Schedule to the A.P.M.C. Act.
3. The Parliament enacted the Tobacco Board Act, 1975 (4 of 1975). This Act is enacted to provide for the development, under the control of the Union, of the tobacco industry. This Act came into force in the State of Maharashtra with effect from 31st May 1980. This Act is enacted by the Parliament under Article 246 of the Constitution as the Tobacco Board Act deals with matters covered by Entry 52 of List I (Union List). Entry 52 runs as under:
Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest.
Section 2 of the Tobacco Board Act, 1975, reads as under:
It is hereby declared that it is expedient in the public interest that the Union should take under its control the tobacco industry.
4. Mr. Chandurkar appearing on behalf of the petitioner has submitted that the State of Maharashtra has no jurisdiction to levy market fee in respect of tobacco because that directly conflicts with the Tobacco Board Act, 1975. The State Legislature has enacted the A.P.M.C. Act under Entry 28, List 11 (State List), which deals with 'market and fairs'. In view of this, Mr. Chandurkar contended that the item of tobacco in the A.P.M.C. Act is unconstitutional after the commencement of the Tobacco Board Act, 1975, on 31.5.1980 and therefore, deserves to be struck down.
5. Mr. Chandurkar has submitted that the issue which arises in the present petition is fully covered by the decision in 1985 SCC 476 Suppl. I.T.C Ltd and Ors. v. State of Karnataka and Ors. In fact, all these petitions are based on this decision. After going through the above decision, we are satisfied that the issue that arises in these petitions is fully covered by this decision.
6. Mr. Palshikar appearing on behalf of the A.P.M.C., Gondia, however, has submitted that the above decision of the Supreme Court (Majority view) has not taken into consideration several aspects and has not considered various provisions of the two enactments and consequently he prayed for dismissal of the petitions. The substance of his argument is that the A.P.M.C. Act aims at regulating the marketing of agricultural produce to prevent the exploitation of the agriculturists from the middlemen. He has further submitted that the fee is claimed by the Market Committee for the service it renders in the market yard, whereas the object of the Tobacco Board Act, 1975, is to control and regulate the tobacco industry and for that purpose various provisions are laid down. Section 31 of the Tobacco Board Act 1975, lays down that the provisions of this Act are in addition to, and not in derogation of, the provisions of any other law for the time being in force. On the basis of this, he argued that the intention of the legislature is that the provisions of the Tobacco Board Act and other State Laws can co-exist and there is no question of repugnancy. According to him, Entry 52 of the Union List, under which the Tobacco Board Act, 1975, is enacted, relates to industries the control of which by the Union is declared by the Parliament by law to be expedient in the public interest. For such control to be effectively exercised the law may provide for production, marketing and other ancillary provisions which may be analogous to State laws, but, according to him, the main object remains to be the control of industries. Thus, he contended that there is no repugnancy between the two enactments and consequently the question of striking down the item of tobacco in the A.P.M.C. Act as unconstitutional and ultra vires does not arise.
7. We do not think it is possible for us to consider the aforesaid challenges raised by Mr. Palshikar since the matter is fully covered by the decision of the Supreme Court. In the decision B.M. Lakhani v. Malkapur Municipality, Their Lordships have said that the decision of the Supreme Court is binding on the High Court under Article 141 of the Constitution and it cannot be ignored on the ground that relevant provision was not brought to the notice of the Supreme Court. Their Lordships have observed in paras 3 and 4 as under:
3. Two questions fall to be determined in this appeal-(1) whether a suit for refund of tax paid to the Municipality is maintainable; and (2) if the suit is maintainable, whether the levy of tax by the Municipality was valid in law.
4. The first question is concluded by the judgment of this Court in Bharat Kala Bhandar's case :
That case arose under the C.P. and Berar Municipalities Act, 1922. The right of a Municipality governed by that Act to levy under Section 66(1)(b) a tax on bales of cotton ginned at the prescribed rate was challenged by a tax-payer. This Court held that levy of tax on cotton ginned by the tax-payer in excess of the amount prescribed by Article 276 of the Constitution was invalid, and since the Municipality had no authority to levy the tax in excess of the rate permitted by the Constitution, the assessment proceedings levying tax in excess of the permissible limit were invalid, and a suit for refund of tax in excess of the amount permitted by Article 276 was maintainable. The decision was binding on the High Court and the High Court could not ignore it because they thought that "relevant provisions were not brought to the notice of the Court."
In view of this decision, we do not think it is possible for us to take into consideration the challenges raised by Mr. Palshikar.
8. His Lordship Justice Fazal Ali, who delivered the majority judgment 1985 SCC 476 Suppl. (cited supra), observed as under:
Once the Centre takes over an industry under Entry 52 of List I and passes an Act to regulate the legislation, the State Legislature ceases to have any jurisdiction to legislate in that field and if it does so, that legislation would be ultra vires the powers of the State Legislature. Therefore, the State of Karnataka had no jurisdiction to levy market fee in respect of tobacco because that directly collides with the Tobacco Board Act, 1975. Therefore, that part of the Karnataka Act must be struck down which takes in itself the power to levy market fee on tobacco or its products.
In view of the above finding, the Supreme Court struck down that part of the Karnataka Act, which took in itself the power to levy market fee on tobacco and its products.
9. We have already observed above that the Supreme Court decision (referred supra) applies to our cases on all fours. Even Mr. Palshikar in all fairness has not disputed that position. His only challenge is that the Supreme Court has not taken into consideration various aspects and hence we would be justified in ignoring that decision. This challenge has no substance. The decision of the Supreme Court is a law binding on all Courts in view of Article 141 of the Constitution. It would be presumed that while laying down the law the Supreme Court must have taken into consideration every conceivable aspect and even this aspect is no more res integra as shown above. Having regard to these facts, we are satisfied that the item 'tobacco' in the Schedule to the A.P.M.C. Act is repugnant to the Tobacco Board Act, 1975, and therefore, we hold the entry of the said item 'tobacco' void and inoperative with effect from 31.5.1980 i.e. the date on which the Tobacco Board Act, 1975, came into force in the State of Maharashtra. We accordingly quash the impugned letter dated 4.3.1986 issued by the Secretary, A.P.M.C, Gondia to the petitioners. All the petitions are allowed and rule made absolute in the above terms.