Uttarakhand High Court
The Malt Company (India) Pvt. Ltd. And ... vs State Of Uttarakhand And Another on 17 April, 2012
Author: B.S.Verma
Bench: B.S.Verma
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Writ Petition (M/S) No. 664 of 2012.
The Malt Company (India) Pvt. Ltd. and another
...Petitioners.
Vs.
State of Uttarakhand and another.
...Respondents.
Mr.V.K.Kohli, Senior Advocate, with Mr. Ramesh Singh and Mr. H.M.Bhatia, Advocates, learned
counsel for the petitioners.
Mr. K.C.Tiwari, learned Brief Holder for the respondent No.1.
Mr. J.C.Belwal, Advocate, learned counsel for the respondent nos. 2 -Krishi Utpadan Mandi Samiti.
Date April 17, 2012.
Hon'ble B.S.Verma, J.
(Stay Application No. 3343 of 2012) Heard learned counsel for the parties.
By means of this writ petition, the petitioners have sought a writ in the nature of certiorari quashing the notice-cum-demand dated 21-1-2012 and have also challenged the vires of Section 27(c)(iii) of the Uttarakhand Agricultural Produce Marketing (Development & Regulation) Act, 2011 (for short the Act) read with Section 2(xx) of the Act.
According to the petitioners, the petitioner no.1 company is engaged in manufacturing of malt. The raw material required for the same is barley. The petitioners purchase the raw material from outside the State and the raw material is brought within the Mandi area for the purposes of manufacture of malt, therefore, the petitioners are not covered by the definition given under Section 27(c)(iii) of the Act and barley is not being stored for the purposes of sale. According to the petitioners, the petitioners are not undertaking any activity of sale of notified agricultural produce brought by them from outside the State and that the activity of storage and that of processing of the said agricultural produce which has been brought by the petitioners is not an activity in connection with or incidental to the sale of the said imported agricultural produce. According to the petitioners, the activity of storage and processing of the said agricultural produce is directly in connection with using the same as part of manufacturing process/activity of Malt in the 2 factory of the petitioners, which is located within the present market area.
Learned counsel for the petitioners in support of his contention has placed reliance upon the judgment rendered by the Apex Court in the case of Edward Keventer Pvt. Ltd. Vs. Bihar State Agricultural Marketing Board and others [(2000) 6 Supreme Court Cases, 264], wherein the Apex Court in paragraph no.5 has inter alia held that "...It is true that "Frooti" and "Appy" are manufactured out of mango pulp and apple concentrate, but after the mango pulp and apple concentrate are processed and beverages are manufactured, the products become entirely different items and the fruits, mango and apple, lose their identity. In common parlance, these beverages are no longer known as mango and apple or as fruits. In other words, after processing mango pulp and apple concentrate, although the basic character of the mango pulp and apple concentrate may be present in beverages, but the end products are not fruits i.e. mango and apple which are specified in the Schedule."
In the case before the Apex Court, the appellant company was engaged in manufacture of fruit drinks and was marketing it under the brand names of "Frooti" and "Appy" in the State of Bihar. In paragraph no.8 of the judgment it has been held that the products "Frooti" and "Appy" not being specified in the Schedule, the respondent had no authority to demand any fee from the appellant on marketing the said products.
Learned counsel for the petitioners has further relied upon the judgment of the Apex Court in the case of Orient Paper & Industries Ltd. Vs. State of M.P. and others [(2006) 12 Supreme Court Cases, 468], wherein the Apex Court has dealt with the definition of the words "market fee" and "processing" and it has been held in paragraph no. 22 that when after the notified agricultural produce is brought within the State into the market area from outside the State and in case the same must be used for processing and the end-user is manufacture, the levy of market fee is not attracted.
3In the case at hand, the stand of the petitioners is that the barley is brought from outside the State into the market-area and the same is used for processing and the end-user is "malt".
Learned counsel for the respondent no.2 has stated that the agricultural produce, i.e. barley, which is being used by the petitioners to manufacture "malt" does not lose its character and that remains an agricultural produce.
Learned counsel for the Mandi Samiti Mr. J.C.Belwal, Advocate, has also raised a preliminary objection that there is an alternate remedy under Section 28 of the Act to file an appeal before the Managing Director therefore, the writ petition is not maintainable.
There is no dispute that there exists a provision of appeal under Section 28 of the Act, but before relegating the matter to the appellate authority, this is to be verified whether the petitioners are engaged in the work of sale, storage, processing or transaction and the above facts can be verified by filing counter affidavit by the respondent Mandi Samiti.
Having heard the submissions of the learned counsel for the parties, prima facie it is obvious that in the case at hand, the barley which is being brought by the petitioners from outside the State is being used in the manufacturing process and the end product is "malt".
As an interim measure, till the next date of listing, no coercive steps for recovery pursuant to the impugned notice shall be taken against the petitioners. (The stay application is disposed of.) Two weeks' time is allowed to the respondents to file counter affidavit. The petitioner is granted one week's time thereafter to file rejoinder affidavit.
List this petition on 8-5-2012 for admission/orders in the daily cause list.
(B.S.Verma,J.) RCP