Punjab-Haryana High Court
Singla Cotton Ginning And Dal Factory vs State Of Haryana And Ors. on 13 March, 1997
Equivalent citations: (1998)118PLR623
JUDGMENT N.K. Aggarwal, J.
1. This is a petition under Articles 226 and 227 of the Constitution for quashing the appellate order passed by the Haryana State Agricultural Marketing Board (for short, 'the Board'), whereby imposition of market fee he has confirmed.
2. The petitioner-firm was a licensee under the Punjab Agricultural Produce Markets Act, 1961 (for short, 'the Act') and carried on business of cotton ginning and Dal factory inside the Market Committee area at Hissar. Records including the stock register of the petitioner-firm were inspected by the Senior Marketing Enforcement Officer for the period 1.10.1980 to 31.7.1981. On the basis of that inspection, the Administrator of the Market Committee passed the order dated 3.11.1981 imposing market fee amounting to Rs. 14,598/-.
3. The petitioner has challenged the levy of market fee primarily on the ground that no opportunity of hearing was afforded by the Administrator after the inspection had been made by the Senior Marketing Enforcement Officer. Since the petitioner was not allowed to lead evidence and to rebut the finding of the Inspecting Officer, it resulted in the failure of natural justice. The petitioner filed an appeal before the Chief Administrator of the Board but that came to be rejected, vide order dated 29.7.1982
4. The petitioner's second plea arises from the argument that the petitioner had purchased gram for processing the same into Dal and, therefore, it did not fall within the definition of 'manufacture'. Since it was not an activity of manufacture, it did not invite the levy of market fee within the meaning of Section 23 of the Act. No market fee is said to be lievable on gram brought into the market area for processing it into Dal. Gram was brought into the market area and was returned after converting it into Dal.
5. The respondents have, in a joint reply, controverted the petitioner's pleas both on the question of due opportunity of hearing and also on the Levi ability of the market fee on the processing of gram into Dal. It is pointed out that sufficient opportunity was given to produce the records but, since the petitioner did not succeed in controverting the finding of the Inspecting Officer, market fee was levied. It is stated that the petitioner had purchased gram from Ashok Kumar Ashwani Kumar, Delhi, and had also made purchases of gram in villages and thereafter brought the stock in trucks into the market area. The Inspecting Officer, in his report, gave the details of the stock purchased by the petitioner from the Delhi party and also gave the truck numbers and details of the quantities of gram brought into the factory from the villages. The value of the gram purchased from the Delhi party was Rs. 2,70,076/- besides the purchase of gram from villages for Rs. 4,59,853/-. The petitioner neither submitted the prescribed returns nor deposited the market fee. It is pointed out that market fee was leviable on any agricultural produce brought inside the notified market area. Market fee was actually levied on the produce of the gram and not on its processing.
6. Shri I.P.S. Doabia, learned counsel for the petitioner, has placed reliance on a decision of this Court in Parkash Woollen Industries, Panipat v. The State of Haryana and Ors., (1980)82 P.L.R. 54. It has been held therein that such dealers as convert gram into Dal would not be liable to pay market fee for bringing gram into market area, for conversion of gram into Dal does not amount to manufacturing of Dal from gram. Dal being a commodity is distinct from gram, and in common parlance also, Dal is not known as gram.
7. Section 23 of the Act empowers a Market Committee to levy, on ad valorem basis, fee on the agricultural produce bought or sold or brought for processing by dealers in the notified market area. Such a fee is leviable in respect of any transaction in which delivery of the agricultural produce bought or sold is actually made in the market area. The primary question which arises for consideration is whether the petitioner brought gram inside the market area for processing. As has been seen, this Court has in Parkash Woollen Industries (supra) held that gram brought into the market area for conversion into Dal did not amount to manufacturing. In this view of the matter, the petitioner is found to be not liable to market fee.
8. It has been argued on behalf of the respondents that the petition does not succeed either on the plea of lack of due opportunity of hearing or on the question that the agricultural produce was brought inside the market area not for manufacturing but for processing only. It is argued that sufficient opportunity was given and, therefore, the order cannot be challenged on that ground. It is also argued that, when agricultural produce is brought inside the market area and the weighment or delivery thereof actually takes place, the subject comes under the purview of market fee and the question of processing had no relevance
9. The petitioner has placed on record a circular letter dated 15.10.1981 issued by the Chief Administrator of the Board to all the Executive Officers-cum-Secretaries of the Market Committees. In the said tetter the Chief Administrator has referred to the decision dated 20.8.1979 in the case of Parkash Woollen Industries (supra) and has thereafter explained that the Act was amended so as to tide over the difficulties regarding the leviability of market fee on an agricultural produce brought into the market area for processing. At the end of the letter, it has been advised that processing fee is chargeable only on three agricultural produce, namely, paddy, cotton and groundnut. It is also explained in the said letter that further amendment of the Act is under consideration.
10. In view of this explanation and clarification, it appears necessary and expedient to refer the matter back to the Market Committee so that the question of leviability of market fee, in the light of amendment of law, if any, can be examined. Though the respondents have defended the action on the ground that sufficient opportunity of hearing was afforded to the petitioner before the levy of market fee, no material has been placed on record in that behalf.
11. In the result, the writ petition is disposed of with a direction to respondent No. 2 (Haryana State Agricultural Marketing Board) to decide the matter afresh after giving due opportunity of hearing to the petitioner and also after examining the question of leviability of market fee on the stock of gram brought by the petitioner inside the market area for the purposes of processing it into Dal in the light of the amendment of law, if any, whereby conversion of gram into Dal has been made subject to levy of market fee. The writ petition stands disposed of accordingly. No order as to costs.