Gujarat High Court
Agriculture vs State on 13 November, 2008
Author: Jayant Patel
Bench: Jayant Patel
Gujarat High Court Case Information System
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SCA/9705/2008 10/ 12 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 9705 of 2008
=========================================================
AGRICULTURE
PRODUCE MARKET COMMITTEE - VADODARA - Petitioner(s)
Versus
STATE
OF GUJARAT & 1 - Respondent(s)
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Appearance
:
MR
KG VAKHARIA WITH DILIP B RANA for
Petitioner(s) : 1,
MR PANDYA, AGP for Respondent(s) : 1,
NOTICE
SERVED BY DS for Respondent(s) : 1 - 2.
MR SN SHELAT WITH CHIRAG B
PATEL for Respondent(s) :
2,
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CORAM
:
HONOURABLE
MR.JUSTICE JAYANT PATEL
Date
: 13/11/2008
ORAL
ORDER
Heard Mr.Vakharia, learned Sr. Counsel with Mr.Rana for the petitioner, Mr.Pandya, learned AGP for the State and Mr.Shelat, learned Sr. Counsel with Mr.Patel for respondent No.2.
Prima facie it appears that the legal position can be said as continued until the provisions of the Act were not amended by Gujarat Act No.17 of 2007 and the rights of the parties could be said as governed by the decision of this Court in Letters Patent Appeal No.139 of 2006, which is, of course, the subject matter of SLP pending before the Supreme Court, wherein the leave has been granted by the Apex Court.
However, it is an admitted position that the Act has been amended and Section 28 has undergone a sea-change. Section 28 as it existed prior to the amendment was as under:-
28. The market committee shall, subject to the provisions of the rules and the maxima and minima from time to time proscribed levy and collect fees on the agricultural produce bought or sold in the market area:
Provided that the fees so levied may be collected by the market Committee through such agents as it may appoint.
Following is amendment in Section 28 of the Act.
Section 28 In the principle Act, Section 28 shall be renumbered as Sub-section (1) of that Section and after Sub-Section (1) as so renumbered, the following sub-section shall be added, namely;-
2(a) The market fees specified in sub-section (1) shall not be levied for the second time in any market area from the buyer who is a processor, grade, 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 payment of market fee has already been made in other 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 are for commercial transaction or for processing, if the permit issued under clause (e) has not been submitted, the market fees 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 market area without payment of market fee payable on such produce, the market fees shall be levied and recovered on five times the market value of the processed produced or value of the agriculture produce, as the case may be.
(c) The market fees shall be payable by the buyer of the agricultural produce and shall not be deducted from the price payable to the agriculturists 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 fees 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 IV A 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 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 agriculture produce from once place to another without such permit.
In light of the aforesaid amended provisions of Section 28, if the Scheme of the Rule 48 and more particularly Rule 48(2) is considered, it would be required for Rule Making Authority to amend the Rule. It is true that this Court while exercising the power may not direct for amendment of the Rules since it is a legislative action, but it can hardly be disputed that Rule, as may exist, cannot be permitted to travel beyond Section, which in the present case is amended provisions of Section 28(2) of the Act.
Section 28 as amended prima facie shows levying of market fees once and prohibits levying of market fees second time. Therefore, it cannot be said that there will be absolute exemption if a processor has imported the agriculture produce in the market area by purchasing the same from outside the market area no fees whatsoever shall be payable, but at the same time if he produces the proof showing that the fees was already paid, he would not be liable to pay the fees second time. It is the case of the market committee that respondent is a processor extracting castor oil from the castor, which is an agriculture produce, whereas the contention of respondent No.2 is that it is an industrial concern undertaking the manufacturing activity of castor oil.
Whether extraction of castor oil from the castor can be said as processing over the castor or the manufacturing activity can be concluded at the final disposal. However, as there is amendment in the Act and Rule 48(2) does not appear to be running in conformity with the provisions of Section, the matter deserves consideration.
Hence, Rule.
So far as the interim relief is concerned, it was contended on behalf of the respondent No.2 that there is a binding decision operating against the Market Committee in favour of the respondent No.2, whereby no fee is leviable. Therefore, the refund was ordered, which is, of course, the subject matter of the SLP before the Supreme Court. It was, therefore, submitted that even if it pertains to the calculation of the fees like other taxation or revenue matter, this Court may not direct for deposit of the amount or even furnishing of the security.
Whereas, on behalf of the Market Committee, it was submitted that if ultimately the petitioner succeeds, the question may arise for effecting the recovery and due to recession in the industry, it may be difficult for the Market Committee to recover the amount and, therefore, the Court may pass suitable directions for such purpose.
Hence, considering the facts and circumstances, it appears that if the payment of the Market Committee, if it is not made by the respondent No.2 of the principal amount under the bonafide belief that the decision is operating in their favour of this Court, at least it will not be a case for imposition of penalty. However, so far as the principal amount of market fee is concerned, suitable measures deserve to be ordered, so that in the event the petitioner succeeds, it may be in a position to realise the amount and things may not become irreversible. If respondent No.2 succeeds, it may get back the amount. But at the same time, as the question of interpretation of Rule 48(2) is to be finalized in light of the amendment under Section 28 unless such Rule is amended by the Rule Making Authority, pending the petition, it would be just and proper to balance the rights of both the sides, so as to control the situation at the ultimate outcome of the petition.
Hence, by interim order, it is directed as under:-
(a) The operation of the impugned order Annexure A passed by the State Government shall remain stayed with the further direction as under:-
(i) The Market Committee shall be in a position to enforce the principal amount of market fee from respondent No.2, unless the declaration is given by respondent No.2 with the proof of the market fee already paid of the agriculture produce brought into market area by purchasing the same from outside the market area.
(ii) The recovery of the aforesaid amount of market fee, as may be demanded by the Market Committee after deduction of the market fee already paid as per the declaration with the proof thereof, remain stayed on the following conditions:-
(1) Respondent No.2 deposits 30% of the outstanding market fees with the Market Committee and furnishes guarantee to the Market Committee, that they shall pay the amount with interest if ultimately it is decided that the amount of market fees is payable by them to the Market Committee and shall not transfer or alienate the immovable property of plant without leave of the Market Committee. The amount as may be deposited by respondent No.2 with the Market Committee shall be kept by the Market Committee in a separate bank account with the nationalized bank and shall not be utilized without leave of this Court, but it would be open to the Market Committee to invest the same in FDR with a nationalized Bank and the details thereof shall be produced in the record of this Court; OR (2) Respondent No.2 deposits 50% of the outstanding market fees with this Court and furnishes an undertaking before this Court for the remaining 50% of the amount to the effect that they shall pay up the remaining market fees with interest as and when it is so ordered by this Court. Such amount shall be invested, if deposited, by the Registrar in the FDR initially for a period of two years, renewable further with the State Bank of India, Gujarat High Court Branch, Ahmedabad.
(3) Respondent No.2 shall be at liberty to comply with either of the conditions within two months from the date of intimation and calculation of the Market Fees recoverable by the Market Committee from respondent No.2.
The aforesaid arrangement shall continue on regular basis at the end of every month for the agriculture produce of castor oil and the intimation shall be in each of next month and compliance thereof shall be within 30 days thereof.
The aforesaid interim order and the amount, if any, deposited or guarantee, if any, furnished or the undertaking shall be subject to final order, which may be passed by this Court in the present proceedings.
It is also observed and directed that it would be open to the petitioner to make representation to the State Government, which is Rule Making Authority, for amendment of the Rule 48 in light of the amended provisions of Section 28 of the Agriculture Produce Market Committee. If such representation is made, the pendency of this petition, shall not operate as a bar to the Rule Making Authority for bringing about amendment, as may be permissible in law.
It would be open to either side to move this Court for final hearing if the rules are amended or the matter before the Apex Court is finally decided, whichever is earlier.
13.11.2008 (Jayant Patel, J.) vinod Top