Calcutta High Court (Appellete Side)
Mr. Ashim Kumar Sarkar vs The State Of West Bengal on 20 May, 2016
Author: Sudip Ahluwalia
Bench: Sudip Ahluwalia
IN THE HIGH COURT AT CALCUTTA
(Criminal Revisional Jurisdiction)
Appellate Side
Present:
The Hon'ble Justice Sudip Ahluwalia
CRR 6 of 2010
Mr. Ashim Kumar Sarkar
Vs.
The State of West Bengal
For the Petitioner : Mr. Alok Kumar Mitra,
Mr. Kollol Kr. Basu,
Mr. Prasanta Bishal,
For the O.P. No. 2 : Mr. P.K. Roy
For the State : Mr. Amartya Ghosh
Heard On : 13-05-2016
Judgment On : 20-05-2016
SUDIP AHLUWALIA, J. -
A complaint was filed against the petitioners by the
Secretary/ Special Officer, Seoraphylly R.M.
Committee under Section 34 of the West Bengal
Agricultural Produce Marketing (Regulation) Act, 1972.
The allegation made therein was that accused persons
had been doing business of items of "agricultural
produce" within the meaning of Section 2 (1) (a) of the
said Act, for several years without any valid licence for
that purpose. They had thereby caused huge revenue
losses to the Government, which had become due to
the Market Committee in whose area the petitioners
were running business under the provision of the said
Act. It was further alleged that in spite of being notified
they took no steps to comply with the Rules of the said
Act.
2. The complaint after being filed in the Court of the
Learned Sub Divisional Judicial Magistrate (as it was
at that time) Srirampur subsequently came up before
the Court of the Learned Judicial Magistrate,
Srirampur, who passed the impugned order dated
16.10.2009 rejecting the application of the petitioners
for being discharged on the ground that they were not
dealing with any "Agricultural Produce" within the
meaning of Section 2 (1) (a).
3. On the other hand, their contention was that the
ingredients being used by them for the purpose of
manufacturing biscuits such has sugar, flour,
arrowroot etc. were being procured by them from
outside the market area and then producing the
distinct and separate finished product of "Biscuits"
which is not itself a agricultural product.
4. The question for determination before this Court now
is whether the learned court below was correct in
determining whether the petitioners are engaged in the
business of dealing with agricultural products within
the meaning of the relevant Section of the Act or not.
5. The substance of the petitioner's contention in this
regard is contained in paragraph -13 and 14 of the
revisional application which are set out below-
"13. Your petitioner states that the petition
of complaint does not contain any allegation
that the petitioner's company is carrying on
business within the market area of
respondent No. 2 for purchase, sell, storage,
preservation or processing of agricultural produce as prescribed under the said Act so as to attract the provisions to the business carried on by your petitioner's company.
14. Your petitioner further states that processing of raw materials is different from manufacturing of a new and distinctly separate Commercial Commodity under different name from the raw materials and/ or basic components. The manufacturing of biscuits have not been brought under and/ or covered by the scope and ambit of the said Act. The same is covered by the provisions of the Central Excise and Salt Act, 1952."
6. It is also their contention that they purchase the raw materials from outside the local limits of the jurisdiction of the complainant and after processing the same, they also do not sell any finished product within the said local area. The Licence for carrying on business under the West Bengal Agricultural Produce Marketing (Regulation) Act, 1972 is required under Section 13 which lays down-
"13. Licence - After six months from the declaration of any area as a market area, no person within the market area, carry on business or as a trade, commission agent, broker, weighman, mesurer, warehouseman or surveyor or sell or purchase agricultural produce, or engage in processing or preservation of agricultural produce, or set up, establish or continue a place for storage, sale or purchase of any agricultural produce, except, under and in accordance with the prescribed terms and conditions of a licence issued in this behalf by the market committee, notwithstanding anything contained in any other law for the time being in force and irrespective of any licence required and issued under any law for the time being in force:
Provided that nothing in this sub- section shall apply to any sale by a producer to his own produce, to retail sale and to purchase by an individual for his own consumption".
7. It is also alleged that the petitioners were carrying on such business without the requisite licence. The other facet of the offence imputed to them is avoidance of the levy of fees by the Market Committee, which is covered under Section 17, which reads as follows:
"17. Levy of fee by market committee - notwithstanding anything contained in the Bengal Finance (Sales Tax) Act, 1941 ( Ben. Act VI if 1941) or any other law relating to taxation of agricultural produce in force, the market area at a rate which shall not be more than two rupees per one hundred rupees of the amount for which the agricultural produce is sold, whether for cash or for deferred payment or for other valuable consideration, irrespective of the fact that the buyer of the produce is the Central Government or the State Government or an agent or undertaking of either of them or a corporation constituted under any law for the time being in force:
Provided that no fee shall be levied in the same market area, more than once, in relation to the same agricultural produce irrespective of the number of transactions.
Explanation - For the purpose of this sub-section all produce taken out, or proposed to be taken out, of a market area shall, unless the contrary is proved, be presumed to have been sold within such area".
8. In "Shree Renuka Sugars Limited & another vs. The State of West Bengal and Others" reported in AIR 2014 Calcutta 60, a Single Judge of this court had observed, inter alia-
"No State Government would be able to mandate that the sale and purchase of any imported agricultural produce is concluded in a market yard or a sub- market yard only. Just as any specified agricultural produce purchase outside a market area would not attract the levy of market fees if it is merely carried into the market area or transported through the market area, the import of an agricultural produce for use in course of any manufacturing process within the market area will not attract the levy of market fees under the Market Act covering the market area. That appears to be elementary".
9. Another Single Judge in "Aurangadabad Biri Merchants Association & Ors. vs. State of West Bengal & Ors." reported in 2015 (1) ICC 963 had observed inter alia:
"Accordingly neither "manufacturer" nor "processing for manufacture" do come under the purview of "agricultural produce".
Therefore, the manufacturers of "Biri" i.e the end product do not require to take license under Section 13 of the Act. Moreover, so long there would be no trade or business the question of taking license under Section 13 of the Act, or the necessity of payment of fee under Section 17 of the Act would not arise. Similarly, " storage" for manufacturing or incidental to manufacturing do not also attract either Section 13 or Section 17 of the Act. When "storage" or "processing" is an independent business the provisions under Sections 13 and 17 would apply".
10. It however transpires that both the above judgments have been appealed against on behalf of the State. MAT 1490 of 2013 is the Appeal against the decision in "Sri Renuka Sugar Ltd. and another"
(supra) while MAT 830 of 2014 is the Appeal admitted against the decision in "Aurangabad Bidi Merchant Association" (supra). Consequently both these Single Bench Judgments and Orders cannot be taken to be the final word on the subject. On the other hand certain decisions have been cited on behalf of the State to show that the petitioners are covered by the application of the W.B. Agricultural Produce Marketing (Regulation) Act, 1972.
11. In "The Howrah Zilla Regulated Market Committee & Anr. Vs. Saj Food Products Private Ltd. and Ors." (M.A.T. Nos. 1123/2013 with C.A.N. Nos. 1123-1124/2013) a Division Bench headed by the then Chief Justice, had in its detailed order passed on August 6, 2013 observed -
"The facts are common in both the appeals. They are being mentioned from M. A. T. 1123 of 2013 arising out of W. P. 20452 (W) of 2012, in which the respondents/writ petitioners have come up with the case that they are holders of the licence from Howrah Zilla Regulated Market Committee as a purchaser of agricultural produce, like flour, sugar, Vanaspati, skimmed milk, edible oil, cashew nut, spice etc. from various suppliers across the State of West Bengal and from various other States for the purpose of manufacturing bakery products, such as, biscuits etc., they are holder of licence under the provisions of the West Bengal Agricultural Marketing (Regulation) Act, 1972 (hereinafter referred to as the "Act") and West Bengal Agricultural Produce Marketing (Regulations) Rules, 1982 (hereinafter referred to as the 'Rules') and the bye-laws made thereunder.
It is the case set up by the petitioners that they cannot be treated as traders as defined in section 2(1)(t) of the Act. They were required to file fortnightly return by notice dated 23.5.2008. It is submitted that as per section 17(2) of the Act, only licensed trader has to deposit the market fee. Since they are involved in the business of manufacturing, marketing and selling of biscuits and other bakery products, no market fee can be levied from them. They cannot be termed as licensed traders. The order of assessment was passed demanding Rs.50,00,000/- of market fee from the petitioners on 12.9.2011. The market fee has been levied on the basis of purchases made by them. They are not liable to make payment under section 17A of the Act. The order of assessment has been questioned by way of filing the writ applications before the Single Bench. The Single Bench by the impugned order has granted interim stay on the levy of the market fee on the ground that prima facie a person has to both purchase and sell agricultural produce in course of such person's business for such person to be regarded as a trader within the meaning of Section 2(1) (t) of the Act and for the obligation to be fastened on such person under section 17A of the Act.
Aggrieved by the impugned order, the intra- court appeals have been preferred. It was submitted by Mr. Roy, learned counsel appearing on behalf of the appellants that similar impugned order has been set aside in other matters, where facts are more or less similar. It is not necessary to involve in selling and purchasing both of the agricultural produce so as to attracting levy of the market fee under section 17 of the Act. The market fee is not being levied upon finished products, but on the purchase of the agricultural produce within the market area for which the market committee is authorised. Various notifications have been issued by the market committee. As such, the order passed by the Single Bench staying recovery of market fee cannot be said to be in accordance with law and the same deserves to be set aside.
After hearing the learned counsel appearing on behalf of the parties, we are of the considered opinion that the case is more or less the same which we have dealt with in the previous decision passed in M.A.T. 1046 of 2013, M.A.T. 1047 of 2013 and M.A.T. 1048 of 2013 dated 29.7.2013, in which we have set aside the impugned order in three matters. In the instant case that decision is sought to be distinguished on the ground that the respondents/petitioners cannot be termed to be 'traders' as defined in section 2(1)(t) of the Act. When we consider the facts of the instant case, it is apparent that the respondents/petitioners are holders of licence issued under section 13 of the Act. Licence is necessary to be issued not only to a trader, commission agent, broker, weighman, measurer, warehouseman or surveyor, but also necessary for sale or purchase of agricultural produce and other matters as specified in section 13(1) of the Act. Thus, purchase by itself where person is trader, commission agent, broker, weighman, etc. of agricultural produce, it is necessary to hold a licence as specified in section 13 of the Act. Section 13(1) of the Act is quoted below:
"trader" means a person ordinarily engaged in the business of purchasing and selling agricultural produce as a principal or as a duly authorised agent of one or more principals and includes a person ordinarily engaged in the business or processing or preservation of agricultural produce." It is apparent that as provided, in the first part of Section 2(1) (t) of the Act, 'trader' means a person engaged in the business of purchasing and selling agricultural produce. However, in the latter portion, the definition has been made inclusive and specific, i. e., 'person ordinarily engaged in the business of or processing or preservation of agricultural produce' is also a 'trader'. When we consider 'includes a person ordinarily engaged in the business', it is apparent that the person who is ordinarily purchasing agricultural produce in huge quantity for commercial exploitation is definitely a person 'ordinarily engaged in the business of purchase' for the commercial purpose. Such a person, in our considered opinion, beyond an iota of doubt, is required to make payment of market fee and would be a 'trader'. When we consider the provisions contained in section 17 of the Act with respect to levy of the market fee, it is apparent that notwithstanding anything contained in the Bengal Finance (Sales Tax) Act, 1941 (Ben. Act VI of 1941) or any other law relating to taxation of agricultural produce in force, the market committee is empowered to levy fees on any agricultural produce "sold" in the market area. It is not in dispute that agricultural produce has been sold in the market area to the respondents and as per section 17(2) of the Act, it is the purchaser who is liable to make the payment of the market fee in the manner prescribed therein. Thus, prima facie the petitioners/respondents cannot escape the liability from making payment of the market fee.
The submission was raised that on biscuits and other manufactured bakery products no market fee can be levied. Such argument is fallacious on the face of it as no market fee can be levied on manufactured products. It is the market fee, which has been levied as apparent from the order of the assessment on the quantity of the purchases made of agricultural produce for commercial exploitation and on that basis the order has been based, which cannot be said to be violative of the provisions contained in section 17A of the Act nor it can be said that the market fee is being levied on a manufactured product.
We have dealt with the same order in other appeals decided on 29.7.2013 and we have not found any ground to grant stay. There should not normally be any interim stay on levy of market fee, recovery of tax etc. as recovery of market fee and tax cannot constitute irreparable injury. Thus, even otherwise, there is no justification to grant interim relief prayed for by the petitioners."
12. As there is a conflict of decisions regarding application of the Act to the manufacturer of any product created by processing of what is undoubtedly "Agricultural Produce" and it has also been observed in certain decisions that the Act applies in case of manufacturing of Biscuits as well as Bakery items, this Court finds no justification to allow the Revisional Application at this stage, considering that trial in the case has virtually not yet commenced.
13. For the above reasons the Revisional Application is dismissed and the Trial Court is directed to proceed with the pending complaint case in accordance with law. The petitioners shall however be at liberty to raise all points including maintainability before the learned Trial Court at the final stage of the arguments. Needless to mention, the Trial Court shall come to its independent final decision without being influenced by any observations in this judgement.
(Sudip Ahluwalia, J.)