M/S Three Star Fruit Company Thru. Proprietor Umar Farooque vs State Of U.P. Thru. Prin. Secy. Krishi Vipran Evam Krishi Videsh Vyapar Lko And 3 Others

A.F.R.
Reserved on 19.08.2026
Delivered on 12.11.2026
HIGH COURT OF JUDICATURE AT ALLAHABAD
LUCKNOW
WRIT - C No. - 4780 of 2025
M/s Three Star Fruit Company Thru. Proprietor Umar Farooque
…..Petitioner(s)
Versus
State of U.P. Thru. Prin. Secy. Krishi Vipran Evam Krishi Videsh Vyapar
Lko and 3 others
…..Respondent(s)
Counsel for Petitioner(s) : Deepanshu Dass, Lalta Prasad Misra
Counsel for Respondent(s) : C.S.C., Aditya Mohan, Dr. V. K.
Singh, Naresh Chandra Mehrotra,
Surendra Kumar Singh
Court No. - 5
HON'BLE ALOK MATHUR, J.
HON'BLE AMITABH KUMAR RAI, J.
(Delivered by Hon’ble Amitabh Kumar Rai,J.)
1. Heard Shri Deepanshu Dass, learned counsel for the petitioner,
Shri Anuj Kudesia, learned Additional Advocate General assisted by Shri
Nishant Shukla, learned counsel on behalf of State-respondent No.1 and
Dr. V. K. Singh assisted by Shri Surendra Kumar Singh, learned counsel
appearing on behalf of respondent Nos.2 to 4-Rajya Krishi Utpadan
Mandi Parishad, Lucknow.
2. This writ petition has been filed by the petitioner seeking
following main reliefs :
“(a) Issue a writ, order or directions in the
nature of Mandamus directing the opposite
parties to permit the Entry and Trading of

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Fresh or Green Coconut within the Mandi
Sthal.
(b) Issue an order of appropriate nature
holding the amendment dated 30.01.1995
whereby Coconut has been entered into the
“Schedule” of the Uttar Pradesh Krishi
Utpadan Mandi Adhiniyam, 1964 under
Header “A Agriculture” and Sub Heading
“III Oilseeds” at Serioa No.11 as Ultra Vires
and further to direct for its entry under
Header “B. Horticulture” and sub Heading
“II. Fruits”.
3. It has been submitted by learned counsel for the petitioner that the
respondents are restraining the petitioner from bringing in and trading in
the agricultural produce, namely, green coconut at Navin Phal Sabzi
Mandi Sthal, Sahibabad (Ghaziabad) in violation of the provisions of the
U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (hereinafter referred to as
the “Act, 1964”).
4. The grievance of the petitioner stems from the notification dated
30.01.1995 issued under Section 4-A of the Act, 1964, whereby coconut
was included in the “Schedule” to the Act, 1964 under the heading “A-
Agriculture” and Sub-heading “III-Oilseeds” at Serial No.11
disregarding the settled botanical definition of the term “coconut”,
according to which coconut is not an oilseed but a fruit and therefore,
ought to have been placed under the heading “B-Horticulture” and sub-
heading “II-Fruits”.
5. It has been submitted by learned counsel for the petitioner that the
petitioner is a wholesale trader in fruits and vegetables and has been
issued a licence by the Krishi Utpadan Mandi Samiti, Sahibabad,
Ghaziabad. The petitioner has been trading in fruits and vegetables under
the licence granted by the Mandi Samiti since 2003.
6. I t has further been submitted by learned counsel for the petitioner
that since 2003, when the petitioner commenced trading and was granted

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a licence by the Mandi Samiti, he had been permitted to trade in
coconuts at the Mandi Yard and there was no prohibition on the entry of
coconut into the Fruit and Vegetable Market Yard.
7. It has also been submitted that vide notification dated 08.05.1996
issued under Section 8 (1) (a) of the Act, 1964, Mandi Fee (Market Fee)
was levied on coconut. However, the Director, Mandi Parishad, vide
order dated 27.07.1996, clarified that taking into consideration
representation of traders pending decision by State Government the
mandi fee may be charged only on raw coconut ( ) and not on
कच्चा नारियल
dry coconuts ( ). Subsequently, vide Government Order dated
सूखे गरी गोले
02.07.2003 and the consequential order dated 09.07.2003 issued by the
Mandi Parishad, the levy of Mandi Fee on coconut was discontinued
altogether.
8. It has been submitted that there was no prohibition on trading in
coconut at Navin Phal Sabzi Mandi Sthal, Sahibabad (Ghaziabad) at any
point of time. However, subsequently, after the year 2020, the User
Charge regime was introduced under Section 17(iii)(c) of the Act, 1964
vide notification dated 11.05.2020 and in pursuance thereof State
Government issued order dated 12.05.2020 allowing trading in 46
commodities in market yards which have been de-notified on payment of
“User Charge”. The said notification dated 11.05.2020 provided for the
trading of “non-specified” agricultural produce, such as cereals,
legumes, oilseeds, fibres, narcotics, spices, horticultural produce
including vegetables and fruits, viticultural produce etc. brought to the
market for sale upon payment of User Charges. It has been submitted by
learned counsel for the petitioner that vide another notification dated
17.09.2021, 46 items were further de-notified as “non-specified”
agricultural produce, which included coconut.
9. The grievance of the petitioner is that following the aforesaid
developments and the introduction of the User Charge regime, the
petitioner is now being restrained from trading in coconuts on the ground
that coconut falls within the category of oilseeds and therefore, cannot
be traded in the Fruit and Vegetable Market Yard, namely, Navin Phal

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Sabzi Mandi Sthal, Sahibabad (Ghaziabad) as the petitioner's licence
permits it to trade in fruits and vegetables. The petitioner has challenged
the action of the respondents in restraining it from trading in coconut
despite having been permitted to do so under the same licence since
2003 on the following grounds:
(a) There was no order passed by the competent authority prohibiting the
entry of or trading in coconut at Mandi Sthal, Sahibabad. An oral or
informal direction issued by the Mandi staff cannot substitute for the
statutory exercise of power.
(b) The amendment dated 30.01.1995 brought coconut within the
Schedule to the Act, 1964. The subsequent notification dated 08.05.1996
provided for the levy of Mandi Fee while the order dated 27.07.1996
specifically dealt with green coconut. These measures are inconsistent
with the proposition that the coconut was never intended to be traded
within the regulated Mandi framework.
(c) The Government Order dated 02.07.2003 and the consequential
directions issued by the Mandi Parishad on 09.07.2003 discontinued the
levy of Mandi Fee on coconut. However, these orders neither removed
coconut from the Schedule to the Act, 1964 nor prohibited their trade at
the Mandi Sthal. Therefore, the discontinuance of levy of market fee
cannot be construed as an implied prohibition on the underlying trade.
(d) Subsequent to the amendments to the Mandi Adhiniyam and the
Mandi Rules, Section 17(iii)(c) of the Act and Rule 66-A of the Rules
respectively provided for the trading of “non-specified” agricultural
produce, such as cereals, legumes, oilseeds, fibres, narcotics, spices,
horticultural produce including vegetables and fruits, viticultural
produce etc. subject to payment of the prescribed User Charge.
Thereafter, vide Government Order dated 17.09.2021, the State
Government identified “non-specified” agricultural produce for the levy
of User Charge and included coconut under the category of oilseeds. The
Mandi Parishad also issued directions for the levy of User Charge. Thus,
the regulatory framework contemplated the lawful movement and
trading of such agricultural produce, subject to payment of the

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WRIC No. - 4780 of 2025
prescribed charge. The petitioner is not seeking exemption from the
statutory dues but merely seeks permission to trade in coconuts.
(e) Coconut was being traded at other Mandi Sthals in Uttar Pradesh,
however, the petitioner was restrained from doing so at Sahibabad. If the
same produce was permitted to be traded elsewhere under the same
regulatory framework upon payment of User Charge and issuance of
entry slips, the selective prohibition imposed at Sahibabad without any
disclosed lawful basis, warrants judicial scrutiny under Article 14 of the
Constitution of India.
(f) T he petitioner has been carrying on the said trade for a considerable
period and the restriction on the entry of coconuts has resulted in a loss
of business and income. The said restriction, therefore, has a direct
bearing on the petitioner's right to carry on his lawful occupation or
business under Article 19(1)(g) of the Constitution of India subject of
course, to reasonable restrictions authorised by law.
(g) The amendment dated 30.01.1995 placing coconut under the
category of “Agriculture-Oilseeds” is wholly misconceived and arbitrary.
Coconut particularly fresh or green coconut is commercially and
botanically regarded as a fruit and horticultural produce. The said
classification, therefore, requires consideration in light of the nature of
the produce and the consequences arising from such classification.
(h) T he cumulative effect of the statutory history, the User Charge
regime, the past practice, the representations made by the petitioner and
the differential treatment meted out to the petitioner demonstrates that
the impugned action of the opposite parties constitutes an arbitrary
restriction. The petitioner ought, therefore, to be permitted to bring in
and trade in fresh/green coconut subject to compliance with the
provisions of the Mandi Adhiniyam, the Rules framed thereunder and the
applicable User Charge requirements.
10. In support of his aforesaid submissions, learned counsel for the
petitioner has relied upon following judgments :
(a) Continental Seeds and Chemicals Ltd. v. Director, Mandi
Parishad, U.P., Lucknow reported in 1988 SCC OnLine 606 in which

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WRIC No. - 4780 of 2025
a Division Bench of this Court has held that the Schedule, divides
produce into categories and an item cannot be subjected to levy merely
by an expansive interpretation when it is not included in the Schedule in
the requisite form.
(b) State of Rajasthan v. Rajasthan Agricultural Input Dealers
Association reported in (1996) 5 SCC 479 in which Hon’ble Supreme
Court has stressed that entries in a market-law Schedule cannot
automatically be enlarged to cover distinct products or derivatives and
that where separate products are intended to be included, the Schedule
should say so expressly. This supports a close examination of the exact
statutory entry and the commodity actually traded.
(c) Shayara Bano v. Union of India reported in (2017) 9 SCC 1 in
which a Constitution Bench of the Hon'ble Supreme Court recognised
manifest arbitrariness as a ground for invalidating legislation under
Article 14 in following words- "Manifest arbitrariness, therefore, must
be something done by the legislature capriciously, irrationally and/or
without adequate determining principle. Also, when something is done
which is excessive and disproportionate, such legislation would be
manifestly arbitrary. We are, therefore, of the view that arbitrariness in
the sense of manifest arbitrariness as pointed out by us above would
apply to negate legislation as well under Article 14."
(d) Nikesh Tarachand Shah v. Union of India reported in (2018) 11
SCC 1 in which Hon’ble Supreme Court reiterated that manifest
arbitrariness can invalidate legislation under Article 14 and explained
that legislation may be invalid where it is capricious, irrational, without
adequate determining principle, or excessive/disproportionate.
11. Shri Nishant Shukla, learned Additional Chief Standing Counsel,
representing State-respondent No.1, on the other hand, submits that the
challenge by the petitioner to the notification dated 30.01.1995 issued
under Section 4-A of the Act, 1964 is misconceived, devoid of merit and
liable to be rejected. It is submitted that the petitioner is a licensed trader
operating at Navin Phal-Sabzi Mandi Sthal, Sahibabad (Ghaziabad) and
cannot be permitted to trade in “coconut” within the said Mandi Sthal.

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Coconut has been included under the heading “A-Agriculture” and sub-
heading “III-Oilseeds” and therefore, this commodity cannot be
permitted to be traded in a Fruit and Vegetable Market Yard.
12. It has further been submitted that vide notification dated
08.05.1996 issued under Section 8 of the Act, 1964, “coconut” was
included in the list of “specified agricultural produce” thereby making it
liable to the levy of market fee. However, vide notification dated
18.07.2003, “coconut” was excluded from the list of notified agricultural
produce, thereby exempting it from the levy of market fee and
development cess.
13. It has been submitted that following the amendments to the Act of
1964, Section 17(iii)(c) empowered the State Government to permit
trade in non-notified agricultural produce within Mandi Sthals upon
payment of user charges. Pursuant thereto, the State Government, vide
order dated 17.09.2021, permitted trade in 46 additional non-notified
agricultural commodities subject to the payment of user charges.
“Coconut” was also expressly included in the said order and categorised
under the heading “Oilseeds”.
14. The submission of the learned Additional Chief Standing Counsel
is that Navin Phal-Sabzi Mandi Sthal, Sahibabad (Ghaziabad) is a
specialised market where trade is permitted only in 7 notified and 77
non-notified commodities falling under the category of “Fruits and
Vegetables”. Since “coconut” has been classified by the State
Government as an “Oilseed”, its trade is not permissible within the said
Fruit and Vegetable Market Yard.
15. It has further been submitted that the petitioner is, however, at
liberty to trade in coconut at the designated Cereal Mandi at Ghaziabad
(New Food Grain Market Site, Govindpuram) upon payment of the
applicable user charges or alternatively to trade in the same anywhere
outside the Mandi premises without any restriction. Thus, the petitioner
may continue to trade in coconut either at the designated Cereal Mandi
at Ghaziabad, upon payment of user charges or anywhere outside the
Mandi premises but not at Navin Phal-Sabzi Mandi Sthal, Sahibabad

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(Ghaziabad), which is a specialised Market Yard exclusively meant for
commodities falling under the category of “Fruits and Vegetables”.
16. Shri Nishant Shukla, learned Additional Chief Standing Counsel,
with regard to the challenge to the notification dated 30.01.1995
concerning the classification of “coconut” as an “Oilseed”, submits that
the kernel of coconut, when dried (copra) is a major source of edible oil,
which is used for human consumption and in the manufacture of soaps,
cosmetics and other industrial products. It is further submitted that the
classification of coconut as an “Oilseed” is logical and consistent with
the purpose and object underlying the classification under the Act, 1964.
17. It has further been submitted that the petitioner’s challenge to the
notification dated 30.01.1995 on the ground that it is ultra vires, is
devoid of merit. It is a well-settled principle of law that there is a strong
presumption in favour of the constitutionality of a statute and the burden
of establishing its unconstitutionality lies heavily upon the person
challenging it.
18. In support of his submissions, learned Additional Chief Standing
Counsel has placed reliance on the judgment of the Supreme Court in the
case of State of A.P. and Others v. McDowell & Co. and Others ,
reported in (1996) 3 SCC 709 , wherein it has been held that a legislative
enactment can be struck down by courts on only two grounds viz. (i)
lack of legislative competence and (ii) violation of any of the
fundamental rights guaranteed under Part III of the Constitution or of
any other constitutional provision.
19. Reliance has also been placed on the cases of Shri Ram Krishna
Dalmia & Others v. Shri Justice S.R. Tendolkar & Others , reported in
AIR 1958 SC 538 , and Hamdard Dawakhana & Another v. The Union
of India & Others, reported in AIR 1960 SC 554 , wherein the Hon’ble
Apex Court held that the legislature is presumed to understand and
correctly appreciate the needs of its own people and its laws are directed
towards problems made manifest by experience.
20. Accordingly, the learned Additional Chief Standing Counsel has
submitted that the classification of “coconut” as an “Oilseed” is based on

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its primary commercial and industrial use for the extraction of oil, a fact
recognised under various statutes and commercial practices.
21. The submission is that the right to carry on any trade or business
under Article 19(1)(g) of the Constitution is not absolute and is subject
to reasonable restrictions. Since the Act of 1964 is a regulatory statute
enacted for the betterment of agricultural marketing, the designation of
specific Market Yards for specific categories of agricultural produce
constitutes a reasonable restriction aimed at ensuring the orderly conduct
of business, preventing congestion, and maintaining hygiene and
infrastructure. Accordingly, it is submitted that “coconut” having been
classified under the category of “Oilseeds” cannot be traded in a “Fruits
and Vegetables” Market Yard and can be traded only in a Grain Market
Yard upon payment of the prescribed user charges.
22. It has also been submitted that the petitioner-firm has outstanding
arrears of Rs.2,55,125/- towards Mandi Fees, Development Cess, User
Charges, for the recovery of which a notice dated 07.11.2023 has also
been issued. As such, the petitioner-firm, being in default, is not entitled
to invoke the writ jurisdiction of this Court under Article 226 of the
Constitution of India. It has further been submitted that the petitioner has
created a false impression by making an incorrect averment that it has
paid the fees as required under the Act, 1964 from time to time whereas
in fact, it has committed a default in making statutory payments.
23. Learned Additional Chief Standing Counsel has further placed
reliance on the judgment of the Division Bench of this Court in
Commissioner of Sales Tax v. Ram Kumar Nand Kumar reported in
1972 SCC OnLine All 451 . In a reference made under Section 11(1) of
the U.P. Sales Tax Act, 1958, the question referred for consideration was
whether having regard to the facts and circumstances of the case,
“coconut” is an “Oilseed” or a “Dry Fruit”.
24. Placing reliance on the aforesaid judgment, learned Additional
Chief Standing Counsel submits that coconuts yield non-volatile edible
oil, which is extensively used for cooking purposes throughout the
country, particularly in the southern regions. The oil is also used in the

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manufacture of vanaspati, soaps and perfumed hair oils. Although green
coconut is regarded as a fruit and copra (dried coconut) is regarded as a
dry fruit in North India, this does not mean that coconut ceases to be an
oilseed.
25. In a nutshell, the submission of learned State Counsel is that
coconut cannot cease to be classified as an oilseed merely because green
coconut is regarded as a fruit. While classifying coconut under the
heading “A-Agriculture” and sub-heading “Oilseeds” in the Schedule
appended to the Act of 1964, the Legislature has not made any
distinction between green coconut and dried coconut. Accordingly, the
term “coconut” must be understood in accordance with its classification
under the heading “Oilseeds” in the Schedule.
26. Having heard learned counsel for the parties and before adverting
to the rival contentions raised by them, it would be appropriate to
examine the statutory provisions of the Act, 1964.
27. The Act of 1964 was enacted by the State Legislature with the
assent of the President and came into force on 10.11.1964. The preamble
reads as follows:
“An Act to provide for the regulation of sale and
purchase of agricultural produce and for the
establishment, superintendence and control of
markets therefor”.
28 . T he Statement of Objects and Reasons as published in the U.P.
Gazette Extraordinary dated 04.08.1964 provides insight into the
material contents and background of the Act of 1964 :
“The present chaotic state of affairs as obtaining in
agricultural produce markets is aft acknowledged
fact. There are innumerable charges, levies and
exactions which the agricultural, producer is
required to pay without having any say in the
proper utilisation of the amount so paid by them. In
matters of dispute between the seller and the buyer,
the former is generally put at a disadvantage by

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being given arbitrary awards. The produce is also
denied a large part of his produce by manipulation
and defective use of weights and scales in the
market. The Government of India and the various
committees and commissions appointed to study the
condition of agricultural markets in the country
have also been inviting the attention of the State
Government from time to time towards improving
the conditions of these markets. The proposal to
enact a marketing legislation was first taken up in
1938; but it could not go through as the then
Ministry went out of office soon after its inception.
The Planning Commission stressed long ago the
legislation in respect of regulation of markets
should be enacted and enforced by 1955-1956. Most
of the other States have already passed legislation
in this respect. The proposed measure to regulate
the markets in this State has been designed with a
view to achieving the following directions:-
(1) to reduce the multiple trade charges, levies and
exactions charged at present from the producer-
seller;
(ii) to produce the verification of accurate weights
and scale and see that the producer-seller is not
denied his legitimate due;
(iii) to establish market committees in; which
agricultural producer will have his; representation;
(iv) to ensure that the agricultural producer has his
say in the utilisation of market funds for the
improvement of the market as a whole:-
(v) to provide for fair settlement of disputes relating
to the sale of agricultural produce:-

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(vi) to provide amenities to the producer seller in
the market;
(vii) to arrange for better storage facilities;
(viii) to stop inequitable and unauthorised charges
and levies from the producer-seller; and to make
adequate arrangements for market intelligence with
a view to posting the agricultural producer with the
latest position in respect of the markets dealing with
his produce".
29. To appreciate the narrow contention arising in the instant writ
petition, a glance at the relevant provisions of the Act of 1964 is
indispensable.
30. The term “agricultural produce” is defined in Section 2(a) of the
Act, 1964 as follows :
“’agricultural produce' means such items of produce
of sericulture, agriculture, horticulture, viticulture,
apiculture, pisciculture, animal husbandry or forest
as are specified in the Schedule, and includes
admixture of two or more of such items, and also
includes any such item in processed form, and
further includes gur, rab, shakkar, khandsari and
jaggery;"
Market Area" is defined in Section 2(k) to mean "an area notified as such
under Section 6 or as modified under Section 8". Principal Market Yard
is defined under Section 2(o) of the Act, 1964 to mean the portion of a
Market Area as declared under Section 7. “Special Commodity Market
Yard” is defined under Section 2(s-2) to mean a market yard as notified
under Section 7-C. "Specified agricultural produce" is defined in Section
2(t) to mean "agricultural produce specified in the notification under
Section 6 or as modified under Section 8". "Sub-Market Yard" is defined
in Section 2(w) to mean "a portion of a Market Area, declared as such
under Section 7". Section 4-A which was introduced in the Act by U.P.

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Act 10 of 1970 conferred power on the State Government to amend the
Schedule. It reads as under:
"4-A. The State Government may by notification in
the Gazette, add to, amend or omit any of the items
of agricultural produce specified in the Schedule,
and thereupon the Schedule shall stand amended
accordingly."
Section 5 of the Act, 1964 provides for a declaration of intention to
regulate and control sale and purchase of agricultural produce in any
area. Where the State Government is of the opinion that it is necessary or
expedient in the public interest to regulate the sale and purchase of any
agricultural produce in any area, and for that purpose to declare that area
as a market area it may, by notification in the Gazette, and in such other
manner as may be prescribed, declare its intention so to do, and invite
objections against the proposed declaration. Section 6 of the Act, 1964
provides for the declaration of market area in respect of agricultural
produce set out in the notification issued under Section 5 after
considering the objections. A combined reading of Sections 5 and 6
would show that in order to be an effective declaration, the notification
must set out the market area that is its geographical boundaries as also
the agricultural produce in respect of which the market area is so
declared. Section 7 of the Act, 1964 confers power to carve out market
yard and Sub-Market Yards in a market area. Section 8 confers power on
the State Government to alter market area as also modification of the list
of agricultural produce in respect of each market area. If a change in the
geographical limits of a market area becomes necessary or addition or
omission in the list of agricultural produce in respect of a market area is
desired, section 8 of the Act, 1964 confers power on the State
Government by a notification to that effect in the Gazette to so alter the
market area or modify the list of agricultural produce. Every agricultural
produce set out in the notification declaring a market area under Section
6 or alterations made under Section 8 becomes specified agricultural
produce for the purposes of the Act, 1964. Section 9 (i) sets out the

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effects of a declaration of a market area, the principal being that no one
within the market area can set up, establish or continue or allowed to be
set up, established or continued, any place for the sale-purchase, storage
etc. of the specified agricultural produce, except under and in accordance
with the conditions of a licence granted by the Market Committee. Sub-
section (2) of Section 9 confers power on the Market Committee to give
licence to carry on business as a trader etc. in the Principal market yard
or Sub-Market Yard. Section 17 enumerates the powers of the Market
Committee which has to be set up for each market area as required by
Section 12, which inter alia includes the power to levy and collect
market fee in the circumstances therein mentioned. The relevant portion
of it reads as under:
"17. A Committee shall, for the purposes of the Act,
have the power to-
(iii) levy and collect
(a)*
(b) market fee, which shall be payable on
transactions of sale of specified agricultural
produce in the market area at such rates, being not
less than one percentum and not more than one and
half percentum of the price of the agricultural
produce so sold, as the State Government may
specify by notification, and such fee shall be realised
in the following manner-
(1) if the produce is sold through a commission
agent, the commission agent may realise the market
fee from the purchaser and shall be liable to pay the
same to the Committee;
(2) if the produce is purchased directly by a trader
from a producer the trader shall be liable to pay the
market fee to the Committee;
(3) if the produce is purchased by a trader from
another trader the trader selling the produce may

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realise it from the purchaser and shall be liable to
pay the market fee to the Committee; and
(4) in any other case of sale of such produce, the
purchaser shall be liable to pay the market fee to the
Committee:
Provided that no market fee shall be levied or
collected on the retail sale of any specified
agricultural produce where such sale is made to the
consumer;………..”
The Schedule appended to the Act enumerates various species of
agricultural produce as required by Section 2(a) as well as Section 4-A.
31. Now, coming to the contentions raised by the rival parties, the
questions that arise for consideration before this Court are as follows:
(i) Whether the petitioner-firm having a licence for the Fruit and
Vegetable Market Yard can be permitted to trade in coconut, which has
been categorized under the heading “A-Agriculture” and sub-heading
“III-Oilseeds” in the Schedule to the Act of 1964 ?
(ii) Whether the categorization of coconut as an oilseed under the
heading “A-Agriculture” and sub-heading “III-Oilseeds” in the Schedule
to the Act of 1964, vide notification dated 30.01.1995 issued under
Section 4-A of the Act of 1964, is ultra vires ?
32. Adverting to Issue No.1, we find that Section 5 of the Act of 1964
provides for the State Government’s intention to declare an area as a
Market Area for the purpose of regulating the sale and purchase of any
agricultural produce and for that purpose, objections are invited.
33. Subsequently, under Section 6 of the Act, 1964, an area is declared
to be a Market Area if, after considering the objections, if any, the State
Government comes to the conclusion that it would be appropriate to
declare such area as a Market Area in respect of the agricultural produce
specified in the notification issued under Section 5 of the Act, 1964.
34. Section 7-C of the Act, 1964 provides for the establishment and
notification of a “Special Commodity Market Yard”. It stipulates that the
State Government, where it considers it necessary or expedient in the

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public interest to do so, may, by notification, declare an existing Market
Yard, established under clause (b) of sub-section (2) of Section 7 as a
Special Commodity Market Yard or may notify any new Market Yard as
a Special Commodity Market Yard for all or any of the specified
agricultural produce in respect of a Market Area.
35. Section 8 provides for the alteration of a Market Area and
modification of the list of agricultural produce. It empowers the State
Government, where it considers such action necessary or expedient in
the public interest to do so by issuing a notification in the Gazette and in
such other manner as may be prescribed with effect from the date
specified in the notification to -
(a) include any agricultural produce in, or exclude any agricultural
produce from, the list of agricultural produce specified in the notification
under section 6;
(b) include any area in, or exclude any area from, the Market Area
specified in the notification under section 6;
(c) divide a Market Area specified in the notification under section 6 into
two or more separate Market Areas;
(d) amalgamate two or more Market Areas specified in the notification
under section 6 into one Market Area; or
(e) declare that a Market Area specified in the notification under section
6 shall cease to be such area.
36. Section 9 of the Act of 1964 deals with the effects of the
declaration of a Market Area. It provides that from the date of
declaration of an area as a Market Area, no Local Body or any other
person shall, within such Market Area, set up, establish or continue or
permit the setting up, establishment or continuation of, any place for the
sale, purchase, storage, weighment or processing of the specified
agricultural produce except under and in accordance with the conditions
of a licence granted by the concerned Market Committee,
notwithstanding anything to the contrary contained in any other law,
custom, usage, or agreement. Meaning thereby, after the declaration of a
Market Area, no trade can be conducted within such Market Area in

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WRIC No. - 4780 of 2025
respect of any commodity other than the specified agricultural produce
notified for that Market Area. It further provides that for the purpose of
trading in the specified agricultural produce, a licence must be obtained
from the concerned Market Committee. However, certain exceptions are
also provided under Section 9 of the Act of 1964, particularly in respect
of agricultural produce produced, reared, caught, or processed by a
producer, or purchased or stored by any person for their domestic
consumption.
37. Section 17(iii) of the Act of 1964 empowers the Market
Committee to levy and collect fees for the issuance and renewal of
licences as well as market fees on transactions involving the sale or
purchase of specified agricultural produce in the Principal Market Yard
and Sub-Market Yards from such persons and at such rates as may be
prescribed provided that such fees shall not exceed two per cent of the
price of the “specified agricultural produce” sold or purchased therein.
38. Before a transaction of sale of agricultural produce as
contemplated under Section 17(iii)(b) of the Act of 1964, becomes
exigible to the levy of market fee, the agricultural produce must first be
notified as “specified agricultural produce” by an appropriate
notification issued under Section 6 or Section 8 of the Act, 1964. Until
such notification is issued, the agricultural produce, even if enumerated
in the Schedule appended to the Act, 1964, does not attain the status of
“specified agricultural produce”. Consequently, no market fee can be
levied on any transaction involving the sale of such agricultural produce.
39. Section 17(iii)(c) of the Act, 1964 was inserted by U.P. Act No.18
of 2020, thereby empowering the Market Committee to levy and collect
user charges in consideration of the materials or services provided in the
principal market yard, sub-market yard or market sub-yard as prescribed
by the State Government.
40. The aforesaid scheme of the Act, 1964 thus clearly provides that
trade in “specified agricultural produce” can be carried out only within a
Market Area in accordance with the provisions of Sections 6, 7 and 8 of
the Act, 1964. Further, a Market Area declared under Section 6 of the

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WRIC No. - 4780 of 2025
Act, 1964 is confined to the agricultural produce specified in the
notification issued at the time of declaration of such Market Area.
41. Thus, before an agricultural produce can attain the status of
“specified agricultural produce” in respect of a Market Area, certain
steps, as contemplated under Section 5 of the Act, 1964, are required to
be taken, including inviting objections, followed by the issuance of a
further notification under Section 6 of the Act, 1964 making the requisite
declaration both in respect of the Market Area and the agricultural
produce. Upon completion of these two steps, the agricultural produce
specified in the notification issued under Section 6 attains the status of
“specified agricultural produce” in relation to the Market Area so
notified.
42. Section 8 of the Act of 1964 confers upon the State Government
the power to alter the Market Area or modify the list of agricultural
produce in respect of such Market Area. It is only upon taking these
steps that the agricultural produce enumerated in the notification issued
under Section 6 or Section 8 of the Act of 1964 would assume and
acquire the status or character of “specified agricultural produce”, in
respect of the sale transactions of which market fee may be levied by the
Market Committee.
43. Thus, the issuance of a notification under Section 4-A of the Act,
1964, amending the Schedule, in the absence of any corresponding
notification under Section 8 of the Act, 1964, would not confer upon
such agricultural produce the status or character of “specified
agricultural produce” qua the concerned Market Area.
44. In the present case, we find that, by notification dated 30.01.1995,
issued under Section 4-A of the Act, 1964, coconut was included under
the heading “A-Agriculture” and the sub-heading “III-Oilseeds” at Serial
No. 11 of the Schedule appended to the Act, 1964. Subsequently, by
another notification dated 08.05.1996, issued under Section 8(1)(b) of
the Act, 1964, coconut was added to the existing list of specified
agricultural produce in respect of the concerned Market Area.
Consequently, coconut became exigible to the levy of market fee.

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WRIC No. - 4780 of 2025
Thereafter, another notification dated 18.07.2003 was issued under
Section 8(1)(a) of the Act, 1964, whereby coconut was excluded from
the list of “specified agricultural produce”.
45. Thus, irrespective of any Government Orders issued during the
period between 08.05.1996, when coconut was included in the list of
“specified agricultural produce”, and 18.07.2003, when it was excluded
therefrom by a notification issued under Section 8(1)(a) of the Act, 1964,
the fact remains that coconut ceased to be “specified agricultural
produce” upon the issuance of the notification dated 18.07.2003.
Consequently, no market fee could be levied on transactions involving
coconut thereafter.
46. The State Government, vide order dated 12.05.2020, permitted the
levy and collection of user charges on 45 commodities in respect of
which a proposal for denotification was pending before it. The said order
provided that trade in these 45 commodities would be permitted within
the Market Yards upon payment of user charges at a rate not exceeding
2%, as prescribed under Section 17(iii)(c) of the Act, 1964. This
arrangement was made in view of the time required to develop the
necessary infrastructure to facilitate trade in such commodities outside
the Mandi Yards. It was further envisaged that traders would continue to
conduct trade in these 45 commodities within the Market Yards until
appropriate infrastructure and arrangements were developed outside the
Mandi Yards to facilitate such trade. Subsequently, a notification dated
24.05.2020 was issued under Section 8(1)(a) of the Act, 1964, whereby
the aforesaid 45 commodities were excluded from the list of “specified
agricultural produce”.
47. Subsequently, the Director, Mandi Parishad, U.P., Lucknow, issued
another Government Order dated 17.09.2021, based on the
recommendations made at a meeting of the Board of the Mandi Parishad,
providing for the permission to trade in 46 commodities, as mentioned in
the Schedule under Section 2(a) of the Act, 1964, upon payment of user
charges at the rate of 1%. The order dated 17.09.2021 issued by the
Director, Mandi Parishad, U.P., Lucknow provided for the levy and

20
WRIC No. - 4780 of 2025
collection of user charges at the rate of 1% on the trade of 45
commodities that had been denotified as “specified agricultural produce”
vide notification dated 24.05.2020 as well as on 46 agricultural
commodities enumerated in the Schedule appended to the Act, 1964.
Those 46 items were not “specified agricultural produce” and finds
mention only in the Schedule referable to Sections 2(a) and 4-A of the
Act, 1964. Accordingly, they were not subject to any market fee and
could not be traded within the Market Yard. The effect of order dated
17.09.2021 was that these 46 items could also be traded in Market Yards
subject to payment of User Charges.
48. A bare perusal of the order dated 17.09.2021 issued by the
Director, Mandi Parishad, U.P., Lucknow indicates that out of the 46
items, 32 were categorised as fruits and vegetables (16-each) while the
remaining 14 were categorised under grains, legumes, oilseeds, and
spices. Coconut also finds mention in the said order dated 17.09.2021
issued by the Director, Mandi Parishad, U.P., Lucknow under the
category of “Oilseeds”.
49. The aforesaid Government Orders and the statutory provisions
discussed hereinabove clearly indicate that trade in coconut in Market
Yards was not permissible after the issuance of the notification dated
18.07.2003, whereby coconut was excluded from the list of “specified
agricultural produce”. It was only upon the issuance of the order dated
17.09.2021 that trade in coconut became permissible within the Market
Yards, subject to the payment of user charges at the rate of 1%.
50. The question that now arises for consideration is whether, after the
issuance of the order dated 17.09.2021 by the Director, Mandi Parishad,
U.P., Lucknow, the petitioner can be permitted to trade in coconut at
Navin Phal Sabzi Mandi Sthal, Sahibabad, Ghaziabad under the licence
granted to it pursuant to Section 9 of the Act, 1964 read with Rule 70(2)
of the U.P. Krishi Utpadan Mandi Rules, 1965 (hereinafter referred to as
the “Rules of 1965”).
51. Navin Phal Sabzi Mandi Sthal, Sahibabad (Ghaziabad) is an
official recognized fruit and vegetable mandi operating under the Krishi

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WRIC No. - 4780 of 2025
Utpadan Mandi Samiti, Ghaziabad. The commodities in respect of which
Navin Phal Sabzi Mandi Sthal, Sahibabad (Ghaziabad) has been notified
as a Market Yard can be traded within its premises. Since coconut is not
categorised as a fruit under the Schedule appended to the Act of 1964,
but is rather categorised under the heading “A-Agriculture” and the sub-
heading “III-Oilseeds”, its trade cannot be permitted within the premises
of Navin Phal Sabzi Mandi Sthal, Sahibabad (Ghaziabad).
52. The contention of learned counsel for the petitioner is that the
petitioner was permitted to trade in green coconut without any objection
or restraint from the authorities. This is a factual aspect for which the
concerned authorities may be held responsible as they permitted the
trade in coconut, which, having regard to the scheme of the Act, 1964,
could not otherwise have been permitted within the premises of Navin
Phal Sabzi Mandi Sthal, Sahibabad (Ghaziabad) at any point of time,
since coconut was not categorised as a fruit or vegetable under the
Schedule appended to the Act, 1964.
53. Even after the issuance of the order dated 17.09.2021 by the
Director, Mandi Parishad, U.P., Lucknow, whereby trade in coconut was
permitted within the Market Yards upon payment of user charges, such
trade could not be permitted within the premises of Navin Phal Sabzi
Mandi Sthal, Sahibabad (Ghaziabad) as the said Market Yard is
specifically designated for the trade of fruits and vegetables. Further,
since coconut has been identified and categorised under the heading “A-
Agriculture” and the sub-heading “III-Oilseeds” in the Schedule
appended to the Act, 1964, its trade could be permitted only in a Market
Yard designated for grains and other commodities which are not
categorised as fruits and vegetables under the said Schedule.
54. Navin Phal Sabzi Mandi Sthal, Sahibabad (Ghaziabad) is a fruit
and vegetable Market Yard and as such, only those commodities falling
under the category of fruits and vegetables as specified in the order dated
17.09.2021 along with those commodities mentioned in of the
(अनुसूची-क)
notification dated 24.05.2020 can be permitted to be traded within the
premises of Navin Phal Sabzi Mandi Sthal, Sahibabad (Ghaziabad) upon

22
WRIC No. - 4780 of 2025
payment of user charges. In other words, a total of 77 commodities
comprising 45 items mentioned in the notification dated 24.05.2020 and
32 items specified under the heading “Fruits and Vegetables” in the order
dated 17.09.2021 can be traded within the premises of Navin Phal Sabzi
Mandi Sthal, Sahibabad (Ghaziabad) upon payment of the prescribed
user charges.
55. It is pertinent to note that a notification issued under Section 6 or
Section 8 of the Act, 1964 pertains not only to the area designated and
declared as a Market Area but also to the “specified agricultural
produce” in respect of which such declaration is made under Sections 6
and 8 of the Act, 1964. Accordingly, any commodity or article which
does not find mention in the declaration issued under Section 6 or
Section 8 of the Act, 1964 cannot be traded within such Market Area.
56. Further, Section 7 of the Act, 1964 provides for the declaration of
a Principal Market Yard and Sub-Market Yards. It stipulates that a
portion of the Market Area may be designated as the Principal Market
Yard, while another portion may be designated as a Sub-Market Yard
within the district. Such declarations must also be consistent with the
declarations made under Sections 6 and 8 of the Act, 1964.
57. Section 7-C of the Act, 1964 provides for the establishment and
notification of a “Special Commodity Market Yard” which must be
consistent with the “specified agricultural produce” notified in respect of
the concerned Market Area. This means that trade within a Special
Commodity Market Yard must be confined to the “specified agricultural
produce” notified for that particular Market Yard and no commodity that
has not been so notified can be permitted to be traded therein.
58. The Schedule containing the list of agricultural produce identifies
and categorises different commodities under distinct headings and sub-
headings. This classification serves a specific purpose, namely, to
identify and categorise the commodities enumerated in the Schedule,
which, in terms of Section 2(a) of the Act, 1964 are defined as
“agricultural produce”, read with Section 4-A of the Act, 1964 so that
they may subsequently be notified for a particular Market Area. While

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WRIC No. - 4780 of 2025
issuing the notification dated 30.01.1995 under Section 4-A of the Act,
1964, the State Government included coconut under the heading “A-
Agriculture” and sub-heading “III-Oilseeds” at Serial No.11. Such
inclusion was independent of the notifications issued under Sections 6 or
8 of the Act, 1964.
59. Subsequently, by notification dated 08.05.1996 issued under
Section 8(1)(a) of the Act, 1964, coconut was included in the list of
“specified agricultural produce” contained in Schedule “A” to the said
notification in respect of the Market Areas specified in Schedule “B”
thereto. Schedule “B” comprised 262 Market Areas including the
Ghaziabad Market Area situated in District Ghaziabad mentioned at
Serial No.26. The effect of the notification dated 08.05.1996 was the
coconut became a “specified agricultural produce” for the Ghaziabad
Market Area and could, accordingly, be traded therein upon payment of
the requisite market fee.
60. Thereafter, by notification dated 18.07.2003, issued under Section
8(1)(a) of the Act, 1964, coconut was denotified and excluded from the
list of “specified agricultural produce” contained in Schedule “A” to the
said notification in respect of the Market Areas specified in Schedule
“B” thereto. Schedule “B” comprised a total of 243 Market Areas
including Sahibabad, Hapur and Muradnagar, all situated in District
Ghaziabad. This meant that upon the issuance of the notification dated
18.07.2003, coconut ceased to be a “specified agricultural produce” in
respect of the Market Areas of Sahibabad, Hapur and Muradnagar
situated in District Ghaziabad and consequently, trade in coconut could
no longer be permitted in these Market Areas.
61. However, despite its exclusion from the list of “specified
agricultural produce” in respect of the aforesaid Market Areas, coconut
continued to find mention as an agricultural produce under the heading
“A-Agriculture” and the sub-heading “III-Oilseeds” in the Schedule
appended to the Act, 1964 with reference to Section 2(a) read with

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WRIC No. - 4780 of 2025
Section 4-A of the Act, 1964, which defines the expression “agricultural
produce”.
62. Section 7 of the Act, 1964 provides for the establishment of
Principal Market Yards and Sub-Market Yards within a Market Area
declared under Sections 6 and 8 of the Act, 1964. On the other hand,
Section 7-C of the Act, 1964 provides for the establishment of a Special
Commodity Market Yard by declaring an existing Market Yard
established under Section 2(b) of the Act of 1964 or by notifying a new
Market Yard as a Special Commodity Market Yard for all or any of the
“specified agricultural produce” in respect of the concerned Market
Area.
63. However, the fact remains that coconut ceased to be a “specified
agricultural produce” in respect of the Sahibabad Market Area situated in
District Ghaziabad vide notification dated 18.07.2003 issued under
Section 8(1)(a) of the Act, 1964. In view thereof, it cannot be said that
trade in coconut was permissible within the premises of Navin Phal
Sabzi Mandi Sthal, Sahibabad (Ghaziabad) after 18.07.2003. If the
petitioner continued to trade in coconut within the said Market Yard after
18.07.2003 and the authorities did not restrain it from doing so, such
inaction on the part of the authorities cannot be construed to mean that
the petitioner was legally entitled to trade in coconut.
64. Since coconut is categorised under the heading “A-Agriculture”
and the sub-heading “III-Oilseeds” whereas Navin Phal Sabzi Mandi
Sthal, Sahibabad (Ghaziabad) is a fruit and vegetable Market Yard, the
position remains that even after the introduction of the user charge
regime and the issuance of the order dated 17.09.2021 by the Director,
Mandi Parishad, U.P., Lucknow trade in coconut can be permitted only
in those Mandi Yards where commodities falling under the heading “A-
Agriculture” are permitted to be traded upon payment of user charges.
Such trade cannot be permitted within the premises of Navin Phal Sabzi
Mandi Sthal, Sahibabad (Ghaziabad) where only those agricultural
produce categorised under the heading “Fruits and Vegetables” in the
Schedule appended to the Act of 1964 read with the order dated

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WRIC No. - 4780 of 2025
17.09.2021 issued by the Director, Mandi Parishad, U.P., Lucknow can
be traded upon payment of user charges.
65. In view of the aforesaid discussion, we conclude that even after
the introduction of the user charge regime, trade in coconut cannot be
permitted within the premises of Navin Phal Sabzi Mandi Sthal,
Sahibabad (Ghaziabad) even upon payment of user charges as coconut
has not been categorised as a fruit or vegetable in the Schedule appended
to the Act, 1964.
66. Having decided the first issue, we now proceed to consider the
second issue, namely, whether the description of coconut in the Schedule
appended to the Act, 1964 is ultra vires. In this regard, learned counsel
for the petitioner has contended that according to the botanical
classification of coconut, it falls within the category of fruits and
therefore, ought not to have been categorised or placed under the
heading “A-Agriculture” and the sub-heading “III-Oilseeds”.
67. Learned counsel for the petitioner has placed reliance on an
extract from a report/book published by the Indian Council of
Agricultural Research–Central Plantation Crops Research Institute,
Kasaragod, Kerala, which has been annexed as Annexure No.16 to the
writ petition. The said extract mentions that a coconut is botanically
classified as a drupe, which is a type of fruit.
68. The reliance placed by learned counsel for the petitioner on the
aforesaid extract itself indicates that a drupe is a type of fruit associated
with coconut. However, this cannot be interpreted to mean that coconut,
in its entirety, is necessarily a fruit. Rather, it indicates that a particular
stage of development of coconut, namely, the drupe, has been classified
as a type of fruit.
69. In ordinary commercial parlance, coconut is understood in several
forms, namely, green coconut, watery coconut, dried coconut, and copra,
all of which fall within the expression “coconut”. Green coconut
contains coconut water and its kernel remains in the tender stage. Green
coconuts are generally consumed during the summer season by cutting
them open to extract and drink the water contained therein.

26
WRIC No. - 4780 of 2025
70. A watery coconut is a fully ripened coconut that enters the market
after the removal of its outer fibrous covering. It is commonly referred to
as a coconut or watery coconut (brown coconut). The water is consumed
as a drink, while the kernel is used for culinary purposes. Once the
coconut has fully matured, it is plucked from the tree and after the
removal of its outer fibrous covering to reduce its weight, is sent to the
market for commercial purposes.
71. Although a tender coconut may be regarded as a green fruit, a
watery coconut (brown coconut) is not commercially understood as a
fruit but is treated as a distinct commodity in its own right. Thus, the
expression “coconut” cannot be interpreted to mean only green or tender
coconut; rather, it encompasses several forms, including tender coconut,
watery coconut, dried coconut and copra.
72. The submission of learned counsel for the petitioner is that green
coconut, which is being traded by the petitioner, is a tender coconut and
constitutes a form of fruit. Therefore, trade in the same should be
permitted upon payment of user charges as it falls within the category of
fruits.
73. The submission so advanced by learned counsel for the petitioner
cannot be accepted for the reason that green coconut (tender coconut)
does not find mention in the Schedule appended to the Act of 1964
wherein agricultural produce has been categorised and defined in terms
of the definition contained in Section 2(a) of the Act, 1964 read with
notification issued under Section 4-A of the Act, 1964. Had the intention
of the State Legislature been to identify green coconut (tender coconut)
as a commodity distinct from coconut, it would certainly have included
green coconut as a separate commodity or item in the Schedule under the
heading “Fruits”.
74. As stated hereinabove, coconut, in ordinary commercial parlance,
is understood in several forms, all of which fall within the expression
“coconut”. Accordingly, the categorisation of coconut under the heading
“A-Agriculture” and the sub-heading “III-Oilseeds” cannot be held to be
illegal or incorrect. Conversely, it can also be contended that coconut as

27
WRIC No. - 4780 of 2025
a commodity in its entirety, cannot, by any stretch of the imagination, be
classified as a fruit, since dried coconut and copra cannot be categorised
as fruits.
75 . Hon’ble Supreme Court in the case of Commissioner of Sales
Tax, Madhya Pradesh vs. Popular Trading Company, Ujjain reported
in (2000) 5 SCC 511 while deciding the issue of whether “watery
coconut” was liable to payment of entry tax and whether “copra” and
“coconut” were commercially distinct commodities, held that “watery
coconut” eventually becomes dry coconut or copra. Therefore, it could
not be contended that “watery coconut” is a distinct commodity and, as
such, cannot be subjected to entry tax. The relevant paragraphs 3 to 6 of
the said judgment are reproduced hereinbelow:
“ 3. The view taken by the High Court in this case
has lost sight of the expression in the opening
clause of the entry “Oilseeds, that is to say”. The
phrase “that is to say” has been the subject-
matter of interpretation by this Court in State of
T.N. v. Pyare Lal Malhotra [(1976) 1 SCC 834 :
1976 SCC (Tax) 102 : (1976) 37 STC 319] . The
expression “that is to say” is descriptive,
enumerative and exhaustive and circumscribes to
a great extent the scope of the entry. The entry
provides for “Oilseeds, that is to say coconut”,
which again says, “i.e. copra and coconut
including any other commodity”. An oilseed
botanically means a seed which is a flowering
plant's unit of reproduction or germ capable of
developing into another such plant. Seed which
can yield oil is an oilseed. If a seed by reason of
application of a scientific method produces oil it is
not necessarily understood to be an “oilseed” in
common parlance. If a commodity possesses all
the qualities of an oilseed it cannot be excluded

28
WRIC No. - 4780 of 2025
from the ambit of the expression “oilseed”. Oil is
generally extracted from dry coconuts, but in some
parts of India it is extracted even from copra
recovered from fresh coconuts. Copra of watery
coconut before it dries up may not yield as much
oil as dried copra. The oil which it yields may also
contain some watery substance which may have to
be eliminated for the purpose of recovering pure
coconut oil. At the same time, it yields sufficient
quantity of oil. Thus “watery coconut” while
yielding oil merely because it yields some watery
substance does not cease to be an “oilseed” and,
therefore, it falls within the entry.
4. In this context, it is necessary for us to refer to
the decision of this Court in Sri Siddhi Vinayaka
Coconut & Co. v. State of A.P. [(1974) 4 SCC
835 : 1974 SCC (Tax) 319] on which strong
reliance has been placed by the High Court. In
that case this Court was concerned with the entry
as contained in the Andhra Pradesh General Sales
Tax Act. The entry therein merely contained
“coconuts” in the Third Schedule and “tender
coconuts” in the Fourth Schedule which are useful
only for drying purposes and which were exempt
from tax. An explanation was added to the Third
Schedule to state that the expression “coconuts”
would mean fresh or dried coconuts, shelled or
unshelled including copra, but excluding tender
coconuts. Again by another amendment another
explanation was added to state that the expression
“coconuts” in the Schedule would mean dried
coconuts, shelled or unshelled, including copra
but excluding tender coconuts. Thus this Court

29
WRIC No. - 4780 of 2025
was concerned in that case with two sets of entries
— one contained in the Central Sales Tax Act,
which is similar to the provisions with which we
are concerned in the present case, and the other as
stated in the Third and Fourth Schedules to the
Andhra Pradesh General Sales Tax Act. In that
context, this Court had to consider whether a
“watery coconut” could be taxed within the
permissible restrictions as also “dried coconut”
that resulted from the drying of the same watery
coconut. It was contended that under the State
statute though “watery coconut” and “dried
coconut” were treated separately there is a
provision for refund when “watery coconut” had
suffered tax and became “dried coconut”. In that
context that decision was rendered and we are
concerned with a different kind of entry for tax.
5. This Court in Ganpat Lal Lakhotia v. State of
Rajasthan [(1997) 10 SCC 455] quoted with
approval what was stated in Sri Krishna Coconut
Co. v. CTO [(1965) 16 STC 511 (AP)] wherein it
was stated as follows:
“In a tender coconut, the kernel is hardly formed
or is only in the initial stages of formation. In a
dried coconut the kernel has formed and fully
developed and further the water inside the coconut
has dried up leading to the drying of the kernel
also. But a fully grown coconut with a well-
developed kernel which contains water cannot be
called either a tender or a dried coconut. This is
the well-known variety of coconuts used for
culinary purposes and on auspicious occasions
and as part of the offerings in temples. I do not

30
WRIC No. - 4780 of 2025
think it is correct or reasonable to describe this
class of coconuts as either dried or tender.”
It was noticed therein that a “watery coconut” in
due course becomes “dried coconut” or “copra”
and, therefore, it could not be stated that “watery
coconuts” are outside the scope of the entry. If for
purpose of the benefit arising under Section 14 of
the Central Sales Tax Act, which was the subject-
matter of consideration before this Court, it has
taken the view that the “watery coconuts” are not
outside the scope of the said provision, there is no
reason to state that the “watery coconuts” in the
present cases fall outside the scope of the Act. In
the light of this analysis, we are of the view that
the High Court was not justified in holding that
“watery coconut” is not taxable under the
relevant entry of the Act. In the result, we set aside
the order made by the High Court and restore that
of the Tribunal. However, in the circumstances of
the case, there shall be no orders as to costs.
6. The appeals are allowed accordingly. ”
76. Hon’ble Supreme Court in the case of Shri Bharuch Coconut
Trading Co. and Others vs. Municipal Corporation of the City of
Ahmedbad and others reported in AIR 1991 SC 494 while deciding the
issue of whether brown coconut (watery coconut) falls within the
definition of green fruit and is, therefore, liable to octroi duty held that
watery coconut i.e. brown coconut is not a green fruit but a distinct
commodity in its own right. The relevant observations of the Hon’ble
Supreme Court, contained in paragraphs 3 to 6 of the aforesaid
judgment, are reproduced hereinbelow for ready reference:
“ 3. The question is whether brown coconut
(watery coconut) is a green fruit or not? In
Ramavatar Budhaiprasad v. Asstt. STO [(1961)

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WRIC No. - 4780 of 2025
12 STC 286 : AIR 1961 SC 1325 : (1962) 1 SCR
279] and CST v. S.N. Brothers [(1973) 3 SCC 496
: 1973 SCC (Tax) 254 : (1973) 31 STC 302] , this
Court held that the expression occurring in
schedules to the Sales Tax Acts have to be
considered with reference to their meaning in
ordinary commercial parlance and should not be
considered according to the strict scientific
meaning. In Ramavatar Budhaiprasad case
[(1961) 12 STC 286 : AIR 1961 SC 1325 : (1962)
1 SCR 279] , this Court held that betel leaves,
though vegetable leaves in the strict scientific
sense, cannot be considered to be vegetables. In
ordinary commercial language in the common
parlance, betel leaves cannot be considered as
vegetables. Coconut in the ordinary commercial
sense is understood in several forms as tender
coconut, watery coconut, dried coconut and copra
and all these come under the expression coconut.
Tender coconut contains juicy water and the
kernel is at the tender stage. The tender coconuts
are used generally during summer (autumn)
season to drink the watery juice therein after
cutting it. A watery coconut is a ripened coconut
and enters the market after the removal of the
outer cover of its fibre. It is called coconut or
watery coconut. For the purpose of the case it is
called brown coconut. The water is used as a
drink and the kernel for culinary purposes. After
the coconut is fully grown it is plucked from the
trees and after removing the outer fibre (to reduce
weight), it is sent to the market for commercial
purposes. As stated earlier it is called coconut or

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WRIC No. - 4780 of 2025
watery coconut (brown coconut). The question,
therefore, is whether the brown coconut (watery
coconut) is a green fruit. The word green is
defined in Chambers Dictionary at page 463 as
adjective of the colour usually in leaves between
blue and yellow in spectrum … unripe, fresh,
undried, raw or colour of green things.
4. In Webster Comprehensive Dictionary
(International Edition) at p. 509, the word ‘fruit’
has been defined as the edible, pulpy mass
covering the seeds of various plants and trees.
They are classified as fleshy, as gourds, melons,
oranges, apples, pears, berries, etc.; drupaceous
as cherries, peaches, plums, apricots, and others
containing stones; dry as nuts, capsules, ashenia,
follicles, legumes, etc. In flowering plants, the
mature seed vessel and its contents, together with
such accessory or external parts of the
inflorescence seemed to be integral with them.
Any vegetable product used as food or otherwise
serviceable to man; as grain, cotton, or flax; also
such products, collectively: the fruits of the earth.
Therefore, in the context of the octroi it could be
legitimate to conclude that all kinds of fresh fruits
are exempted articles.
5. In P.A. Thillai Chidambara Nadar v. Addl.
Appellate Asstt. Commissioner [(1985) 4 SCC
30 : (1985) 60 STC 80] , this Court was to
consider whether ripened coconut which is none
other than watery coconut is an exempted article
as vegetable under the Tamil Nadu General Sales
Tax Act (1 of 1959). This court held that fresh
fruits and vegetables being household articles of

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everyday use for the table, these will have to be
construed in the popular sense, meaning the sense
in which every householder will understand them.
Viewed from this angle, the most apposite test
would be an answer to a simple question: Would a
householder when asked to bring home some
‘fresh fruits’ and some ‘vegetables’ for the
evening meal, bring coconut too? Obviously the
answer is in the negative. Accordingly this Court
held that ripened coconut is neither a fresh fruit
nor vegetable. The watery coconut is no doubt a
ripened coconut used for several purposes like
offerings to a deity in a Hindu temple being
broken or used on auspicious occasions or used in
preparation of the daily table food or in
confectionery like biscuits or in the extraction of
oil when it is fresh or dried kernel. When a person
in the commercial market goes and asks for
coconut no one will consider brown coconut to be
vegetable or fresh fruit, much less a green fruit.
No householder would purchase it as a fruit. No
doubt in some English dictionary, coconut is
called a fruit or nut but it is to be understood in
its ordinary commercial parlance. In Sri Krishna
Coconut Co. v. CTO [(1965) 16 STC 511 : AIR
1966 AP 128] , the Andhra Pradesh High Court
was to consider whether fully grown coconut with
well developed kernel containing water i.e.
watery coconut could be called tender or dried
coconut. In that context considering the scope of
an explanation to Schedule III of the A.P. General
Sales Tax Act, 1957 which exempted tender
coconut from the sales tax under the Act, it was

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held that in a tender coconut, the kernel is hardly
formed or is only in the initial stages of
formation. In a dried coconut the kernel is formed
and fully developed and further the water inside
the coconut has dried up leading to the drying of
the kernel also. But a fully grown coconut with a
well developed kernel, which contains, water
cannot be alleged either a tender or a dried
coconut. This is well known that coconut is used
fo culinary purposes and on auspicious occasions
and as part of the offerings in temples. It was held
in that case that the watery coconuts are fully
developed coconuts and they are exigible to sales
tax. In Kunchi Rajeshwara Sastry & Sons v. Asstt.
CCT [(1976) 37 STC 399 (AP HC) : 1976 Tax LR
1786] , the Division Bench of the Andhra Pradesh
High Court was to consider whether copra is an
oil seed within the meaning of Item (vi) of the list
of declared goods mentioned in Section 14 of the
Central Sales Tax Act, 1956, and whether it is
exigible to sales tax under the Andhra Pradesh
Sales Tax Act, 1957. In that context it was held
that copra is an oil seed and it is a declared good
within the meaning of Central Sales Tax Act,
1956. The watery coconuts are made liable to tax
at the point of last purchase and that, therefore,
copra would be taxed till that period at the point
of last purchase and the coconut of all varieties
would include copra also. Therefore, it is a
declared goods. The Division Bench while
considering whether copra is an oil seed held thus
:

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Coconut is understood in several forms, namely,
tender coconut, watery coconut, dried coconut
and copra, and all these come under the
expression ‘coconut’. Except in the case of tender
coconut from which oil cannot be extracted, in all
other cases, oil can be extracted and all of them
are regarded in common parlance as oil seeds.”
In Sri Lakshmi Coconut Industries v. State of
Karnataka [(1980) 46 STC 404 (Karn HC)] , the
Division Bench of the Karnataka High Court was
to consider whether desiccated coconut falls
within the entry coconut, which is one of the
declared goods under Section 14 of the Central
Sales Tax Act, 1956 and is also included at Entry
5 of the Fourth Schedule to the Karnataka Sales
Tax Act, 1957. In that context the meaning of the
word oil seeds was extensively examined by the
Division Bench and held that desiccated coconut
is a coconut and a declared good under Section
14 of the Central Sales Tax Act, 1956. In Deputy
Commissioner of Agrl. Income Tax and Sales Tax,
Kerala v. A.P. Raman [(1960) 11 STC 263 (Ker
HC)] , the Kerala High Court also took the same
view. In CST v. Ram Kumar Nand Kumar [(1973)
31 STC 321 : 1973 Tax LR 2165 (All HC)] , the
Allahabad High Court also held that coconut is
an oil seed within the definition of Section 3-
AA(1)(vi) of the U.P. Sales Tax Act, 1948.
6. In the light of the above discussion we conclude
that the watery coconut (brown coconut) is not a
green fruit but is a separate entity by itself. It
cannot also be considered to be a dry fruit within
the meaning of Entry 11 of Rule 4. Dried fruit is

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distinct from the coconut. Therefore, the watery
coconut (brown coconut) does not fall within the
meaning of Item 13-B of Rule 4 of the Rules also.
All articles or goods which are not specified
elsewhere in the schedule or in the list of
exempted articles or goods would fall under Item
55 of Rule 14. Brown coconut is not an exempted
article among the list of articles in Item 10 of
Rule 4, namely, green fruit (brown coconut)
(watery coconut) would fall within Item 55 of
Rule 14 of the Rules and is exigible to octroi. ”
77. The aforesaid judgment clearly indicates that the Hon’ble
Supreme Court has categorically held that watery coconut (brown
coconut) is not a green fruit. Accordingly, the contention of the petitioner
that coconut ought to be placed under the heading “Fruits” is wholly
misconceived.
78. A Division Bench of this Court in the case of M/s Jayprakash
Pramod Kumar and others vs. U.P. Raj Krishi Utpadan Mandi
Parishad, U.P., Lucknow and others reported in 2005 SCC OnLine
All 1708 while deciding the issue of whether persons carrying on the
business of sale and purchase of bamboo could be required under the Act
of 1964 to obtain a licence for conducting such business and to pay
market fee on transactions involving the sale and purchase of bamboo
within the respective Market Areas, considered the question of whether
bamboo falls within the category of “wood” under the heading “Forest
Products” contained in the Schedule to the notification issued under
Section 8(1)(a) of the Act, 1964. After considering several judgments of
the Hon’ble Supreme Court, the Division Bench held that bamboo is an
item covered by the entry “wood” as specified in the Schedule to the
Act, 1964. The Division Bench further held that an entry in a taxing
statute must be interpreted in accordance with the meaning attributed to
it in common parlance, that is, the meaning in which it is understood by
persons dealing in the commodity concerned.

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79. Hon’ble Supreme Court in the case of Ramavatar Budhaiprasad
vs. Assistant Sales Tax Officer, Akola reported in AIR 1961 SC 1325
held that entries in taxation statutes must not be construed in a technical
sense or from a botanical point of view but must be understood in their
common parlance. Where a word has not been defined in the statute and
is a word of everyday use, it must be construed in its popular sense, that
is, in the sense in which persons conversant with the subject matter of
the statute would understand it. Hon’ble Apex Court further held that the
word “vegetables” as used in a taxing statute must be understood in its
common parlance, denoting a class of vegetables grown in a kitchen
garden or on a farm and used for the table. Accordingly, betel leaves
cannot be classified as vegetables.
80. Hon’ble Supreme Court in the case of Motipur Zamindary Co.
(P) Ltd. vs. State of Bihar reported in AIR 1962 SC 660 held that
sugarcane does not fall within the definition of the expression “green
vegetables”.
81. Hon’ble Supreme Court in the case of Saraswati Sugar Mills vs.
Haryana State Board reported in (1992) 1 SCC 418 has held that the
term “vegetable” must be understood in its common parlance sense and
not in its botanical sense so as to include sugarcane.
82. In the present context, we find that the term “coconut”, in ordinary
commercial parlance, is understood to encompass several forms, one of
which is green coconut. However, this, by itself, does not imply that all
other forms of coconut can also be classified or categorised as fruits.
Thus, we are of the view that the State Legislature has rightly placed
coconut, as understood in common parlance, under the heading “A-
Agriculture” and the sub-heading “III-Oilseeds” in the Schedule
appended to the Act, 1964. Such classification cannot be said to be
defective or illegal in any manner. Accordingly, we hold that the
notification dated 30.01.1995 issued under Section 4-A of the Act, 1964
is ultra vires.
83. We would also like to observe that the Hon’ble Supreme Court,
while considering the legislative wisdom of the Legislature, has

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consistently held that the Legislature is presumed to understand and
correctly appreciate the needs of its people. Such legislative wisdom
cannot be questioned or interfered with except on the grounds of lack of
legislative competence, violation of any of the fundamental rights
guaranteed under Part III of the Constitution or contravention of any
other constitutional provision.
84. W e do not find any such ground in the present case. The licence
granted to the petitioner pertains exclusively to trade within Navin Phal
Sabzi Mandi Sthal, Sahibabad (Ghaziabad), which is a Fruit and
Vegetable Market Yard. The petitioner-firm, at no point of time, had any
legal right to trade in green coconut. However, it continued to do so as
the authorities did not restrain it from carrying on such trade. Mere
inaction on the part of the authorities cannot, by itself, create any right in
favour of the petitioner-firm to continue trading in green coconut when
such trade is otherwise not legally permissible.
85. As indicated hereinabove, the right to carry on trade under Article
19(1)(g) of the Constitution is subject to reasonable restrictions. We find
that the licence granted to the petitioner did not, at any point of time,
authorised it to trade in coconut. It was not legally permissible for the
petitioner to trade in green coconut, which is merely one of the form of
coconut under the pretext that certain reports describe green coconut as a
fruit and that according to botanical classification, it also falls within the
category of fruits.
86. The writ petition is dismissed . No order as to costs.
(Amitabh Kumar Rai,J.) (Alok Mathur,J.)
November 12, 2026
Mahesh
Digitally signed by :-
MAHESH KUMAR
High Court of Judicature at Allahabad,
Lucknow Bench