Full Judgment Text
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PETITIONER:
RAUNAQ RAM TARA CHAND & ORS. ETC
Vs.
RESPONDENT:
THE STATE OF PUNJAB & ORS.
DATE OF JUDGMENT14/07/1975
BENCH:
GOSWAMI, P.K.
BENCH:
GOSWAMI, P.K.
ALAGIRISWAMI, A.
BHAGWATI, P.N.
CITATION:
1975 AIR 1587 1976 SCR (1) 1
1975 SCC (2) 554
CITATOR INFO :
RF 1980 SC1124 (32)
MV 1985 SC 679 (25)
ACT:
Punjab Agricultural Produce Markets Act, 1961 Sections
6, 10, 23-Punjab agricultural Produce Markets (General)
Rules, 1962-Rules 17, 29 and 31- Whether fees can be levied
on persons who are not licensees as contemplated by Section
23 and rule 29.
HEADNOTE:
The appellants sell Gur and Shakkar within the market
area notified under Punjab Agricultural Produce Markets Act,
1961. The appellants have obtained licences under Section 10
of the Act in Form as Commission Agents. Since the
appellants were selling Gur and Shakkar in their own shops
within the notified market area without submitting accounts
and without Payment of fees they were asked to show cause by
the Market Committee why legal action should not be taken
against them for violation of rules 29(3) and 31(1) of the
Punjab Agricultural Produce markets (General) Rules, 1962.
The appellants dismissed their liability to pay the fees
under the Act. The Administrator of Market Community levied
fees on the appellants on the basis of best judgment
assessment and also imposed penalty. The High Court allowed
the Writ Petitions filed by the appellants and quashed the
order of assessment as arbitrary and violative of the
principles of natural justice. The High Court, however,
rejected the contention of the appellants questioning the
validity of the fees levied.
Under section 10 of the Act any person may apply for a
licence which may be granted on such conditions as may be
prescribed. Under section 6(3) after tho issue of a
notification under section 6(1) no person can purchase or
sell any Agricultural produce except under a licence granted
in accordance with the pro visions of the Act. Section 23
authorizes the Committee to levy fees on the agricultural
produce bought or sold by the licensees in the notified
market area. Rule 29 provides that the Committee shall levy
fees on the agricultural produce bought or sold by licensees
in the notified market area. Rule 17(1) provides that a per
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son desirous of obtaining a licence under section 10 of the
Act shall apply in form A. The licence granted to the
appellant is in accordance with form B. No licence has been
issued to the appellants for doing the business of busing
and selling agricultural produce. Therefore, although the
appellants are licensees as required for some of the
businesses mentioned in Form B. they have no licence for
carrying out business of purchase and sale of agricultural
produce within the notified Market Area. Reading section 23
and rule 29 it is clear that the Act authorises levy of fee
on the agricultural produce bought or sold by licensees
only.
Allowing the appeal,
^
HELD : The appellants have not as a matter of fact been
issued licences as contemplated by section 23 and rule 29,
and no fees can, therefore, be levied on them in respect of
purchase and sale of agricultural Produce by them. The
appellants are, therefore, not liable to payment of fee
under the Act as demanded. [15B-C]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 299
and 120 to 124 of 1972.
From the Judgment and order dated the 25th March, 1970
of the Punjab & Haryana High Court in Civil Writ No. 325 of
1968, L.P.A. No. 177 of 1969, Civil Writ No. 1534, 1545,
1829 and 2201 of 1969 respectively.
G. L. Sanjay, S. K. Mehta, R. L. Batta and M.
Qumaruddin, for the appellants (in Civil Appeal No. 299/72).
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V. C. Mahajan, S. S. Khanduja and R. L. Bata, for the
appellants (In C.As. Nos. 120-124/72)
D. Mukherjee, Hardev Singh, R. S. Sodhi and G. C. Garg,
for the respondents. (In C.A. No. 299/72).
The Judgement of the Court was delivered by
GOSWAMI, J. In these appeals by certificate of the High
Court of Punjab and Haryana validity of action taken by the
Market Committee, Patiala, under the provisions of the
Punjab Agricultural Produce Markets Act, 1961, is under
challenge.
The appellants are shop-keepers of Gur Mandi, Patiala,
and are licensees under section 10 of the Punjab
Agricultural Produce Markets Act, 1961 (briefly the Act) and
are also pucca arhtiyas. It is not in dispute that they sell
gur and shakkar within the market area notified under the
Act. It is also admitted that they have licences under
section 10 of the Act in Form ’B’ as kacha arhtiyas or
commission agents. Since they were found to be selling gur
and shakkar in their own shops within the notified market
area without submitting accounts and without payment of fees
they were asked to show cause by the Market Committee why
legal action should not be taken against them for violation
of rules 29(3) and 31(1) of the Punjab Agricultural Produce
Markets (General) Rules, 1962 (briefly the Rules) and for
violation of condition No. 1 of the licence which is to the
effect that the licensee shall comply with the provisions of
the Act, Rules and Bye-laws framed thereunder and
instructions issued from time to time.
The appellants disclaimed liability to pay fee under
the Act on various grounds. The Administrator of the Market
Committee after some correspondence levied on one of the
appellants, M/s Prem Chand Ram Lal, appellants in Civil
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Appeal No. 120 of 1972, Rs. 5014/- as market fee on the
basis of best judgment assessment and imposed equal amount
of penalty and a demand notice was issued for payment. M/s
Prem Chand Ram Lal filed a writ application before the High
Court for quashing the demand notice. The High Court allowed
the petition quashing the order of assessment as arbitrary
and violative of the principles of natural justice. The High
Court, however rejected the other contentions of the said
petitioner questioning the validity of the fee levied. M/s
Prem Chand Ram Lal filed a Letters Patent Appeal against the
judgment of the learned single Judge rejecting their other
substantial points.
The appellants in civil Appeal No. 299 of 1972 had also
filed a writ application under articles 226 and 227 of the
Constitution in the High Court questions the action taken
against them as well as the levy under the Act. By a common
judgement of March 25, 1970 the Division Bench of the High
Court dismissed the Letters Patent Appeal of M/s Prem Chand
Ram Lal as also the writ application of the appellants and
granted certificates to appeal to this Court.
The question is whether the appellants are liable to
payment of fee under the Act.
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Action in this case was taken for violation of rules
29(3) and 31(1) of the Rules. We will read these rules :
R.29(1). ’Under section 23 a Committee shall levy
fees on the agricultural produce bought or sold by
licensees in the notified market area at the rates
fixed by the Board from time to time‘... "
(3) "The fees shall be paid to the Committee or a
paid officer duly authorised to receive such payment on
the day of the transaction or on the following day".
R.31(1). "Every licensed dealer and every dealer
exempted under rule 18 from obtaining a licence shall
submit to the Committee a return in Form M showing his
purchases and sale of each transaction of agricultural
produce on each day, on the day on which the
transaction takes place or on the following day .......
"
The fault of the appellants lies in that they have
neither paid fees under rule 29(3) nor have they submitted
returns in Form ’M’. A perusal of the above two rules would
show that the Committee is authorised to levy fees on
agricultural produce brought or sold only by a licensee in
the notified market area. Similarly under rule 31 (1) only a
licensed dealer is required to submit a return.
We have now to take note of the scheme disclosed in a
few other relevant provisions which are material for our
purpose.
Under section 10 of the Act "any person may apply to
the authority specified in section 9 for a licence which may
be granted for such period, in such form, on such conditions
and on payment of such fees not exceeding one hundred rupees
as may be prescribed". There is a proviso to this sub-
section whereby "if any personal carrying on any business of
the nature specified in sub-section (3) of section 6 in a
notified market area on the date of issue of notification
under sub-section (1) of that section fails to apply for
licence on or before the date specified therein t‘or
obtaining licence, the prescribed authority may, before a
licence is issued, impose on him such penalty not exceeding
one hundred rupees as may be prescribed". By section 5 of
the Act the State Government by notification declares its
intention of exercising control over the purchase, sale,
storage and processing of specified agricultural produce in
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a specified area. By section 6(1) the Government by
notification notifies a market area for the purpose of the
Act. Section 6(3) may be quoted:
6(3). "After the date of issue of such
notification or from such later date as may be
specified therein, no person, unless exempted by rules
made under this Act, shall, either for him I self or on
behalf of another person, or of the State Government
within the notified market area set up, establish or
continue or allow to be continued any place for the
purchase, sale, storage and processing of the
agricultural produce except
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under a licence granted in accordance with the
provisions of the Act. the rules and by-laws made
thereunder and the conditions specified in the
licence.. ..."
As we read the above sub-section it is clear that no
person shall, unless exempted by rules, inter alia,
purchase, sell, store or process the specified agricultural
produce except under a licence. It is not the case of the
appellants that they belong to the exempted class.
Rule 17(1) provides that "a person desirous of
obtaining a licence under section 10 of the Act shall apply
in Form A (to be submitted in duplicate) to the Chairman of
the Board through the Committee of the area in which he
wishes to carry on his business and shall also deposit with
the committee the requisite licence fee". Sub-rule (3)
provides that if any person on the specified date fails to
apply for a licence, he is liable to penalty in accordance
with a certain scale. Under sub-rule (7) "the Chairman may
grant a licence to the applicant in Form B. The licence
shall be subject to the conditions mentioned therein".
When we look to Form ’A’ which is the form for
application for a licence under section 10 we find that
against entry 8, the applicant has to give the "particulars
of the business for which the licence is required" under
four heads:
(1) Kacha Arhtiya
(2) Commission Agent
(3) Storage
(4) Processing
Similarly in Form ’B’ which is the form of the licence
under section 10, against entry 5, the same particulars of
the business as against entry in Form ’A’ appear. As a
matter of fact one of the licences of the appellants was
shown to us and it was in accordance with Form ’B’. It is,
therefore, clear that no licence has been issued to the
appellants for doing business of buying and selling
agricultural produce. It is the case of the appellants that
they make direct purchases and this fact is not
controverted. Although, there are, the appellants are
licensees as required for some of the businesses mentioned
in Form ’B’, they have no licence for carrying on business
of purchase and sale of agricultural produce within the
notified market area.
Now under section 23 "a Committee may, subject to such
rules as may be made by the State Government in this behalf,
levy on ad valorem basis fees on the agricultural produce
brought or sold by licensees in the notified market area at
a rate not exceeding rupee one fifty paise for every one
hundred rupees, provided..... " Section 43 provides for rule
making power. Rule 24 is referable to section 43(2)(v), but
we are not concerned with this rule in this case. Rule 29
provides that under section 23 a Committee shall levy fees
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on the agricultural produce bought or sold by licensees in
the notified market area at the rates fixed by the Board
from time to time. Reading section 23 and rule 29 together
it is not possible to escape from the conclusion that the
Act
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authorises levy of fee on agricultural produce bought or
sold by licensees only. The appellants have licence only in
respect of the business of kacha arhtiya and commission
agent. While we express no opinion on the point whether the
absence of reference to buying and selling of agricultural
produce in Form ’A’ and Form ’B’ disables the Committee to
issue licences for that purpose, we are of opinion that the
present appeals can be disposed of all the sole ground that
the appellants have not as a matter of fact been issued such
licences and no fees can, therefore, be levied on them in
respect of purchases and sales of agricultural produce by
them. The appellants are, therefore, not liable to payment
of fee under the Act as demanded.
The appellants also contend that since gur and shakkar
are manufactured products they cannot come under the
definition of agricultural produce with the meaning of
section 2(a) of the Act. Section 2(a) defines agricultural
produce to mean "all produce whether processed or not, of
agriculture, horticulture, animal husbandry or forest as
specified in the Schedule to this Act" which mentions 85
items of commodities. These are statutorily agricultural
produce under section 2(a). It is not possible to entertain
the argument that the Court will undertake a judicial
scrutiny of these items in order to come to a conclusion
whether these are agricultural produce or not. In view of
the definition in section 2(a) such an enquiry is out of
place. In this context we may note that under section 38 the
State Government may be notification add to the schedule any
other item of agricultural produce or amend or omit any such
specified item It is because of this power to add to the
schedule items of agricultural produce that the first part
of the definition under section 2(a) gives guidance as to
what agricultural produce means. The submissions are.
therefore. devoid of substance.
In the result the appeals are allowed. The appellants
are not liable for payment of fee with regard to their sales
in the notified market area other than in the capacity as
kacha arhtiyas or commission agents. In the circumstances of
the case there will be no order as to costs.
P.H.P. Appeals allowed.
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