Tender Coconut Can’t Be Sold In Sahibabad Fruit Mandi Under Coconut’s Oilseed Listing: Allahabad HC Rejects Trader’s Bid

In brief

The question

Whether a trader licensed for a Fruit and Vegetable Market Yard could trade in coconut, classified in the Schedule as an oilseed, at that yard.

The court held

The Court answered the first issue against the petitioner: coconut could not be traded at Navin Phal Sabzi Mandi Sthal, Sahibabad, even on payment of user charges, because that yard was designated for fruits and vegetables.

It also directed

It rejected the challenge to the 30 January 1995 classification and dismissed the writ petition, with no order as to costs.

01Facts

The petitioner, a licensed trader in fruits and vegetables at Navin Phal Sabzi Mandi Sthal, Sahibabad, Ghaziabad, sought permission to trade in fresh/green coconuts and challenged the 30 January 1995 notification placing coconut under “Agriculture—Oilseeds” in the Schedule to the U.P. Krishi Utpadan Mandi Adhiniyam, 1964.

¶ 3–9

It claimed that it had traded coconuts at the market yard since 2003 and that the 2021 user-charge regime permitted such trade.

¶ 3–9

The State contended that the yard was designated for fruits and vegetables, while coconut was classified as an oilseed and could be traded at a suitable market yard on payment of user charges.

¶ 11–16

The Court framed two issues concerning the petitioner’s entitlement to trade there and the validity of the classification.

¶ 3–9, 11–16, 31

02Issues

i.Whether a trader licensed for a Fruit and Vegetable Market Yard could trade in coconut, classified in the Schedule as an oilseed, at that yard.

¶ 31(i)

ii.Whether the classification of coconut as an oilseed under the 30 January 1995 notification was ultra vires.

¶ 31(ii)

03Law Applied

Under Sections 2(a), 4-A, 5–9 and 17 of the 1964 Act, the Schedule identifies agricultural produce, but produce becomes “specified agricultural produce” for a particular Market Area through the applicable notification under Section 6 or Section 8; a Section 4-A amendment to the Schedule alone does not confer that status.

¶ 30, 38–43

Section 7 permits designation of market yards, while Section 7-C permits Special Commodity Market Yards; trade in a yard is confined to produce permitted for that yard.

¶ 34–37, 55–57

Section 17(iii)(c) authorises user charges for services or facilities provided in market yards.

¶ 39

In construing commodity entries, the Court applied the ordinary commercial-parlance approach, rather than a strictly botanical classification, drawing on Commissioner of Sales Tax, M.P. v. Popular Trading Co. and Shri Bharuch Coconut Trading Co. v. Municipal Corporation of Ahmedabad, among other authorities.

¶ 75–82

It also applied the principle that a legislative classification is presumed valid absent a recognised constitutional ground for invalidation.

¶ 17–20, 83

Provisions in the judgment · 1 · Linked ones open on LawLens

Central Sales Tax Act, 1956 Section 14

04Reasoning

The Court held that coconut had been included in the specified produce for the relevant market areas in 1996, but was excluded by notification dated 18 July 2003; it therefore ceased to be specified agricultural produce in those areas.

¶ 44–45, 59–63

The 17 September 2021 order later permitted trade in coconut in Market Yards on payment of user charges, but listed it under oilseeds, not fruits and vegetables.

¶ 47–49

Since Sahibabad was a Fruit and Vegetable Market Yard and the permitted commodities there did not include oilseeds, the user-charge regime did not authorise coconut trading at that location.

¶ 51–65

Past non-enforcement could not create a legal entitlement to trade there.

¶ 52, 63, 84

On the classification challenge, the Court found that “coconut” in commercial usage encompasses tender, watery, dried coconut and copra; the botanical description of coconut as a fruit did not determine its statutory or commercial classification.

¶ 67–79, 82–83