JUDGMENT

G.N. Ray, J.-Leave granted. Heard learned counsel for the parties.

2. The questions raised for decision in the appeal are as to whether the respondents Nos. 1 to 3 who purchased Khairwood and processed the same and manufactured katha are producers within the meaning of the Himachal Pradesh Agricultural Produce Marketing Act (hereinafter referred to as Marketing Act) and whether the said respondents are also dealers within the meaning of the Marketing Act and therefore they are required to obtain licence for their trading activities under the said Marketing Act.

3. The respondent No. 1, Shankar Trading Co. Pvt. Ltd., is a private limited company which has established its sale depot at Una which is within the jurisdiction of the Marketing Committee at Una within the State of Himachal Pradesh. The respondents purchased khairwood and processed the said khairwood by subjecting the wood to various physical and chemical processes and converted the khairwood into katha . The appellant No. 1, Himachal Pradesh Marketing Board, and the appellant No. 2, Marketing Committee, Una, constituted by the Himachal Pradesh Marketing Board under the Marketing Act, required the respondent No. 1 Shanker Trading Co. Pvt. Ltd., to obtain licence and pay the requisite market fee @ 1 on the sale of katha which are processed by the said respondent during the marketing year. The said demand for obtaining licence and to pay the requisite market fee was made on the footing that the respondents who produce katha are manufacturers and as they also act as dealers of katha under the Marketing Act, they were required to obtain licence for the trading activities within the market area and to pay the requisite market fee for such trading activity.

4. The respondents Nos. 1 to 3 challenged the appellants demand for levy of market fee and also the direction of the appellants asking the respondents to obtain licence under the Marketing Act in the High Court of Himachal Pradesh by filing a Writ Petition being Writ Petition No. 238 of 1989. The said respondents contended that they were manufacturers of katha from khairwood. Accordingly, they were not producers. In any event, the producers selling their manufactured products which is also an agricultural produce are not required to obtain a licence under the Marketing Act either for the purpose of producing or for selling. The appellants contested the said Writ Petition by filing a counter to the Writ Petition. It was contended inter alia by the appellants that Section 2(h) of the said Marketing Act only protects actual producers like the farmers but such protection was not extended to the companies like the respondent No. 1. It was further contended that the purpose of exemption of the producers within the meaning of Section 2(h) of the Marketing Act was that such farmers who were producers of agricultural produce within the meaning of the Marketing Act were not required to obtain any licence for the purpose of selling their own agricultural produce but the persons who purchase the raw material from outside and produce end product from such raw materials are not exempted from obtaining the licence under the Marketing Act. The Marketing Act only envisages exemption of the farmers who manufacture their agricultural produce but no such exemption is available to a non agriculturist engaged in the manufacture of end product from the agricultural produce.

5. The said Writ Petition was, however, allowed by the impugned judgment dated November 30, 1994. The High Court inter alia has come to the finding that the manufacturing processes required to be undertaken for obtaining the end product katha from the khairwood as alleged in the writ petition should be accepted in the absence of indicating any other process by the respondents in the Writ Petition (the appellants herein) for obtaining the end product katha from the khairwood. The High Court has indicated that katha is not grown and produced in the farms