IMPORTANT POINT
The principle of equivalence, is the foundation for levy of a fee. It must be held to be the foundation of a statutory charge like supervisory charges.

Headnote:Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 – Section 62– Supervision charges-Levy of – Issuance of Notification by State of Maharashtra in exercise of its power under Section 62 of Act adding some items in Schedule appended thereto such as sugar, dry fruits, edible oils and vanaspati to Schedule of Act – Collection of market fee as also supervision charges on all notified agricultural produces marketed on wholesale basis by Appellant.1, Market Committee-Writ petitions thereagainst by respondents contending that they were not liable to pay any market fee or supervision charges-High Court although rejected contention that respondents were not liable to pay any market fee, opined that appellant was not entitled to collect supervision charges – Appeal thereagainst on plea that question as to whether any supervision charges were payable or not having not been raised by respondents High Court committed a serious error in arriving at said conclusion – A finding of fact had been arrived at by High Court that no service was being rendered by the State – If no service was being rendered, even no fee could have been levied – The principle of equivalence, therefore, is the foundation for levy of a fee-It must be held to be the foundation of a statutory charge like supervisory charges – It was for the State to prove it- Once the State had failed to bring record foundational facts, it was not for appellant who was merely a statutory authority for collecting same as an agent of State to contend that same was payable – Cost of supervision, if borne by the State has to be recovered by it – The burden was, therefore, on State to justify the levy- Even the general or special order, if any, purported to have been issued by the State had not been brought on record – On what basis, the supervision charges were being calculated was not known- The premise for levy or recovery of the amount of supervisory charges was not founded on any factual matrix – Only the source of the power had been stated but the basis for exercise of the power had not been disclosed – No infirmity found in the impugned judgment – Appeal dismissed. (Paras 13 to 18)
       Facts of the Case :
        Issue in consideration in present case was regarding validity of the levy and collection of the supervision charges by Appellant.1, Market Committee on Issuance of Notification by State of Maharashtra in exercise of its power under Section 62 of Act adding some items in Schedule appended thereto such as sugar, dry fruits, edible oils and vanaspati to Schedule of Act.
       Findings of the Court :
        A finding of fact had been arrived at by High Court that no service was being rendered by the State. If no service was being rendered, even no fee could have been levied. The principle of equivalence, therefore, is the foundation for levy of a fee. It must be held to be the foundation of a statutory charge like supervisory charges. It was for the State to prove it. Once the State had failed to bring record foundational facts, it was not for appellant who was merely a statutory authority for collecting same as an agent of State to contend that same was payable. Cost of supervision, if borne by the State has to be recovered by it. The burden was, therefore, on State to justify the levy. Even the general or special order, if any, purported to have been issued by the State had not been brought on record. On what basis, the supervision charges were being calculated was not known. The premise for levy or recovery of the amount of supervisory charges was not founded on any factual matrix. Only the source of the power had been stated but the basis for exercise of the power had not been disclosed. No infirmity was found in the impugned judgment. Appeal was hence dismissed.
       Result : Appeal dismissed.

JUDGMENT

S.B. Sinha, J. —

1. Leave granted.

2. Appellant is a Market Committee constituted under the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 (for short, ‘the Act’). First respondent herein deals in Edible Oils and Vanaspati. By reason of a Notification dated 25.9.1987, the State of Maharashtra in exercise of its power under Section 62 of the said Act added some items in the Schedule appended thereto such as sugar, dry fruits, edible oils and vanaspati to the Schedule of the Act. Appellant No.1, Market Committee, started collecting market fee as also supervision charges on all notified agricultural produces marketed on wholesale basis. The wholesale market in respect of condiments, spices, dry fruits etc. was shifted from Greater Bombay to New Bombay on and from 1.1.1991 where a huge market had been constructed by the appellants.

3. Respondents allegedly, despite the applicability of the provisions of the said Act as also the Notification dated 25.9.1987, did not get itself registered thereunder contending that ‘Vanaspati’ had not been included in the Schedule appended thereto. Some of the traders dealing in edible oil had also obtained exemption from payment of market fee and supervision charges for a short time. Such exemption granted was, however, withdrawn. Various litigations were initiated before the Bombay High Court questioning the validity of the said notification as also levy of market fee and supervision charges by the Committee.

4. Respondent Nos.1 and 2 also filed writ petitions in the year 1988 contending that they were not liable to pay any market fee or supervision charges.

5. The High Court by reason of a judgment and order dated 16.6.2006 although rejected the contention that the respondents were not liable to pay any market fee, opined that the appellant was not entitled to collect supervision charges. Supervision charges as also interest accrued thereon were payable to the State Government. The High Court in its judgment held :

“The impugned orders which have been passed either during the pendency of the petition or before the petition was filed are silent on the quantum of supervision charges paid by the respondent No.1-Committee to the State Government in respect of the sale/distribution of vanaspati produced by the petitioners and marketed in the market area of respondent No.1, though not from the market yard. In the absence of the petitioners having an outlet or a depot or a trading centre in the market yard of respondent no.1, the other place is only the premises of the petitioners as admittedly the respondent no.1 has not established any other collection centres or subsidiary markets by exercising powers under Section 5 and Section 30A of the Act. We are, therefore, of the considered view that the respondent No.1-Committee has no powers to cause recovery of supervision charges from the petitioners as at present and the impugned orders to that extent are unsustainable.”

In regard to the payment of interest, it was held :

“We are afraid Clause (y) below Rule 120 does not come to the rescue of the Market Committee in support of its case that it has the power to charge interest varying from 12% to 21% on the delayed dues of market fees and supervision charges under bye-law No.14(A). Section 31 as well as sections 34A to 34C clearly provide for only penal charges and bye-law no.14 cannot be termed so as to cover condition of trading and marketing in the market area. We have also noticed that on issuance of the notice by the Market Committee, the petitioners have taken due steps and during the pendency of the petitions or before the impugned orders for recovery were passed, they have deposited certain sums. In both the petitions, it is not a case of inordinate delay in responding to the demands and, in fact, the demands have been substantially met within few months. No reasons have been given in the impugned orders as to why the Market Committee felt it appropriate to recover intere

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2008 Supreme(SC) 728

2008(3) Supreme 321SUPREME COURT OF INDIAS.B. Sinha & Lokeshwar Singh Panta, JJ.Mumbai Agricultural Produce Market Committe & Anr. — PetitionersversusHindustan Lever Limited & Ors. — RespondentsAppeal (civil) 3042 of 2008Decided on : 29-04-2008

IMPORTANT POINT The principle of equivalence, is the foundation for levy of a fee. It must be held to be the foundation of a statutory charge like supervisory charges.

Cases Referred (2)

2008(3) Supreme 321
SUPREME COURT OF INDIA
S.B. Sinha & Lokeshwar Singh Panta, JJ.
Mumbai Agricultural Produce Market Committe & Anr. — Petitioners
versus
Hindustan Lever Limited & Ors. — Respondents
Appeal (civil) 3042 of 2008
Decided on : 29-04-2008

IMPORTANT POINT
The principle of equivalence, is the foundation for levy of a fee. It must be held to be the foundation of a statutory charge like supervisory charges.