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1995 Supreme(Kar) 126
Karnataka High Court
PREM MCE MILL, MANVI, RAICHUR DISTRICT - Appellant
Versus
STATE OF KARNATAKA - Respondent
Decided On : 02-24-95
W.P. : 33418 of 1994
B.R.SATENAHALLI, E.G.SRIHARAN, N.DEVDAS
The surrender of levy rice to the Government or Government Agencies under the Karnataka Rice Procurement Levy Order, 1984, does not amount to a sale and therefore the collection of market fee in respect of the transactions made under levy control order is illegal.
Headnote:
MARKET FEE - LEVY RICE - SALE - Karnataka Agricultural Produce Marketing (Regulation) Act, 1966 (26 of 1966) - Levy Order issued under Essential Commodities Act, 1955 (10 of 1955) - Levy rice surrendered to the Government or Government Agencies - Not a transaction of sale - Not liable to market fee.
Fact of the Case:
Petitioners, rice millers, challenged the demand for market fee by the Enforcement Officer appointed under the Karnataka Agricultural Produce Marketing (Regulation) Act, 1966 (26 of 1966) in respect of the transactions made by them in respect of rice which was controlled by the Levy Order or orders issued by virtue of Entry 48 of List II and Entry 33 of List III of 7th schedule, since they are not covered under the enactment of entry 26 and 28 of List-II of 7th Schedule and for the issuance of writ, order or direction in the nature of writ of mandamus communicating and directing the respondent-Market committees to allot shop-cum-godown to the petitioners in the respective Market Yards and for such further or other reliefs.
Finding of the Court:
The Court held that the surrender of levy rice to the Government or Government Agencies in pursuance of the Karnataka Rice Procurement Levy Order, 1984, the grading of the rice is provided and the surrender of the rice to the Government on the procurement of rice fixed and the deductions by the Government is being done. In view of Clauses 6, 7 and 8 of the levy order, it is obligatory on the petitioners to surrender and to furnish the details regarding purchase, sale and to surrender the levy rice on the Government rate i.e., on the price or rate fixed by the Government. The Court found that the transactions made or surrenders of the rice made under levy control order is not a transaction of the nature which may amount to sale and as such the collection of market fee in respect of those transactions is illegal and it is the Act which is one to be called to be one without jurisdiction and without authority conferred by law to Karnataka Agricultural Produce marketing Committees, under the Karnataka Agricultural produce Marketing (Regulation) Act.
Issues: 1. Whether the surrender of levy rice to the Government or Government Agencies under the Karnataka Rice Procurement Levy Order, 1984, amounts to a sale? 2. Whether the collection of market fee in respect of the transactions made under levy control order is legal?
Ratio Decidendi: 1. The Court held that the surrender of levy rice to the Government or Government Agencies under the Karnataka Rice Procurement Levy Order, 1984, does not amount to a sale. The Court reasoned that the transaction is in the nature of compulsory acquisition by the State Government from the stock of rice or paddy belonging to the petitioners i.e., millers or licensed dealers and as such in such transaction there is complete lack of volition or free consent of consensual consent and as such it cannot amount to sale. 2. The Court held that the collection of market fee in respect of the transactions made under levy control order is illegal. The Court reasoned that the transaction is not a sale and therefore in view of the provisions of the Levy Order, it cannot be taken to be the transaction of sale giving rise to liability to levy of market fee.
Final Decision: The Court allowed the petition and issued a writ of mandamus to the respondents not to demand and collect the market fee from the petitioners in respect of the transactions, covered by the Karnataka Rice procurement (Levy) Order and the surrender of rice made by the petitioners to the Government or purchasing agent i.e., Food corporation of India, under the above Levy Order.
( 1 ) BY this petition the petitioner has prayed for issuance of writ of prohibition, prohibiting the Enforcement Officer appointed under the Karnataka Agricultural Produce Marketing (Regulation) Act, from demanding and collecting the market fee in respect of the transactions made by the petitioners in respect of Rice which is controlled by the Levy Order or orders issued by virtue of Entry 48 of List II and Entry 33 of List III of 7th schedule, since they are not covered under the enactment of entry 26 and 28 of List-II of 7th Schedule and for the issuance of writ, order or direction in the nature of writ of mandamus communicating and directing the respondent-Market committees to allot shop-cum-godown to the petitioners in the respective Market Yards and for such further or other reliefs. The petitioners have also claimed interim relief to the effect that respondents and their subordinates be directed not to demand or collect market fee in respect of transactions made by the petitioners under levy order and to further direct the respondents not to seize the accounts books of the petitioners pending disposal of the writ petition.
( 2 ) THE petitioners case in brief is the petitioners are the Rice Millers, situated in the respective places mentioned in the cause title and they have obtained necessary licenses from the competent authorities under the provisions of the Karnataka agricultural Produce Marketing Committees Licensing Order, 1986 and also under Rice Milling Industries (Regulation) Act, 1958. According to the petitioners case, petitioners are purchasing paddy in the Market Yard, after paying the market fee to the respective Market Yards and thereafter the paddy being converted into rice. The petitioners case is that the rice, i. e. , converted rice is covered by the Levy Order known as "karnataka Rice Procurement Levy Order, 1984", which has been issued under the Essential Commodities Act. The petitioners further case is that under the Karnataka Rice procurement Levy Order, 1984, it is the obligation of petitioners to surrender the levy rice to the Government or the agent appointed by the Government. That after surrendering the levy rice to the Government, it is also the obligation cast on the petitioners to make appropriate application seeking direction to transport the rice in Form-D and the respective Form-D's have to be issued by the Deputy Commissioner, which contains restrictions restraining the persons to transport commodities under the Certificate. It is further case of the petitioners that it is further obligation to have transfer certificate for releasing the commodities contained in Form-D to appropriate persons mentioned in the transfer certificate and as such the transfer certificate contained in Form-D cannot be attracted by the provisions of Karnataka Agricultural Produce Marketing (Regulation) Act, with respect to the commodities controlled by the yard. The petitioner has annexed Annexure-A, to the effect, that this position of law has been clarified as such by the Chief marketing Officer. The petitioners grievance is that in spite of the certificate in Form-D being issued while transporting the rice under Form-D with the certificate issued by the Tahsildar, lorries of the petitioners were stopped unnecessarily and market fee is being collected with penalty, without issuing any receipt to that effect, as mentioned in detail in paragraph-2 of the writ petition. The petitioners further case is that under Karnataka agricultural Produce Marketing Committees Act, vide, Section 8 (2), trade outside the Market Yard with respect to the notified goods or agricultural produce is prohibited, but when a transaction takes place after the levy order, the transactions is permitted to take place outside the yard in the respective place and the produce, under the levy order. The petitioners further case is that as regards the marketing of essential items or commodities like rice, marketing fee was never
