Brishketu Saran Sinha, J.

The prayer in this writ application under Articles 226 and 227 of the Constitution is to quash Annexures 1' and 2' appended to it. Annexure 1' is an order of the Assessment Sub Committee dated 26th July, 1983, and Annexure 2' is the consequential demand notice dated 28th July, 1983, for payment.

2. Messrs Chhabirani Agro Industrial Enterprises Limited is a public limited company and manufactures Vanaspati and has its factory at Durgawati in the district of Rohtas. The head office is at Calcutta, Durgawati, where the petitioner's factory is situated, is included within the local limits of the Agricultural Produce Market Committee, Mohania, district Rohtas (respondent no. 1). The Vanaspati manufactured by the company is sold either at Durgawati within the market area of respondent no. 1 or is sold through its commission agents located at various places, both in the State of Bihar as well as outside the State. The sales effected through the commission agents are known as 'consignment sales. In cases of consignment sales the company despatches Vanaspati to its commission agents who sell the same at their places of business and remit the sale proceeds after adjusting their advances, securities and commission. For the period 1982-83 the total liability of the market fee of the company, according to, its books of account was Rs. 2,81,418,67 paise which was paid. During this period the company had sold Vanaspati on consignment basis through it commission agents within the State of Bihar as well as outside it. The sales were to the tune of Rs. 3,36,827,40.00 and since these transactions did not represent sale and purchase within the local limits of the respondent, Market Committee, no fee was leviable on such transactions and, accordingly, no market fee was collected nor was to be paid, In pursuance of a notice of assessment issued to the company, all books of account and documents were produced before the Assessment Sub Committee which were duly verified and no discrepancy or irregularities were found, still according to the petitioner-company, the Assessment Sub Committee illegally and arbitrarily subjected the petitioner-company to a fee liability of Rs. 3,36,827.40 paise on the aforesaid consignment sales and also mechanically, without giving any finding with respect to mens rea or guilty intention, imposed 100 percent penalty to the tune of the same amount and thus created a total demand of Rs. 6,73,654.80 paise, A copy of this assessment order is Annexure 1'. On the basis of this assessment the demand has been made, a copy of which is Annexure 2'.

3. In the writ petition it has been urged that rule 88 of the Bihar Agricultural Produce Market Rules, 1975, is ultra vires the rule making power of the State Government as it is inconsistent with the mandatory provisions of section 27A (i) of the Bihar Agricultural Produce Market Act, 1960 (hereinafter referred to as 'the Act'). This plea has been raised on the basis that since the assessment has been made by two members only of the Assessment Sub Committee, the assessment is bad. It has further been urged in the petition that sales outside the market committee concerned are not liable to market fee. The extension of the meaning of 'sale' by inserting an explanation 2(p) (i) by the Bihar Agricultural-Produce Markets (Amendment) Act, 1983, has also been challenged. The assessment has been challenged on some other grounds as well.

4. A counter affidavit has been filed on behalf of the respondents in which apart from other statements made, it has been stated that in view of the amendment to section 9(5) of the Act, provision has been made for authorising a person to exercise all powers of the Chairman, Vice Chairman and members of the Market Committee on the expiry of their term of three years; and, as in the instant case, the term of the Agricultural Produce Market Committee, respondent no. 1 expired, the state Government authorised and empowered the Sub-d