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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, J.
Gulshan Polyols Limited – Appellant
Versus
State Of Gujarat – Respondent
R/Special Civil Application No. 17299 of 2021 With R/Special Civil Application No. 687 of 2020
Decided on : 14-10-2022
Levy of market fees under section 28 of the Gujarat Agricultural Produce Markets Act, 1963 (Act, 1963) - Interpretation of provisions - Applicability of section 28(2)(b) of the Act, 1963 - Whether industrial concerns are liable to pay market fees on agricultural produce brought into the market area for processing and manufacturing - Scope and applicability of Rule 48(2) and Rule 49 of the Gujarat Agricultural Produce Markets Rules, 1965 (Rules, 1965).
Fact of the Case:
The petitioners, both industrial concerns, challenged the levy of market fees by the Agricultural Produce Market Committee (APMC) under section 28 of the Act, 1963. The petitioners contended that they were not liable to pay market fees as they brought agricultural produce from outside the market area for processing and manufacturing, and had submitted Form-V as required under Rule 48(2) of the Rules, 1965. The APMC, on the other hand, argued that the petitioners were liable to pay market fees as they had not obtained a permit under clause (e) of section 28(2) of the Act, 1963 for removal of the agricultural produce from the market area.
Finding of the Court:
The Court held that the petitioners were not liable to pay market fees under section 28 of the Act, 1963. The Court interpreted section 28(2)(b) of the Act, 1963 to mean that no market fees are leviable on agricultural produce brought into the market area by an industrial concern for processing and manufacturing, provided that the industrial concern has submitted Form-V as required under Rule 48(2) of the Rules, 1965. The Court also held that Rule 49 of the Rules, 1965, which prescribes the recovery of market fees, is not applicable in cases where Rule 48(2) is applicable.
Issues: 1. Whether industrial concerns are liable to pay market fees on agricultural produce brought into the market area for processing and manufacturing under section 28 of the Act, 1963? 2. Applicability and scope of Rule 48(2) and Rule 49 of the Rules, 1965.
Ratio Decidendi: 1. The Court held that industrial concerns are not liable to pay market fees on agricultural produce brought into the market area for processing and manufacturing under section 28 of the Act, 1963, provided that they have submitted Form-V as required under Rule 48(2) of the Rules, 1965. 2. The Court held that Rule 48(2) of the Rules, 1965, which exempts industrial concerns from paying market fees on agricultural produce brought into the market area for processing and manufacturing, is applicable in cases where the industrial concern has submitted Form-V. Rule 49 of the Rules, 1965, which prescribes the recovery of market fees, is not applicable in such cases.
Final Decision: The Court allowed the petitions and quashed the impugned orders passed by the APMC levying market fees on the petitioners. The Court also directed the APMC to refund the market fees paid by the petitioners.
JUDGMENT :
1. Heard learned Senior Advocate Mr. Mihir Joshi with learned advocate Mr. Dipen Desai for the petitioner in Special Civil Application No.687/2020 and for the respondent no.3 in Special Civil Application No.17299/2021, learned Senior Advocate Mr. B.S. Patel with learned advocate Mr. Chirag B. Patel for the respondent no.3 in Special Civil Application No.687/2020, learned advocate Mr.Hriday Buch for the petitioner in Special Civil Application No.17299/2021 and learned Assistant Government Pleader Mr. Dhawan Jayswal for the respondent-State.
2. Special Civil Application No.687/2020 is preferred by Agriculture Produce Market Committee, Bharuch feeling aggrieved by the order dated 3.12.2019 passed by the respondent no.1-Deputy Secretary (Appeals), Agriculture, Welfare and Cooperation Department of the State under section 48 of the Gujarat Agriculture Produce Markets Act, 1963 (For short “the Act, 1963”) in Revision Application No.30 of 2019 whereby revision application preferred by respondent no.3 –M/s. Jabsons Foods was partly allowed by quashing and setting aside the order dated 11.01.2019 passed by the petitioner for levy of market fees on the goods purchased from outside the market area and further directing respondent no.3 to inform the petitioner Market Committee about the market fee after verification of Form No.V with regard to agriculture produce purchased or sale in the market area of the petitioner.
3. Special Civil Application No. 17299/2021 is filed by the petitioner being aggrieved by order dated 18.09.2021 passed by respondent no.1 - Deputy Secretary (Appeals), Agriculture, Welfare and Cooperation Department of State in Revision Application No.20/2021 whereby revision application filed by respondent no.3 – Agriculture Produce Market Committee, Jhagadiya was allowed and order of the respondent no.2-Director, Agriculture Marketing and Rural Finance Department dated 11.06.2020 in Appeal No.31 of 2019 was quashed and set aside. Accordingly, the petitioner was directed to pay the market fees under section 28 of the Act, 1963.
4. Special Civil Application No. 687/2020 was admitted by order 10.01.2020. Special Civil Application No.17299/2021 with regard to the same subject matter of levy of market fees under section 28 of the Act, 1963 was also admitted by order dated 20.12.2021 in view of the submissions made on behalf of the petitioner that respondent no.1 Deputy Secretary (Appeals) has taken a completely contrary view to its own earlier view as per order dated 3.12.2019 in Revision Application No.30/2019 in the matter of Jabsons Foods which is the subject matter of challenge before this Court in Special Civil Application No. 687/2020.
5. In view of above facts, both the matters were ordered to be heard together while admitting Special Civil Application No. 17299/2021.
6. The petitioner of Special Civil Application No. 17299/2021 was protected by way of interim relief against the impugned order on condition of depositing of Rs. 1 crore with the Registry and furnishing a bank guarantee of Rs. 3 crore from any nationalised bank till the final disposal of the petition.
7. Considering the issues raised in both these petitions, it would be fruitful to record facts of each cases individually.
8. Brief facts of Special Civil Application No. 687 of 2020 are as under :
8.1) The petitioner is Agriculture Produce Market Committee at Bharuch constituted under the provisions of Act, 1963 and is a local authority as per Section 10(2) of the Act. Respondent no.3 is a trader operating in the market area of the petitioner Market Committee.
8.2) It is the case of the petitioner that the respondent no.3 though being a processor and undertaking activities such as processing of agriculture produce and thereby liable to pay market cess, was not paying the market cess to the petitioner Market Committee and therefore, the petitioner Market Committee issued notices to the respondent No.3 directing the respondent no.3 to pay the outstanding mark
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