The power to levy cess under Section 21 of the Assam Agricultural Produce Market Act, 1972 was found to be unconstitutional and ultra vires to the provisions of CGST Act, 2017 and AGST Act, 2017.

JUDGMENT :

14 writ petitions are taken up for disposal by this common judgment and order taking into account the similarity of facts as well as the issues being paramateria.

2. The writ petitioners in the instant batch of the writ petitions have challenged the levy and collection of cess by the respondent authorities under the provisions of the Assam Agricultural Produce Market Act, 1972 post the GST regime and further sought for directions upon the respondents to refund the cess amount which have been wrongfully and illegally collected from the petitioners.

3. This Court prior to dealing with the dispute finds it relevant to take note of some of the provisions of the Assam Agricultural Produce Market Act, 1972 (for short, ‘the Act of 1972’) which are pertinent to the instant dispute. The said Act was enacted to provide for better regulation of buying and selling of agricultural produce and the establishment of market for agricultural produce in the State of Assam and for matters connected therewith. In terms with Section 2 (1) (i) of the Act of 1972 "Agricultural produce" has been defined to mean and include any produce whether processed or non-processed of agriculture, horticulture, animal husbandry, pisciculture, sericulture and forest as specified in the Schedule. In terms with Clause (xvi) of Section 2 (1) of the Act of 1972, "Market" has been defined as a regulated market established under the Act of 1972 for the market area and includes a market proper, a principal market-yard and a sub-market-yard or yards, if any. Clause (xvii) of Section 2 (1) of the Act of 1972 defines "Market area" to mean any area declared to be a market area under Section 5 of the Act of 1972. Section 5 of the Act of 1972 empowers the State Government by notification in the Official Gazette to declare the area specified in the notification under Section 4 or any portion thereof to be a market area for the purpose of the Act of 1972 in respect of all agricultural produces specified in the said notification.

4. In the backdrop of the above, let this Court take into account the power to levy cess which is the subject matter of dispute in the instant batch of writ proceedings. Section 21 of the Act of 1972 stipulates the power to levy cess. The said Section 21 being relevant is reproduced hereinunder:-

“21. Power to levy cess.

(1) Every market committee shall levy and collect a cess on the agricultural produce bought or sold in the market area at a rate not exceeding two rupee for every one hundred rupees of the aggregate amount for which a specified agricultural produce is bought or sold whether for cash or for deferred payment or other valuable considerations.

(2) The Assam State Agricultural Marketing Board shall also have the power to levy and collect cess for any or all of the Market Committee(s) in the market areas in addition to the powers of the Market Committee (but not both), whenever felt necessary with approval of the State Government, on the agricultural produce bought or sold in such market area(s) at a rate not exceeding two rupees for every one hundred rupees of aggregate amount for which a specified agricultural produce is bought or sold whether for cash or for deferred payment or other valuable considerations.

(3) No cess will be levied on goods manufactured from the agricultural produce on which cess is proposed to be levied and which are ultimately exported out of the Country.

Explanation — 1. ‘[For the purpose of this section all Specified Agricultural Produce shall unless the contrary is proved be deemed to be bought or sold in notified market area if –

(i) Such produce is taken out or proposed to taken out of the said area; or

(ii) the agreement of sale or purchase thereof in respect of such produce is entered into the said area; or

(iii) in pursuance of sale or purchase or the agreement of sale or purchase such produce is delivered in