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2019 Supreme(Raj) 319
IN THE HIGH COURT OF RAJASTHAN
PUSHPENDRA SINGH BHATI, J.
Hira Industries and Others – Appellants
Versus
State of Rajasthan and Others – Respondents
Civil Writ Petition Nos. 8204, 8402, 8403, 8422, 9151, 9152, 9894, 9898, 9899, 11439 of 2010, 10272, 11328 of 2011, 2922 of 2014
Decided On : 16-05-2019
Advocate Appeared:
For the Appellants : Mr. Vikas Balia, Dr. Sachin Acharya, Mr. Prashant Tatia, Mr. Bheem Arora.
For the Respondents: Mr. L.K. Purohit, Mr. Vipul Dharnia, Mr. Ravi Bhansali, Mr. Mahesh Chandra Bishnoi.
Industrial concerns are exempt from payment of market fee on the agricultural produce purchased from outside the State for industrial use.
Headnote:
AGRICULTURAL PRODUCE MARKET FEE - Levy - Exemption - Industrial concerns - Purchase of agricultural produce from outside the State for industrial use - Notification deleting exemption - Validity - Whether the petitioners, who are purchasing the material, which is admittedly an agricultural produce, and bringing the same to the area known as market area covered under the provisions of the Act of 1961 and the Rules of 1963, are liable to pay the market fee on the said produce or not.
Fact of the Case:
The petitioners, who are industrial concerns, were purchasing agricultural produce from outside the State for industrial use. The respondent-Agricultural Produce Market Committee was levying market fee on the petitioners on the said produce. The petitioners challenged the levy of market fee, contending that they were exempt from payment of market fee as per the provisions of the Rajasthan Agricultural Produce Market Act, 1961 and the Rajasthan Agricultural Produce Market Rules, 1963. The State Government issued a notification deleting the exemption. The petitioners challenged the notification.
Finding of the Court:
The Court held that the petitioners were not liable to pay market fee on the agricultural produce purchased from outside the State for industrial use. The Court held that the sale of the agricultural produce took place and was concluded outside the State of Rajasthan, and before these goods were brought to the market area, they had already become the owner thereof, by virtue of the sale outside the State, and therefore, the petitioners were not liable to pay any market fee.
Issues: Whether the petitioners, who are purchasing the material, which is admittedly an agricultural produce, and bringing the same to the area known as market area covered under the provisions of the Act of 1961 and the Rules of 1963, are liable to pay the market fee on the said produce or not.
Ratio Decidendi: The Court held that the petitioners were not liable to pay market fee on the agricultural produce purchased from outside the State for industrial use. The Court held that the sale of the agricultural produce took place and was concluded outside the State of Rajasthan, and before these goods were brought to the market area, they had already become the owner thereof, by virtue of the sale outside the State, and therefore, the petitioners were not liable to pay any market fee.
Final Decision: The Court allowed the writ petitions and quashed the notification issued by the State Government deleting the exemption from payment of market fee to the petitioners.
PUSHPENDRA SINGH BHATI, J.
1. With the consent of learned counsel for the parties, the matters have been heard finally.
2. These writ petitions under Article 226 of the Constitution of India have been preferred claiming, in sum and substance, the following reliefs:
"(a) set aside and quash the common order dated 16.03.2010 (Annexure 12) passed by the respondent No. 2 in Appeal No. 12/2009.
(b) direct the respondent authorities not to levy any market fee on purchase of agricultural produce including legume by the petitioner firm for being used for industrial purpose and declare that the levy of Mandi Fee on agricultural produce including legume by the respondents is ultra vires, illegal and void.
(c) declare that the provisions of Rajasthan Agricultural Produce Market Act, 1961 and the Rajasthan Agricultural Produce Market Rules, 1963 are not applicable to the petitioner firm.
(d) restrain the respondents for levying, imposing, demanding and recovering market fee from the petitioner firm on the purchase of agricultural produce including legume from outside the State of Rajasthan.
(e) declare that Rule 58 of the Rules of 1963 is not applicable on the petitioner firm and is ultra vires qua the industrial concerns like petitioner firm.
(f) in the alternative and without prejudice the notification dated 27.04.2005 may kindly be quashed.
(g) grant such further reliefs which in the facts and circumstances of this case may do complete justice to the petitioner firm; and h. award cost of this writ petition to the petitioner firm."
3. For the purpose of the present adjudication, the pleadings and facts are being taken from S.B. Civil Writ Petition No. 8403/2010.
4. As the pleaded facts would reveal, the petitioner-Firm falls within the ambit of small scale industry, for which permanent registration certificate has also been issued by the Government of Rajasthan. The petitioner-Firms job is to purchase the commodity from outside the State of Rajasthan and process it in its premises by different scientific ways.
5. The respondent-Agricultural Produce Market Committee (hereinafter referred as the Committee) has been constituted as per the provisions of the Rajasthan Agricultural Produce Markets Act, 1961 (henceforth to be referred to as the Act of 1961). The respondent-Committee is a Marketing Committee and is a Body Corporate. The Market Committee is required to manage the market, principal market yard and sub market yard in the market area, for which it was constituted, and it controls and regulates running of the market in the interest of agriculturists and traders in the market.
6. As per the provisions of the Rajasthan Agricultural Produce Market Rules, 1963 (hereinafter referred to as the Rules of 1963), a license is required to be obtained for carrying on business. Such license is to be issued by a Committee in accordance with the provisions of Section 14 of the Act of 1961. As per the pleadings made in the writ petition, the petitioner-Firm has obtained a license from the respondent-Committee, although as per the petitioner-Firm, it is not required to obtain such license. In this regard, reference of Section 17 of the Act of 1961 has been made, and the same is reproduced as hereunder:
"Section 17 - Power to collect market fees - The market committee shall collect market fees from the licensees in the prescribed manner on agricultural produce bought or sold by them in the market area at such rate as may be specified by the State Government, by notification in the official Gazette, subject to a maximum of [Rs. 2/-] per rupees one hundred worth of agricultural produce."
7. Reference of Rule 58 of the Rules of 1963 has also been made, which is also reproduced herein-below:-
"58. Market area Cess (1) A market area committee shall collect cess on agricultural produce bought and sold in the market area at such rate as may be specified [by the Government by way of notification:
Provided that no cess shall be levied on any such notified agricultur
