The crucial factor in determining the levy of market fee is whether the sale or purchase of agricultural produce took place within the market area, as established by the material placed on record.

Rajesh Bindal, J.

1. This order will dispose of a bunch of writ petitions bearing CWP Nos. 3871, 14399, 16206, of 2000, 543, 10449 of 2001, 3659, 12882, 15111 of 2002, 11559, 11560, 11561, 11562, 14731, 18374 of 2003, 11738 to 11752, 16317, 16477 of 2004, 3915, 6225, 8277, 14131 of 2005, 8990 of 2006, 6184 of 2008, and 9429 of 2010, involving identical issue.

2. The common issue involved in the aforesaid writ petitions is challenge to the vires of Rule 29(7) of the Punjab Agricultural Produce Markets (General) Rules, 1962 (for short, 'the Rules'). Beside this, orders passed by the different authorities under the Punjab Agricultural Produce Markets Act, 1961 (for short, 'the Act'), have also been impugned.

3. The facts in detail have been noticed from CWP No. 3871 of 2000.

4. The petitioner herein is engaged in the business of rice shelling. In the process of manufacturing rice, the petitioner purchase paddy from various mandis situated in the State of Punjab and also from outside the State. It is claimed that there is no dispute regarding payment of market fee on the paddy purchased from within the State of Punjab. The dispute arose with regard to the paddy purchased from the State of Haryana. It is claimed in the petition that for the paddy purchased from the State of Haryana, the entire transaction takes place outside the State of Punjab, namely, purchase, weighment and delivery and it is only that paddy is transported to the rice sheller situated in the State of Punjab. Transaction of sale completed outside the State of Punjab. Details of the quantum of paddy purchased from outside the State of Punjab was furnished by the petitioner to the market committee. Immediately thereafter the petitioner was served with a notice for payment of market fee and rural development fund thereon.

5. The petitioner replied to the aforesaid notice claiming that no market fee or rural development fund is payable as the transaction of purchase of paddy had taken place in the State of Haryana, where the market fee was paid and said sale or purchase had not taken place in any market area in the State of Punjab. Still the demand notice was issued. The matter was taken up in appeal before the Secretary, Mandi Board, whereby the demand was upheld. Order was challenged in revision before the Special Secretary, Department of Agriculture, Punjab. Number of documents were produced before him to substantiate the claim. Even the revision was also dismissed.

6. In the petition, besides challenging various orders passed by the authorities under the Act, challenge has been made to Rule 29(7) of the Rules, which has been relied upon to raise and uphold demand against the petitioner.

7. Mr. Roshan Lal Batta, learned senior counsel appearing for the petitioners submitted that Section 23 of the Act is the charging section which provides for levy of fee. It provides that fee is leviable on agricultural produce bought or sold by a licensee in the notified market area at the rates specified. Proviso to the aforesaid section provides that no fee shall be leviable in respect of any transaction in which delivery of agricultural produce bought or sold is not actually made. Exceeding the powers vested in the aforesaid section regarding charging of fee while framing the Rules, it has been provided in Rule 29(7) of the Rules that even if agreement to sell or purchase is entered in a market area or the agricultural produce is weighed or the delivery thereof is taken, the same shall be deemed to have been bought or sold in that market area. With the aforesaid Rule deeming fiction has been added, expanding the definition of sale and purchase, which term otherwise is well known and mere weighment of goods have been termed to be sale and purchase. In support of the arguments, reliance was placed on judgment of Hon'ble the Supreme Court in Agricultural Market Committee vs Shalimar Chemical Works Limited AIR 1997 Supreme Court 2502. It was submitted that similar provision con