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2008 Supreme(All) 528
[2008(3) ADJ 460]
ALLAHABAD HIGH COURT
BEFORE : SUNIL AMBWANI, J.
VED RAM & SONS ...........Petitioner
Versus
DIRECTOR MANDI PARISHAD, LUCKNOW AND OTHERS ........Respondents
(Civil Misc. Writ Petition No. 58900 of 2007, decided on 29th February, 2008)
Counsel :
Yashwant Verma for the Petitioner; B.D. Mandhyan and Satish Mandhyan for the Respondents.
Headnote:(A) U.P. Krishi Utpadan Mandi Adhiniyam, 1965—Section 17(3), Explanation—Market fee and development cess—Assessment of—Power of Committee—To levy and collect market fee—Presumption added to Section 17(3)—Is rebuttable—But question of discharge of this presumption and nature of evidence to rebut such presumption—Has engaged attention of Supreme Court in [1980 Supp. SCC 27]—It is the settled view of Supreme Court in absence of any period of assessment or machinery provisions, each transaction has to be examined on its own facts—This presumption will only shift burden of proof upon manufacturing trader—It was found that there is no provision of making assessment of market fee and development cess under the Adhiniyam or Rules framed thereunder—It was also found that there is no assessment authority with quasi powers to receive evidence, to compel attendance of witnesses and production of documents—There is no period prescribed for making assessment, deposit of market fee and constitution of appellate authority also—On absence of these important aspects, Supreme Court advised legislature to provide necessary machinery in rules—But no steps has been taken as yet—Secretary of market committee, being executive authority—Is not competent to make such assessment—Moreover, absence of provision for appeal—Makes entire exercise arbitrary as it is based on whim and fancy approach of Secretary, who has no judicial training or experience—Pointing out several infirmities in Adhiniyam and Rules, High Court in the instant case, observed that both the assessing authority and revising authority decide matters with no understanding and training of law—High Court in this case also felt that State Government should wake up and provide for machinery provisions in rules for assessment of market fee and development cess and other effective measures. [Paras 11 to 13, 18, 19 and 31]
(B) U.P. Krishi Utpadan Mandi Adhiniyam, 1965—Section 17(3), Explanation—Evidence Act, 1872—Sections 4 and 114—Presumption of certain facts contained in Section 17(3)—Presumption—Raise a conclusive presumption, as clarified by Section 4 and empower Courts and quasi-judicial authorities to give effect thereto by virtue of Section 114—In the instant case, levy of market fee was found to be based on misreading of law and precedents—Revisional authority too failed to apply its mind—Both the orders, therefore, wholly illegal and cannot be sustained—Matter remanded for decision afresh in accordance with law after giving opportunity of hearing to both the parties. [Paras 14 to 17, 21, 26 to 29 and 31 to 33]
Hon’ble Sunil Ambwani, J.—The petitioner is a private limited company with its registered office at 56 and B-33 Site No. IV, Industrial Area, Sahibabad District Ghaziabad. It is engaged in the manufacture and sale business of production of milk products including ‘Desi Ghee’ in the name and style of ‘Pa. V in the market area of Krishi Utpadan Mandi Samiti at Ghaziabad (KUMS, Ghaziabad). The petitioner also sells its products through consignee agents. A list of 15 consignee agents with their offices in the States of West Bengal; Gujarat; Goa; Orissa; Maharashtra; Rajasthan and New Delhi, is enclosed with the writ petition. These consignee agents provide services namely uploading of goods from the truck, storage in the depots of the petitioner, despatch by trucks to redistribution stockists as per sale order, raise sale invoices on behalf of the petitioner-company in the name of re-distribution stockists and collect payments. The dispute in the present case is limited to the imposition of the ‘market fee’ and ‘development cess’ on the transactions through consignee agents under Section 17 of the U.P. Krishi Utpadan Mandi Adhiniyam, 1965 (the Adhiniyam) for the period 14.5.2004 to 31.3.2005.
2. In reply to the show cause notice issued to the petitioner on 22.5.2004, directing the petitioner to produce all the documents with regard to production, sale-purchase movement and storage for the concerned year, with reference to an enquiry initiated on the declaration by the petitioner that the stock transfer vide consignment note No. 94 dated 14.5.2004 despatching 5250 Kgs Desi Ghee to Anand Sales Corporation at Ahmedabad, the gate pass was not necessary as the agricultural produce was not sold in the market area, the petitioner filed a reply on 14.6.2004 explaining the entire transactions of manufacture and transfer of ghee to its godown situated in various parts of the country. The market committee was not satisfied with the explanation and that by the order dated 27.4.2005 the Secretary of the market committee of the KUMS, Ghaziabad found, relying upon the Explanation to Section 17 (3)(b) of the Adhiniyam, and the judgment of Supreme Court in Mandi Samiti v. Mahalakshmi Sugar Works, dated 2.2.1995 and Krishi Utpadan Mandi Samiti v. M/s Saraswati Cane Crusher, dated 25.3.1998 found that it was necessary to obtain gate pass after producing sufficient evidence by way of valid rebuttal of the sale and movement of the agricultural produce, and that the petitioner was required to obtain gate pass.
3. The Secretary KUMS, Ghaziabad also relied upon a judgment of Division Bench of this Court in Heinz India (P) Ltd. and another v. State of U.P. and others, (Writ Petition No. 2323 of 1997 decided on 20.8.2004) on the sales through C&F agents in holding that such transactions are deemed sales and attract market fees. The Secretary, KUMS, Ghaziabad further found that the petitioner did not give sufficient evidence to clarify the position with regard to sale and the orders for movement of ghee, details of payments, sale position, the details of accounts and the position of C&F agents. The day books of C&F agents were not produced. The Secretary KUMS, Ghaziabad consequently imposed market fee at Rs. 9,39,200.05 and the development fees at Rs. 2,34,800/-, total Rs. 11,74,000/- for 3906.80 quintals of ‘deshi ghee’ taken out from the market area of KUMS, Ghaziabad valued to approximately at Rs. 4,69,60,035.00 under Section 17 (3) (b) of the Adhiniyam and also directed that in future the petitioner shall produce details of its business and obtain gate passes, whenever it is transporting the ghee from the market area of KUMS, Ghaziabad. The petitioner filed a revision under Section 32 of the Adhiniyam against the assessment before the Director, Rajya Krishi Utpadan Mandi Parishad, U.P. The revision was heard and dismissed on 31.10.2007, by the Deputy Director (Administration/Marketing), exercising delegated powers of the Director of Rajya Krishi U
