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2008 Supreme(All) 1075
[2008(5) ADJ 215]
ALLAHABAD HIGH COURT
BEFORE : SABHAJEET YADAV, J.
M/s. K.R.B.L. LTD., GAUTAM BUDH NAGAR ......Petitioner
Versus
STATE OF U.P. AND OTHERS ...........Respondents
(Civil Misc. Writ Petition No. 5639 (M/S) of 2007, decided on 2nd May, 2008)
Counsel :
Bharatji Agarwal, Piyush Agarwal and S.M.K. Choudhary for the Petitioner; B.D. Mandhyan, and Satish Mandhyan for the Respondents.
Headnote:(A) Sale of Goods Act, 1930—Section 4—Constitution of India—Articles 366(29-A) and 286—Market fee and development cess—Issue of recovery notice to petitioner by respondents—Hence, petition against—Held, petitioner liable to pay market fee and development cess to be charged on specified agricultural produce in market area of Ghaziabad and other concerned market areas from where petitioner has purchased paddy. [Paras 1, 119 and 120]
(B) U.P. Krishi Utpadan Mandi Adhiniyam, 1964—Sections 17(iii)(b), 32, 5 and 6, 8—U.P. Krishi Utpadan Mandi Niyamawali—Rules 2(18), 2(19)—Market fee and development cess—Discretionery jurisdiction—Exercise of—Remanding matter back to Mandi Samiti by Addl. Director (Admn.) only for deciding issue of Stock transfer from Ghaziabad to Alipore at Delhi Unit of petitioner, and refund of amount of market fee and cess, deposited by petitioner under protest, and given findings regarding sale price of broken/kinki/rice, which was fixed at average rate of Rs. 700 per quintal—Also, Mandi Samiti treating stock transfer, made by Ghaziabad Unit as its sale within market area of Ghaziabad—Order of Addl. Director was illegal—And order passed by Mandi Samiti, on remand, fixing price of rice @ Rs. 1350 per quintal for broken and wand rice, and upheld by Addl. Director, to be reasonable—Therefore, in case subsequent orders passed by Mandi Samiti and Addl. Director quashed to that extent earlier order passed by Addl. Director was not in accordance with law would automatically revive—Held, Court did not exercise discretionary jurisdiction under Article 226 of Constitution in favour of petitioner for quashing aforesaid orders. [Paras 43, 44 and 45]
(C) U.P. Trade Tax Act, 1948—Section 3—Central Sales Tax Act, 1956—Section 5—Market fee and development cess—Levy of—Rice obtained by petitioner from its Delhi Branch and exported from Ghaziabad Unit (U.P.)—Whether can be treated to be “sale”, within market area of Ghaziabad for purpose of levy of market fee and development cess—Or it would be exempted from such levy in view of Government Notification dt. 24.10.2000—Held, such admitted sale in market area of Ghaziabad by way of export sale outside India, was treated to be “sale” within market area of Ghaziabad under Section 17(iii)(b) of U.P. Krishi Utpadan Mandi Adhiniyam, 1964—Therefore, petitioner was not entitled for any exemption from levy of market fee and development cess on said quantity of rice (i.e. 52575) under Notification dt. 24.10.2000—And, thus, petitioner liable to pay Mandi fee and development cess thereon. [Paras 46, 61, 76, 79 and 80]
(D) U.P. Krishi Utpadan Mandi Adhiniyam, 1964—Section 17(iii)(b)—Sale—And Stock transfer from Ghaziabad Unit to Alipore Delhi Branch of petitioner—Question of—Held, unless provisions of Act was amended, so as to comprehend stock transfer of specific agricultural produce by a person from his one unit to another unit as deemed sale, there can be no deemed sale for such stock transfer of rice by petitioner from its Ghaziabad rice mill to its Alipore Branch—Therefore, such transfer cannot be deemed sale. [Paras 81, 108]
(E) Res judicata—Principles of—Applicability—Is not applicable in fixation of market fee by Mandi Samiti—Moreover, res judicata in taxation matters, is not applicable—And even if it is applicable that will be applicable for particular year and for particular matter. [Code of Civil Procedure Code, 1908—Section 11]. [Para 20]
Hon’ble Sabhajeet Yadav, J.—By this petition, petitioner has challenged the impugned order dated 9.10.2007 passed by respondent No. 3 and consequential recovery notice dated 10.10.2007 issued by respondent No. 2 making a demand of market fee and development cess from the petitioner under U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (hereinafter referred to as ‘the Act’).
2. The relief sought in the writ petition rests on the assertion that the petitioner is a Company incorporated under the Companies Act in the name and style of M/s KRBL Limited. It is world’s largest Basmati rice exporting unit. Petitioner has its various branches in the State of U.P., Punjab, Haryana, Delhi and Rajasthan in the name of M/s KRBL Limited. It has its head office at Delhi and its processing unit and godown is at Alipur which is also situated in Delhi. The petitioner Company has established milling plant at Ghaziabad in U.P. which was operating since the year 2002-2003. The petitioner and all its branches are registered under their respective Sales Tax Act and under Central Sales Tax Act wherein they are being duly assessed. All the branches are also registered and being assessed under their respective Krishi Utpadan Mandi Law operating in the respective States. It is stated that since the capacity of milling plant at Ghaziabad is very high and it has to fulfill the huge export requirement, hence the petitioner has to purchase paddy within U.P. and also mills the paddy received from its various branches. The paddy received from other States is procured after paying Mandi Fee and Development Cess in their respective States by the branches of petitioner Company which supplied paddy for the milling. The rice so recovered from the paddy procured for the purpose of milling from other States is either exported outside India or stock transferred on account of own branch of petitioner to Alipur situated in Delhi. It is also stated that rice sent to Alipur branch, Delhi after milling in Ghaziabad is further processed, sorted and packed. It is stated that no sale takes place within the market area of Ghaziabad and, therefore, there is no liability to pay Mandi Fee under the Act.
3. It is further stated that on 17.4.2004 Krishi Utpadan Mandi Samiti, Ghaziabad has illegally imposed Mandi Fee and Development Cess on the rice of petitioner for the year 2002-2003. A photostat copy of the order dated 17.4.2004 is on record as Annexure-1 of the writ petition. Being aggrieved against the aforesaid order, the petitioner filed revision under Section 32 of the Act. Vide order dated 14.9.2006, the Additional Director (Admn.) has remanded the matter back to the Mandi Samiti only for deciding the issue of stock transfer from Ghaziabad to Alipur at Delhi Unit of the petitioner and refund of the amount of market fee and cess deposited by the petitioner under protest and has given conclusive finding regarding sale price of broken/Kinki/rice which was fixed at average rate of Rs. 700 per quintal. A photostat copy of the order dated 14.9.2006 passed by Additional Director is on record as Annexure-2 of the writ petition.
4. In para 15 to 31 of the writ petition, it is stated that modus operandi of petitioner is that the paddy is purchased by the various branches of petitioner in their respective States after paying Mandi Fee is sent for milling at Ghaziabad Unit of the petitioner. A photostat copy of one sample of document depicting the bill, stock transfer challan, bilty, G.R., unloading slip receipt, gate pass and arrival receipt issued by Krishi Utpadan Mandi Samiti, Ghaziabad depicting the movement of paddy from the Ex-U.P. Branch to the Ghaziabad unit is enclosed as Annexure-5 of the writ petition. It is stated that this is a sample document and the details of each and every transaction can be produced if so desired by the Court. After milling the paddy, the rice is sent by way of stock transfer to Alipur branch of the petitioner on the instruction of respective branche
