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High Court Of Madhya Pradesh
G. P. Singh, C. J. and B. C. Varma, J.
SAJJAN MILLS LIMITED, RATLAM - Appellant
Versus
KRISHI UPAJ MANDI SAMITI, RATLAM - Respondents
Misc. Petn. 272 Of 1979
Decided On : 08/25/1980
The petitioner is a company engaged in the business of sale and manufacture of textiles. For the purpose of manufacture of textiles the petitioner purchases unginned Cotton from agriculturists The contention of the petitioner was that it was not a 'market functionary' nor was a trader, and thus was not liable to pay market fees under section 19, nor was libel to take a licence under section 32 of the Act.
Held: It is true that the definition of market functionary in section 2 (1) (j) of the Act does not in term include a manufacturer. All the Same, it includes a 'trader" which according to section 2(1) (p) means a person who in his normal course of business buys or sells any notified agricultural produce. The petitioner's business is admittedly manufacture of textiles.
The petitioner thus is a person who in the normal course of business buys a notified agricultural produce, namely, Cotton. That being so the petitioner is a trader and as such a market functionary. [Para 4]
(2) Krishi Upaj Mandi Adhiniyam, 1972 (MP)-S. 6 (b), proviso-meaning of the phrase 'own private use'-production or conversion into a different commodity-is not 'own private use'.
(3) Words and phrases-phrase 'own private consumption- meaning of.
The words 'own private consumption" as used in the proviso to section 6(b) can only mean complete disappearance by use an individual such as eating away of a food article The term does not seem to have been used to include the use of an agricultural produce in a commercial activity for production or conversion into a different commodity. [Para 5]
(4) Krishi Upaj Mandi Adhiniyam, 1972 (MP)-S.19 - fee under-nature of-substantial amount should be spent on benefit of the payer- increased in fees when illegal.
(5) Word, and phrases-fee what is.
The levy under section 19 of the Act is not on the agricultural produce in the sense imposing any kind of tax or duty on the agricultural produce. It is also not a tax on the transaction of purchase or sale. It is an impost on the buyer of the agricultural produce in the market in relation to transactions of hill purchase. Generally speaking, the fee is defined to be a charge for special service rendered to individuals by some Government agency.
It must be shown with some amount of certainty, reason bleness or preponderance of probability that quit a substantial portion of the amount of fee on realised is spend for the special benefit of its payers. AIR 1980 SC 1008, AIR 1971 SC 1182 relied on.
The raising of market fee from O.50 to Re. 1.00 cannot be held to be justified when according to the return more than 60% of it is shown to have been utilised for the purchase of plant protection pesticides and when the Notification by which the fee was raised specifically directed that the amounts so raised must be kept separate and should be spent only after issuance of directions by the State Government in that behalf (1968) 3 SCR 374 and (1970) 2 SCR 348 relied on. AIR 1980 SC 1124 referred to. [Para 7]
(6) Krishi Upaj Mandi Adhiniyam, 1972 (MP)-S. 19-agricultural produce not brought for sale purchased or sold out of market area-no market fee can be charged. [Para 9]
(7) Krishi Upaj Mandi Adhiniyam. 1972 (MP)-S. 33 (1)-cancellation of licence-opportunity to snow cause must be given before cancellation-order should give reasons. [Para 10]
( 1 ) THE petitioner is a company engaged in the business of sale and manufacture of textiles. It has textile mills at Dhamnod Road. Ratlam, within the market area of Krishi Upaj Mandi, Ratlam (respondent No. 1), established under the madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972 (hereinafter called the act), For the purpose of manufacture of textiles, the petitioner purchases unginned cotton from agriculturists. This cotton is then ginned, pressed and spinned and is then finally converted into finished product, viz. , the cloth. All this process is undertaken by the petitioner in the Mills. The cloth is then marketed through dealers. 'cotton' is one of the commodities included in the schedule to the Act and is admittedly an 'agricultural produce' within the meaning of term as defined under Section 2 (1) (a) as meaning all produce whether processed or not, of agriculture, horticulture, animal husbandry, apiculture, pisciculture, or forest. The petitioner has obtained a licence under section 32 of the Act. The respondent No. 1 has levied and charged market fee for purchase of cotton from the petitioner. The rate of market fee so charged is at 0. 50 per one hundred rupees of the price except for a period between 1-41976 to Sl-7-1977 when market fee was charged at Re. 1/- per one hundred rupees of the price. The petitioner objected to levy and recovery of the market fee and also protested against its liability to take a licence under Section 32. By order dated 9-5-1977 (Annexure-C), the respondent-Samiti rejected the objection. Appeal/reference against the order of the Samiti (respondent No. 1)was also rejected by the Joint Director of Agriculture (respondent No. 2) by order, dated 14-11-1977 (Annexure-D ). This petition was then filed on 30-11978 the respondent No. 1 cancelled the petitioner's licence.
( 2 ) ACCORDING to the petitioner, it is not a market functionary within the meaning of Section 2 (1) (j) of the Act as the petitioner's undertaking only consumes the argicultural produce (i. e. , cotton) as a raw material and is, therefore, not within the mischief of the Act. The petitioner, therefore, asserts that it is not required to take any licence under section 32 nor is required to pay any market fee on the purchase of cotton for use in the manufacture of textiles. Further challenge in this petition under Article 226 of the Constitution is to the levy and recovery of market fee at more than 0. 50 p. on the ground that the increase from 0. 50 p. to Re. 1/- is not correlated to the services rendered by the respondent No. 1 and that no fee at all can be charged on the agricultural produce purchased outside the market area. The petitioner prays for quashing of the orders, Annexures C and D, and for a further direction for refund of the fee paid. It is also prayed that the respondents be directed not to realise any market fee. The order, dated 30-1-1978, passed by the respondent No. 1 cancelling the petitioner's licence has also been questioned.
( 3 ) WE may first take up the question of petitioner's liability to pay the market fee levied under Section 19 and also to take out a licence under Section 32 of the Act. The contention is that being a manufacturer, the petitioner cannot be said to be a market functionary. Even otherwise, if the purchase is made from the producers for its "own private consumption", it can use any place in the market area for marketing of cotton which is a notified agricultural produce. Further contention is that since the petitioner is neither a trader nor the owner or occupier of any processing or pressing factory or such other market functionary, it is not required to obtain a licence to operate in the market area of Krishi Upaj Mandi Samiti, Ratlam. In order to appreciate this contention, certain provisions of the Act have to be noted. Section 2 (1) (j) defines 'market functionary' to include a broker, a commission agent, an exporter, a ginner, an importer, a presser, a processor,
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