IMPORTANT POINTS
1. A total absence of machinery provisions for assessment/recovery of the tax levied under an enactment, which has the effect of making the entire process of assessment and recovery of tax and adjudication of disputes relating thereto administrative in character, is open to challenge before a Writ Court in appropriate proceedings.
2. The evidence required to rebut a statutory presumption ought to be clear and convincing, no matter the degree of proof may not be as high as proving the fact to the contrary beyond a reasonable doubt.
3. The power of judicial review is neither unqualified nor unlimited. It has its own limitations.

Headnote:Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964- Section Sections 17(iii),32- Demand of market fee from Glaxo India Ltd., and from Heinz India Ltd., qua sales effected by said two companies of its products including ghee-Demands were resisted by both companies - Heinz made claims for refund of amount paid by it towards market fee - Said claim for refund of amount paid by appellant-Heinz was rejected by the Mandi Samiti –Revision Petitions-Dismissed-Writ Petitions-Dismissed-Appeals- No evidence was produced to show as to why a particular quantity of ghee was to be delivered to a particular place- No mention in transport biltis as to who was to pay the freight for the transportation of ghee- There was a break in the chain of reasons in as much as the appellants did not bring forth the link evidence giving details of the sale transactions pursuant to which C&F agents had made the delivery of the goods- The orders passed by Mandi Samiti and Director clearly showed that there was no clear and convincing evidence to establish that presumption arising under Section 17(iii) of Act stood rebutted –No interference called for with the findings recorded by Mandi Samiti and Mandi Parishad -Appeals dismissed (Paras 50 to 62)
       Facts of the Case :
        A. Market fee was demanded herein in the instant case from Glaxo India Ltd., and from Heinz India Ltd., qua sales effected by said two companies of its products including ghee. Said Demands were resisted by both companies on ground that bulk of ghee produced in their unit at Aligarh, if not the entire quantity, was sent out of Mandi limits on stock transfer basis and that there was no sale involved in such transfers so as to attract levy of Mandi Fee on the same. Heinz made claims for refund of amount paid by it towards market fee and furnished to Mandi Samiti material to support that claim. The claim for refund of amount paid by appellant-Heinz was rejected by the Mandi Samiti.
        B. Revision petitions thereagainst and Writ petitions thereagainst were also dismissed .Aggrieved appellants have preferred present appeals.
       Findings of the Court :
        A. The Court held that no evidence was produced to show as to why a particular quantity of ghee was to be delivered to a particular place. There was no mention in transport biltis as to who shall pay the freight for the transportation of ghee. This is because if the transport of ghee outside Aligarh, was a stock transfer and not pursuant to a sale made within the market area, the payment of freight would have been the responsibility of the company for there was no transfer of the ownership in that case to any third party. The company should have in that case firmly established that the transport charges payable in regard to the transport of the stocks of ghee out of the mandi area were paid by it and by no one else.
        B. There was a break in the chain of reasons in as much as the appellants did not bring forth the link evidence giving details of the sale transactions pursuant to which C&F agents had made the delivery of the goods.The orders passed by Mandi Samiti and Director clearly showed that there was no clear and convincing evidence to establish that presumption arising under Section 17(iii) of Act stood rebutted .No interference was called for with the findings recorded by Mandi Samiti and Mandi Parishad .Appeals were dismissed.

JUDGMENT

T.S. Thakur, J.

1. These appeals by special leave arise out of an order dated 20th August, 2004, passed by the High Court of Judicature at Allahabad whereby a batch of writ petitions challenging an order passed by the Director, Rajya Krishi Utpadan Mandi Parishad, Lucknow, dated 3rd July, 1997, under Section 32 of the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (hereinafter called ‘the Act’), have been dismissed. The order passed by the Director, Rajya Krishi Utpadan Mandi Parishad pertained to 19 revision petitions of which 8 petitions were filed by Glaxo India Ltd. relevant to the period 1st November, 1990 to 30th September, 1994 while the remaining 11 petitions pertained to Heinz India Pvt. Ltd. relevant to the period between 1st October, 1994 and 31st May, 1996. During the pendency of the Special Leave Petitions, Writ Petition (C) No.144/2005 was filed under Article 32 of the Constitution of India, inter alia, praying for a writ of certiorari, quashing order dated 25th September, 2004 passed by the Deputy Director (Administration) Krishi Utpadan Mandi Parishad, Gomti Nagar, Lucknow in another batch of revision petitions (pertaining to the period between 3rd June, 1996 and 30th April, 2004) and an assessment order dated 7th July, 1998 passed by the Krishi Utpadan Mandi Samiti, Aligarh. A declaration to the effect that the goods removed from the petitioner’s unit at Aligarh to places outside the State of Uttar Pradesh were by way of stock transfer and no Mandi Fee was payable on such transfers has also been prayed for. The facts giving rise to the appeals and the writ petition may be summarised as under:

2. Glaxo India Ltd., set up an industrial unit at Aligarh for the manufacture of what is sold in the market under the brand names Glacto, Complan, Farex, Glucon D and other products generically called milk foods/weaning foods and energy beverages. It is not in dispute that the manufacturing process undertaken in the said unit produced ghee as a by- product of the said items. It is also not in dispute that with effect from 1st October, 1994, the Family Products Division of Glaxo India Ltd. Was taken over by Heinz India Pvt. Ltd. who continued manufacturing the products mentioned above including ghee as a by-product of its manufacturing activity.

3. In terms of Section 17(iii) of the Act, sale of specified agricultural produce within the Mandi limits attracts levy of what is described as Mandi Fee from the person effecting the sale. The Mandi Samiti accordingly started demanding the said fee from Glaxo India Ltd., upto the year 1994 and from Heinz India Ltd., from 1994 onwards qua sales effected by the said two companies of its products including ghee. These demands were resisted by both the companies primarily on the ground that bulk of the ghee produced in their unit at Aligarh, if not the entire quantity, was sent out of the Mandi limits on stock transfer basis and that there was no sale involved in such transfers so as to attract the levy of the Mandi Fee on the same. Even so, the companies appear to have continued removing their goods from the Mandi limits in accordance with the procedure in vogue at the relevant time. In Krishi Utpadan Mandi Samiti & Ors. v. Shree Mahalaxmi Sugar Works & Ors.1 (1995) Supp (3) SCC 433, decided on 2nd February, 1995, this Court noticed the Explanation to Section 17(iii) of the Act and observed that there was a presumption against the dealers. This Court held that in view of the said presumption it is open to the Mandi Samiti to raise demands against the dealers before the issue of passes. If there is a valid rebuttal to the presumption and it is shown that no sale took place within the notified market area the dealers will be entitled to the passes, otherwise not. This Court further held that even if the dealers are compelled to pay the market fee as demanded it shall be open to them to challenge the same in the manner provided under the Act. This implied that if the claim

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2012 Supreme(SC) 255

2012 (2) Supreme 649SUPREME COURT OF INDIAT.S. Thakur and Dipak Misra, JJ.Heinz India Pvt. Ltd. & Anr. — AppellantsversusState of U.P. & Ors. — RespondentsCivil Appeal No.1476 of 2006(With Civil Appeal No.1478/2006, Civil Appeal No.1477/2006 and W.P. (C) No.144/2005)Decided on : 23-3-2012

Cases Referred (16)