1999 (8) TMI 919 - SC - Indian Laws

Market Act Application: Sugarcane Exempt, Wheat Affirmed, Milk Exempt, Tea Dismissed

Belsund Sugar Co. Ltd. Versus State of Bihar and others

The Court held that the Market Act did not apply to transactions involving sugarcane, sugar, and molasses due to existing regulatory frameworks. Market ... Whether the Market Act can apply to the transactions of purchase of sugarcane and sale of sugar and molasses by the appellant sugar mills in view of the fact that regulation of these transactions is already effected by Bihar Sugarcane (Regulation of Supply and Purchase) Act,1981 as well as and Sugar both issued under Section 3 of the Essential Commodities Act,1955 and also under the provisions of Bihar Molasses(Control) Act, 1947? Whether imposition of market fee under the Market Act by the respective market committees is justified in the absence of any service rendered to the appellant sugar mills under the provisions of the Market Act and consequently the levy of market fee can be said to be not supported by any quid pro quo? Held that:- Appeal allowed of assessee. Instead of the relief granted by the High Court limiting to the non-levy of market fee on sugar after 2.5.1977, it is directed that levy of market fee on sugar for the entire period covered by the writ petition will be treated to be unauthorised. This judgment will have only prospective operation and will not affect past transactions entered into prior to the date of this judgment. Issues Involved:1. Legality of the levy of market fee on sugarcane, sugar, and molasses.2. Applicability of market fee on wheat products like atta, maida, suzi, and bran.3. Levy of market fee on vegetable oil.4. Regulation of rice milling industry under the Market Act.5. Applicability of market fee on milk and milk products.6. Regulation of tea sales under the Market Act.Detailed Analysis:1. Sugarcane, Sugar, and Molasses:The primary issues were whether the Bihar Agricultural Produce Markets Act, 1960 (Market Act) could apply to transactions involving sugarcane, sugar, and molasses, and whether market fees could be justified without any service rendered to sugar mills.Contentions:- Appellants: Argued that the Market Act should not apply due to the existence of the Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981 (Sugarcane Act), and various control orders under the Essential Commodities Act, 1955. They also contended that no services were provided by the market committees.- Respondents: Countered that the sugar mills had no locus standi as the market fee was levied on buyers, not sellers. They also argued that sufficient services and infrastructural facilities were provided.Judgment:- The Court held that the Market Act could not apply to transactions of sugarcane, sugar, and molasses due to the comprehensive regulatory framework provided by the Sugarcane Act and various control orders. The exemption notification under Section 42 of the Market Act further supported this view.- On the issue of quid pro quo, the Court found that since Section 15 of the Market Act did not apply, the market committees were not obligated to provide any services, rendering the levy of market fee unjustified.Relief:- The appeals were allowed, and the High Court's judgments were set aside. The decision was given prospective effect, meaning future transactions would not be subjected to market fees, but past transactions would not be reopened.2. Wheat Products (Atta, Maida, Suzi, Bran):The appellants challenged the applicability of the Market Act to wheat products, arguing that the I.D.R. Act and various control orders under the Essential Commodities Act occupied the field.Judgment:- The Court rejected the contention, stating that wheat and its products are agricultural produce as defined by the Market Act. The Court found no conflict between the Market Act and the I.D.R. Act or the control orders.Relief:- The appeals were dismissed.3. Vegetable Oil:The appellants argued that the Market Act should not apply to vegetable oils due to various control orders under the Essential Commodities Act.Judgment:- The Court held that vegetable oils, being manufactured from agricultural produce (oil-seeds), fell within the scope of the Market Act. The control orders did not regulate the purchase and sale of vegetable oil products.Relief:- The appeals were dismissed.4. Rice Milling Industry:The appellants contended that the Rice Milling Industry (Regulation) Act, 1958, occupied the field, and the Market Act should not apply to their transactions.Judgment:- The Court found that the Rice Milling Industry (Regulation) Act did not cover the regulation of purchase and sale of rice and paddy. The Market Act was applicable to these transactions within the market area.Relief:- The appeals were dismissed, with a clarification that the market committees could not compel the relocation of rice mills but could regulate their transactions.5. Milk and Milk Products:The appellant argued that their products, being special infant foods, were not agricultural produce under the Market Act.Judgment:- The Court agreed, stating that the products did not fall under the category of milk or milk products as defined in the Schedule to the Market Act.Relief:- The appeal was allowed, and the High Court's judgment was set aside. The decision was given prospective effect.6. Tea:The appellant contended that the Market Act should not apply to their transactions of manufactured tea, which was regulated by the Tea Act and various control orders.Judgment:- The Court held that the Market Act could apply to transactions of manufactured tea within the market area. The Tea Act and control orders did not cover the field of regulating sale transactions of packed tea in the market areas.Relief:- The appeal was dismissed.Final Orders:1. Sugar group matters: Appeals allowed, High Court judgments set aside, prospective effect given.2. Wheat products: Appeals dismissed.3. Vegetable oil: Appeals dismissed.4. Rice milling industry: Appeals dismissed with clarifications.5. Milk and milk products: Appeal allowed, High Court judgment set aside, prospective effect given.6. Tea: Appeal dismissed.No order as to costs in all these appeals.