1998 (8) TMI 616 - SC - Indian Laws

Court affirms sellers' duty to pay market fees on agricultural sales under Levy Order, dismissing appeals.

Mahaluxmi Rice Mills & Ors. Versus State of U.P. & Ors.

The Court clarified that transactions involving the sale of agricultural produce to the Government under the Levy Order constitute sales, affirming the ... - Issues:The issue involves determining whether the market fee payable to the Market Committee constituted u/s 6 of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964, shall be paid by the seller or purchaser when agricultural produce is sold by a trader to the Government.Summary:The appellants, traders in rice milling, challenged demands by the Market Committee to remit market fee as per Section 17(iii) (b) (3) of the Act. The High Court rejected their contentions, leading to Special Leave Petitions and subsequent appeals. The main contention was whether selling rice to the Government under the Levy Order constitutes a transaction of sale. A three-Judge Bench clarified that such transactions are sales. The appeals were then referred to a larger Bench to address the remaining question.During the hearing, arguments were presented regarding the liability to pay market fee. The Market Committee contended that the primary liability lies with the purchaser to ensure fee collection. Conversely, the appellants argued that the trader's liability should be linked to the purchaser, especially when the purchaser is the Government. The Court analyzed the provisions of the Act and emphasized that the seller must pay the market fee to the Committee, regardless of fee realization from the purchaser.Referring to previous judgments, the Court highlighted the distinction between the rights of the seller to collect fee from the purchaser and the obligation to pay the fee to the Committee. The Constitution Bench's decision reinforced that the Market Committee is entitled to collect the fee from the seller, who can then recover it from the purchaser. Ultimately, the Court dismissed the appeals, affirming the responsibility of the appellants to pay the market fee to the Market Committee in relevant transactions.This judgment clarifies the interpretation of the Act regarding market fee payment obligations in transactions involving agricultural produce sold to the Government, providing guidance on the roles of sellers, purchasers, and the Market Committee in fee collection.