Statutory cess on agricultural produce cannot be expanded by delegated rules or collected on mere transport through check gates.

Rule 21(7) of the Assam Agricultural Produce Market (General) Rules, 1975 was held ultra vires because delegated legislation cannot enlarge the limited statutory presumption in Section 21 by adding new triggers such as agreement, weighment or delivery. The Court also held that the Assam Agricultural Marketing Board lacked authority to levy or collect cess under Section 21, as that function vested in the Market Committee. Cess could not be realised at check gates on mere transport of notified produce where no sale or purchase occurred in the market area. Refund of cess already collected was refused.

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Issues: (i) Whether Rule 21(7) of the Assam Agricultural Produce Market (General) Rules, 1975 was ultra vires for enlarging the statutory presumption under Section 21 of the Assam Agricultural Produce Market Act, 1972; (ii) whether the Assam Agricultural Marketing Board had authority to levy and collect cess under Section 21 of the Act; (iii) whether cess could be realised at check gates on transported notified agricultural produce when no sale or purchase took place in the market area; and (iv) whether cess already realised was liable to refund.

Issue (i): Whether Rule 21(7) of the Assam Agricultural Produce Market (General) Rules, 1975 was ultra vires for enlarging the statutory presumption under Section 21 of the Assam Agricultural Produce Market Act, 1972.

Analysis: Section 21 created only a limited legal fiction that notified agricultural produce taken out or proposed to be taken out of a market area shall be presumed to have been bought or sold within that area. The rule-making power under Section 49(2)(v) permitted regulation of the method, manner and mode of collection, but did not authorise the delegate to widen the statutory presumption by adding new factual triggers such as agreement, weighment or delivery. Since delegated legislation cannot enlarge the scope of the parent enactment, the additional deeming conditions in Rule 21(7) exceeded the legislative policy.

Conclusion: Rule 21(7) was ultra vires and invalid.

Issue (ii): Whether the Assam Agricultural Marketing Board had authority to levy and collect cess under Section 21 of the Assam Agricultural Produce Market Act, 1972.

Analysis: The statutory scheme vested levy and collection of cess in the Market Committee, not in the Board. The Board's supervisory powers under the Act did not include taking over the Committee's statutory function of levying or collecting cess, and a resolution of the Board could not transfer that power. The Board and its employees therefore lacked independent authority to assess or collect the cess.

Conclusion: The Board had no authority to levy or collect cess under Section 21.

Issue (iii): Whether cess could be realised at check gates on transported notified agricultural produce when no sale or purchase took place in the market area.

Analysis: Cess under the Act was attracted only when there was a sale or purchase within the market area. Where notified agricultural produce had already been purchased outside Assam, was transported at the purchaser's risk, and no sale or purchase occurred at the check gates, the statutory presumption could not be extended to cover mere movement or transport. The legal fiction was confined to the movement of produce out of the market area and could not justify levy at check gates on transit alone.

Conclusion: Cess could not be realised at the check gates in the absence of sale or purchase in the market area.

Issue (iv): Whether cess already realised was liable to refund.

Analysis: Although further realisation of cess was directed to stop, the Court declined to order refund of amounts already collected.

Conclusion: Refund of cess already realised was refused.

Final Conclusion: The statutory levy was confined to transactions of sale or purchase within the market area, the enlarging deeming rule was invalid, and check-gate collection on mere transit of goods was impermissible, but past collections were not ordered to be refunded.

Ratio Decidendi: A delegate cannot widen a limited statutory presumption in a taxing provision, and cess on notified agricultural produce can be levied only on sale or purchase within the market area, not on mere transport through check gates.

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