TaxTMI 
TaxTMI 
1979 (5) TMI 136
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....ave been heard together and are being disposed of by a common judgment. In the erstwhile composite State of Punjab the Act was passed in the year 1961 to consolidate and amend the law relating to the better regulation of the purchase, sale, storage and processing of agricultural produce and the establishment of markets for agricultural produce in the State. Under section 3 of the Act the State Agricultural Marketing Board was constituted for the entire area of the composite State, which later, in the year 1966 came to be bifurcated into the States of Punjab and Haryana. Under the various provisions of the Act, which will be noticed shortly hereinafter, market areas and market yards were declared putting restrictions on the traders to carry on their trade under a licence granted by the various Market Committees established and constituted in accordance with sections 11 and 12, within the specified boundaries or areas. The traders were required to take out licences on payment of a licence fee. Under section 23 of the Act a Market Committee was required and authorised to levy on ad-valorem basis fees on the agricultural produce bought or sold by licensees in the notified market area ....
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.... 1975, were again challenged in the High Court. But the Full Bench which finally heard the Writ Petition upheld the increases by its judgment delivered on January 28, 1977, which is reported in Kewal Krishan Puri and another v. The State of Punjab and others. Civil Appeal 1083 of 1977 has been preferred in this Court from the said judgment of the High Court. Both in the State of Punjab and the State of Haryana the rate of market fee was further raised from Rs. 2/- to Rs.3/-. It was unsuccessfully challenged in the High Court. The dealers have preferred appeals from the judgments of the High Court as also filed Writ Petitions in this Court. In the State of Punjab the fee was raised to Rs. 3/-by Ordinance 2 of 1978 which must have been replaced by an Act. The Ordinance was promulgated on April 28, 1978. The Writ Petition 4436 of 1978 has been filed in this Court challenging the previous increases in the fee along with the last increase of Rs. 3/-. The High Court upheld it by its judgment dated May 18, 1978. Special Leave Petition (Civil) 2768 of 1978 was preferred from this judgment. Writ Petition No. 3849 of 1978 was filed in the High Court by a large number of dealers, which was d....
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....ry 96 carves out the legislative field for fees in respect of any of the matters in the said list except the fees taken in any Court. Similarly in the State List entries relating to taxes are entries 46 to 63 and entry 66 provides for fees in respect of any of the matters in List II but not including fees taken in any Court. Entry relating to fees in List III is entry 47. Our Constitution, therefore, recognises a different and distinct connotation between taxes and fees. The leading case of this Court which has been referred and followed in many subsequent decisions is the case of The Commissioner, Hindu religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt. The point decided therein was that the provision relating to the payment of annual contribution contained in section 76(1) of the Madras Hindu Religious and Charitable Endowments Act, 1951 is a tax and not a fee and so it was beyond the legislative competence of the Madras State Legislature to enact such a provision. The meaning given to the word "tax" by Latham C.J. of the High Court of Australia in Matthews v. Chicory Marketing Board has been quoted with approval at page 1040 and has been often ....
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....t equivalent of the fee by a mathematical precision, yet, by and large, or predominantly, the authority collecting the fee must show that the service which they are rendering in lieu of fee is for some special benefit of the payer of the fee. It may be so intimately connected or interwoven with the service rendered to others that it may not be possible to do a complete dichotomy and analysis as to what amount of special service was rendered to the payer of the fee and what proportion went to others. But generally and broadly speaking it must be shown with some amount of certainty, reasonableness or preponderance of probability that quite a substantial portion of the amount of fee realised is spent for the special benefit of its payers. We may now extract some very useful and leading principles from the decision of this Court in Shirur Mutt's (1954 S.C.R., 1005, supra) pointing out the difference between tax and fee. At pages 1040-41 says Mukherjea J., as he then was: "The second characteristic of tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax. This is expressed by saying that the levy of tax....
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....er for Hindu Religious & Charitable Endowments. Mysore. 1963 Suppl. 2 SCR 302 Pointout the various differences between the earlier law and the amended one at pages 320-21 the imposition of fee was upheld. In two other cases of this Court following the ratio of Shirur Mutt's decision the imposition of fee was upheld, vide, Mahant Sri Jagannath Ramanuj Das and another v. The State of Orissa and another and Ratilal Panachand Gandhi v. The State of Bombay and other [1954] SCR 1055. We now proceed to consider. some more decisions of this Court in which apparently some different phrases were used for explaining the meaning of the word 'fee' and its distinction from 'tax'. Both sides placed reliance upon Those decisions. But if the phrases are understood in the context they were used and with reference to the facts those cases it would be noticed that the leading principle has not basically undergone any change. In the case of The Hingir-Rampurr Coal Co. Ltd. & Ors. v. The State of Orissa and others [1961] 2 SCR 537 the challenge was to the cess levied by the orissa Mining Areas Development Fund Act, 1952. The petitioners' stand in the first instance was that the cess levied was not a ....
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....de or business, in the last analysis such services may indirectly form part of services to the public in general. If the special service rendered is distinctly and primarily meant for the benefit of a specified class or area the fact that in benefitting the specified class or area the State as a whole may ultimately and indirectly be benefitted would not detract from the character of the levy as a fee. Where, however, the specific service is indistinguishable from public service, and in essence is directly a part of it, different considerations may arise. In such a case it is necessary to enquire what is the primary object of the levy and the essential purpose which it is intended to achieve. Its primary object and the essential purpose must be distinguished from its ultimate or incidental results or consequence . That is the true test in determining the character of the levy." (underlining, ours) At pages 549-50 in the decision of The Hingir-Rampur Coal Co. Ltd. (supra), reference has been made in passing to the decision of the Australian High Court in Patron v. Milk Board (Victoria).(1) The majority which, amongst others, included Dixon J., held the purported levy to be invalid....
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.... respondent cinema contended that the levy was a fee and had to be justified as being imposed in return for services to be rendered. Alternatively the respondent submitted that if it was a tax it was invalid as it amounted to an illegal delegation of legislative functions. The majority view was expressed by Sarkar J., as he then was, and the impost was upheld as a tax. In the minority opinion delivered by Ayyangar J., it was held that even in the case of a licence fee a correlation between the fee charged and the service rendered was necessary to be established. It was, therefore, held to be a tax but invalidly imposed under a power suffering from the vice of unconstitutional legislative delegation. In the cases before us the licence fees charged from the various traders in the market areas are not excessive and have not been attacked on any ground whatsoever. We are. therefore, not concerned to find out whether an element of quid pro quo is necessary in cases of all kinds of licence fees. Some licences are imperative to be taken only by way of regulatory measure, some are in the nature of grant of exclusive right or privilege of the State, such as, excise cases noticed by this Cou....
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....n the market nor did it ever purport to do so The nature of the impost and the power. under which it was levied squarely and uniformally remained within the realm of the fee and fee of the kind which could not but sustained on the establishment of the element of quid pro quo between the authority charging the fee and its payer. The next case to be considered is the decision of this Court in Nagar Mahapalika Varanasi v. Durga Das Bhattacharya & ors. [1968]3 SCR 374 in which it was held that the annual licence fee charged from the rickshaw owners and the drivers by the Varanasi Municipal Board could be justified only on the basis of the element of quid pro quo. The fee was held to be ultra vires and illegal because after excluding certain items of expenditure the balance did not constitute sufficient quid pro quo for the amount of the licence fee charged. It could not be sustained as a tax. Certain major items of expenditure incurred by the Municipal Board were attributable to the discharge of its statutory duty and, therefore, at page 386 it was said by Ramaswami J.,-it is manifest that the licence fee cannot be imposed for reimbursing the cost of ordinary municipal serves which th....
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....d to be a qui pro quo for the services rendered. But in these matters it will be impossible to have an exact co-relationship. The co-relationship expected is one of a general character and not as of arithmetical exactitude." Difference between a licence to regulate a trade, business or profess on in public interest and in a case where a Government which is the owner of a particular property may grant permit or licence to some one to exploit that property for his benefit for consideration has been pointed out at page 325. The State of Bihar had failed to place materials in the High Court to establish the reasonable corelationship between the value of the services rendered with the fee charged. For some special reasons the case was remanded. But one thing may be pin-pointed from a passage occurring at page 327 that the expenses of maintaining an elaborate staff by the Excise Department were not only for the purposes of ensuring that denaturing is done properly by the manufacturer but also for the purpose of seeing that the subsequent possession of denatured spirit in the hands either of a wholesale dealer or retail seller or any other licensee or permit-holder is not misused by conv....
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....ants for their travel from the village homes to the Courts would also be a service of them In cases of court fees one has to take broad view of the matter to find out whether there exists a broad co-relationship with the fees collected and the cause of administration of justice. Even mixing the amount of court fee collected with the general fund will be permissible. It may not be kept in a separate fund or earmarked separately. The very fact that in relation to court-fees there are separate Entries in the Seventh Schedule e.g. Entry 77 List I and Entry 3 of List II, indicates that even though the character of the levy is not very much different from that of the general types of fees, in the matter of approach for finding out the element of quid pro quo quite a different test has not to be applied as indeed, to some extent it has to be applied in many kinds of fees depending upon the totality of the facts and circumstances. Each case has to be judged from a reasonable and practical point of view for finding out the element of quid pro quo. In the case of State of Maharashtra & ors. v. The Salvation Army, Western India Territory [1975] 3 SCR 475 Mathew J., speaking for the Court aft....
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.... Iyer J., speaking for the Court repelled that argument and since the impost could not to justified as fee the resolution of the Municipal Council was held to be invalid. In the Chief Commissioner, Delhi and another v. The Delhi Cloth and General Mills Co. Ltd. and others 1970 2 SCR 348 the question for consideration was whether the registration fee charged on the document satisfied the two conditions of fee which were enumerated in the fol- lowing language:- "(i) there must be an element of quid pro quo that is to say the authority levying the fee must render some service for the fee levied however remote the service may be; (ii) that the fee realised must be spent for the purposes of the imposition and should not form part of the general revenues of the State." The second condition was found not to be fulfilled and hence the impost was held to be bad. We would like to point out that the first condition is rather couched in too broad and general a language. Rendering some service, however remote the service may be, cannot strictly speaking satisfy the element of quid pro quo required to be established in cases of the impost of fee. But then, as pointed out, in some of the cases....
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....mmad and another v. The State of Bombay and another. [1962] 2 SCR 659 Wanchoo J., as he then was, speaking for the Court repelled the attack at page 669 on section 11 of the Bombay Act which gives power to the Market Committee subject to the provisions of the rules and subject to such maxima as may be prescribed to levy fees on the agricultural produce bought and sold by licensees in the market area. The attack was that the impost was in the nature of sales tax. It was repelled on the ground that: "Now there is no doubt that the market committee which is authorised to levy this fee renders services to the licensees, particularly when the market is established. Under the circumstances it cannot be held that the fee charged for services rendered by the market committee in connection with the enforcement of the various provisions of the Act and the provisions for various facilities in the various markets established by it, is in the nature of sales tax. It is true that the fee is calculated on the amount of produce bought and sold but that in our opinion is only a method of realising fees for the facilities provided by the Committee." Since the market was not found to have been prop....
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....es charged by the market committee are correlated to the expenses incurred by it for rendering these services. The market fee, of 25 naya paise per Rs. 100/ worth of agricultural produce and the licence fees prescribed by Rules 71 and 73 are not excessive. The fees collected by the market committee form part of the market committee fund which is set apart and earmarked for the purposes of the Act. There is sufficient quid pro quo for the levies and they satisfy the test of "fee" as laid down in Commissioner Hindu Religious Endowments Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt-[954] S.C.R., 1005." It would be noticed that even the rate of 25 paise per hundred rupees had to satisfy all these tests. In the instant cases we are concerned with the rates of market fee which are much higher than the Bihar rate. Correlative service also, therefore, must satisfy the tests of rendering more services in the market area. The fund cannot be permitted to be utilised for an end, such as, augmenting the agricultural produce etc., if it has no reasonably direct or close connection with the services rendered to the payers of the fee. From a conspectus of the various authorities o....
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.... in force in the States of Punjab and Haryana. We shall examine the relevant provisions with reference to the Punjab Act and the Rules and will only refer to those of Haryana when some difference of some significance or consequence has got to be pointed out. Under clause (f) of section 2 of the Act "dealer" is defined to mean :- "any person who within the notified market area sets up, establishes or continues or allows to be continued any place for the purchase, sale, storage or processing of agricultural produce notified under subsection (l) of section 6 or purchases, sells, stores or processes such agricultural produce." Clause (hh) inserted by Punjab Act 4O of 1976 says: "licensee" means a person to whom a licence is granted under section 10 and the rules made under this Act and includes any person who buys or sells agricultural produce and to whom a licence is granted as Kacha Arhtia or commission agent or otherwise but does not include a person licensed under section 13." As per clause (i): market" means a market established and regulated under this Act for the notified market area, and includes a market proper, a principal market yard and sub-market yard." The definitio....
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.... yards as may be necessary. The marginal note of section 8 is "No private market to be opened in or near places declared to be markets." There is some difference in the provisions of the Act as introduced by the Haryana Amendment in relation to the establishment of notified market area, declaration of market yards and the inhibition on any person to establish or continue any place for the purchase "sale, storage and processing of any agricultural produce." There was also a controversy before us as to the exact interpretation of the language of the two Statutes in relation to such inhibition. But for the purposes of the cases before us it is not necessary to further encumber the judgment by attempting to reconcile by harmonious construction the various provisions of the two Acts in relation to this matter. Suffice it to say that there is no special provision in the Statute for establishment of markets or markets proper as per the definition contained in clauses (i) and (k) of section 2 of the Act, yet it is reasonable to assume that the intention of the legislature is to constitute the market yards as the market proper and ordinarily and generally the market would be the same but ma....
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....l, subject to such rules as may be made by the State Government in this behalf, levy on ad-valorem basis fees on the agricultural produce bought or sold by licensees in the notified market area at a rate not exceeding three rupees for every one hundred rupees: Provided that- (a) no fee shall be leviable in respect of any transaction in which delivery of the agricultural produce bought or section in which delivery is actually made." (b) a fee shall be leviable only on the parties to a transaction in which delivery is actually made." Thers is a slight variation in section 23 as amended by Haryana Act 21 of 1973. Therein some market fee may be charged on the agricultural produce even brought for processing by licensees in the notified area. But we are not concerned with the charge of such a fee in any of these cases. Rule 29 of the Punjab Rules says: "Levy and collection of fees on the sale and purchase of agricultural produce. (1) Under section 23 a Committee shall levy fees on the agricultural produce bought or sold by licensees in the notified market area at the rate to be fixed by the Board from time to time. Provided that no such fees shall be levied on the same agricultu....
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....ricultural produce in the sense of imposing any kind of tax or duty on the agricultural produce Nor is it a tax on the transaction of purchase or sale. The levy is an impost on the buyer of the agricultural produce in the market in relation to transactions of his purchase. The agriculturists are not required to share any portion of the burden of this fee. In case the buyer is not a licensee then the responsibility of paying the fees is of the seller who may realise the same from the buyer. But such a contingency cannot arise in respect of the transactions of sale by an agriculturist of his agricultural produce in the market to a dealer who must be a licensee. Nor was any such eventuality occurring in any of the cases before us was brought to our notice. Probably such an alternative provision was meant to be made for outside buyers who are not licensees when they buy the agricultural produce from or through the licensees. Any way we are not concerned with that question. Under section 27(1): "All moneys received by a Committee shall be paid into a fund to be called the Market Committee Fund and all expenditure incurred by the Committee under or for the purposes of this Act shall be....
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.... comforts and facilities, such as shelter, shade, parking accommodation and water for the persons, draught cattle, vehicles and pack animals coming or being brought to the market or on construction and repair of approach roads; culverts, bridges and other such purposes; (ix) expenses incurred in the maintenance of the offices and in auditing the accounts of the Committees; (x) propaganda in favour of agricultural improvements, and thrift; (xi) production and betterment of agricultural produce; (xii)meeting any legal expenses incurred by the Committee; (xiii) imparting education in marketing or agriculture; (xiv)payments of travelling and other allowances to the members and employees of the Committee, as prescribed: (xv) loans and advances to the employees; (xvi)expenses of and incidental to elections; and (xvii)with the previous sanction of the Board, any other purpose which is calculated to promote the general interests of the Committee or the notified market area or with the previous sanction of the State Government, any purpose calculated to promote the national or public interest." Let us first scan these clauses one by one on the footing that the Market Committee Fund ....
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.... having an element of quid pro quo will dwindle down and become an empty formality. Uplift of villages and helping the agriculturists by all means is the duty and the obligation of the State no doubt and it has to do it by incurring expenses out of the public exchequer consisting of the income from various kinds of taxes etc. One may not have any serious objection to the items of expenditure mentioned in clauses (xii), (xiv), (xv) and (xvi). But the other clauses do require some careful examination. Obviously clause (x) and clause (xi) cannot form the items of expenditure out of the market fees. In face of the view of the law expressed by us above the propaganda in favour of the agricultural improvement and expenditure for production and betterment of agricultural produce will be in the general interest of agriculture in the market area. The whole of the State is divided into market areas. So long as the concept of fee under our Constitution remains distinct and limited in contrast to tax such expenditure out of the market fee cannot be countenanced in law. The first part of clause (xiii) may be justified in the sense of imparting education in marketing to the staff of the Market ....
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.... goes beyond the scope of the purpose of the utilisation of the market fees. The authorities have to bear this in mind and on a proper occasion the matter will have to be dealt with by courts in the light of this judgment where a concrete case comes of raising of a loan, spending the money so raised which cannot be reasonably connected with the purposes for which the market fee can be spent, as to whether such a loan can be repaid or interest on it can be paid out of the realizations of the market fees. One of the points mooted before us was as to how far the market committees can be compelled to part with 30% of their income in favour of the Marketing Board. If so, for what purposes the Board fund, namely, the Marketing Development Fund can be expanded. It is to be remembered that market fee is levied by each and every Market Committee separately in its own area and if a good and substantial portion of this fee has got to be expanded for rendering services in the area to the payers of the fee in relation to the transactions taking place therein, then logically speaking it flows from it that any money paid to the Board out of the collections of the market fee has also got to be ex....
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....he employees; (xvi)expenses incurred in auditing the accounts of the Board; and (xvii)with the previous sanction of the State Government, any other purpose which is calculated to promote the general interests of the Board and the Committee; or the national or public interest. On a parity of the reasoning which we have applied in the case of Market Committee Fund we may point out that the Market Development Fund constituted primarily and mainly out of the contributions by the Market Committees from realisations of market fees, can also be expended for the purposes of the market in the notified market area in relation to the transactions of purchase and sale of the agricultural produce and for no other general purpose or in the general interests of the agriculture or the agriculturists. On that basis we may, as at present advised hold as valid the purposes mentioned in clauses (i), (ii), (iii), (iv), first part of clause (v) clauses (vi), (vii), (viii), (ix), (xii), first part of clause (xiii), clauses (xiv), (xv) and (xvi). At the same time we hold that the Marketing Development Fund constituted out of the Market fees cannot be expended for the purposes mentioned in second part o....
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.... which fee is levied, nor can it be spent for carrying out the governmental functions of the State. If many of the purposes mentioned in the Act, as we have shown above, are outside the ambit of the service element and fall within the realm of the governmental functions, then it is plain that to say by generalisation that the fee money can be spent for the purposes or objects of the Act is not quite correct. The High Court has extracted section 28 of the Act but has failed to scan the effect of the various purposes in some of the clauses. After referring to the income and expenditure statements of Market Committee, Hissar from 1969-70 to 197374 the conclusion of fact drawn at page 15 is that the market fee constitutes more than 80% of the income of the Market Committee and the amount spent on "works" is nearly one-half of the total expenditure. The further finding is "the major item on which the amount has been spent under the head 'works' consists of the amount deposited with the public works department, Hissar, as contribution for construction of village link roads." On that finding itself it is manifest that Public Works Department was carrying out the governmental functions of....
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....y donations to educational institutions imparting general education. The Market Committee, Hissar, spent Rs. 1,07,794/- on the water supply scheme for a village. Even the High Court was constrained to disapprove of this. It also spent a sum of Rs. 6,00,000/- for the construction of a Panchayat Bhawan. Many other instances are mentioned in paragraph 37 of the judgment which show that the Market Committees were getting enormous income from market fees and they were made to squander away a good portion of that money unauthorisedly, although none of the purposes in itself was objectionable or bad. Rather, they were very laudable. But taking an overall view of the matter the High Court felt persuaded in the case of Haryana to uphold the maximum limit of Rs. 2/- by adding "no interference seems to be called for at this time." In the case of Punjab, however, the allegation of the petitioners before the High Court was that the market committees were collecting lakhs of rupees every month and the Marketing Board was collecting crores of rupees. The Marketing Board was asked to contribute one crore of rupees to the Guru Gobind Singh Medical College which had been recently established at Fari....
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.... of their produce. The Legislation like the present one has its root in the attempt on the part of the nation to provide a fair deal to the growers of crops and also to find a market for its sale at proper rates without reasonable chances of exploitation. If this object is kept in view, then the clauses of which the constitutionality has been challenged, would certainly fall within the ambit of Entry 28. Clauses (x), (xiii) and (xiv) would help the growers to make improvements in the production of agricultural produce with the result that their agricultural produce would find a better market resulting in getting them high price for their agricultural produce." It is to be emphasised at this stage that the question is not of the legislative competence to enact those clauses, nor is there a question of the fee assuming the character of a tax and therefore, its imposition being beyond the legislative competence of the State Legislature. The precise and the short question is whether the Market Committees and the Board can be authorised to spend the amount realised by market fees, as fee and fee alone for achieving all the objects of the Act when such expenditure cannot be justified an....
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....y an amount of Rs. 1.43 crores and not 5 crores." "It may, however, be submitted that the entire money collected by the Market Committees is being used for the purposes envisaged under the Act." "The Market Committees have to provide facilities as envisaged under the Act. The petitioners had asked for the copies of balance sheets. The balance sheets were originally prepared when the accounts of the Committees were being audited by "the Chartered Accountants." Now, the accounts are being audited by the Examiner, Local Fund Accounts which is a Government Agency. The preparation of balance sheets involved unnecessary expenditure and wastage of time and energy. Consequently, the practice of preparing balance sheets was given up a few years back." These paragraphs were placed before us also from the records of Civil Appeal 1083 of 1977. After quoting the various paragraphs from counter-affidavit the High Court says in paragraph 20 of the judgment at page 355: "From the aforesaid specific averments made in the written statement, referred to above, it is clear that to carry out the purposes of the Act it had become necessary to enhance the rate of the market fee and such an enhancemen....
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....y new materials placed before us in view of the counter filed on behalf of the Haryana Marketing Board in the High Court portions of which are extracted in the judgment. It will be useful to give the whole of the extract from the judgment of the High Court. It runs as follows: "It is well known to every one that the recent floods in Haryana were unprecedented and created havoc in the State Almost one-third of Haryana was submerged under water damaging the standing crops and uprooting the inhabitants making them homeless. The State has to resort to quick measures, for removing the miseries of people and to rehabilitate them The projected income from market-fee in the year 197778 was Rs. 9 crores. But due to the floods at the old rate of 2% it is expected to be Rs. 7.77 crores. The Committees will only be able to achieve the projected income of 1977-78 as anticipated in the beginning of the year only if the fee is charged at enhanced rate of 3%. Only with the projected income the Board will be able to provide the services envisaged by it to the farmers of the area. The Board allotted works amounting to Rs. 8.53 crores in the year 1976-77, out of which the Board will be able to compl....
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....d not vice versa. We must not be misunderstood to say that we are against the sentiment expressed in the interests of the agriculturists. Nor are we opposed in the least to the achievement of all the laudable objects envisaged under the Act. Let them all be achieved by all means known to law by meeting the expenses after augmenting the public revenue or by diverting the expenditure from wasteful or unimportant channel to the more important one under the Act. But surely we cannot countenance the achievement of all those objects by utilising a good and substantial portion of the market fee collections when the utilisation goes against the concept of quid pro quo which is very essential in case of fees. As we have already stated Civil Appeal 1616 of 1978 arised from the order of the High Court dated 18-9-1978 dismissing the connected Writ Petition filed by a few hundred dealers of various Market Committees in the State of Punjab challenging the increase of the market fee from Rs. 2/- to Rs. 3/-. Before us in the Writ Petitions not only the increase of the rate from Rs. 2/- to Rs. 3/- has been challenged but the previous increases have also been challenged. For the reasons to be briefl....
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.... output of the raw-materials required in the manufacturing process in the factory, it is also a benefit to the factory owner. Is it reasonably possible to travel as wide as that? Neither the Royal Commission nor the National Commission suggested as to how the integrated development of marketing and the agricultural produce is to be financed. They were not concerned with that aspect of the matter. None can have any objection to the carrying out of the integrated development but it must be carried out by legal means raising the finance in a way known to law. The improvements, checks, controls and regulations must be carried out in the market or in its vicinity. Much of the facilities provided in the market yards or around it will also be for the direct benefit of the producers. But then, being intimately connected with marketing operations the benefit to the producers must be deemed to be special or direct benefit to the traders also. Under the Marketing Rules the auction cannot be conducted by any person other than the person engaged by the Committee. [Rule 24(5)], and weighments and measurements of agricultural produce intended for sale are to be made through licensed weighments o....
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....o. 3 sought and respondent No.2 approved the expenditure on the electrification of the villages situate within the jurisdiction of respondent No. 3." In the Writ Petition, respondent No. 2 was the Marketing Board and respondent No. 3 was the concerned Marketing Committee. In the same case in the High Court additional affidavit was filed by Shri Tirath Singh, Chairman of the Punjab Board. It is stated in paragraph 7 that apart from development works in the budget estimates in the year 1975-76, there were other development projects to be taken in hand some of which were enumerated in that paragraph. We may take up only two or three items out of the same to show in contrast how one will be within the limits of law and the others will widely beyond it. Item No. (iii) reads as follows:- "To provide Rest Houses, Cattle Sheds, Cart Sheds, Light and Water arrangements in all the market yards." A good portion of these facilities will be utilised by the agriculturists who would be coming to the market yards for sale of their produce. Yet in the view we have expressed above it will be a service to the trader directly connected with the marketing operations. In contrast we quote items (x) an....
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....t to be supplied to the agriculturists for use at their village homes or in their fields surely they cannot be valid expenditure out of the collections of the market fee. Mr. Tarkunde filed an abstract of the statement of income from market fee and licence fee and expenditure incurred therefrom by The Market Committee, Hissar as worked out from Annexure R-I to R-V filed in the High Court. It would be seen from this abstract that in the year 1974-75 the income from market fee was Rs. 24,08,141/- and from licence fee about Rs. 6,000/only. A sum of Rs. 7,89,670/- was contributed under section 27 of the Act to the Board and a sum of Rs. 14,73,732/- was spent on Works including link roads. Similar was the position in the year 1975-76. In 1976-77 income from licence fee was only Rs. 16,000/- and odd and incomes from market fee was Rs. 38,27,233 /-. A big chunk to the tune of Rs. 12,19,383/- went as contribution to the Board and Rs. 24,47,408/- were spent on works including link roads. Similar abstracts were given in respect of other Market Committees showing exactly the same position. Abstracts were also given to us by Mr. Tarkunde showing the income of the Haryana Board by contribution....
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....sidy and what portion of the amount was spent out of the market fee Income. Similarly in Annexure R-III from the statement of income and expenditure of the Haryana Board for the year 1975-76 it would appear that a sum of Rs. 1,28,70,662/- was spent "on general improvement in M.C. and other notified area and construction of F.A.C.C." Apart from that the other items of expenditure are a sum of Rs. 20,00,000/- in purchase and acquisition of land for new mandies and Rs. 10,00,000/- and odd for purchase of land, construction of building for Board's office and staff quarters in the mandies. Again in this year a sum of Rs. 95,00,000/- and odd is shown to have been spent on Gober Gas plant. It may be inclusive of the figure of the earlier year. Then from Annexure R-IV, the statement for the year 1976-77, it will be found that a sum of rupees one crore was given as loan to Haryana Electricity Board. We have taken some of these items just by way of example to illustrate that the authorities took full liberty to treat the realisation from market fee as a general realisation of tax which they were free to spent in any manner they liked for the purposes of the Act, the development of the area, ....