TaxTMI 
TaxTMI 
2013 (11) TMI 1564
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....reby the learned Single Judge substantially set aside the order dated 19-4-2005 of the revisional authority and partly allowed the application filed by APMC by framing questions of law. 2. The brief facts of the case are stated below to appreciate the rival claims of the parties and to find out as to whether the appellant APMC is entitled for the relief sought for in these appeals. The appellant APMC was constituted pursuant to Notification issued on 14-1-1958 under the provisions of the Bombay Agricultural Produce Markets Act, 1939 and the area of Baroda City and Baroda Taluk of Baroda District was declared as the market area for the purpose of the Gujarat Agricultural Produce Markets Act, 1963 (hereinafter referred to as "the Act"). The respondent Company, manufacturing castor oil from out of the castor seeds purchased by it comes under the jurisdiction of the market area of APMC and therefore, it is liable for paying the market fees/cess for the trading activities carried out by it in the market area. APMC levied market fee on the castor seeds bought by the Company on the basis that castor seeds were brought within the market area of APMC. The respondent Company contested ....
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.... the appeal preferred by the respondent Company and dismissed the appeal preferred by APMC and stated (on the first issue) that as soon as the agricultural produce, namely, castor seeds, bought by the representatives of the Company, is brought from outside the market area into the market area, after payment of octroi on such produce in their capacity as owner of the goods, the same would be treated as completion of sale outside the jurisdiction of the market area. The Division Bench of the High Court, therefore, held that the collection of market fees from the respondent Company by APMC is contrary to the provisions of the Rules, namely, Rule 48 sub-rule (2) of the Rules, which grants exemption to agricultural produce brought from outside into market area by the industrial unit for its own use. On the second issue, the High Court held that the by-product, namely, de-oiled cake contains less than 1% oil and is not notified in the Schedule as per Section 2(f) of the Act and hence, the above product being totally different from oil cake, there is no liability upon the respondent Company to pay the market fees. Hence, the present civil appeals. 4. It is the case of APMC that o....
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....he said revision application, APMC filed its reply on 23-1-2005. The respondent Company filed rejoinder on 23-2-2005 to the reply filed by APMC. The Deputy Secretary (Appeal) allowed Revision Application No. 2 of 2005 by its cryptic order dated 19-4-2005 and set aside the order dated 27-12-2004 passed by APMC. It is the case of APMC that the revisional authority erroneously arrived at the conclusion that Rule 48(1) is not applicable and wrongly held that Rule 48(2) was applicable to the fact situation and further wrongly held that no market fee is to be paid by the respondent Company on the de-oiled cake. 6. Being aggrieved by the order of the revisional authority dated 19-4-2005 in Revision Application No. 2 of 2005, APMC preferred Civil Application No. 13606 of 2005 before the learned Single Judge of the High Court of Gujarat. The learned Single Judge after hearing the parties vide his order dated 22-12-2005 set aside the order of revision insofar as the levy of market fee on the castor seeds is concerned holding that the sale did take place within the market area and therefore APMC was authorised to charge fee from the respondent Company for such purchase and partly all....
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....her the Division Bench was justified in setting aside the finding of fact recorded by the learned Single Judge, holding that the castor seeds purchased by the respondent Company are within the market area of APMC? (iv) Whether the Division Bench is justified in recording the finding on the second issue (see para 7, above at p. 737c-d) in connection with LPA No. 195 of 2006 that the respondent concern is not liable to pay any market fee on the de-oiled cakes sold by it which are stated to be the by-product in the course of manufacturing castor oil which is not one of the items enumerated in the Schedule to the Act and the notification issued by the Directorate? (v) What order? Answer to Points (i) to (iii) 9. Points (i) to (iii) are answered together as they are interrelated with each other by assigning the following reasons: It would be necessary for this Court to refer to the definition of "agricultural produce" under Section 2(i) and provisions relating to levy of market fee under Section 28 of the Act and under Rule 48(1) of the Rules for the purpose of appreciating the factual matrix with reference to the rival legal contentions urged on behalf of the parti....
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.... that the respondent Company is an industrial concern which has been undertaking manufacture of castor oil out of the castor seeds which are declared as agricultural produce in the Schedule to the Act vide notification issued by the Directorate of APMC, Baroda. 11. It is the case of the respondent Company that the demand and assessment made and levying the market fee on the castor seeds for the period from 19-4-2004 to 30-11-2004 is erroneous as castor seeds were purchased from outside the market area of APMC, Baroda and the same were brought for the use of the industrial concern which is situated within the market area of APMC, Baroda for the purpose of using the same for manufacturing of the oil. In this regard, APMC had called upon the respondent Company to produce the accounts for the period 19-4-2004 to 30-11-2004 in respect of the goods being used in the mill and was further asked to obtain licence from the Market Committee for the year 2004-2005. On 7-12-2004 the respondent Company submitted monthly statement for the aforesaid period in respect of the purchases made of castor seeds by the Company. APMC on the basis of details provided by the respondent Company prepa....
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.... Rs. 305 per 100 kg. The total quantity shown was 112.50 quintals and the total amount claimed was Rs. 1,71,562. In the said bill dated 3-5-2004, it was indicated that payment was yet to be made. At p. 28 to the compilation, there is a purchase voucher/remittance note issued by the respondent Company. It is not in dispute that the said purchase voucher/ remittance note pertains to the same consignment transported by Manish Trading Company under the bill dated 3-5-2004. The purchase voucher indicates that the quantity of the castor seeds received was short by 37.50 kilos. The weight of bags of 150 kilos was also deducted from the quantity of castor seeds. The agreed rate of Rs. 305 for 100 kilos remained constant and the respondent Company therefore agreed to remit a total amount of Rs. 1,70,991 to Manish Trading Company referred to supra. To the query from the Court, the learned counsel appearing on behalf of the Company, on instructions, made submissions that consignments were received from the sellers within the market area for the purpose of finding out shortfall or pilferage and the payment is made to the extent of actual quantity received. The learned Single Judge has also ref....
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.... such as natural calamity or theft, the respondent Company did not receive the full quantity of castor seeds, then the payment shall be made only for the quantity received by it and not for the entire quantity to be supplied by the trader. The learned Single Judge has further rightly recorded the finding of fact that when the castor seeds reach the market area, they were weighed by the Company and payment thereof was agreed to be made to the tune of quantity received and till then the castor seeds continue to be in the ownership of the seller. The Company becomes the owner of the property only once the exact weight of the castor seeds was ascertained and purchase voucher was obtained. The learned Single Judge rightly held that APMC is justified in contending that the sale of castor seeds did take place within the market area and the appellant was authorised to charge fees from the respondent Company for such purchase. Therefore, the learned Single Judge held that the castor seed was bought by the respondent Company within the market area of APMC, Baroda and therefore Rule 48(1) of the Rules is applicable to the fact situation and not Rule 48(2) as contended by the counsel. The s....
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....circumstances of the case which indicates a contrary intention. This exercise has to be done to give effect to the opening words, namely, 'Unless a different intention appears' occurring in Section 19(3). In Hoe Kim Seing v. Maung Ba Chit[AIR 1935 PC 182] it was held that intention of the parties was the decisive factor as to when the property in goods passes to the purchaser. If the contract is silent, intention has to be gathered from the conduct and circumstances of the case." 14. Therefore, the learned Single Judge on the basis of documents which are all admitted documents came to the right conclusion and held that the castor seeds were bought by the respondent Company within the market area. Therefore, APMC has rightly made assessment of market fee and levied the same as per Section 28 of the Act, which assessment order has been erroneously set aside by the revisional authority without proper appreciation of facts and applying the relevant provisions, namely, Section 28 and Rule 48(1) and came to the erroneous conclusion and held that the goods bought were brought from outside the market area for the purpose of manufacturing oil by the Company in its factory. ....
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....by this Court in Shalimar Chemical Works Ltd. case wherein the learned Single Judge rightly came to the conclusion that the castor seeds were purchased by the Company in the market area for the relevant period in question in respect of which the assessment order was passed levying the market fee and directing the Company to pay the same was legal and valid. The same came to be erroneously set aside by the revisional authority without proper application of mind and law to the fact situation and the same was then set aside by the learned Single Judge of the High Court. The said findings of the learned Single Judge have been erroneously set aside by the learned Division Bench at the instance of the respondent Company in LPA No. 139 of 2006. Therefore, we have to hold that the said finding of the Division Bench in reversing the legal and valid finding of fact recorded by the learned Single Judge on proper appreciation of facts and undisputed evidence on record and rightly applying the provisions of the Sale of Goods Act referred to supra and Rule 48(1) is erroneous. Therefore, we have to set aside the said order passed in LPA No. 139 of 2006 and restore the order of the learned Single ....
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....o so as to extract maximum possible oil out of it. At the first stage alter cleaning and separating raw seeds from husk, etc., the castor seeds are crushed through mechanical devices to extract oil from the same. This mechanical process would obviously leave substantial amount of oil in the oil cake which may come into existence after extraction of oil. If this residual product was sold by Respondent 2 in the market, the same would squarely fall under the head of oil cake. To that extent there is no serious dispute raised by Respondent 2 also. However, Respondent 2 does not sell the oil cake which comes into existence by extracting oil from castor seeds through the abovementioned mechanical process. The oil cake so produced is made to undergo further extensive sophisticated and complex process by which instead of leaving 10% oil contents in the oil cake, the percentage of residue of the oil is brought down to less than 1%. By sophisticated means of operation, the wastage of oil is minimised and the oil extraction percentage is improved. Ultimately therefore, the final byproduct which comes into existence and which is sold by Respondent 2 in the market is de-oiled cake having less t....
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....e expeller and the outcome is groundnut oil and groundnut oil cake. The groundnut oil cake again is pressed through the solvent in which "food hexane" is sprayed resultantly groundnut oil and groundnut de-oiled cakes are obtained.' " 17. Further reference was made to the Gujarat Sales Tax Act wherein the oil cake and de-oiled cake are considered to be two different products from the entries contained in the said Act and the Schedule. The said entries are referred to for the purpose of interpretation of the terms so defined in the said Act. The term oil cake is not defined in the APMC Act and further on the basis of the available material on record which elaborates the difference in the contents of oil in oil cake and de-oiled cake, cognizance of different terms, namely, oil cake and de-oiled cake in the Gujarat Sales Tax Act, difference in the process of oil extraction which would lead to by-product of the oil cake and de-oiled cake, we have to hold that de-oiled cake is a completely different product than oil cake. Also, we have to refer to the judgment of this Court in State of A.P. v. Modern Proteins Ltd on which strong reliance was placed by the respondent Compa....
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....e notification for the purpose of levying market fee. Therefore, we do not find any good reason whatsoever to interfere with the concrete finding of fact on this aspect of the matter. Hence, we have to affirm the concrete finding of fact recorded by the learned Single Judge and of the Division Bench of the High Court. We do not find any valid and cogent reasons to arrive at a different conclusion other than the view taken by them as the said view is based on a proper appreciation of the factual matrix and the statutory provisions as de-oiled cake is not mentioned in the Schedule to the Act and the notification. The item which is mentioned is oil cake which is different and distinct from the de-oiled cake as distinguished by this Court in Modern Proteins Ltd case referred to supra. The High Court has rightly applied the said decision to the fact situation. Therefore, we are of the view that the said finding of fact recorded by the High Court is legal and valid. The same does not call for interference. Accordingly, the appeal of APMC on this aspect of the matter must fail as we are affirming the order of the Division Bench of the High Court on the levy of the market fee on de-oiled c....
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....ught tor declaratory relief to declare that APMC is entitled to levy market fee on the respondent Company for purchase of castor seeds as per the demand notices dated 5-3-2008 and 15-4-2008 given to the respondent Company. Further, by way of amendment to the prayer column, it has sought for declaratory relief to declare Rule 48(2) of the Gujarat Agricultural Produce Markets Rules, 1965 (for short "the Rules") as ultra vires of Sections 28-A and 59 of the Gujarat Agricultural Produce Markets Act, 1963 (hereinafter referred to as "the Act") urging various facts and legal grounds. The amended sections were added to the Act vide the Gujarat Agricultural Produce Markets (Amendment) Act, 2007. 4. The learned Single Judge of the High Court after hearing the learned counsel for the parties passed an interim order on 13-11-2008 in Agriculture Produce Market Committee v. State of Gujarat referring to Section 28(1) of the Act and amended Sections 28(2)(a), (b), (c), (d) and (e) of the Act and issued rule to examine the correctness of Rule 48(2) in view of the amendment to the Act incorporating sub-section (2)(a) to Section 28 of the Act and directed the respondent Company by giving d....
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....s for the interpretation of Section 28 of the Act read with Rule 48(2) of the Rules. The relevant para 8 from the Division Bench judgment rendered in the aforesaid letters patent appeal filed by the respondent Company is extracted hereunder:- "8. Section 28 of the Act empowers the Market Committee to levy and collect fees on notified agricultural produce bought or sold in the market area, subject to the provisions of the Rules and at the rate maxima and minima, from time to time prescribed. Thus, the power of the Market Committee to levy prescribed fees is envisaged in the above section. In juxtaposition to the above section, it is necessary to refer to Rule 48 of the Rules, and more particularly Rules 48 and 49, placed in Part VI with heading 'Fees, levy and collections', pertaining to market fees. Rule 48 sub-rule (1) and the Explanation is highlighted by the learned Single Judge and discussion has taken place on the basis of certain material available on record with regard to sale of castor seeds by one Manish Trading Company of Ahmedabad to the Company and after relying upon Sections 19 to 22 of the Sale of Goods Act, the learned Single Judge fo....
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....es and is entitled for exemption from payment of market fees. Therefore, exercise undertaken by the learned Single Judge to find out the place of sale, so as to bring the case of the Company under Rule 48 sub-rule (I) of the Rules, is of no help and the finding, on that basis, arrived at by the learned Single Judge, will have to be quashed and set aside in the backdrop of the above discussion and the fact situation. 5. Thereafter the amended provisions of Sections 28-A and 31-D of the Act are referred to by the Division Bench along with Section 28(1) of the Act and Rule 48(2) of the Rules as well as sub-sections (2)(a) and (b) of Section 28 of the amended provisions of the Act to come to the conclusion, that in view of the factual legal situation, the revisional authority had rightly interfered with the demand notices issued by APMC and therefore held that the civil appeal filed by APMC lacks merit and dismissed the same and the interim relief granted was set aside and consequently rule was also discharged. The correctness of the same is challenged here by urging various questions of law and grounds in support of the same. The same need not be adverted to in this judgment ....
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....d that the demand for the market fee made by APMC for castor seeds is justified as per the reasoning given in our judgment in the connected Civil Appeal No. 3130 of 2008, that the castor seeds were bought in the market area and not brought into the market area. It would suffice to say that the order dated 10-2-2009 of the Division Bench of the High Court in Jay ant Oils and Derivatives Ltd. v. Agriculture Produce Market Committee setting aside the order dated 13-11-2008 of the learned Single Judge in Agriculture Produce Market Committee v. State of Gujarat and affirming the order dated 30-6-2008 of the revisional authority in Revision Application No. 69 of 2008, without examining the correctness of Rule 48(2) of the Rules and applying the Division Bench judgment rendered in Letters Patent Appeal No. 139 of 2006 is without considering the factual matrix and therefore, the same is liable to be set aside. Accordingly, we set aside the same and remand the matter to the High Court to place the matter before the roster of the learned Single Judge to examine the validity of Rule 48(2) of the Rules, as questioned with reference to Section 28-A of the amended provision of Act 17 of 2007 and....