TaxTMI 
TaxTMI 
2015 (12) TMI 846
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....C) No. 8859 of 2015) CIVIL APPEAL NO. 14220 OF 2015 (Arising out of SLP (C) No. 15474 of 2015) CIVIL APPEAL NO. 14221 OF 2015 (Arising out of SLP (C) No. 15479 of 2015) CIVIL APPEAL NOS. 14222-14234 OF 2015 (Arising out of SLP (C) Nos. 15480-15492 of 2015) CIVIL APPEAL NOS. 14235-14237 OF 2015 (Arising out of SLP (C) Nos. 7701- 7704 of 2015) CIVIL APPEAL NO. 14238 OF 2015 (Arising out of SLP (C) No. 15083 of 2015) CIVIL APPEAL NOS. 14239-14240 OF 2015 (Arising out of SLP (C) Nos. 15471-15472 of 2015) CIVIL APPEAL NO. 14241 OF 2015 (Arising out of SLP (C) No. 20533 of 2015) CIVIL APPEAL NO. 14242 OF 2015 (Arising out of SLP (C) No. 22134 of 2015) CIVIL APPEAL NOS. 14243-14246 OF 2015 (Arising out of SLP (C) Nos. 22130-22133 of 2015) AND CIVIL APPEAL NO. 14247 OF 2015 (Arising out of SLP (C) No. 26494 of 2015) JUDGMENT V. Gopala Gowda, J. Leave granted in all the Special Leave Petitions. 2. The present appeals arise out of the common impugned judgment and order dated 16.12.2014 passed in Special Appeal No. 384 of 2014 and Special Appeal No. 75 of 2013 along with a batch of other Special Appeals by the High Court of Uttarakhand, whereby the High Court dismissed the challen....
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....challenge to legislative competence does not survive." The High Court held that the main thrust of the argument of the appellants was that a market fee can only be charged if there is a sale and purchase involved in the agricultural produce and even where there is no sale and purchase of the agricultural produce, the "market fee" in that event can only be charged if the goods are bought for specified purposes alone, as provided under Section 27(c)(iii) of the Act, otherwise not. However, the Writ Petitions were allowed to the extent that the demand notices against them were quashed with the observation that the appellants herein brought the agricultural produce into the market area for manufacturing it into a finished product. The main intention of the appellants was not to store the agricultural produce but to convert it into another product. Thus, the storing of the product was only for incidental purposes and not for the purposes of business. 5. Subsequently, vide Notification dated 03.01.2013, the State Legislature enacted the Uttarakhand Agricultural Produce Marketing (Development and Regulation) (Amendment) Act, 2012. Section 1(2) of the Amendment Act provides that the ....
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....parable transaction, which is well within the province of the State Legislature and the powers available to it in Entry 28, read with Entry 66, of List II. Entry 28 of List II provides for "markets".........In the market, may be, what is intended to be regulated is sale and purchase; but, as already noted, the markets are to be developed and regulated." The order of the High Court dated 10.07.2014, passed by the learned single Judge was upheld. Hence, the present appeals. 8. We have heard the learned senior counsel for both the parties. On the basis of the factual evidence on record produced before us, the circumstances of the case and also in the light of the rival legal contentions urged by the learned senior counsel for both the parties, we have broadly framed the following points which require our attention and consideration:- 1) Whether the State Government of Uttarakhand has the legislative competence to enact the impugned provisions? 2) What Order? Answer to Point 1 9. Mr. Dushyant Dave, learned senior counsel appearing on behalf of the appellants contends that the Amendment is ultra vires the Constitution, as the same is not supported by the relevant entry....
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....xceeded its legislative competence while enacting the aforesaid impugned provisions in the Amendment Act by going beyond the scope of Entry 28 read with Entry 66 of List II of the Seventh Schedule of the Constitution of India. More so, when a law made by the Parliament, namely, the Industries (Development and Regulation) Act, 1951 already occupied the said field. The learned senior counsel places reliance on the following paragraphs of the judgment in the case of ITC Ltd. referred to supra, which reads as under: "110. The controversy in this case to a large extent turns on the meaning of the words "industry" as used in the three legislative lists. Now the power to legislate in respect of all industries has been given under Entry 24 of List II to the State Legislatures subject to Entries 7 and 52 of List I. Entries 7 and 52 of List I allow Parliament to legislate in respect of particular 'industries' - namely such industries which are declared by Parliament by law to be necessary for the defence or for the prosecution of war (Entry 7) and industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest (Entry 52). ....
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....egislature has superiority over the other then to extent of the repugnancy the one supersedes the other. But two enactments may be repugnant to each other even though obedience of each of them is possible without disobeying the other. The test of two legislations containing contradictory provisions is not, however, the only criterion of repugnancy, for if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field, the enactments of the other legislature whether passed before or after would be overborne the on the ground of repugnance. Where such is the position, the inconsistency is demonstrated not by a detailed compression of provisions of the two statutes but by the mere existence of the two pieces of legislation........." The learned senior counsel further placed reliance on the case of The Hingir-Rampur Coal Co. Ltd. v. The State of Orissa AIR 1961 SC 459, the relevant portion of which is quoted as under: "......Before we deal with this question it is necessary to consider the difference between the concept of tax and that of a fee. The neat and terse definition of tax which has been give....
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....tinizes the schemes of the levy very carefully and determine whether in fact there is a co-relation between the service and the levy, or whether the levy is either not co-related with service or is levied to such an excessive extent as to be a pretense of a fee and not a fee in reality. In other words, whether or not a particular cess lived by a statute amounts to a fee or tax would always be a question of fact to be determined in the circumstances of each case. The distinction between a tax and a fee is, however, important, and it is recognised by the Constitution. Several Entries in the Three Lists empower the appropriate Legislatures to levy taxes; but apart from the power to levy taxes thus conferred each List specifically refers to the power to levy fees in respect of any of the matters covered in the said List excluding of course the fees taken in any Court." The learned senior counsel contends that legislative competence is a prerequisite for the valid imposition of a fee. 13. Mr. Ashok K. Pariza, the learned senior counsel appearing on behalf of some of the appellants contends that Amendment Act of 2012 is not constitutionally valid as the State Legislature is not emp....
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.... of the industry. The raw materials would be goods which would be comprised in Entry 27 of List II. The process of manufacture or production would be comprised in Entry 24 of List II except where the industry was a controlled industry when it would fall within Entry 52 of List I and the products of the industry would also be comprised in Entry 27 of List II except where they were the products of the controlled industries when they would fall within Entry 33 of List III." 16. The learned senior counsel further contends that the reliance placed upon the preamble of the Act by the appellants is misplaced as it is a settled principle of law that when the provisions of a statute are clear and unambiguous, the preamble must necessarily fade into insignificance. The preamble may be used as a key to open the mind of the Legislature in case of ambiguity in the provisions of the Statute. The learned senior counsel places reliance on the decision of this Court in the case of Maharishi Mahesh Yogi Vedic Vishwavidyalaya v. State of M.P. (2013) 15 SCC 677, wherein at para 87 it was held, inter alia, as under: "......at the very outset, it will have to be held that the Preamble cannot....
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....Union of India (2012) 8 SCC 680, wherein it was held as under: "The same principle was reiterated in Secunderabad Hyderabad Hotels Owners' Association case (supra) where the existence of two types of fee and the distinction between them has been highlighted as follows: "9. It is, by now, well settled that a licence fee may be either regulatory or compensatory. When a fee is charged for rendering specific services, a certain element of quid pro quo must be there between the service rendered and the fee charged so that the licence fee is commensurate with the cost of rendering the service although exact arithmetical equivalence is not expected. However, this is not the only kind of fee which can be charged. Licence fee can also be regulatory when the activities for which a licence is given require to be regulated or controlled. The fee which is charged for regulation for such activity would be validly classifiable as a fee and not a tax although no service is rendered. An element of quid pro quo for the levy of such fees is not required although such fees cannot be excessive." 18. The learned senior counsel contends that the fee which is sought to be levied in the instant....
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....tion. It has been held in several cases that a long title along with preamble or even in its absence is a good guide regarding the object, scope or purpose of the Act whereas the preamble being only an abbreviation for purposes of reference is not a useful aid to construction. The preamble of an Act, no doubt can also be read along with other provisions of the Act to find out the meaning of the words in enacting provisions to decide whether they are clear or ambiguous but the preamble in itself not being an enacting provision is not of the same weight as an aid to construction of a Section of the Act as are other relevant enacting words to be found elsewhere in the Act. The utility of the preamble diminishes on a conclusion as to clarity of enacting provisions. It is therefore said that the preamble is not to influence the meaning otherwise ascribable to the enacting parts unless there is a compelling reason for it." (emphasis laid by this Court) 21. From a perusal of the abovementioned case law, it becomes clear that the preamble cannot control the enacting part. The preamble read with the provisions of a statute, however, makes the legislative scheme clear and can be used t....
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....om such date, as may be notified." 22. A combined reading of all the above mentioned provisions and the preamble makes it amply clear that the Act has been enacted with a view to regulate the buying and selling of the agricultural produce within the area notified as Market Area under Section 4 of the Act. At the cost of repetition, we extract the impugned provision, i.e. Section 27 (c) (iii): "any such agricultural produce, which arrives in any Market area of the State for sale, storage, processing, manufacturing, transaction or other commercial purposes from any other State or out of Country for the first time, it shall be registered as "Primary Arrival" and on such produce, Market fee and Development cess shall be payable." Section 27 (c)(iv) reads as: "any agricultural produce which is brought to any Market area within the State after the transaction of sale from any other Market area of the State after paying Market fee and Development cess for the purpose of sale, storage, processing, manufacturing, transaction or other commercial purposes, it shall be called as "Secondary Arrival" and on such produce, no Market fee and Development cess shall b....
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.... and the production, supply and distribution of goods. Once we turn to Entry 33 of the Concurrent List, we find that on the topic of trade and commerce in, and the production, supply and distribution of, goods enumerated therein at Sub-clause (b), we find listed items of foodstuffs, including edible oilseeds and oils." The scope of the term 'Industry' for the purpose of Entry 52 of List I was examined at length by Ruma Pal, J. in her concurring opinion in the constitution bench decision of ITC Ltd. referred to supra, wherein it was held as under: "126. To sum up: the word 'Industry' for the purposes of Entry 52 of List I has been firmly confined by Tika Ramji to the process of manufacture or production only. Subsequent decisions including those of other Constitution Benches have re-affirmed that Tika Ramji's case authoritatively defined the word 'industry'-to mean the process of manufacture or production and that it does not include the raw materials used in the industry or the distribution of the products of the industry. Given the constitutional framework, and the weight of judicial authority it is not possible to accept an argument canvassing a wi....