TaxTMI 
TaxTMI 
2017 (6) TMI 1390
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.... 8294 of 2017 (Arising out of SLP (C) No. 38313 of 2012), Civil Appeal No. 8288 of 2017 (Arising out of SLP (C) No. 38314 of 2012), Civil Appeal No. 8292 of 2017 (Arising out of SLP (C) No. 38315 of 2012), Civil Appeal No. 8291 of 2017 (Arising out of SLP (C) No. 38316 of 2012), Civil Appeal No. 8295 of 2017 (Arising out of SLP (C) No. 38317 of 2012), Civil Appeal No. 8289 of 2017 (Arising out of SLP (C) No. 38318 of 2012), Civil Appeal No. 8296 of 2017 (Arising out of SLP (C) No. 38319 of 2012), Civil Appeal No. 8299 of 2017 (Arising out of SLP (C) No. 38533 of 2012), Civil Appeal No. 8300 of 2017 (Arising out of SLP (C) No. 38567 of 2012), Civil Appeal No. 8301 of 2017 (Arising out of SLP (C) No. 192 of 2013), Civil Appeal No. 8302 of 2017 (Arising out of SLP (C) No. 256 of 2013), Civil Appeal No. 8304 of 2017 (Arising out of SLP (C) No. 1133 of 2013), Civil Appeal No. 8207 of 2017 (Arising out of SLP (C) No. 1567 of 2013), Civil Appeal No. 8298 of 2017 (Arising out of SLP (C) No. 1570 of 2013), Civil Appeal No. 8303 of 2017 (Arising out of SLP (C) No. 9980 of 2013), Civil Appeal No. 8305 of 2017 (Arising out of SLP (C) No. 10341 of 2013), Civil Appeal No. 8306 of 2017 (Arising o....
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....reof, it would be appropriate to discuss the facts and the reasons given by the High Court for arriving at the said conclusion. 4. Before the High Court, lead case was that of Arihant Udyog, which is the position herein as well. Arihant Udyog is a small-scale industry registered as such with the Government of Rajasthan. According to Arihant Udyog, since it is purchasing the agricultural produce from outside the State for industrial purpose, it is not liable to pay any market fee. It is, however, a licensee under the Act, obtained by it Under Section 14 thereof. Likewise, all other Appellants are also licensees. 5. Some relevant provisions of the Act, Rules and the Administrative Circulars require a mention at this stage, which read as follows: Section 14 of the Act Power of market committee to issue Licence.-(1) Where a market is established under the provisions of this Act, the market committee may issue and renew Licence, in accordance with the Rules and bye-laws, to traders, brokers, weighmen, measurers, processors, surveyors, warehousemen or other persons to operate in the market on payment of the prescribed fees. (2) The market committee may al....
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...., unless the contrary is proved, be presumed to be bought and sold within such market area. (2) The cess levied as per Sub-rule (1) shall not be levied more than once on agricultural produce bought or sold in the market area. (3) The market area committee shall also levy and collect licence fee from traders, brokers, weighman, measurer, surveyors, warehousemen and other persons operating in the market area as provided in the bye-laws. (4) Deleted [Sub-Rule (4) of Rule 58, before deletion, read as under:] 6. As per Section 14 of the Act, a trader is required to obtain a licence and is under lawful obligation to make good the market fee. Insofar as levy of market fee is concerned, power is given to the Market Committee in this behalf to prescribe the market fee on agricultural produce, bought and sold by the licensee in the market area. Rule 58 is the Rule under which this market fee is prescribed. Initially, when the Rules were framed in the year 1963, Rule 58 contained Sub-rule (4) as well, which empowered the Market Committee to exempt payment of market fee in respect of certain market produce. Circular dated March 07, 1992 was issued Under Sub-rule (....
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....ded in a truck. Truck number is mentioned in the invoice, so also weight of the goods, rate at which the goods are sold and total amount of the invoice. This invoice is dated March 22, 2006. It contains the following three terms and conditions: 1. Goods once sold & delivered will not be taken back. 2. Responsibility of the seller ceases as soon as the goods are delivered. 3. Interest @ 24% per annum is payable on all payments received after 10 days. 9. Condition No. 2 prescribes that responsibility of the seller would cease as soon as goods are delivered. It would mean that till the goods are delivered, the seller would remain responsible. Admittedly, the goods were to be delivered only at Jodhpur (i.e. within the market area), which is so stipulated in the invoice. On the basis of the aforesaid conditions, the High Court held that as per the provisions of Sale of Goods Act, 1930 the ownership in the goods stood transferred to the Appellant only on the delivery of the goods, which delivery took place within the market area at Jodhpur and, therefore, the transaction of buying and selling was completed at Jodhpur. On this analogy, the High Court came to ....
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....et area. He emphasised that both the conditions of buying as well as selling in the market area have to be satisfied, as is clear from the word 'and'. Learned Counsel also relied upon the following observations from the judgment of this Court in Agricultural Market Committee v. Shalimar Chemical Works Ltd. (1997) 5 SCC 516: 38. Section 20 indicates that in case of unconditional contract of sale in respect of specified goods in a deliverable state, the property in the goods passes to the buyer at such time as the parties intend it to be transferred. Section 19(3) provides that Sections 20 to 24 contain the Rules for ascertaining the intention of the parties as to the time at which the property in the goods shall be treated to have passed to the buyer. Both Sections 19 and 20 apply to the sale of "specific" or "ascertained" goods. 39. Section 20, which contains the first Rule for ascertaining the intention of the parties, provides that where there is an unconditional contract for the sale of "specific goods" in a "deliverable state", the property in the goods passes to the buyer when the contract is made. This indicates that as soon as a contract is made in ....
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....as not dependent upon the payment of price or the delivery of goods to the Respondent. 12. Mr. H.L. Tiku, learned senior Counsel appearing for M/s. Deepak Enterprises, also emphasised that the Appellant was purchasing the agricultural produce (sugar/paddy) from outside the State of Rajasthan which is brought to its factory in Rajasthan for processing the same into mishri, patasa, makhana, burra, etc. from sugar and rice from the paddy, which goods are not 'agricultural produce' as per Schedule-I of the Act. It was, thus, argued that the Appellant was not dealing with sale and purchase of any agricultural produce in market area. His further submission was that purchase of agricultural produce was outside the State of Rajasthan which was transported to Rajasthan at the Appellant's risk and cost, as per the provisions of the invoice. The goods are ascertained and in deliverable state. The invoices itself mention the terms and conditions that the goods are being sold at the risk of the Appellants, in clear terms and in some of the cases the Appellant has even obtained the insurance of goods in its name. After the goods were entrusted to the carrier, the sellers from outs....
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....ingle Judge came to the conclusion on the basis of appreciation of the aforesaid facts and held that the sale was not effected till the consignment was received by the Respondent Company and the same was weighed within the market area. 14. From the aforesaid arguments it becomes clear that applicability of Section 17 of the Act read with Rule 58 of the Rules would depend upon the question as to whether agricultural produce is bought and sold by the licensee in the market area. It is also the common case of the parties that the answer to the aforesaid issue would depend upon the question as to when and at what stage the title in the goods passes, if the entire transaction takes place outside the State of Rajasthan and the ownership in the goods also passes outside Rajasthan, then the market fee is not payable. It is also the common case of the parties that answer to the aforesaid question would depend upon the applicability of Section 4 read with Section 19 of the Sale of Goods Act, 1930, which provisions are to be applied keeping in view the terms and conditions on which the goods are sold. That is the exercise which is done by the High Court by looking into the terms on which t....
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....ract intend it to be transferred. (2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case. (3) Unless a different intention appears, the Rules contained in Sections 20 to 24 are Rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer. 16. Sub-section (3) of Section 19 is another significant provision which mentions that Rules contained in Sections 20 to 24 are the Rules for ascertaining the intention of the parties, unless a different intention appears in the contract for the sale of specific or ascertained goods. It means, if such an intention as to when the parties to the contract intend the property in goods to be transferred cannot be gathered from the contract, Rules contained in Sections 20 to 24 would be applied. 17. Section 20 deals with a situation where specific goods are in a deliverable state. In that case property in goods passes to the buyer when the contract is made, even when time of payment of the price or the time of delivery of the goods or both is post....
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....eller. Such a responsibility can be only if the ownership remains of the seller. No other document was produced by Arihant Udhyog which could demonstrate the intention that property in goods passed in their favour before these goods were delivered. 22. Thus, insofar as judgment of the High Court in Arihant Udhyog is concerned, no fault can be found therein. The appeal filed by Arihant Udhyog is, accordingly, dismissed. 23. Having said so, we find that the High Court has passed impugned common judgment deciding as many as fifteen writ petitions. Other writ petitions are also dismissed taking into consideration the terms and conditions of the contract of sale between Arihant Udhyog and its seller. This is clearly a wrong approach. In each case the High Court was supposed to go into the contract for sale between the licensees and their sellers and in view of the terms and conditions contained in each of the case, the High Court was supposed to decide as to whether in their cases also ownership in goods transferred only in the market area within the State of Rajasthan. 24. Insofar as the case of M/s. Deepak Enterprises is concerned, the same is decided by the High Court by sep....
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....the High Court has rightly repelled this argument by observing that once the goods bought are agricultural produce on which market fee is leviable in terms of Schedule attached to the Act, then the market fee is payable. If it is used as raw material for manufacturing purpose thereafter would be of no consequence. 28. However, as mentioned above, it is to be first ascertained whether agricultural produce was bought and sold in the market area or not is the question which needs to be determined in each case after applying the principles of law as enumerated above. The High Court would be required to ascertain this on the basis of terms and conditions of sale in each case and that would determine the fate of each of the writ petitions filed by the Appellants. This exercise is not done and after dealing with the case of Arihant Udhyog, other writ petitions are also dismissed. Thus, except Arihant Udhyog, where we have upheld the judgment of the High Court, orders of the High Court in other cases are set aside and writ petitions are remanded back to the High Court to decide them in the light of the law stated by us in this judgment. 29. The consequence is that the appeal of Ariha....