TaxTMI 
TaxTMI 
2009 (5) TMI 1021
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....d in this case, was once decided by a Division Bench of this Court in Gurram Polisetti v. Government of Andhra Pradesh 200 (4) ALD 253 (DB). The Division Bench judgment was assailed before the Supreme Court in Civil Appeal No. 4484 of 2000 (Guntur District Produ. M.A. Co-op Un. Ltd. v. Agricultural Market Committee). The apex Court set aside the Judgment of this Court and remitted for fresh hearing. Thereafter, petitioners in remanded matters, withdrew those writ petitions with liberty to file fresh writ petition. This writ petition came to be filed thereafter. A learned single Judge, before whom initially matter was listed, referred writ petition to Division Bench. But, learned Chief Justice directed that the matter be heard by a Full Bench. Brief fact of the Matter 2. The factual background is not disputed by the parties. In exercise of powers under Section 3(3) of the Act, Government issued Notification vide their order in G.O.Ms. No. 2095, dated 29.10.1968 (hereafter called, declaration order), notifying twenty (20) areas for the purpose of the Act in respect of agricultural produce, livestock and products of livestock (hereafter cumulatively referred to as 'market pr....
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....rred by Sub-section (4) of Section 4 of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 (Act 16 of 1966) and in supercession of all the G.Os., issued on the subject of Agricultural Produce, Livestock and products of Livestock and flowers, the Governor of Andhra Pradesh hereby directs that all the notified markets shall regulate the purchase and sale of all the notified agricultural produce, livestock and products of Livestock issued in Schedule-II to the G.O.Ms. No. 2095, Food and Agriculture (Agrl.,) Department, dated 29.10.1968 and flowers issued in Schedule to G.O.Ms. No. 610, Food and Agriculture Department, dated 21.10.1978 respectively as amended from time to time. 4. As noticed supra, from the date of deletion order till the issue of impugned order, market fee was not levied on 'ghee' nor traders in ghee were required to obtain licence. After earlier writ petitions were dismissed as withdrawn, Guntur Agricultural Market Committee (GMC), first respondent herein, issued notice, dated 12.02.2007, under Section 7(1) of the Act to petitioner-proprietary concern engaged in ghee business, directing him to obtain licence for doing business in not....
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.... existing notified areas. When such power is exercised, all market committees can only regulate the sale and purchase of those notified market products and every time such market products are deleted or included for the purpose of regulation, there is no necessity to issue separate marketwise notification. Pointing out the scheme of Sections 3 and 4 of the Act, they would urge that inviting objections at the stage of Sections 4(1), 4(3) and 4(4) of the Act, compatible with principles of natural justice is not warranted nor called for within the scope of the provisions of the Act. According to them, Sections 3(3) and 4(4) of the Act would operate in different spheres and serve different purposes. They submit that Notification issued under these provisions is a one-time exercise of declaring notified areas or notified market area and every time market products are varied, there is no necessity to invite objections. They submit that when legislature specifically does not contemplate procedure as envisaged under Section 3(2) of the Act with reference to exercise of power under Sections 4(1), 4(3) and 4(4) of the Act, the Court cannot read any such procedure into the Act. They point out....
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....f defining words on Government. Not only the animals mentioned in Section 2(v) and not only the products of livestock defined in Section 2(xv), but all such animals and all such products of livestock as may be declared by notification are to be treated as livestock and/or products of livestock, as the case may be. 9. If cows and buffalos are livestock, what are the products of 'cows and buffalos', whether only raw hides, raw skins, bones, horns and hoof, hair and wool of cows, buffaloes, goat, sheep etc., are products of livestock? Learned Counsel for petitioner vehemently contends that 'ghee' cannot be treated as a product of cow or buffalo. Therefore, it is necessary to explain as to what are milk (buffalo or cow) or dairy products as understood by general public and those who engage in business of milk products. 'Milk', 'curd', 'butter', 'butter milk' and 'ghee' are traditional milk products in India. In modern times, other products like icecream, kulfi, kalakand, kova, srikand, gulab jamoon and a large varieties of sweets, chhana products (used for preparation of Rasgulla) became popular as modern products of milk. Indi....
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.... market fee under U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (U.P. Act). It was contended that hides and skins in 'raw' condition are different from 'tanned' condition. Reliance was placed on various decisions arising under Sales Tax laws, which made distinction among various products derived or produced from the similar raw product. The Supreme Court rejected such argument and held that the meaning of a market product has to be understood on the basis of the expression of agricultural produce as defined in Section 2(a) of the U.P. Act. A perusal of Section 2(a) of the said Act makes it clear that an agricultural product would be a product which is specified in the Schedule or one which is admixture of two or more items and would also include any such item in a processed form. In our view it makes no difference, for the purposes of the said Act, that the item concerned is a different commodity from the one which is included in the Schedule. It is possible that by virtue of an admixture of two or more items or by virtue of processing a different commodity or item may come into existence. Even though a different commodity may come into existence, it would stil....
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....arly, all such 'products of livestock' as may be declared by the government by notification are to be treated as products of livestock for the purpose of the Act. By reason of Section 2(x) when once a notification is issued under Section 3(3) of the Act, declaring market products, by reason of Section 2(v) and 2(xv), all products of cows, buffalo, bullocks, bulls, goats etc., shall have to be treated as products of livestock for the purpose of the Act. Here we may refer to Ram Chandra Kailash Kumar v. State of U.P. AIR 1980 SC 1124, Dineshchandra Jamnadas Gandhi v. State of Gujarat AIR 1989 SC 1011, Sita Devi v. State of Bihar 1995 Supp (1) SCC 670 and I.T.C. Limited v. Person Incharge, Agriculture Market Committee, Kakinada AIR 2004 SC 1796 : 2004 AIR SCW 792. 13. In Ram Chandra Kailash (supra), traders in U.P., challenged levy of market fee under U.P. Krishi Utpadan Mandi Adhiniyam Act, 1964. Writ petitions were dismissed by Allahabad High Court. On appeal, before Supreme Court, questions were whether market fee could be levied both on paddy and rice, whether market fee is payable on 'ghee' by the producer/trader or purchaser, and whether the market fee could b....
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....ural produce' as to include all produce whether processed or non-processed of agriculture, horticulture, animal husbandry, specified in Schedule to the enactment. The question was whether market committee can levy market fee on buffalos, bullocks and cows bought and sold in weekly market. The High Court of Patna held that cattle is an agricultural produce for the purpose of levy. It was argued before the Supreme Court that cattle is not an agricultural produce. Rejecting the contention, it was held that: In view of the fact that the legislature itself, on identifying the cattle to be an agricultural produce, laid its policy to subject cattle for levy of market fee, it is not open to the court to scan its wisdom. Though in the normal connotation cattle may appear to be not an agricultural produce, it needs to be given effect unless the legislature lacks competence which is not the case of the appellant. The policy and the wisdom of the legislature cannot be tested by taking aid of the preamble of the Act particularly when the language of Section 2(1)(a) is inclusive, unambiguous, specific and explicit. Preamble of the Act is the key to open the mind of the legislature w....
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....petent for the Government to declare ghee as 'product of livestock' for the purpose of regulating its purchase and sale, in any notified market area. In re Point 2 19. This is essentially enquiry into the procedural irregularity, if any. To be more precise, question as to whether the impugned notification is valid essentially involves consideration of the point as to whether the Government followed the procedure contemplated under the provisions of the Act before issuing the notification. Incidentally it requires to be considered whether any procedural non-compliance by itself vitiates impugned notification rendering it invalid and unenforceable. Procedural irregularity 20. The Act is seamless. It is not divided into Chapters, but for sake of convenience, provisions of the Act can be grouped. Sections 3, 5, 5A, 6, 6A, 6B, 8 to 11 form one group of establishment or machinery provisions. These deal with (i) identification of notified areas; (ii) constitution of market committee; (iii) establishment of markets; (iv) provision of facilities for purchase and sale of market products; and (v) declaration of market areas. This group of provisions also provide for discip....
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.... 23. We may refer to following elucidation of five steps by Full Bench of this Court in Mamidi Satyanarayana Murthy v. State AIR 1977 AP 147 (FB). Thus, to clarify the concepts and the different terminologies used in the Act, it may be pointed out that the notified area is the largest geographical and physical unit. There may be a single market or more than one market for each notified area. There is to be a market committee which is a body corporate and it operates over the entire notified area. The market committee has to set up one or more markets within the area of its operation as may be directed by the Government. After the directions have been issued by the Government, the market committee has to establish a market or markets in accordance with the directions of the Government and for each market it has to fix, under Section 4(3)(c), the limits of the market and the limits of the market area referred to as the 'market area'. Under Section 4(4), the market area and such other area adjoining thereto as may be specified by the Government in the notification issued under that Section becomes the notified market area. Thus, the largest physical unit is the not....
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.... : AIR 1985 SC 1416 and Satyavir Singh v. Union of India AIR 1986 SC 555. In the latter authority, summarizing conclusions reached in former, inter alia it was held (Paras 28 and 29): It is well established both in England and in India that the principles of natural justice yield to and change with the exigencies of different situations and do not apply-in the same manner to situations which are not alike. They are neither cast in a rigid mould nor can they be put in a legal strait jacket. They are not immutable but flexible and can be adopted, modified or excluded by statute and statutory rules as also by the constitution of the tribunal which has to decide a particular matter and the rules by which such tribunal is governed. Instances of cases in which it has been so held are Norwest Holst Ltd. v. Secretary of State for Trade (1978) 1 Ch. 201, 227, Suresh Koshy George v. University of Kerala (1969) 1 SCR 317, 322 : AIR 1969 SC 198 at p.201, A.K. Kraipak v. Union of India (1970) 1 SCR 457, 469 : AIR 1970 SC 150 at p. 157, Union of India v. Col. J.N. Sinha: (1971) 1 SCR 7191 (794-95) : (AIR 1971 SC 40 at p. 42, Swadeshi Cotton Mills v. Union of India (1981) 2 SCR 533, 591 ....
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....) 3 SCC 434 : AIR 2006 SC 1489 and Promoters & Builders Association of Pune v. Pune Municipal Corporation (2007) 6 SCC 143. 28. It is - more often than not; the legislative practice to provide for machinery for enforcing a police law (regulating law) or taxing law. In interpreting such 'machinery provisions', Court should always interpret in a manner so as to make provisions workable, by applying the maxim ut res magis valeat quam pereat (liberal construction should be put so as to make statute workable). If any interpretation renders an Act or any of its core provisions unworkable, such interpretation should be avoided unless the legislative intention is clear and unambiguous. In Saurabh Chaudri v. Union of India (2003) 11 SCC 146, Commissioner of Income Tax v. Lakshmi Machine Works (2007) 11 SCC 126 and K.P. Mohammed Salim v. Commissioner of Income Tax (2008) 11 SCC 573, Supreme Court held that a statute or any enacting provision therein must be so construed as to make it effective and operative on principle expressed in the said maxim. 29. In Tinsukhia Electric Supply Co. Limited v. State of Assam (1989) 3 SCC 709 : AIR 1990 SC 123, a Constitution Bench of Supreme ....
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....olding that a company has no immunity from prosecution, and that fine can be imposed for violating a penal provision. The majority also held that law should be interpreted so as to make it workable. However, in their dissenting opinion B.N. Srikrishna and N. Santosh Hegde, JJ, dealing with the maxim ut res magis valeat quam pereat, observed as under, (para 72 of SCC) The maxim "ut res magis valeat quam pereat" is pressed into service to contend that the duty of the court is to construe the enactment in such a way so as to implement rather than defeat the legislative purpose. In our view, this maxim can be pressed into service only if it is permissible to extract another reasonable meaning from the plain words used in the statute. There is a further difficulty in accepting this principle as applicable to the case on hand. This principle might enable the court to resolve the difficulty in construing a statute so that an interpretation is put on the statute which will carry forward the intention of the statute. However, it is to be remembered that the interpretation put on the statute must be of determinative import in all cases. This maxim cannot enable the court to put a va....
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....A notified area may be pruned by excluding a part of area from it or may be enlarged by including another geographical area. These can be done, however, only after following provisions of Sub-sections (1), (2), (3) of Section 3 of the Act. A similar power is conferred under Section 4(5) of the Act on the Government. Under Section 4(5) the Government may exclude from a notified market area any area comprised therein or include in any notified market area any area specified in such notification. Here again, when they choose to exclude or include from or in a notified market area, Government have to follow procedure contemplated under Sub-sections (1) to (4) of Section 4 of the Act. It is thus very clear that legislature intended procedural compliance under Sections 3(1) to 3(3), and/or under Section 4(1) to 4(4) only when merger/de-merger of a notified area or notified market area is proposed. When a notification is issued under Section 4(4) notifying market products to be regulated by AMCs, there is no requirement of complying with or following the procedure contemplated under Sub-sections (1) to (4) of Section 4 of the Act. This interpretation makes the provision workable. For inst....
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.... notification under Section 3. (emphasis supplied) 34. By the same logic, whenever the market products are deleted or re-introduced under Section 4(4), the Government need not follow the procedure contemplated under Sections 4(1) and 4(3) of the Act. It is also not necessary for the market committee constituted under Section 4(1), every time to take steps as contemplated under Sub-section (3)(a) and (3)(b) of Section 4 of the Act to provide facilities whenever products are added to the list of notified regulated market products. 35. In Sasa Musa Sugar Works v. State of Bihar (1996) 9 SCC 681, facts are as follows. Sugar was included in the Schedule of Bihar Agricultural Produce Markets Act, 1960, upto 1977. By notification, sugar was deleted as one of the market products with effect from 02.05.1977. Again by another notification, dated 21.05.1977, earlier notification was rescinded. This rescinding notification was challenged. In Delhi Cloth and General Mills Co. Limited v. Agricultural Produce Market Committee AIR 1993 Pat 43 : (1992) 2 Pat LJR 253, Patna High Court invalidated rescinding order, for non-compliance with procedure contemplated under Sections 3 and 4 of Biha....
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....9 of the Markets Act and State Government is clothed with such power which can be exercised without any aid of the provisions of Sections 3 and 4 of the Act. It should also be noted that since deletion of sugar from the Schedule was made in exercise of power under Section 39, and such deletion was not a deletion under Section 4(1) of the Act, the procedure prescribed in Sections 3 and 4 of the Act, was not required to be followed. Section 4(3) does not contemplate inclusion or exclusion of produce under Section 39 of the Act but is applicable only to the inclusion or exclusion of any area from the area of market or any produce specified therein as have been notified for control in a specified market already by notification issued under Sections 3 and 4 of the Act. (emphasis supplied) 36. It was also held that Section 4(3) (Section 4(3) of the Bihar Act is similar to Section 4(5) of the A.P. Act) thereof does not contemplate inclusion or exclusion of products under Section 39 of the Act, but is applicable only to inclusion or exclusion of any area from the notified market area. We may observe that though the scheme of Bihar Act and Andhra Pradesh Act are slightly different, th....
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....t expect the Government to abolish all the existing market committees and re-start exercise under Section 4(1) and then requiring such newly constituted market committees to establish markets, provide facilities and then request the Government to issue notification under Section 4(4). Further more, any exercise under Section 4(4) can be in two stages. The Government can first issue notification declaring market area and then issue another notifying regulated market products market areas notified simultaneously or earlier. Every time the items of market products are changed, there is no necessity for the Government to follow entire cumbersome procedure. 38. Above view derives strength from Section 4(5) of the Act which, as noticed earlier, enables Government to exclude from a notified market area any area comprised therein and/or to include any notified market area in an area specified in such notification. As ordained by the provision, Government are required to follow entire procedure contemplated under Sections 4(1), (2), (3) and (4) which only means constituting market committee, such market committee establishing markets, providing facilities and then Government issuing noti....
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....nd. A century ago, in Taylor v. Taylor (1875) 1 Ch D 426 Jessel M.R. adopted the rule that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and that other methods of performance are necessarily forbidden. This rule has stood the test of time. It was applied by the Privy Council, in Nazir Ahmed v. Emperor 63 Ind App 372 AIR 1936 PC 253 (2), and later by this Court in several cases, Shiv Bahadur Singh v. State of U.P. (1954) SCR 1098 : AIR 1954 SC 332 : 1954 Crl LJ 910 : Deep Chand v. State of Rajsthan (1962) SCR 662 : AIR 1961 SC 1527 : 1961 (2) Crl. LJ 705 to a Magistrate making a record under Sections 164 and 364 of the Code of Criminal Procedure, 1898. This rule squarely applies "where indeed, the whole aim and object of the legislature would be plainly defeated if the command to do the thing in a particular manner did not imply a prohibition to do it in any other". (Maxwell's Interpretation of Statutes, 11th Edn., pp. 362-363). (emphasis supplied) 41. In a given case if Government excludes from a notified market area or includes in any notified market area without following procedure envisage....
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....a Municipal Corporation v. Pawan Kumar Saraf (1999) 2 SCC 400 : AIR 1999 SC 738, respondent was indicted for an offence under Section 16(1)(a)(i) read with Section 7 of Prevention of Food Adulteration Act, 1954 (PFA Act, for brevity), on a charge of adulteration of asafoetida, based on the report of Public Analyst, Calcutta. After entering appearance in Criminal Court, he made an application to send samples to Director of Central Food Laboratory (Director). The Director sent certificate favouring the accused to the effect that the sample conforms to the standard prescribed for asafetida. The accused then moved the criminal Court for discharging him from prosecution. Trial Magistrate declined, whereupon he moved the High Court, which quashed the prosecution proceedings. Before Supreme Court, Calcutta Municipal Corporation projected that certificate of Director does not supersede report of the Public Analyst. The accused relied on Section 13(3) of the PFA Act which provides that certificate issued by Director shall supersede report of the Public Analyst. Dealing with this aspect, Supreme Court referring to Black's Law Dictionary (5th edn.,) observed that the word 'supersede&#....
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....ns. By repealing and replacing the previous notifications by other notifications, the result was not to wipe out any liability accrued under the previous notifications. If this contention of the respondents were to be accepted, the result would be startling. It would mean, for example, that when a notification has been issued under Section 5(1) prescribing a rate of tax, and that notification is later superseded by another notification further enhancing the rate of tax, all tax liability under the earlier notification is wiped out and no tax can be collected by the State Government in respect of any transactions effected during the period when the earlier notification was in force. 45. When all Government orders on the subject of market products issued from time to time in respect of all notified market areas stood superseded and the impugned order comes into effect, the ghee shall stand included in all market areas including GMC. Learned Counsel for petitioner has not brought to our notice any authority to support his contention that impugned order does not revive 'ghee' as one of the regulated products in GMC. As noticed supra in Sasa Musa Sugar Works (supra), Supreme ....
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....yard etc. Referring to this G.O., in Sreenivasa General Traders v. State of Andhra Pradesh AIR 1983 SC 1246, Supreme Court observed that if any of the facilities are not provided by the market committee, it is open to the payers to have the remedy to take up the matter with State Government which has ample power under Section 22 of the Act to direct supersession of market committee. The relevant observations are as below. It will be noticed that these facilities are to be provided by the market committees in course of time 'as and when funds permit'. It is needless to stress that the question of providing these facilities would depend on the financial capacity of each market committee. That would depend on whether there are sufficient funds available at its disposal with the Market Committee. We are not impressed by the submission that if a market committee does not have sufficient funds to provide the special amenities it should borrow loans from the State Government under Sub-section (1) of Section 18 of the Act or the State Government should provide grant-in-aid to such market committee under Sub-section (2)(iii) of Section 16(1)(a)(i) of the Act. If any particu....
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....unds. As noticed supra, no reply affidavit is filed denying allegations. At this stage, we may refer to Sections 14 and 15 of the Act. Section 14 mandates that all monies received by market committee shall be paid into market committee funds (MCF). Section 15 stipulates and enumerates purposes for which such MCF may be expended. The purposes for which MCF may be used are acquisition of site for market; establishment, maintenance and improvement of market; construction of buildings for market; maintenance of standard weights and measures; collection and dissemination of information regarding all matters relating to crop statistics and marketing in respect of market products; schemes for extension or cultural improvement of notified market products; propaganda for improvement of market products; promotion of grading services; measures for preservation of food grains and meet staff and establishment charges. GMC was notified by market area order vide G.O.Ms. No. 1066, dated 30.07.1971. It is also averment in counter affidavit of GMC that they have already established markets and provided facilities. Therefore, we have no manner of doubt that GMC has already provided facilities and the....
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.... reasonable correlation to the fee. While conferring some special benefits on the payers of the fees, it is permissible to render service in the general interest of all concerned. The element of quid pro quo is not possible or even necessary to be established with arithmetical exactitude. But it must be established broadly and reasonably that the amount is being spent for rendering services to those on whom the burden of the fee falls. There is no postulate of a fee that it must have a direct relation to the actual services rendered by the authorities to each individual to obtain the benefit of the service. The element of quid pro quo in the strict sense is not always a sine qua non for a fee. The element of quid pro quo is not necessarily absent in every tax. It is enough if there is a broad, reasonable and general correlationship between the levy and the resultant benefit to the class of people on which the fee is levied though no single payer of the fee receives direct or personal benefit from those services. It is immaterial that the general public may also be benefited from some of the services if the primary service intended is for the payers of the fees. (emphasis supplie....
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....riculturist, every trader in Ghee (other than daily farmer or small time agriculturist, who keeps cows and buffaloes) is required to obtain licence under Section 7(1) of the Act. We also hold that the impugned notification vide G.O.Ms. No. 286, dated 05.07.1994, does not suffer from any illegality and infirmity and the same is valid. The writ petition is therefore dismissed. Having regard to facts and circumstances, we make no order as to costs. ORDER P.S. NARAYANA, J 54. Kommisetty Nammalwar & Co., Quntur, represented by its Proprietor, filed the present Writ Petition under Article 226 of the Constitution of India praying for issuance of a writ of mandamus declaring the action of the respondents in issuing G.O.Ms. No. 286, Agriculture and Co-operative Marketing-1 Department dated 5-7-1994 directing all the notified markets to regulate the purchase and sale of notified agricultural produce, livestock and product of livestock issued in Schedule II of G.O.Ms. No. 2095 dated 20-9-1968 in supersession of all the G.Os. issued earlier including the G.O. under which thee product of 'ghee' is deleted from the notified products without mentioning any reasons whatsoever and ....
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....nce had not been followed, the writ petitioner is bound to succeed. The Counsel also explained how the interim order was operative for sufficiently a long time even when the matter was pending before the Apex Court and how the matters again came back to this Court and under what circumstances the present Writ Petition had been filed. While making elaborate submissions, the learned Counsel had drawn the attention of this Court to Section 3(3) and Section 3(4) and Section 4(3) and Section 4(4) in particular. The Counsel also had pointed out to the relevant G.Os., the relevant portions of the G.Os., and further relied on several decisions to substantiate his submissions. 57. On the contrary, the learned Government Pleader for Agriculture and Marketing would maintain that in the prior batch of Writ Petitions, the G.O. as such had not been challenged. The learned Government Pleader had drawn the attention of this Court to the language of Section 4(4) of the Act and would maintain that the issuance of general notification would be sufficient. These provisions may have to be construed in favour of the Market Committee keeping in view the object of the Act. The learned Counsel also woul....
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....n challenged as being violative of any of the fundamental rights. The learned standing Counsel also would maintain that the constitutionality of an action normally should be upheld since there is a presumption in favour of the constitutionality and when the petitioner is unable to establish contra, the petitioner is bound to fail and hence the Writ Petition to be dismissed. The learned standing Counsel also relied on several decisions in this regard. 59. The learned Counsel representing the parties also relied upon several decisions and further made certain submissions relating to the correctness or otherwise of the prior decisions made by this Court and pointed out certain of the distinguishing features in relation thereto. 60. The Act is enacted for the purpose of regulation of purchase and sale of agricultural produce, livestock and products of livestock and for establishment of markets in connection therewith. The various provisions of the Act enable the Government to notify various products, livestock and products of livestock as specified in the draft notification. A detailed procedure is prescribed under Section 3 of the Act for the purpose of notifying the products in....
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....o. 6 under the caption of 'products of livestock'. 62. The Government had issued G.O.Ms. No. 1066, Food and r Agricultural (Agrl.IV) dt.30-7-1971 declaring notified Market Committee area of 1st respondent-Market Committee under column 5 of the said G.O. In the notified commodities under column No. 4 'ghee' was shown at serial No. 9. 63. G.O.Ms. No. 448 dt.29-3-72 was issued in exercise of power under Section 4(4) of the Act and 'ghee' was deleted in respect of Ongole and Guntur Market Committees by having carried out an amendment to G.O.Ms. No. 976 dt. 16-7-1971 and G.O.Ms. No. 1066 dt.30-7-1971 respectively. 64. G.O.Ms. No. 286 dt.5-7-94 was issued under Section 4(4) of the Act and all the Market Committees had been directed to regulate purchase and sale of all the commodities specified in the said notification as remained notified in Schedule II of the Act. Accordingly, the 1st respondent-Market Committee had initiated action to levy market fee on 'ghee' and how the traders who were bent upon challenging the same began the litigations and the series of litigations up to the Apex Court and how again the present Writ Petition had been filed ....
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....riculture & Cooperation dated 5-7-1994 empowering the notified markets to regulate the purchase and sale of the notified agricultural produce, livestock and products of livestock, issued in Schedule 11 of G.O.Ms. No. 2095 dated 27-10-1968 as amended from time to time. As on the date of issuance of G.O.Ms. No. 286, dated 5-7-1994, 'ghee' was not a notified product in respect of the Agricultural Market Committee for the purpose of regulating its purchase and sale in view of the fact that the same had been deleted by G.O.Ms. No. 448, Food & Agriculture (Agriculture-IV) Department dated 29-3-1972. It is also the case of the petitioner that unless a particular product is notified for the purpose of regulating its purchase and sale in the specified area for marketing, the concerned Market Committee will not have any power or Authority to regulate the purchase and sale of the said product in the said notified area. If any area is to be notified or the existing area of any market is to be notified under Sub-section (4) of Section 3, the procedure under Sub-sections (1), (2) and (3) to be followed. It is also the case of the petitioner that the Government had not issued any draft no....
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.... dismissed by a Division Bench. When the matter was carried to the Supreme Court, by order dated 28-3-2006, the Supreme Court remanded the matter for fresh consideration while making it clear that the interim Order granted shall continue till the disposal of the matters by this Court afresh. However on a request made by the petitioners, the said writ petitions were withdrawn with liberty to file a fresh writ petition. Thus, the present writ petition came to be filed. Sri K. Madhava Reddy, advocate, who accepted notice for the 1st respondent Market Committee, while bringing to the notice of this Court that an identical issue was considered by a Division Bench of this Court in MANU/AP/0162/2004 and the contentions of the petitioners therein were rejected, submitted that this writ petition is liable to be dismissed as covered by those decisions. Be that as it may, as mentioned above, since the very same question relating to the payment of market fee or 'ghee' was once considered and negatived by the Division Bench, in my considered opinion, it would be appropriate to post this writ petition before a Division Bench for consideration. Accordingly, the ....
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....a stood declared under Section 3(3) of the Act by having meticulously adhered to the procedure mandated by Section 3 of the Act. The Government in exercise of power conferred on it under Section 4(4) of the Act, preceded by fulfillment of legal requirements under Section 4(3)(a)(b) & (c), had issued G.O.Ms. No. 1066, Food & Agriculture (Agrl. IV) Department dated 30-7-1991 and declared limits of notified market area with respect to regulation and control of notified commodities specified under the said G.O. wherein 'ghee' - found its place and serialized at item No. 9 by virtue of Section 4(2) of the Act and the petitioner-Market Committee stands obligated to enforce the provisions of the Act and Rules made thereunder under the approved bye-laws. It was also stated that Section 3 of the Act deals with creation of notified area in strict compliance with the procedure prescribed under Section 3(1), (2) & (3) of the Act in respect of any agricultural produce, livestock and products of livestock. Further it is stated that embodiment of Section 4(1) of the Act contemplates constitution of Market Committee for the notified area and endows it with status and entity as body corpora....
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.... the notified commodity 'ghee' had been re-notified in respect of the 1st respondent-Market Committee and stands enumerated and serialized at item No. 6 under group (iv) captioned as livestock product and in consequence G.O.Ms. No. 448 dated 29-3-19782 remained superseded. The 1st respondent-Market Committee had provided facilities by having established markets at Guntur and Pathipadu, more so, keeps on extending facilities subject to availability of funds. It is pertinent to state that the procedure envisaged under Section 3(3) of the Act would require to be followed as one time exercise intending to declare notified area and by reason thereof the procedure under Section 3 of the Act certainly seems to be uncalled for at the time the notification is issued under Section 4(4) of the Act declaring notified market area in respect of any notified produce. The action of the 1st respondent in initiating steps to get the petitioner to act in accordance with the provisions of the Act, levy and collect market fee on 'ghee' pursuant to issuance of G.O.Ms. No. 286 cannot be said to be arbitrary, illegal and unconstitutional. It was also stated that the Government in exercise ....
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....tified agricultural produce, livestock and products of livestock out of the notified commodities specified under Schedule II appended to the Act. It was further stated in para-9 of the counter affidavit that the petitioner had been carrying on business in purchase and sale of 'ghee' whereby rendered himself liable to obtain licence under Section 7(1) of the Act and incurred liability of payment of market fee on the said transactions taken place under Section 12(1) of the Act irrespective of the polemics whether 'ghee' would fall within the meaning of the term 'products of livestock' defined under Section 2(xv) of the Act, given the fact that 'ghee' finds its place in Schedule II appended to the Act and specified as notified commodity under Section 4(4) of the Act in respect of the respondent-Market Committee. The Apex Court in Sita Devi (Smt.) (Dead) By L.Rs. v. State of Bihar and Ors. (referred (9) supra) while dealing with issue of levy and collection of market fee on cattle notified as agricultural produce and specified under animal husbandry products under the provisions of Bihar Agricultural produce Markets Act 1960, held that though in the norm....
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....he Act and declared the notified market area of Agricultural Market Committee, Guntur in respect of notified agricultural produce, livestock and products of livestock of which 'ghee' had been specified at serial No. 9 under column 4 of the annexure of the said G.O. It is further stated that that the respondent-Market Committee had established markets in Guntur and Pathipadu and provided amenities besides allowed the Department to set up 'ghee' laboratory within the premises of Guntur Market Yard and keeps on extending the facilities ring fencing its funds keeping in view the general interests of all the concerned and the test of quid pro quo may be expected to satisfy with close and proximate relationship of all transactions. The respondent-Market Committee provides facilities to the payers of fee in general so also ploughs back its income for the purposes delineated in Section 15 of the Act. The Apex Court in Sreenivasa General Traders v. State of Andhra Pradesh (referred (10) supra) dissecting the provisions of Act had an occasion to deal with the meaning and amplitude of the term 'fee' and held that correlation between fee and the services rendered expect....
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....merated under different groups in the Schedule II appended to the Act have become specified for the purpose of regulation by all the market committees, the respondent-Market Committee had called upon the petitioner to obtain licence under Section 7(1) of the Act to pay the market fee. It was also stated that G.O.Ms. No. 448 dated 29-3-1972 stood superseded on issuance of G.O.Ms. No. 286 dated 5-7-1994. It is apposite to state that the contention of the petitioner that the procedure contemplated under Section 3(3) of the Act is not followed calling for objections for including 'ghee' as notified product and issuance of G.O.Ms. No. 286 dated 5-7-1994 would do violence and is contrary to the provisions of the Act and is in clear violation of principles of natural justice does not stand to legal scrutiny for the reason that notification under Section 3(3) of the Act declaring notified area in respect of particular agricultural produce, livestock and products of livestock would be issued as one time exercise and requirement. The procedure envisaged under Section 3 of the Act would be adhered to at the time of bifurcation of the notified area of any Market Committee and the purpo....
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....ction 4(4) of the Act without following the procedure contemplated under Section 3(3) of the Act may not lay open to impeachment inasmuch as declaration of notified area under Section 3(3) of the Act would be exercised as one time requirement and the Government under Section 4 derives power with respect to inclusion and deletion of agricultural produce, livestock and products of livestock to be regulated within the notified market area of the Market Committee. This Court in Vijayawada Skin Merchants Association and Ors. v. State of A.P. (referred (8) supra) dissecting the import and implications under Section 3 and 4(4) of the Act delivered the Judgment holding that the notification under Section 3 of the Act is not necessary every time the notification was issued under Section 4 of the Act either notifying or denotifying the agricultural produce and hence inclusion of 'ghee' as notified product by having issued G.O.Ms. No. 286 dated 5-7-1994 would remain beyond challenge. It was further stated that 'ghee' which falls under the group 'product of livestock' would remain subjected to levy and collection of market fee. This Court in Vijayawada Skin Merchants As....
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....nder: Section 13: When powers and duties to be exercised and performed: Where an Act confers a power or imposes a duty then the power may be exercised and the duty shall be performed from time to time as occasion requires. Section 15: Revocation and alteration of rules, bye laws and orders: Where an Act confers a power to make any rules or bye laws, or to issue orders, the power shall be construed as including a power exercisable in the like manner and subject to the like consent and conditions, if any, to rescind, revoke, amend or vary the rules, bye laws or orders. 74. The respective stands taken by the parties already had been referred to supra. The non-following of the procedure or the non- following of the steps expected to be followed and the absence of issuance of specific notification and the power to issue general notification had been argued in elaboration in the context of Sections 3 and 4 of the Act in particular and to substantiate their submissions several decisions had been relied upon. In the light of the same, the following Points may have to be decided in the present Writ Petition: 1. Whether 'ghee' cannot be treated as livest....
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....at type of commodities could be dealt as with livestock and products of livestock. Since the High Court has not dealt with the basic issue which was raised before it in the writ petitions, it would be appropriate for the High Court to rehear the writ petitions. If the State of Andhra Pradesh has not in reality filed a counter affidavit, it shall be permitted to do so within eight weeks. The impugned common judgment of the High Court is set-aside and the matter is remitted to it for hearing the writ petitions afresh. We make it clear that we have not expressed any opinion on the merits of the case. Since the matter is pending since long, we request the High Court to dispose of the matters as early as practicable preferably within six months from the date of receipt of our order. The interim order passed in the matter shall continue till the disposal of the matters by the High Court afresh. By granting this protection, it shall not be construed as if we have expressed any order on the merits of the case. The appeals are disposed of accordingly. 77. When the batch of cases came up before the learned Division Bench, it was found that the validity of G.O.Ms. No. 286 aforesaid had not....
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....nsustainable for the reason that 'ghee' may be manufactured by following mechanical process from butter and butter is a derivative of milk. Further specific stand had been taken that the procedure of giving opportunity as contemplated by Section 3(1), (2) and (3) had not been followed. The discretion conferred on the Government to be exercised in a reasonable manner and when deletion is made also when once deletion is made and subsequent thereto, the same had been reintroduced, the representations if any of the organizations to be considered after affording reasonable opportunity. Incidentally, the contents of G.O.Ms. No. 286 dated 5-7-1994, Schedule-II of G.O.Ms. No. 2095 dated 29-10-1968 and Schedule-II of G.O.Ms. No. 610 dated 21-10-1978 as amended from time to time and G.O.Ms. No. 448 dated 29-3-1972 also had been referred to. 79. The Government in exercise of power under Section 3(3) of the Act had issued G.O.Ms. No. 2095, Food and Agriculture (Agrl.IV) dt.29-10-68 and declared notified areas in respect of the several Agricultural Market Committees so also specified agricultural produce, livestock and products of livestock in Schedule-I and Schedule II respectively.....
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....ion, and a common seal with power to acquire, hold and dispose of property and may, by its corporate name, sue and be sued: Provided that any market committee functioning immediately before such constitution in respect of a notified area abolished under the proviso to Clause (c) of Sub-section (4) of Section 3 shall stand abolished. (1-A) Any notification made under Sub-section (1) for the constitution of a new market committee in respect of any new notified area declared under Clause (c) of Sub-section (4) of Section 3, may contain such supplemental, incidental and consequential provisions, including provisions as to the composition of the new market committee or new and existing market committees and the apportionment of the assets and liabilities between the market committees affected thereby. (2) It shall be the duty of the market committee to enforce the provisions of this Act and the rules and bye-laws made thereunder in the notified area. (3)(a) Every market committee shall establish in the notified area excluding the scheduled areas such number of markets as the Government may, from time to time, direct for the purchase and sale of any no....
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....e defendant warranting levy of market fee and even basic amenities were not provided for as required by the Government Orders. He further deposed that under Ex. A2 receipt, the defendant illegally collected Rs. 3,071. 20 ps., from the plaintiff. The two demand notices, dated 1-3-1980 and 20-9-1980 were marked as Exs. A3 and A4. Ex. A5 is the certified copy of the judgment in AS No. 192 of 1980 on the file of I-Addl. District Judge, Rajahmundry. One Sreeramulu, the then Secretary, was examined as DW1. DW1 deposed that the defendant-Market Committee published the necessary notifications in the Gazette as contemplated by the Act and the notifications are marked as Exs. Bl to B4. This witness further deposed that the Market Committee purchased an extent of Acs. 11-00 and odd for the purpose of establishing the market yard at Rajahmundry and Exs. B5 and B6 speak of purchase of the said land. This witness further deposed that the site was purchased, the office building was constructed and the roads were laid and weighing platforms were built and water facilities were provided and godowns were also constructed and the Photostat copy of the cash book entry to show money was spent for such ....
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.... specific services to a specified area or class; it may be of no consequence that the State may ultimately and indirectly be benefited by it. The power of any Legislature to levy a fee is conditioned by the fact that it must be "by and large" a quid pro quo for the services rendered. However, correlationship between the levy and the services rendered expected is one of general character and not of mathematical exactitude. All that is necessary is that there should be a "reasonable relationship" between the levy of the fee and the services rendered. If authority is needed for this proposition, it is to be found in the several decisions of this Court drawing a distinction between a tax and a 'fee'. See: The Commissioner, Hindu Religious Endowments Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt AIR 1954 SC 282 (supra); H.H. Sudhindra Thirtha Swamiar v. Commr, for Hindu Religious and Charitable Endowments, Mysore 1963 Suppl (2) SCR 302 : AIR 1963 SC 966; Hingir-Rampur Coal Co. Ltd v. State of Orissa (1961) 2 SCR 537 : AIR 1961 SC 459; H.H. Shri Swamiji of Shri Admar Mutt v. The Commrr. Hindu Religious and Charitable Endowments Dept. (1980) 1 SCR 368 : AIR 1980 SC ....
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....agricultural produce had been dealt with as follows: From a conspectus of the various authorities of this Court we deduce the following principles for satisfying the tests for a valid levy of market fees on the agricultural produce bought or sold by licensees in a notified market area: (1) That the amount of fee realised must be earmarked for rendering services to the licensees in the notified market area and a good and substantial portion of it must be shown to be expended for this purpose. (2) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce. (3) That while rendering services in the market area for the purpose of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefits must be conferred on them which have a direct, close and reasonable correlation between the licensees and the transactions. (4) That while conferring some special benefits on the licensee, it is permissible to render such service in the market which may be in the general i....
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....record that the market Committee had made provision for certain services and facilities in the notified market area and efforts were being made for extending the services. The market committee had recently come into existence and completion of all the intended services and facilities takes time. It has clearly emerged from the evidence of DW 1 that steps were being taken for extending the services and facilities in the market area. The plaintiff has led no evidence to contradict the defendant's evidence. Whether particular services and amenities are available at a given place and the extent thereof are questions of fact which require to be proved or demolished on basis of evidence to be led by the parties concerned. Since the plaintiff has not led any evidence whether oral or documentary in support of its case, the" Court is left with no option but to accept the evidence of defendant which shows that some services and facilities in the notified market area were already available while arrangements were being made for various other facilities and services. The foundation for the case set up by the plaintiff is not available on record. The law is well settled that though quid pro....
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....s specified in the notification. Once articles like 'dry fish', 'raw hides', 'raw skin', 'bones', 'horns and hoofs' are included in the notification and they satisfy the requirement of that expression as defined in Clause (x) of Section 2 of the Act it would not only be unnecessary but also be misleading to test whether each of the items therein would answer the definition of terms 'agricultural produce' or 'livestock' or 'product of livestock'. A given article may or may not fall within the meaning of the one or the other of the above said terms 'agricultural produce', 'livestock' or 'product of livestock' but if that article is included in the omnibus expression 'notified market produce, livestock or product of livestock as defined in Section 2(x) of the Act, the notification cannot be said to be illegal on the ground that an article cannot be fit in any one of the above terms. We feel that grouping of various items in the impugned notification leaves much to be desired. Much of the controversy could have been avoided by proper and consistent grouping of items. Be that as it may, for the a....
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.... Admittedly Section 3 notification was issued after draft had been published and thereafter onions were notified and in terms of Sub-section (4) of Section 4, but subsequently by G.O. Rt. No. 997 dated 4.4.1979, onions were de-notified. Therefore the exercise of issuing a draft notification and a final notification under Section 3 is a one time exercise. For the purposes of declaring a notified area, Sub-sections (4) and (5) of Section 4 make it clear that notification for a specified notified market area with respect to a produce can be issued and revoked without any draft notification under Section 3. We are fortified in our view by a Full Bench judgment of this Court reported in Mamidi Satyanarayana Murty and Ors. v. The state of Andhra Pradesh and Ors. AIR 1977 AP 147 (FB). While analyzing the Act in para 5, the Full Bench held: In order to understand the controversy in this case, it is necessary to point out that there are five distinct concepts mentioned in the Act. Under Section 2(vi) 'market' means a market established under Sub-section (3) of Section 4 and includes market yard and any building therein. Section 2 (viii) defines 'market committee&....
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....d in the Act, it may be pointed out that the notified area is the largest geographical and physical unit. There may be a single market or more than one market for each notified area. There is to be a market Committee which is a body corporate and it operates over the entire notified area. The market Committee has to set up one or more markets within the area of its operation as may be directed by the Government. After the directions have been issued by the Government, the market Committee has to establish a market or markets in accordance with the directions of the Government and for each market it has to fix, under Section 4(3)(c), the limits of the market and the limits of the market area referred to as the 'market area'. Under Section 4(4) the Market area and such other area adjoining thereto as may be specified by the Government in the notification issued under that Section becomes the notified market area. Thus, the largest physical unit is the notified area and within that notified area is the notified market area pertaining to each market established by the market Committee. Within the notified area is the market area which defines the limits of every market and with....
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.... this Sub-section any person who carries on the business of purchasing or settling any notified agricultural produce, livestock or products of livestock not exceeding such value as may be prescribed; Provided further that a person selling notified agricultural produce, livestock or products of livestock grown, reared or produced by him, shall be exempt from the provisions of this sub-section, but the Government may for special reasons to be recorded in writing, withdraw such exemption in respect of any such person; Provided also that the market committee shall not renew the licence granted under this section, unless the licencee pays all the arrears of amounts due to it under provisions of this Act. Explanation: Nothing in the second proviso to this Sub-section shall be construed as exempting a co-operative marketing society registered or deemed to be registered under the Andhra Pradesh Co-operative Societies Act, 1964, selling notified agricultural produce, livestock or products of livestock grown, reared or produced by any of its members. (2) Nothing in Sub-section (1) shall apply to a person purchasing notified agricultural produce, livestock ....
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....ural produce, livestock or products of livestock purchased or sold in the notified market area at such rate, not exceeding two rupees as may be specified in the bye-laws for every hundred rupees of the aggregate amount for which the notified agricultural produce, livestock or products of livestock is purchased or sold, which for cash or deferred payment or other valuable consideration. Explanation I: For the purposes of this section, all notified agricultural produce, livestock or products of livestock taken out of a notified market area shall, unless the contrary is proved, be presumed to have been purchased or sold within such area. Expression II: In the determination of the amount of fees payable under this Act, fractions of ten paise equal to or exceeding five paise shall be counted as ten paise and other fractions often paise shall be disregarded. 93. In Sri Lashmi Dry Fish Traders v. State AIR 1986 A.P. 330 (D.B.) the learned Division Bench held at paras 4, 5 and 7 observed as hereunder: In the impugned notification dt. 7-11-1978 in the group-V the livestock 'fish' is not included. What are included in that group are : 1) Bull, 2) Bullock....
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....ich are grown in a kitchen garden or in a farm and are used for the table. "We find it difficult to hold that in common parlance when a customer asks for 'fish' he means dry fish also, 'fish' is understood in common parlance only as 'wet fish' with or without life. In the result the writ appeals are allowed and the impugned notification in so far as the inclusion of the 'dry fish' in Schedule II to the said notification is concerned is quashed. No costs. Advocates' fee Rs. 150/- in each. However, the Apex Court in I.T.C. Limited v. Person Incharge Agricultural Market Committee, Kakinada 2004 AIR SCW 792 held at para-4 as hereunder: The State Government has issued notifications declaring their intention of regulating the purchase and sale of different kinds of agricultural produce, live stock and products of live Stock which have been broadly classified as agricultural group, fruit group, vegetable group, fish group, live stock group, poultry group etc. The notification regarding the Fish group includes the following items: 1. Live fish including fish with or without life in any form. 2. Dry Fish. 3.....
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....ttle may appear to be not an agricultural produce, it needs to be given effect unless the legislature lacks competence which is not the case of the appellant. The policy and the wisdom of the legislature cannot be tested by taking aid of the preamble of the Act particularly when the language of Section 2(1)(a) is inclusive, unambiguous, specific and explicit. Preamble of the Act is the key to open the mind of the legislature when the language of the statute is ambiguous. Absurdity or irrationality of bringing the enumerated items of agricultural produce within the sweep of the legislature is not a principle of interpretation of the statute and the court cannot strike down the Act on its basis. The inclusive definition in Section 2(1)(a) under the caption animal husbandry products, cattle has been specified as one of the items of agricultural produce for the purpose of Section 27. We find that the market committee, therefore, is well within its power to levy and collect market fee when the cattle was bought or sold in the notified market or notified market area. It is a common knowledge that in rural areas weekly cattle fairs are conducted in which cattle will be brought fo....
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....n the other hand we find no provision in the Act or the Rules to limit the operation of the law in a particular market area only in respect of the agricultural produce produced in that area. Point No. 10: Apropos this point attention is first to be focussed on the definition of the word 'producer' in Clause (p) and 'trader' in Clause (y) of Section 2 of the Act which have already been quoted. A producer who produces agricultural produce generally does not indulge in trading activities so as to become a trader within the meaning of Clause (y). He is covered by Clause (p) only. If a person is simply a trader indulging in trading activities he is covered by the definition in Clause (v). We have coined the expression producer-trader for a person who is both a producer of agricultural produce and himself trades in it. For the purposes of the Act he ceases to be a producer and becomes a trader only as the definition indicates. While discussing the question of levy of market fee on paddy and rice this aspect of the matter is important and therefore we thought it appropriate to highlight it at this stage. By and large in the notification dated 11/04/1978 there is h....
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....uestion of fact, and as observed above, after clarifying the law we direct the Market Committees to levy market fee in the light of this judgment. It will be open to any trader to go to the High Court again, if necessary, for the redress of his grievance in connection with a disputed question which may arise even after our judgment. In relation to the transactions of Ghee we had two types of dealers before us - (1) a dealer who purchases milk or cream from the villagers and others and manufactures Ghee in his plant and (2) a dealer who purchases such Ghee from the manufacturer of Ghee and sells it to another trader in the same market area. The first dealer will be liable to pay market fee because he is the producer of Ghee within the meaning of the Act and at the same time a trader in Ghee also. When he sells Ghee to another dealer in Ghee who is simply a dealer then under Sub-clause (3) of Section 17(iii)(b) the manufacturing dealer will be liable to pay market fee to the Market Committee on the transaction of Ghee. But he will be entitled to pass on the burden to his purchaser. Apropos the Market Committee, however, the liability will be of the manufacturing dealer. If m....
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....arkets Act itself delineates its scope, which is to provide for better regulation of buying and selling of agricultural produce and the establishment of markets for agricultural produce in the State and for matters connected therewith. In the Statement of Objects and Reasons of the Markets Act, it has been indicated that the Act is aimed to constitute regulated markets so as to secure to the cultivator better prices, fair weighment and freedom from illegal deductions, a fair deal for the agriculturists provides good incentive for the agriculturists to adopt improved agricultural programme etc. The main objects of the Markets Act are to create market area and markets with a view to ensuring constitution of market committees fully representatives of growers, traders, local authorities and government for supervising the working of regulated markets and regulation of market charges and prohibition of realisation charges etc. (II) (a) When the State government decides to exercise its control over the purchase, sale, storage or processing of any agricultural produce in a specified area, it can do so only by issuing a notification declaring its intention to that effect and by inv....
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....ion that the provisions of the Act should be read as a whole so as to determine the scope and effect of each of them. The provisions of the Act should be harmoniously construed so as to allow each of the provisions to have full effect. No particular provision should be so construed as would render other provisions ineffective or redundant. Moreover, the provisions are to be so construed as would subserve the basic scheme and object of the legislation. (IV) The amending/validation Act introducing Section 4-A and Section 4-B fails to revive control of any agricultural produce, even if it is included in the Schedule under Section 39 of the Act, until and unless the provision of Sections 3 and 4 of the Act read with Section 15 are complied with. Section 4-A and Section 4-B are invalid. Section 4-A contains two sub-sections. Sub-section (1) of Section 4-A, insofar as it dispenses with the requirement of complying with the provisions of Sections 3 and 4 before market fee can be validly levied on an agricultural produce, is bad and void for being repugnant to the scheme of the Act. It is also bad and void for truncating valuable rights given to citizens and others under Sections ....
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....y had a right at least to set forth the grievances for consideration by the State government. Section 4-B of the Act is a consequential provision. Section 4-B is a validating provision proceeding on the basis of curing the defects pointed out by the Division Bench of the High court in the DCM case through the medium of Section 4-A and consequently validating all collections as if the same was authorised by the Amending Act and also removing the impediments of any judgment by a court to the contrary. It is, therefore, submitted that Section 4-B containing the words: "as if such levy and collection was made under the provisions of this Act as amended by this Act...indicate that Section 4-B cannot have any existence independent of its own. The effect of the judgment of the division bench in striking down Section 4-A entirely and upholding the fiction contained in Section 4-B would lead to an anomalous result that without curing the defects, a judgment can be overruled by the legislature by a simple process of amendment. It is well settled that a mere attempt to overrule the decision of the courts by amending the law is not sufficient and would itself be an encroachment on the....
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.... crop in a particular area and calls for objections and suggestions to be made within a prescribed time. After the objections are received, the State government considers them and declares the areas to be specified in the notification or any portion thereof to be a notified area for the purpose of the Act in respect of commercial crop or crops specified in the notification." (VII) In this connection reference has also been made to the decision of this court in Lakhan Lal v. State of Bihar. In Lakhan Lal case, this court had noted that power under Section 4(1) should be exercised reasonably. It is contended that the intention of the judgment is that the reasonableness of the exercise of the power under Section 4(1) is amenable to judicial review. By dispensing with Section 3 and 4, the Markets Act has become plainly vulnerable. (VIII) Referring to Kewal Krishan Puri case, it is contended that for a fee to be valid, levy must be imposed on the agricultural produce bought or sold by licensees in a notified market area and must also be earmarked for rendering services to the licensees in the notified market area and a good and substantial portion of it must be shown t....
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....the said Notification dated 2/5/1977 is not alleged by the sugar mills. As a matter of fact, they accept that by the said notification sugar stood deleted from the Schedule. But when such deletion is sought to be negatived by issuing Notification dated 21/5/1977 rescinding the earlier Notification dated 2/5/1977, challenge as to the validity of the later notification was made by filing writ petitions before the High court. In the judgment in DCM case such notification dated 21/5/1977 rescinding earlier notification has been held invalid by the High court on the ground that once control has been effected in respect of a scheduled goods by following provision under Sections 3 and 4, reintroduction of an item in the Schedule is not permissible without following the provisions of Section 3 and 4. In our view, such decision cannot be sustained for the reasons indicated hereafter. Inclusion or deletion of an item in selecting the field of control is to be made in exercise of power under Section 39 of the Markets Act and State government is clothed with such power which can be exercised without any aid of the provisions of Section 3 and 4 of the Act. It should also be noted that since del....
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....as declared as the principal market yard for the market area under the proviso to Section 4a(2) of the Act. A few days later another notification was issued declaring some other place as the principal market yard for the market area. Vakhar Bagh was not even declared as a sub-market yard. The effect was that Vakhar Bagh Market Yard ceased to be a market yard. This was questioned in Bapubhai Ratanchand Shah v. State of Bombay (1955) 57 Bom LR 892 at Pp. 903, 904. The argument was that Vakhar Bagh had necessarily to be declared as a Principal Market Yard since there was no sub-market yard under the proviso to Section 4a(2) and that once having been so declared another market yard could not be substituted in its place. This argument was repelled by Chagla, C.J., and Tendolkar, J. It was observed: Now, Section 4A(2) confers upon the Government the power to declare any enclosure, building or locality in any market area to be a principal market yard for the area and other enclosures, buildings or localities to be one or more sub-market yards for the area. It is clear that by reason of Section 14 of the General Clauses Act any power that is conferred on Government can be exercise....
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...., which it still on the Statute Book, provides that a market shall be established for a market area and that after the establishment of a market, a notification under Section 5 (declaring market yards) shall be issued. Section 15 of the Act provides that no specified agricultural produce shall be bought or sold at any place within the market area other than the principal market yard or sub-market yard established therein except such quantity as may be prescribed for retail sale or personal consumption. The arguments advanced in the Maharashtra and Karnataka cases were advanced in the Bihar cases also. For the reasons already mentioned we reject the submissions in one of the Bihar cases it was further submitted that when a market yard was disestablished at one place and established at another place, it was the duty of the concerned authority to invite and hear objections. Failure to do so was a violation of the principles of natural justice and the notification disestablishing the market yard at one place and establishing it elsewhere was therefore, bad. It was said that even as there was express provision for inviting and hearing objections before a "market area" was declared under....
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.... and 6 as hereunder: The solution to the question raised before us principally depends upon the nature of the function that is performed by the State Government under Section 3 of the Act. If that function is judicial or quasi-judicial involving adjudication of the rights of any person resulting in civil consequences, it no doubt becomes necessary to follow the maxim audi alteram partem (hear the other side) before taking a decision. It is also true that in order to establish that a duty to act judicially applies to the performance of a particular function, it is no longer necessary to show that the function is analytically of a judicial character or involves the determination of a lis inter partes; though a presumption that natural justice must be observed will arise more readily where there is an express duty to decide only after conducting a hearing or inquiry or where the decision is one entailing the determination of disputed questions of law and fact. Prima facie, moreover, a duty to act judicially will arise in the exercise of a power to deprive a person of his livelihood or of his legal status where the statue is not merely terminable at pleasure, or to deprive a p....
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....discharging such function arose for consideration. 100. In Raunaq Ram Tara Chand v. State Punjab 1957(2) SCC 354 it was held at paras 13 and 14 as hereunder: Now under Section 23 "a Committee may, 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 rate not exceeding rupee one fifty paise for every one hundred rupees, provided...." Section 43 provides for rulemaking power. Rule 24 is referable to Section 43(2)(v), but we are not concerned with this rule in this case, Rule 29 provides that under Section 23 a Committee shall levy fees on the agricultural produce bought or sold by licensees in the notified market area at the rates fixed by the Board from time to time. Reading Section 23 and Rule 29 together it is not possible to escape from the conclusion that the Act authorises levy of fee on agricultural produce bought or sold in the notified market area by licensees only. The appellants have licence only in respect of the business of kacha arhtiya and commission agent. While we express no opinion on the point whether the absence o....
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....e said Act makes it clear that an agricultural product would be a product which is specified in the Schedule or one which is admixture of two or more items and would also include any such item in a processed form. In our view it makes no difference, for the purposes of the said Act, that the concerned item is a different commodity from the one which is included in the Schedule. It is possible that by virtue of an admixture of two or more items or by virtue of processing a different commodity or item may come into existence. Even though a different commodity may come into existence, it would still be an 'agricultural produce'. This is best illustrated by Sugarcane which is in Schedule A, Item VIII at Serial No. 14. From Sugarcane, "rab" and "gur" are manufactured. They are already different commodities or items. Yet they are all included. The specific inclusion of items like "gur, rab, shakkar, khandsari and jaggery" is to make it clear that merely because it becomes a different item or commodity it is not excluded. We see no reason to go into the difference between 'manufacturing' and 'processing'. In the strict sense of the terms there may be a dif....
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....e expression "or otherwise as specified in the Schedule". Nor switch over from indigenous method of producing anything to scientific or mechanical method changes its character. Khandsari sugar, which is produced by open pan process and is not different from sugar produced by vacuum pan process except in composition, filterability and conductivity as held in Rathi Khandsari Udyog : AIR 1985 SC 679 (Supra) was held to be agricultural produce in some decisions. No distinction was made on method of production, namely, by modern plant and machinery. To say, therefore, that sugar being produced in mill or factories could not be deemed to be agricultural produce is both against the statutory language and judicial interpretation of similar provisions of the Act in statutes of other States. Rice or dal produced in mills have been held to be agricultural produce in Ramesh Chandra v. U.P. State (1980) 3 SCR 104 : AIR 1980 SC 1124 and State of U.P. v. Ganga Das Mill 1985 SCR 87. Even in Halsbury Laws of England, Vol. I the word agricultural produce for purposes of agricultural marketing schemes is understood as, 'including any product of agriculture or horticulture and any article of food ....
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....ose incurred on capital assets like roads and buildings. These figures will show that there is a reasonable nexus between the market fees levied and the expenses incurred on the services rendered to the buyers and sellers of the agricultural produce. It will be obvious from the above purposes for which the market fee is to be utilised that the said purposes are in furtherance of the object of the Act, viz., to regulate the buying and selling of agricultural produce and the establishment and proper administration of markets for agricultural produce for the benefit of the agriculturists who are the primary producers of the said produce. The machinery and the facilities for which the market fees are being expended are all necessary to provide the necessary infrastructure to further the object of the Act. But for such infrastructure, the objects of the Act cannot be properly and adequately implemented. The fact that the respondent-Mills may not be the direct beneficiary of anyone or some of the said facilities or does not make use of them does not absolve it from payment of the market fees. The said machinery and the facilities are meant for the benefit of all the buyers and s....
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....tee. As regards the reliance placed by the High court on the second proviso to Sub-section (2) of Section 19 of the Act which provides that in case of a commercial transaction between traders in the market area, the market fee shall be collected and paid by the seller, we are unable to understand as to how the said provision can be pressed into service to negative the levy of the market fee, even assuming that the Forest Department is for the purposes of the said provision, a trader when it sells the bamboos. The Forest Department is required by that provision to collect the fees from the buyers in the present case, from the respondent-Mills. The market fee has, therefore, in any case, to be paid by the respondent-Mills if not to the Market Committee directly, at least to the Forest Department, and it is to be paid at the time of the purchase of the bamboos. It is immaterial for this purpose whether the bamboos are purchased by the respondent-Mills for selling them or for using them as their raw material in the manufacture of paper. The liability of the respondent-Mills to pay the market fees is in no way negated on that account. The provision requiring the seller to colle....
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....very caption "Animal Husbandry Products", butter and ghee are separately mentioned as Items 7 and 8 which are wholly manufactured out of milk. It, therefore, becomes clear that save and except butter and ghee no other milk product is sought to be covered by the sweep of the Act as "Animal Husbandry Products" and the basic animal husbandry produce like "milk" only in sold form is sought to be covered by a separate solitary Item 20 as one of the "Animal Husbandry Products". Therefore, any other manufactured product like the present ones, utilizing the same ingredients of milk powder as one of the ingredients but which are processed by addition of all other extra items with the result that finished products like baby foods emerge as manufactured items for serving as substitute for milk to be fed to infants who cannot digest liquid milk or solidified milk as such, cannot be treated to be "agricultural produce" as part and parcel of the listed "Animal Husbandry Products" mentioned in the Schedule to the Act. Learned Senior Counsel for the appellant in support of his contentions tried to rely upon specimen copies of printed material affixed to the sealed tins of these manufactured commod....
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....: In our opinion, where the legislature has used words in an Act which if generally construed, must lead to palpable injustice and consequences revolting to the mind of any reasonable man, the court will always endeavour to place on such words a reasonable limitation, on the ground that the legislature could not have intended such consequence to ensue, unless the express language in the Act or binding authority prevents such limitation being interpolated into the Act. In construing an Act, a construction ought not be put that would work injustice, or even hardship or inconvenience. Unless it is clear that such was the intention of the legislature. It is also settled that where the language of the legislature admits of two constructions and if constructions in one way would lead to obvious injustice, the courts act upon the view that such a result could not have been intended, unless the intention had been manifested in express words. Out of the two interpretations, that language of the statute should be preferred to that interpretation which would frustrate it. It is a cardinal rule governing the interpretation of the statutes that when the language of the legislature admi....
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....affected and failure to publish the resolution did not affect the merits of its imposition and failure to notify the resolution in the Gazette was not fatal to the legality of the imposition. In the second case it was held that the non-publication of a special resolution imposing a tax was a mere irregularity, since the inhabitants had no right to object to special resolutions and had otherwise clear notice of the imposition of the tax. It is true that both these cases relate to non-publication of a resolution regarding imposition of a tax where the imposition of a tax was otherwise well known to the public. In the present case the situation may not be the same but there certainly was an effort to bring the Plan and regulations to the notice of the public by giving notice of the Plan in the Official Gazette. Non-publication of the Plan in the Official Gazette was therefore a curable defect capable of being cured by Section 76J. It is here that the failure of the appellants to plead want of publication or want of knowledge in the first instance assumes importance. In the answer to the writ petitions, the appellant took up the substantial plea that they had complied with the requirem....
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.... may be declared by the Government by notification, to be products of livestock for the purposes of this Act. Section 2(v) of Act defines "livestock" as hereunder: Livestock means cows, buffaloes, bullocks, bulls, goats and sheep, and includes poultry, fish and such other animals as may be declared by the Government by notification to be livestock for the purposes of this Act. 112. In the light of the liberal or relaxed interpretation adopted by the Apex Court in certain decisions no doubt in the light of the specific provisions of the said Enactments elaborate submissions were made that 'ghee' also would fall within the meaning of "livestock". Even if the principles in Sita Devi's case (referred (9) supra) to be applied while deciding the question whether 'ghee' would fall within the meaning of livestock or not, since the said decision was decided in a given set of circumstances, in the light of the provisions of the Enactment referred to in the said decision, the said decision may not be applicable to the present case. If "livestock" or "agricultural produce" and the categories thereof had been specified in the statute itself by appending in the....
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....vasan v. State of Karnataka (referred (25) supra). But however in the light of the relevant portions of the provisions of both Sections 3 and 4 specified above and in the light of the fact that in subsections, the expressions 'shall' and 'may' have been employed, this Court is of the considered opinion that the steps contemplated in issuance of the notifications being mandatory or imperative, it cannot be said that these are only directory and hence this is only a curable irregularity. It is needless to say that inasmuch as there is no serious controversy between the parties that all the steps as ordained by the provisions aforesaid had not been followed in issuing the impugned G.O.Ms. No. 286, dt.5-7-1994, the said G.O. cannot be sustained and the same is liable to be quashed and accordingly, it is hereby quashed. It is needless to say that on both the grounds that 'ghee' would not fall within the definition of the livestock product and also on the ground that the very G.O. under challenge had not been issued in accordance with law, the provisions of the statute, the writ petitioner is bound to succeed and accordingly the Writ Petition is hereby allowed. No....
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....nder this clause, the entire area comprised in an existing notified area is united to one or more notified areas, the said existing notified area shall stand abolished. ^13 4. Constitution of Market Committee and declaration of notified market area: (1) The Government shall constitute by notification a market committee for every notified area from such date as may be specified in the notification and the market committee as constituted shall be a body corporate by such name as the Government may specify in the said notification, having perpetual succession, and a common seal with power to acquire, hold and dispose of property and may, by its corporate name, sue and be sued: Provided that any market committee functioning immediately before such constitution in respect of a notified area abolished under the proviso to Clause (c) of Sub-section (4) of Section 3 shall stand abolished. (1-A) Any notification made under Sub-section (1) for the constitution of a new market committee in respect of any new notified area declared under Clause (c) of Sub-section (4) of Section 3, may contain such supplemental, incidental and consequential provisions, including provisions as to the co....