TaxTMI 
TaxTMI 
2024 (3) TMI 443
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....ter referred to as "the Act") and the second would be whether the Government notification (G.O. Ms. No.286 dated 05.07.1994), which inter alia notifies "ghee" as one of the products of livestock for the purpose of regulation of purchase and sale of "ghee" in all notified market areas was published after due compliance of the procedure contemplated under the provisions of the Act? 2. In the erstwhile State of Andhra Pradesh, the above Act was brought with the purpose to consolidate and amend the laws regulating the purchase and sale of agricultural produce, livestock and products of livestock, along with establishment of markets in connection therewith. The aim was to secure effective and remunerative price of commodities by bringing producers and traders face to face thereby eliminating middlemen and do away with some other earlier unethical trade practices, which were exploiting agriculturists and farmers. In other words, it was a farmer friendly legislation. The commodities which were to be regulated were not only agricultural produce but also livestock as well as products of livestock. Whereas livestock has been defined under Section 2(v) and products of livestock has been defi....
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.... notification as a livestock product. Thereafter, in the year 1971, a notification u/s 4 (4) was published, which declared the 'notified market areas' in respect of the respondentcommittee, i.e. Agricultural Market Committee, Guntur and "ghee" was specified as a notified product. However, in 1972 the 1971 notification was amended and "ghee" was taken out of the list of notified livestock products in respect of the respondent-committee, and it remained so for a considerable period of time. We must clarify here that both these notifications i.e., notifications of 1971 & 1972 were issued u/s 4 (4) of the Act and not u/s 3 (3) of the Act. 6. Later, on 15.07.1994, the Govt of A.P. published a general notification directing all the notified markets within the State of AP to regulate all the products notified in Schedule II of the 1968 Notification, which also included Ghee. 7. It is this notification of the year 1994 which came to be challenged by the producers of livestock products and which has now before us for determination. This notification was challenged before the Andhra Pradesh High Court on two grounds. The first challenge was that "ghee" is not a "product of livestock" and t....
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....P) Ltd. v. State of U.P. (2001) 3 SCC 135; Kishan Lal v. State of Rajasthan, AIR 1990 SC 2269; Ram Chandra Kailash Kumar v. State of U.P. 1980 Supp (1) SCC 27 and Smt. Sita Devi (Dead) by LRs. v. State of Bihar & Ors. 1995 Supp (1) SSC 670 held that all animal husbandry products would fall within the meaning of 'products of livestock' as defined under Section 2 (xv) of the Act. Further, the majority decision has also held that the inclusion of "ghee" as a livestock product cannot be faulted merely because it is derived from another dairy product. It was observed by the High Court that even though "ghee" is not directly obtained from milk, which is a product of livestock, it would still be a "product of a product of livestock". The relevant portion of the judgment of the High Court is as under: "Scientifically or common sense point of view, even though ghee is not directly obtained from milk (which is certainly a product of cow/buffalo), it is certainly a product of a product of livestock i.e., cow or buffalo. It would be rather illogical or irrational to say that ghee is not a milk/dairy product or to say that it is not a product of livestock. Ghee is certainly a product of lives....
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....ning. 11. The second argument of the appellant that the procedure given under Section 3 of the Act has not been followed, is also not correct. There is a basic difference between the notification which has to be made under Section 3 of the Act and the notification which has to be made subsequently under Section 4 of the Act. What has to be done under Section 3 is a onetime measure where the Government notifies an area where purchase and sale of agricultural produce, livestock and products of livestock can be made. This is a one-time exercise. What happens under Section 4 of the Act is that the Govt. declares the 'notified market area' in respect of any notified product (products which have already been notified under section 3 of the Act). A perusal of Sections 3 and 4 of the Act clearly shows that whereas a draft notification is mandatory under Section 3 and so is the hearing of objections to the draft notification, there is no similar provision under Section 4 of the Act. The two Sections of the Act Section 3 and Section 4 are being reproduced below for a comparative analysis : Section 3 Section 4 3. Declaration of notified area :- (1) The Government may publish in such ....
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.... new market committee in respect of any new notified are 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]. [(1-B) Notwithstanding anything contained in Section 3 and in subsection (1) and (1-A) of Section 4 of the Act, the Government, may, by notification, also constitution a separate market committee to a special market in a notified area.] (2) It shall be the duty of the market committee to enforce the provisions of this Act and rules and byelaws 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 notified agricultural produce, livestock or products of livestock and shall provide such facilities in the market as may be specified by the Government, from time to time, by a general or special order. (b) Every mar....
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....r the purpose of regulation by any respective Agricultural Market Committee (AMC). In other words, a prior hearing or prior publication of the draft notification is not a requirement under Section 4 of the Act, since the notification of the year 1994 is a notification under Section 4 and not of Section 3 of the Act. Therefore, the argument that the process under Section 3, has not been followed is totally misconceived. No prior process was required to be followed as contemplated under Section 3 of the Act for working the scheme under Section 4 of the Act. Consequently, we hold that there was nothing wrong in the 1994 notification and the challenge to the notification has rightly been turned down by the Full Bench of the Andhra Pradesh High Court. 12. We are now left with one more issue related to the market fee. Since the 1994 notification had an effect which made 'Ghee' a product that could be regulated under provisions of the Act, Market Committees were empowered to levy fee on the sale and purchase of 'ghee' as per section 12 of the Act. During the pendency of the matter before the High Court, the appellants were not required to pay market fee as they were granted interim prote....