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TaxTMI 
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2024 (7) TMI 861
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.... 3. Respondent filed Civil W.P. No. 14847 of 2009 before the High Court of Punjab & Haryana seeking such exemption. Therein, in response to the notice issued, the Counsel for the State produced the minutes of meetings of the Empowered Committee held under the Chairmanship of the Chief Minister, Punjab, on 17.12.2009, which has been reproduced as follows: "i). Integrated Cotton Ginning and Spinning Units which have not sought the status of Mega Projects would be eligible for incentives under the Industrial Policy, 2003, including exemption from payment of market fee as per Para 11.4.2(i). This would be for a period of ten years from the date of issue of the notification. a. Units that have availed of the benefit under the Mega Projects Scheme but have now sought benefits under the 2003 Policy e.g. Cotton Units seeking exemption from market fee, would be eligible for incentives and concessions only under one specific package i.e. ether the Industrial Policy of 2003 or the standard package of the incentives of Mega Projects finalized in November, 2007 as per their choice." 4. The High Court, vide impugned order dated 27.01.2010, dismissed the Writ Petition in the following man....
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....al produce bought or sold by licensees in the notified market area [at the rate of [one rupee and fifty Paise]] for every one hundred rupees: Provided that - no fee shall be leviable in respect of any transaction in which delivery of the agricultural produce bought or sold is not actually made; and a fee shall be leviable only on the parties to a transaction in which delivery is actually made." 10. Rural Development Fund is levied under Section 5 of the 1987 Act and the constitution of fund is dealt under Section 6. The relevant provisions are as follows: "Section 5 - Levy and collection of fee Subject to the rules made under this Act, there shall be levied for the purpose of this Act, a fee on ad valoram basis, at the rate of rupees two for every one hundred rupees, in respect of the agricultural produce, bought or sold in the notified market area. (2) The fee levied under sub-section (1) shall be paid by the dealer in such manner as may be prescribed and shall be realised by a Market Committee established under the Punjab Agricultural Produce Markets Act, 1961 (Punjab Act 23 of 1961) : Provided that the burden of the fee shall be passed on by the dealer by a....
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....at and paddy no market fees shall be levied on purchases made by agro and food processing units. (ii) Similarly for commodities other than wheat and paddy purchased by food and agro processing units, no Rural output tax shall be charged. ..." 12. Heard learned counsel for the parties and perused the material on record. 13. Learned Counsel appearing for the Appellant State argued that the Market fees under the 1961 Act and Rural Development fees under the 1987 Act are two different "fees" levied under two different Acts having different objects and purpose. That the 2003 Policy does not specifically exempt Rural Development fees and therefore, such an assumption cannot be made by the Respondent. Further, it was submitted that there are various industries that are exempted from Market fees and not exempted from Rural Development fees, including the company M/s Partap Furane Pvt. Ltd. with which a similarity as being claimed by the Respondent. 14. On the other hand, Mr. Aman Lekhi, Ld. Senior Counsel appearing for the Respondent argued that the expression 'Market fees' has been used in the Policy of 2003 because both the 1961 Act and the 1987 Act contemplate levy of fees in ....
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....m Market Fee or both from Market Fee and Rural Development Fee. In such cases, exemption from Market Fee will not be automatically applicable on Rural Development Fee, rather, the exemption from Rural Development Fee will applicable if the competent authority issues a specific order/ notification in this respect." 18. However, the Respondent was quick to bring to our notice that the communication dated 02.11.2010 only withdraws the Memo dated 09.10.2001 and not the Note dated 28.08.2001. Further, it was also argued that the Appellant's reliance on communication dated 21.02.2011 is wholly misconceived as that communication is subsequent to the petition of the Respondent being disposed of by the High Court. 19. It is clear that the issue as to whether the 2003 Policy only grants exemption from the Market fees as levied under the 1961 Act and does not grant exemption from the Rural Development fees under the 1987 Act, has not been adjudicated by the High Court on merits. The said adjudication could not happen as the Counsel for the State had stated before the High Court that Market fee will also cover Rural Development fee and the High Court dismissed the petition as not pressed. T....
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....well. 23. The 2003 Policy does not specifically exempt Rural Development fees and therefore, such an argument by the Respondent is highly presumptive, far-fetched and a clear attempt at over-reaching the scope of the 2003 Policy. If such an assumption is allowed, it would considerably broaden the canvas of the incentives available under the 2003 Policy, which was never intended. In fact, such a loose interpretation of the State policies would lead to an ambiguity to the State's intent and render it opposite to the public policy. 24. In view of the aforesaid, holding that the exemption from Market fees is inclusive of Rural Development fees shall be contrary to the statutory provisions and objective behind both the Acts as well as the 2003 Policy. Thereby, the two fees cannot be equated or assumed to be same or similar for the purposes of exemption. Effect of communication made by the State via various notes/letters 25. As mentioned before, the Respondent has heavily relied on letters dated 09.10.2001, 28.08.2001 and 10.09.2001 published by the Department of Agriculture to seek such an exemption. The Appellant has submitted before us that the letter dated 28.08.2001 was only is....