TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1226
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....8,42,300/- is the market fee at 1.5% on Rs. 12,28,20,000/-, the value of the agricultural produce (11,000 metric tonnes of wheat), and Rs. 55,26,900/- is the penalty. 3. The petitioner M/s. Parisons Milling Company Private Limited is directed to pay the said amount on the premise that the petitioner has sold 11,000 metric tonnes of wheat within the "market area" as defined in the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966 ( for short 'Act, 1966'). 4. In terms of the impugned order, second respondent rejected the petitioner's claim that on 28.10.2006, it sold 9,000 metric tonnes of wheat, on "high seas" to its sister concern, M/s Parisons Foods Private Limited. Facts in W.P. No. 14950/2022 5. This petition is filed by M/s Parisons Foods Private Limited. In terms of the impugned order dated 17.11.2021, second respondent directed the petitioner, M/s Parisons Foods Private Limited to pay Rs. 61,21,568/-, which includes Rs. 15,30,392/- towards 1.5% market fee on Rs 10,20,26,160/-, the value of wheat, and Rs. 45,91,176/- towards penalty. 6. The petitioner's claim is that on 28.10.2006, it purchased 9,000 metric tonnes of Australian wheat from....
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....address their contentions on disputed facts, to consider whether the controversy over certain disputed questions of fact can be resolved based on the official records issued and produced by the Customs Department. 13. The details of earlier rounds of Writ Petitions, Writ Appeal and proceedings before the Apex Court in Special Leave Petition may not be necessary for the adjudication of these petitions, as there is no direction or specific findings which bind this Court. On all occasions, it was open remand. 14. Both Sri Gautam Bharadwaj, the learned counsel for the petitioners and Dr Nanda Kishore, the learned counsel for the respondent - Committee extensively argued on the Bills of Entry produced. The original Bills of Entry were not made available. The petitioners submitted that the originals are with the Customs Department. At the same time, petitioners also produced an endorsement issued by the Customs Department stating that the documents (in physical format) are not available, as the transactions are 20 years old. 15. As the cases involve the interpretation of Bills of Entry issued by the Customs Department, to have a better understanding of the process involved before issu....
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....ch, according to the petitioners in all petitions, record first sale transactions in Australia. 21. Referring to the Bills of Entry issued by the Customs Department which reveal the name of the importer, contract number, and other particulars mentioned therein, it is urged that the High Seas sale transactions have taken place on 28.10.2006 and 31.10.2006 and neither the seller nor the buyer is disputing the transactions and the APMC has no jurisdiction to adjudicate on the transactions which have taken place outside the "market area" under the Act,1966. 22. Learned counsel for the petitioners would submit that the original documents were in the custody of the Customs Department, and the Customs Department has endorsed stating that it is not possible to trace the original records. The very fact that the Customs Department has validated the Xerox copies of Bills of Entry means that the non-production of the originals is of little consequence is the submission. 23. It is also urged that the agreements evidencing the sale transactions, though signed on shore, will not invalidate the sale transactions that have taken place on the high seas. 24. It is also urged that the bank stateme....
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....en place. 29. It is also submitted that original documents are not produced despite sufficient opportunity being granted to the petitioners. In the absence of any such original documents, APMC is justified in holding that the alleged transaction on the high seas is not genuine. 30. Learned Counsel for APMC also urged that Bills of Entry would only mean that certain goods are imported from Australia, and it is not the conclusive proof of the alleged high seas sales transactions. The high seas transactions must be independently established with acceptable materials, and the petitioners failed to prove the high-seas sale transactions, is the submission. 31. In the alternative, it is urged that even if alleged agreements for sale dated 28.10.2006 and 31.10.2006 are held to be valid, the sale transactions are not complete, as the condition for transfer of right and title agreed in the agreement, i.e., endorsement in the Bills of Lading, by the seller in favour of the buyer, is admittedly not made. Thus there is no sale on high-seas and since the seller and buyers are claiming that sale has taken place, and as the notified goods are seized within the "market area", it must be deemed ....
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.... after the goods were seized by the authorities under the Act, 1966. (k) The payments said to have been made after the goods are intercepted do not exactly match with the value of the goods said to have been sold as reflected in the invoice. (l) Insofar as the transaction between M/s Parisons Milling Company Private Ltd. and M/s Parisons Foods Private Ltd. covered in Bill of Entry No. 217539 in the name of M/s Parisons Foods Private Ltd. for 9000 Metric Tonnes of wheat, the invoice number mentioned is 608047 and the invoice date is 22.10.2006. However, in the invoice generated for sale between M/s Parisons Milling Company Private Ltd and M/s Parisons Foods Private Ltd. dated 28.10.2006, the number is 01/PMCL. There is a mismatch to this effect. (m) In the Bill of Lading No. 6 reflecting transaction between AWB International Ltd. and AWB India Pvt. Ltd., there is no reference contract Number. The Invoice dated 31.10.2006 raised by AWB India Pvt. Ltd. in favour of M/s Parisons Roller Flour Mills Pvt. Ltd. does not refer to the Bill of Lading No. 6. (n) The Bill of Entry in favour of M/s Parisons Roller Flour Mills Pvt. Ltd. refers to invoice No. 608069 dated 22.10.2006 and do....
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....en one part-owner and another. (2) A contract of sale may be absolute or conditional. (3) Where, under a contract of sale, the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. (4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled, subject to which the property in the goods is to be transferred." 38. From Section 4 of the Act, 1930, it is evident that the contract of sale may be absolute or conditional. The sale takes place when property in goods is transferred by the seller to the buyer. It is also apparent that under the contract of sale, if the property in goods is transferred from the seller to the buyer, the contract is referred to as a 'sale'. 39. If the transfer of the property in goods is to take place at a future time, or is subject to some other condition, to be fulfilled thereafter, the contract is called an 'agreement to sell'. 40. The agreement to sell becomes a sale when t....
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.... will have the authority to impose a market fee only if the sale transaction takes place within the market area. However, M/s Parisons Foods Private Limited and M/s Parisons Roller Flour Mills Private Ltd. have asserted that they have purchased the wheat on high seas, from M/s Parisons Milling Company Pvt. Ltd and AWB India respectively. The APMC also contends that the sale has taken place. The dispute is relating to place of sale. 46. Under the Act, 1966, when the notified agricultural produce is found in the possession of a person who is not a consumer, and who is a trader, then the person has to establish as to why he is not liable to pay the market fee on the notified agricultural produce. 47. The Court has to consider whether the high seas sale transaction is established without endorsement on the Bills of Lading in favour of the purchaser - M/s Parisons Foods Pvt. Ltd. and M/s Parisons Roller Flour Mills Pvt. Ltd, and despite payments made after seizure of agricultural produce from the alleged buyers. 48. The stipulation in the agreement for sale is that the right and title in the goods is transferred on endorsement made in the Bill of Lading by the seller in favour of the....
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....ection also clarifies that the "warranty" may amount to a "condition", though it is termed as "warranty" in the agreement. In other words, nomenclature of the stipulation in the agreement is not the criterion to decide whether the stipulation is a condition or a warranty. 56. At this juncture, it is necessary to refer to Clauses 9 and 13(a) of the agreements for sale dated 28.10.2006 and 31.10.2006 and other relevant clauses in the agreement for sale dated 31.10.2006. 57. Now the Court has to refer to Clauses No.9 and 13(a) of the agreements. Clause No.9 of the said agreement dated 28.10.2006 reads as under: "9. Delivery: All the rights and title of the above goods are transferred to the Buyer by the seller endorsing the above Bills of Lading in favour of the said Buyer." Clause No. 13(a) of the agreement dated 31.10.2006 reads as under: "Title of the goods will be unconditionally and constructively transferred in buyers favour on the execution of this agreement and on endorsement of the bill(s) of lading in the buyer's favour". 58. It is also necessary to refer to other relevant Clauses in the agreement dated 31.10.2006 which are slightly different from the contents o....
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.... is concluded or terminated in any other manner provided under law. 64. For the above-mentioned reasons, the Court is of the view that, even if the endorsement on the Bill of Lading is treated as a condition of transfer, the absence of endorsement does not invalidate the contract since, no action is taken by the aggrieved party to repudiate the contract. Thus, the Court is of the view that second sale (beyond the jurisdiction of Australia) indeed has concluded without the endorsement by the seller as the parties are at ad idem. Both buyer and seller are asserting that the sale of wheat has taken place. And even if the APMC contends that a sale has taken place. The only difference is that, buyer and seller contend that the sale has taken place on high seas. APMC contends that the sale is within the market area. 65. For the reasons recorded, the Court is of the view that the sales under scrutiny are valid without the endorsement on the Bills of Lading by the seller in favour of the buyer. However, the question is when and where the sales are concluded, i.e., whether the sales took place on "high seas" or "within the market area". 66. Referring to Clause No. 10 of the agreement dat....
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.....58 indicates that the sale transaction is complete. However, clause No. 13(a) extracted in the paragraph No. 57 supra, incorporated in the agreement would reveal that the sale transaction is subject to endorsement on the Bill of Lading by the seller in favour of the buyer. The clause No. 10 under the caption 'Delivery and Clearance' also incorporates the condition that the seller shall sign/endorse in favour of the buyer for clearance of goods by the buyer. Though clause No. 10 could be interpreted to say that said endorsement is only required for the purpose of clearance before the Customs Authority, clause No. 13(a) is very specific and provides for transfer of title of goods by way of an endorsement. If the Court holds that the sale transaction is complete by referring to the clause in the first page of the agreement extracted above, the remaining clauses incorporating the condition for sale, particularly the clause relating to endorsement on the Bills of Lading would become redundant. Such an interpretation is not permissible in the facts and circumstances of the case. If the agreement is read as a whole, it can be concluded that the sale is complete on endorsement in ....
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....or their representatives in Mangalore port as the delivery of Bills of Lading on high seas is not established and more than anything else, it is not pleaded that Bills of Lading have been handed over on high seas. (d) For want of endorsement on the Bills of Lading, which is a condition precedent for transfer of right and title and for want of plea and proof for delivery of Bills of Lading on high seas, the Court has to hold that the Bills of Lading were delivered on shore at Mangalore to the buyers, and the buyers have presented the same along with Bills of Entry. (e) As per the definition of the "importer" as found in Section 2(26) of the Customs Act, 1962, the purchaser of goods, before the goods are cleared for consumption by the Customs Department, is also an importer. The Customs officials need not verify whether the sale transaction took place on high seas to treat the transaction as import for the purpose of levying the customs duty. All that the customs officials are required is to see whether the sale transaction in respect of imported goods has taken place before it is cleared by the Customs Department. (f) Importer does not necessarily mean that he purchased the go....
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....essing. Hence, the said judgment also does not apply to the facts of the case. 80. Reliance is also placed on the judgment of the co-ordinate bench of this Court in ITC Ltd. vs State of Karnataka and Others 2005 SCC Online Kar 86. 81. On going through the aforementioned judgments, this Court is of the view that the questions raised in the present petitions are not addressed in the said judgments. 82. In the present case, the question is whether the petitioners are required to pay market fee on the premise that the sale transaction has taken place within the market area. The judgment in ITC supra, deals with the question relating to payment of market fee in respect of goods for which the market fee is already levied and later, the said agricultural produce is processed after payment of market fee. 83. The Court has come to the conclusion that the agreements dated 28.10.2006 and 31.10.2006 relied on by the petitioners are the "agreements to sell" with certain conditions incorporated therein subject to fulfilment of which the "sale" gets concluded. The Court also held that the endorsement on the Bill of Lading is the condition precedent for "concluding the sale" though not complie....