Raunaq Ram Tara Chand & Ors Vs.
The State of Punjab & Ors  INSC 129 (14 July 1975)
CITATION: 1975 AIR 1587 1976 SCR (1) 1 1975
SCC (2) 554
CITATOR INFO :
RF 1980 SC1124 (32) MV 1985 SC 679 (25)
Punjab Agricultural Produce Markets Act, 1961
Sections 6, 10, 23-Punjab agricultural Produce Markets (General) Rules,
1962-Rules 17, 29 and 31- Whether fees can be levied on persons who are not
licensees as contemplated by Section 23 and rule 29.
The appellants sell Gur and Shakkar within
the market area notified under Punjab Agricultural Produce Markets Act, 1961.
The appellants have obtained licences under Section 10 of the Act in Form as
Commission Agents. Since the appellants were selling Gur and Shakkar in their
own shops within the notified market area without submitting accounts and
without Payment of fees they were asked to show cause by the Market Committee
why legal action should not be taken against them for violation of rules 29(3)
and 31(1) of the Punjab Agricultural Produce markets (General) Rules, 1962.
The appellants dismissed their liability to
pay the fees under the Act. The Administrator of Market Community levied fees
on the appellants on the basis of best judgment assessment and also imposed
penalty. The High Court allowed the Writ Petitions filed by the appellants and
quashed the order of assessment as arbitrary and violative of the principles of
natural justice. The High Court, however, rejected the contention of the
appellants questioning the validity of the fees levied.
Under section 10 of the Act any person may
apply for a licence which may be granted on such conditions as may be
prescribed. Under section 6(3) after the issue of a notification under section
6(1) no person can purchase or sell any Agricultural produce except under a
licence granted in accordance with the pro visions of the Act. Section 23
authorizes the Committee to levy fees on the agricultural produce bought or
sold by the licensees in the notified market area. Rule 29 provides that the
Committee shall levy fees on the agricultural produce bought or sold by
licensees in the notified market area. Rule 17(1) provides that a per son
desirous of obtaining a licence under section 10 of the Act shall apply in form
A. The licence granted to the appellant is in accordance with form B. No
licence has been issued to the appellants for doing the business of busing and
selling agricultural produce. Therefore, although the appellants are licensees
as required for some of the businesses mentioned in Form B. they have no
licence for carrying out business of purchase and sale of agricultural produce
within the notified Market Area. Reading section 23 and rule 29 it is clear
that the Act authorises levy of fee on the agricultural produce bought or sold
by licensees only.
Allowing the appeal, ^
HELD : The appellants have not as a matter of
fact been issued licences as contemplated by section 23 and rule 29, and no
fees can, therefore, be levied on them in respect of purchase and sale of
agricultural Produce by them. The appellants are, therefore, not liable to
payment of fee under the Act as demanded. [15B-C]
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 299 and 120 to 124 of 1972.
From the Judgment and order dated the 25th
March, 1970 of the Punjab & Haryana High Court in Civil Writ No. 325 of
1968, L.P.A. No. 177 of 1969, Civil Writ No. 1534, 1545, 1829 and 2201 of 1969
G. L. Sanjay, S. K. Mehta, R. L. Batta and M.
Qumaruddin, for the appellants (in Civil Appeal No. 299/72).
2 V. C. Mahajan, S. S. Khanduja and R. L.
Bata, for the appellants (In C.As. Nos. 120-124/72) D. Mukherjee, Hardev Singh,
R. S. Sodhi and G. C. Garg, for the respondents. (In C.A. No. 299/72).
The Judgement of the Court was delivered by
GOSWAMI, J. In these appeals by certificate of the High Court of Punjab and
Haryana validity of action taken by the Market Committee, Patiala, under the
provisions of the Punjab Agricultural Produce Markets Act, 1961, is under challenge.
The appellants are shop-keepers of Gur Mandi,
Patiala, and are licensees under section 10 of the Punjab Agricultural Produce
Markets Act, 1961 (briefly the Act) and are also pucca arhtiyas. It is not in
dispute that they sell gur and shakkar within the market area notified under
the Act. It is also admitted that they have licences under section 10 of the
Act in Form 'B' as kacha arhtiyas or commission agents. Since they were found
to be selling gur and shakkar in their own shops within the notified market
area without submitting accounts and without payment of fees they were asked to
show cause by the Market Committee why legal action should not be taken against
them for violation of rules 29(3) and 31(1) of the Punjab Agricultural Produce
Markets (General) Rules, 1962 (briefly the Rules) and for violation of
condition No. 1 of the licence which is to the effect that the licensee shall
comply with the provisions of the Act, Rules and Bye-laws framed thereunder and
instructions issued from time to time.
The appellants disclaimed liability to pay
fee under the Act on various grounds. The Administrator of the Market Committee
after some correspondence levied on one of the appellants, M/s Prem Chand Ram
Lal, appellants in Civil Appeal No. 120 of 1972, Rs. 5014/- as market fee on
the basis of best judgment assessment and imposed equal amount of penalty and a
demand notice was issued for payment. M/s Prem Chand Ram Lal filed a writ
application before the High Court for quashing the demand notice. The High Court
allowed the petition quashing the order of assessment as arbitrary and
violative of the principles of natural justice. The High Court, however
rejected the other contentions of the said petitioner questioning the validity
of the fee levied. M/s Prem Chand Ram Lal filed a Letters Patent Appeal against
the judgment of the learned single Judge rejecting their other substantial
The appellants in civil Appeal No. 299 of
1972 had also filed a writ application under articles 226 and 227 of the
Constitution in the High Court questions the action taken against them as well
as the levy under the Act. By a common judgement of March 25, 1970 the Division
Bench of the High Court dismissed the Letters Patent Appeal of M/s Prem Chand
Ram Lal as also the writ application of the appellants and granted certificates
to appeal to this Court.
The question is whether the appellants are
liable to payment of fee under the Act.
3 Action in this case was taken for violation
of rules 29(3) and 31(1) of the Rules. We will read these rules :
R.29(1). '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`...
" (3) "The fees shall be paid to the Committee or a paid officer duly
authorised to receive such payment on the day of the transaction or on the
R.31(1). "Every licensed dealer and
every dealer exempted under rule 18 from obtaining a licence shall submit to
the Committee a return in Form M showing his purchases and sale of each
transaction of agricultural produce on each day, on the day on which the
transaction takes place or on the following day .......
" The fault of the appellants lies in
that they have neither paid fees under rule 29(3) nor have they submitted
returns in Form 'M'. A perusal of the above two rules would show that the
Committee is authorised to levy fees on agricultural produce brought or sold
only by a licensee in the notified market area. Similarly under rule 31 (1)
only a licensed dealer is required to submit a return.
We have now to take note of the scheme
disclosed in a few other relevant provisions which are material for our
Under section 10 of the Act "any person
may apply to the authority specified in section 9 for a licence which may be
granted for such period, in such form, on such conditions and on payment of
such fees not exceeding one hundred rupees as may be prescribed". There is
a proviso to this sub- section whereby "if any personal carrying on any
business of the nature specified in sub-section (3) of section 6 in a notified
market area on the date of issue of notification under sub-section (1) of that
section fails to apply for licence on or before the date specified therein t`or
obtaining licence, the prescribed authority may, before a licence is issued,
impose on him such penalty not exceeding one hundred rupees as may be
prescribed". By section 5 of the Act the State Government by notification
declares its intention of exercising control over the purchase, sale, storage
and processing of specified agricultural produce in a specified area. By
section 6(1) the Government by notification notifies a market area for the
purpose of the Act. Section 6(3) may be quoted:
6(3). "After the date of issue of such
notification or from such later date as may be specified therein, no person,
unless exempted by rules made under this Act, shall, either for him I self or
on behalf of another person, or of the State Government within the notified
market area set up, establish or continue or allow to be continued any place
for the purchase, sale, storage and processing of the agricultural produce
except 4 under a licence granted in accordance with the provisions of the Act.
the rules and by-laws made there under and the conditions specified in the
licence.. ..." As we read the above sub-section it is clear that no person
shall, unless exempted by rules, inter alia, purchase, sell, store or process
the specified agricultural produce except under a licence. It is not the case
of the appellants that they belong to the exempted class.
Rule 17(1) provides that "a person
desirous of obtaining a licence under section 10 of the Act shall apply in Form
A (to be submitted in duplicate) to the Chairman of the Board through the
Committee of the area in which he wishes to carry on his business and shall
also deposit with the committee the requisite licence fee". Sub-rule (3)
provides that if any person on the specified date fails to apply for a licence,
he is liable to penalty in accordance with a certain scale. Under sub-rule (7)
"the Chairman may grant a licence to the applicant in Form B. The licence
shall be subject to the conditions mentioned therein".
When we look to Form 'A' which is the form
for application for a licence under section 10 we find that against entry 8,
the applicant has to give the "particulars of the business for which the
licence is required" under four heads:
(1) Kacha Arhtiya (2) Commission Agent (3)
Storage (4) Processing Similarly in Form 'B' which is the form of the licence
under section 10, against entry 5, the same particulars of the business as
against entry in Form 'A' appear. As a matter of fact one of the licences of
the appellants was shown to us and it was in accordance with Form 'B'. It is,
therefore, clear that no licence has been issued to the appellants for doing
business of buying and selling agricultural produce. It is the case of the
appellants that they make direct purchases and this fact is not controverted.
Although, there are, the appellants are licensees as required for some of the
businesses mentioned in Form 'B', they have no licence for carrying on business
of purchase and sale of agricultural produce within the notified market area.
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 brought or sold by
licensees in the notified market area at a rate not exceeding rupee one fifty
paise for every one hundred rupees, provided..... " Section 43 provides
for rule making power. Rule 24 is preferable 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 5 authorises levy of fee on agricultural produce
bought or sold 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 of reference to buying and selling of
agricultural produce in Form 'A' and Form 'B' disables the Committee to issue
licences for that purpose, we are of opinion that the present appeals can be
disposed of all the sole ground that the appellants have not as a matter of
fact been issued such licences and no fees can, therefore, be levied on them in
respect of purchases and sales of agricultural produce by them. The appellants
are, therefore, not liable to payment of fee under the Act as demanded.
The appellants also contend that since gur
and shakkar are manufactured products they cannot come under the definition of
agricultural produce with the meaning of section 2(a) of the Act. Section 2(a)
defines agricultural produce to mean "all produce whether processed or
not, of agriculture, horticulture, animal husbandry or forest as specified in
the Schedule to this Act" which mentions 85 items of commodities. These
are statutorily agricultural produce under section 2(a). It is not possible to
entertain the argument that the Court will undertake a judicial scrutiny of
these items in order to come to a conclusion whether these are agricultural
produce or not. In view of the definition in section 2(a) such an enquiry is
out of place. In this context we may note that under section 38 the State
Government may be notification add to the schedule any other item of
agricultural produce or amend or omit any such specified item It is because of
this power to add to the schedule items of agricultural produce that the first
part of the definition under section 2(a) gives guidance as to what
agricultural produce means. The submissions are.
therefore. devoid of substance.
In the result the appeals are allowed. The
appellants are not liable for payment of fee with regard to their sales in the
notified market area other than in the capacity as kacha arhtiyas or commission
agents. In the circumstances of the case there will be no order as to costs.
P.H.P. Appeals allowed.