Reddy, B.P. (J) Jeevan Reddy, B.P. (J) Paripoornan, K.S.(J)
1996 AIR 1251 1996 SCC (3) 321 JT 1996 (4) 8 1996 SCALE (2)694
O R D
counsel for both the parties.
only question in this batch of appeals is where the transaction of sale of
specified agricultural produce is between a trader and a trader, whether the
purchasing trader is liable to pay the market fee in cases where the selling
trader does not collect it from him. This question has to be answered with
reference to the language of Section 17(iii)(b) which reads as under:
Powers of the Committee.-- A Committee shall, far the purposes of this Act,
have the power to- (iii) levy and collect:
market fee, which shall be payable on transactions of sale of specified
agricultural produce in the market area at such rates, being not less than one percentum
and not more than two percentum of the price of the agricultural produce so
sold, as the State Government may specify by notification, and such fee shall
be realized in the following manner- (1) if the produce is sold through a
commission agent may realise the market fee from the purchaser and shall be
liable to pay the same to the Committee;
the produce is purchased directly by a trader from a producer the trader shall
be liable to pay the same to the Committee;
the produce is purchased by a trader from another trader the trader selling the
produce may realise it from the purchaser and shall be liable to pay the market
fee to the Committee; and (4) in any other case of sale of such produce, the
purchaser shall be liable to pay the market fee to the Committee;
omitted as unnecessary]" A reading of the aforesaid provisions shows that
the liability to pay the market fee is placed primarily upon the purchaser.
Sub-clauses (i) and (4) expressly say so. So does sub-clause (2). [Sub-clause
(2) is also consistent with the general policy underlying such enactments that
the producer of specified agricultural produce is not to be made liable to pay
the fee.] Now, coming to sub-clause (3), with which we are directly concerned
herein, it says that "trader selling the produce may realise it from the
purchaser and shall be liable to pay the market fee to the committee". On
the basis of the language of this sub-clause, it is contended by the purchasing
dealers (who are respondents in these appeals) that the levy in such a case is
upon the selling trader and that it is for him to pay the market fee.
submitted that such selling trader may collect the fee from the purchaser or he
may not. Whether the selling trader collects it from the purchaser or not, it
is he who is liable to pay the market fee since the levy is upon him, it is
submitted. We are unable to agree with the submission. A reading of the several
sub-clauses shows, as mentioned hereinbefore, that the liability to pay the
market fee is always upon the purchaser. It is no different in sub-clause (3).
If the ultimate liability was not upon the purchaser, there was no meaning in
the Legislature saying that the selling producer may realise the fee from the
purchaser and make it over to the Committee. The use of the word
"shall" in the said use means that where the selling trader realises
the fee from the purchasing trader, he is bound to make it over to the
Committee. But where the selling trader does not realise it from the purchaser,
he is under no obligation to pay the market fee to the Committee. In such a
case, the liability to pay the market fee is upon the purchasing trader. This
interpretation, in our opinion, accords with the scheme of clause (b) of
Section 17(iii) of the Act.
Ghosh, learned counsel for the respondents, contended that prior to the
amendment of Section 17(iii)(b) by Uttar Pradesh Act 7 of 1973 [with effect
from June 12, 1973], clause (b) was clear and specific
in the sense that it expressly made the purchaser liable to pay the market fee.
Learned counsel says that by amendment the said concept was modified, and in
certain cases, i.e., in the situation provided for by sub-clause (3) of the
amended clause (b), the levy was shifted to the selling trader. The unamended
clause (b) read as under:
market fees, which shall be payable by purchasers on transactions of sale of
specified agricultural produce in the market area at such rates, being not less
than one and a half per centum of the price of the agricultural produce so sold
as the State Government may specify by notification in the gazette." While
it is true that unamended clause (b) expressly placed the levy upon the
purchaser, it is not possible to agree with Dr.Sankar Ghosh that the basic
concept that ultimate liability to pay is that of the purchaser was given up in
the amended clauses (b). The said concept has only been eludicated with
reference to specific situations.
this connection, the learned counsel for the appellant has brought to our
notice the decision of this Court in Upaj Mandi Samiti & Ors. v. Orient
Paper & Industries Limited (1994 (7) J.T. 414) rendered with reference to
the Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1973. The relevant provision in
the Madhya Pradesh Act is in Section 19(2), which read as under:
market fees shall be payable by the buyer in the notified agricultural produce
and shall not be deducted from the price payable to the seller.
that where the buyer of a notified agricultural produce cannot be identified,
all the fees shall be payable by the person who may have sold or brought the
produce for sale in the market area;
further that in case of a commercial transaction between traders in the market
area, the market fees shall be collected and paid by the seller.
further also that no fees shall be levied upto 31st March 1990 on such
agricultural produce as may be specified by the State Government by
notification in this behalf if such produce has been sold outside the market
yard or sub-market yard by an agriculturist to a Cooperative Society of which
he is a member." This Court held, construing the above provision, that the
primary liability to pay the fee is placed upon the buyer and that the second
proviso to sub-section (2) of Section 19 does not detract from the said Rule.
It was held that the said proviso merely enables the seller to collect the fee
from the buyer and pass it on to the Committee. It is true that there is a
certain distinction in the language used in the Madhya Pradesh Act and Uttar
Pradesh Act but as explained above, the central concept is same under both the
enactments. Be that as it may, on the language of the Uttar Pradesh Act, we
have come to the conclusion mentioned hereinbefore.
the above reasons, we set aside the judgment of the High Court and hold that
where the selling trader does not collect the fee from the purchasing trader,
the liability to pay the market fee remains to be that of the purchaser and he
cannot refuse to pay the said fee. Of course, where the selling trader collects
the fee from the purchaser-trader, he is under an obligation to make over the
fee to the Market Committee.
brought to our notice by Sri Garg, learned counsel for some of the respondents
herein, that certain individual factual questions were raised by the
respondents in the writ petition. But these factual questions could not have
been gone into in the writ petition. The proper course for the concerned
respondents is to raise the said questions in accordance with the procedure
prescribed by law, i.e., by following the remedies provided under the Act.
appeals are accordingly allowed with the above observations.
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