Shri Bhagwan
Dass Sood Vs. State of Himachal Pradesh & Ors [1996] INSC 1329 (25 October 1996)
G.N.
Ray, G.B. Pattanaik G.N.Ray. J.
ACT:
HEAD NOTE:
This
appeal is directed against judgment dated November 30, 1994 passed by the
Division Bench of Himachal Pradesh High Court Writ Petition No.568 of 1988 (M/s
Sardar Singh & question of law and all the said writ petitions were
disposed of by the judgment rendered in C.W.P.No.568 of 1988.
The
main contention raised before the Himachal Pradesh High Court in the said
petitions was that the Writ Petitioners were not required to take licences
under Section 4 (3) of the Himachal Pradesh Agricultural Produce Market Act,
1949 (hereinafter referred to as Market Act) and are also not required to pay
market levy. The petitioners contended that the market committee had
established principal/sub market yards within the territorial jurisdiction of
the market committee. But the petitioners did not carry on their business
within the principal market or market yards/sub market yards. On the contrary,
they had been agricultural produce outside the principal market/yard or sub
yards. They had carrying on their business in their own premises which were
though within the notified market area, but were outside the principal
market/market yard or sub-market yards. Even then, the market committees were
insisting the petitioners to obtain licence and pay market fee in accordance
with the provisions of the Markets Act and the Rules framed thereunder. Such
action on the part of the market committee was wholly illegal and
unconstitutional. It appears from the impugned decision of the High Court that
the petitioners contention was that the provisions relating to taking of licences
for carrying on business and payment of market fee under the Markets Act have
placed unreasonable restrictions on their right to carry on their trade and
hence Section 4 (3) and 21 of the Markets Act are violative of Article 19 (i)
(g) of the Constitution of India. It was contended that market fee had a direct
relationship with the services rendered and since the market committee rendered
no service in respect of the area in which the petitioners had carried on their
trading activities but the services rendered by the market committee remained
confined only to principal market/market or sub market yard established by the
market committee. realisation of market fee was illegal and unconstitutional.
Such
contentions were disputed by respondents by contending that principal market
yards had been identified and constructions had been undertaken. According to
respondent, such market and market and sub market yards would consist of shops,
auction platforms and various public utility services like provision for
drinking water, latrines, sanitation, farmers rest houses etc. would be
provided. Such scheme would cost expenditure of several crores of rupees by
each of the market committee. Though the works were in process, works of such
magnitude involving very heavy expenditure could not be immediately implemented
in full and the works in progress would require some more time to be completed.
The respondents contended that even in respect of areas outside principal
market and market or sub market yards inspecting staff had been appointed to
ensure proper weighment and payment of price to the producers of scheduled
agricultural produce. It was also contended that income to be derived from
market fee would be spent for providing the aforesaid facilities and amenities.
Hence, there was sufficient nexus justifying imposition of levy and collection
of the same.
By the
impugned judgment, the High Court has held that levy of market fee was quite
justified. The requirement of obtaining licence fee and payment of levy of
market fee constituted reasonable restriction under Article 19 (1) (g) of the
Constitution. Hence, the provisions of Section 4 (3) and 21 of the Markets Act
were intra vires and valid. It appears that the High Court has relied on the
decisions of Punjab and others (AIR 1980 SC 100B), Ram
Chandra Kailash 1983 SC 1246).
In Kewal
Krishna Puri's case (supra), market fees were levied under the Punjab
Agricultural Produce Markets. 1961.
But
such fees were increased. Such increase was challenged before this Court by
contending that the market fees levied under the Act were sufficient for
meeting the requirements of the said Act. Even then, increase in such fees was
made for diverting the said fund for purposes other than those for which market
fees were levied. A Constitution Bench of this Court has held that the fee must
have direct nexus with the services provided by the market committee and since
the increase was not intended to provide any additional service, the same
cannot be lawfully imposed.
It has
been indicated by this Court in Kewal Krishna Puri's case that the element of
quid pro quo may not be possible or even necessary to be established with
mathematical exactitude but broadly and reasonably it must be established by
the authorities who charge the fees that the amount is being spent for
rendering services to those on whom falls the burden of fees. It has also been
indicated that a good and substantial portion of amount collected on account of
fees, may be, in the neighborhood of two thirds or three fourths, must be shown
with reasonable certainty as being spent for rendering services kind as
mentioned hereinbefore.
In Ram
Chandra Kailash Kumar's case (supra), the principles justifying imposition of
levy of market fee as indicated in Kewal Krishna's case have been affirmed by
another Constitution Bench of this Court. It has been held in Ram Chandra's
case that declaration of big areas as market areas does not offend any
provisions of law. In Sreenivasa General Traders case (supra), this Court has
held that establishment of a principal market yard or sub market yard and
provisions for amenities and facilities to persons using the same is sufficient
quid pro duo for the purpose.
This
Court has also emphasised in this decision that traditional view or quid pro
quo has undergone sea change, though corelation between the fee collected and
service rendered or intended to be rendered is still important. The true test
is whether its primary and essential purpose is to render specified service to
a specified area or class. It is of no consequence that the State may
ultimately and indirectly be benefitted by it. The power of the Legislature to
levy a fee is established by the fact that it must be by and large a quid pro
quo for the service rendered. All that is necessary is that there should be
reasonable relationship between the levy of fee and services rendered.
The
principles governing quid pro quo justifying levy of market fee in Kewal
Krishna's case were taken into State of Punjab (AIR 1985 SC 218). In view of finding by this Court that increase in
levy was unjustified in Kewal Krishna's case, the Legislature by amendment
inserted Section 23A in the Punjab Agricultural Produce Markets Act, 1961. The
said provision dealt with saving of excess fee already charged. Section 23A
provided that notwithstanding anything contained in any judgment, decree or
order of any court, it would be lawful for a market committee to retain fee
levied and collected by it in excess of that levied under Section 23. In
considering the constitutional validity of Section 23A since impugned in Amar Nath's
case, this Court has held that observations contained in Kewal Krishna's case
about the extent of fees levied and realised to be spent for justifying quid
pro quo. are not to be read as Euclid's
Theorems nor as provisions of the statute. The observations must be read in the
context in which they appear. The constitutional validity of Section 23A has
been upheld in Amar Nath's case by indicating that Section 23A intended to
prevent unjust enrichment by these dealers who had already passed on the burden
to the next purchaser and so reimbursed themselves.
The
High Court has held in the impugned judgment that levy of market fee on the
traders carrying on business outside principle market/market or sub market
yard, cannot be held as invalid as it has sufficient nexus with the services
rendered. The services are directly beneficial to the producers of agricultural
produce and are available within the notified market area.
Mr. P.P.
Rao, learned Senior Counsel appearing for the appellant, has submitted that
Section 4 (3) and 21 of the Markets Act may not be held invalid on the score of
offending Article 19 (1) (g) of the Constitution and Markets Committee may be
competent to impose levy of market fee on scheduled agricultural produce
generally but the question required to be considered as to whether any market
fee was at all leviable on the appellant and consequently the appellant was
under any obligation to take licence under the Markets Act, has not been
considered by the High Court presumably because a number of writ petitions were
disposed of by the common judgement impugned in this appeal where the specific
question raised by the appellant was not in issue in other cases and the High
Court has addresses to itself the question of constitutional validity of
Section 4 (3) and 21 of the Markets Act only in the context of existence of
quid pro quo warranting imposition of levy of market fee.
The
High Court has not adverted to the core question involved in the appellant's
case that the appellant being a petty retailer, had purchased from other
dealers such articles which had already been subjected to levy of fee under the
Markets Act and hence there was no question of payment of levy of fee by the
appellant. Consequently, there was no requirement for obtaining any licence
under the Markets Act for carrying out the said retailer's business in an area
far away from any principal/sub market yard where no benefit consistent with
levy of market fee was available, even though quid pro quo for justifying
imposition of levy of market fee is not required to be correlated with any
mathematical precision with the amount of service rendered and amount of fees
levied and realised by the Market Committee.
Mr. Rao
had contended that the scheme of the Markets Act and Rules framed there under
is to protect the interests of the producers and for this purpose the Act and
the Rules contain various provisions to enable the market committees to notify
market areas and establish markets and market yards in different parts, provide
therein and levy and collect fees from the licensed dealers. According to Mr.Rao,
on a reasonable interpretation of the Act, the power to establish markets in
the notified market area is coupled with duty to establish sufficient number of
markets in different parts of the notified area which are reasonably accessible
to producers and traders.
Mr. Rao
has contended that in the instant case, non- establishment or a principal
market or market yards in or around Kasauli town where the appellant is
carrying on his retail business outlet. renders the traders in Kasauli town not
liable to obtain licences and pay any market fee. Mr. Rao has submitted that
the imposition of levy of market fee may be held justified if the principal
market and market yards or sub market yards are reasonably accessible to the
producers and traders of scheduled agricultural produce so that the benefit
arising out of an organised market having various amenities, are available to
the producers and dealers coming to the principal/sub market yards. When
principal/sub market yards are established, completion of such principal/sub
market yards with consequential constructions of shops, yards, toilets, rest
room, offices etc. may take a reasonable time. It may not be necessary to wait
for imposition of levy of market fee till the construction of infra structures
of such principal/sub market yards are fully completed because such completion
takes some time. There may be impelling necessity to generate funds out of
imposition of levy of market fee to take various works necessary to establish
principal and market and sub market yards at a desired level consisting of
various essential infra structures with amenities of services attached for
effective implementation of the aims and objectives under the Markets Act.
Where principal market and market/sub market yards with some essential infra
structures have been established and provisions for reasonable amenities to the
producers and traders coming to such principal market and market yards or sub
market yards are being taken within a reasonable time frame imposition of levy
of market fee may be justified. In such a case, validity of imposition of levy
cannot be challenged on the ground that amount of levy collected and amount of
services then available are not fully correlated provided no part of income
derived put of levy of market fee is spent for purposes for which levy of fee
was not imposed.
Mr. Rao
has submitted that where a large acre has been notified as market area under
the Act but only in one or two places, a principal market and market yards or
sub-market yards have been established where the amenities envisaged under the
Act and Rules are available, and transactions taking place in such
market/market yards are regulated but to a large percentage of producers and
traders of scheduled agricultural produce, no amenity of an organised principal
market/market yards is at all available because of inaccessibility to such
market yards either on account of long distance of such market/market yards
from the place of business of such traders or for some other reasons,
imposition of levy on such traders who do not purchase from organised
market/market yards and are wholly deprived of any benefit available to them
arising put of imposition of levy of market fee, simply on the basis that such
areas also come under the notified market areas, must be held illegal and
unconstitutional. According to Mr.Rao, in such circumstances, the basic
ingredient of fee being related with return of some service to the payer of fee
is not satisfied and the fee, in reality, partakes the character of tax.
Mr. Rao.
in support of his contentions, has relied on of Maharashtra (1981 (2) SCR 866 (888)). In Arunachala Nadar's case
(supra). this Court has noted the practice of notifying a radius of five miles
around the market buildings and yards and occasionally ten miles and has
observed that keeping in mind the purpose of establishing organised
market/market yards for the benefit of producers and to protect them from
exploitation by traders and middlemen it is unlikely that the government will
fix longer distance in the prevailing circumstances. In Lakha Lal's case
(supra), a Constitution Bench of this Court has held that power under Section 4
(of the Bihar Markets Act to notify market area should be exercised reasonably
consistent with the beneficial purpose envisaged under the Act. In R.K.Porwal's
case (supra), this Court has examined the question of reasonableness of the
location of a market and after being satisfied that the location of the market
was reasonable, upheld the same.
Mr. Rao
has submitted that it cannot be reasonably presumed that the Himachal Pradesh
Legislature have intended that Section 4 (3) should be construed literally to
cover even retail dealers in scheduled agricultural produce to be covered for
the imposition of levy and requirement to obtain licence from such retail
dealers. Until Section 4 (3) is read down by reasonably interoreting the scope
and ambit of the said Section. Section 4(3) is liable to be struck down being violative
of Articles 14 and 19 (1) (9) of the Constitution.
Mr. Rao
has submitted that it is the case of the appellant that the appellant has a
shop or outlet in the town of Kasauli and he
is a retailer of scheduled agricultural produce. He purchases such articles
from other bigger dealers. From the shop or retail outlet of the appellant in Kasauli,
there is no principal market/market or sub market yards within a radius of
about 20 kilometers.
Mr. Rao
has submitted that the appellant cannot afford purchasing from dealers in principal
market/market yards sub yards because of long distance of such place of
business and consequential cost of transportation. The appellant, for impelling
necessity, purchases from other dealers in near about places and carry on his
retail business n various agricultural produce in his shop at Kasauli under the
administrative control of Kasauli Cantonment Board. Hence, in any event, the
appellant is not liable to pay market fee levied on various agricultural
produces by the Market Committee.
Mr. Rao
has submitted that Markets Act and the Rules framed thereunder envisage a
single point levy. Once a particular scheduled agricultural produce has already
been subjected to levy of market fee, subsequent sale or purchase of such
produce cannot be subjected to levy of market fee.
In
this connection, Mr. Rao has referred to Rule 81 of Himachal Pradesh
Agricultural Produce Market Rules, 1971 framed under the Markets Act, Sub rule
(1) of Rule 81 provides as follows:
81.
Exemption from payment of fees-
(1) If
a fee has once been levied on sale or purchase of any quantity of agricultural
produce in a notified market area and the dealer concerned complies with the
provisions with the sub-rule (2) of this Rule, then no fee shall be leviable on
the sale or purchase within the same notified area of any agricultural produce
manufactured or extracted from the agricultural produce in respect of which the
fee has already been paid.
(2)
The dealer concerned in the sale of purchase of any quantity of agricultural
produce from which he manufactures or extracts any other agricultural produce
shall maintain in Form L time and correct accounts of sale or purchase as the
case may be, of the said agricultural produce manufactured or extracted from
it.
Mr.Rao
has submitted that dealers n agricultural produce are not exempted from the
levy of market fee. It is only the actual growers of agricultural produce who
are exempted from the imposition of levy of market fee when they sell
agricultural produce grown by them to dealers. Since the appellant is small
retail dealer who purchases from various other dealers it should be reasonably
held that the other dealers being liable to pay levy on the first transaction
in course of dealership business and once the goods in question have already
been subjected to levy subsequent transaction between dealer and sub dealer and
sub dealer and retailer like the appellant is not open to any levy of market
fee.
Mr.Rao
has also submitted that the purpose of requiring a licence to be obtained for
carrying on dealership business is to bring the dealer under control so that
such dealer does not escape payment of levy of market fee due from him.
Where
a retailer has no obligation to pay levy of fee, the very purpose of obtaining licence
for dealership business in case of such retailer does not arise. Mr.Rao has
submitted that the dealer must be understood and defined in the context of its
liability to pay levy of market fee. All traders in the State of Himachal Pradesh are not liable to pay levy of
market fee even if they carry on their business within a notified market area.
It is only the dealers dealing in scheduled agricultural produce under the Act,
who have been brought within the purview of Markets Act. Hence, a retailer
purchasing the items of its business from other dealers, who as aforesaid, must
be presumed to have been subjected to levy of market fee on the agricultural
produces sold by such dealer to the retailer should be excluded from the
definition of dealer by interpreting the definition reasonably and in the
context of single point levy envisaged under sub rule (1) of Rule 81 of the
Rules framed under the Act.
Mr.Rao
has submitted that unfortunately the liability of the appellant either to take
a licence for carrying on retail business in agricultural products and his
liability to pay levy of market fee in the context of single point levy, have
not been taken into consideration by the High Court because the Writ Petition
of the appellant was heard along with other Writ Petitions where only a common
question of law raised in such writ petitions about non existence of liability
to pay any levy of market fee in the absence of quid pro quo of services to be
rendered to the writ petitioners on account of levy of market fee had been
taken into consideration. Mr.Rao has submitted that the writ petition of the
appellant should be remanded to the High Court for considering the questions of
law in the context of factual matrix to be established by the respective
parties.
Disputing
such contentions of Mr.Rao, Mr.E.C.Aggarwala, learned counsel appearing for the
respondents Nos.2 and 3, has submitted that the appellant on the admitted
position that he purchases agricultural produce from other dealers and carries
on retail business in such produce is a 'dealer' as defined in Section 2 (i) of
the Markets Act. Notified market area has been prepared under Section 4 of the
Markets Act. Section 4 (3) of the Markets Act purchase, sale etc. of
agricultural produce so notified except under a licence granted in accordance
with the provisions of Markets Act.
Section
5 of the Markets Act contemplates that in each notified market area there shall
be one principal market yard and one or more sub-market yards as the Government
or the Board may find necessary. Section 21 of the Markets Act provides that
market committee shall levy on advalorem basis fee on agricultural produce
bought or sold by licensees in the notified market area at the rate not
exceeding one rupee for everyone hundred rupees, as may be fixed by the Board.
The
market area of Solan District in Himachal Pradesh included the area of Kasauli,
Dharampur, Jagjitnagar, Garkhal etc, including Chakki ka More. By notification
dated June 18, 11973, the extent of area of the Market Committee, Solan was
described as :-
(1)
All the revenue estates including Municipal Committees, notified area
committees and Cantonment Board area of Solan District (except Nalagarh Tehsil)
(2)
Revenue of Rajgarh Sub-Tehsil/Padihad Tehsil of Sirmor District.
Mr. Agarwala
has contended that the appellant Bhagwan Das admittedly carries on business in
agricultural produce in Kasauli which is within a notified market area. The
appellant is a dealer within the meaning of Section 2 (i) of the Markets Act.
In view of the fact that the entire Solan revenue estate and District of Solan
excluding Nalagarh area have been notified as market area, the appellant being
a dealer and carrying on business in agricultural produce was bound to obtain licence
under Section 4 (3) of the Markets Act. Inspite of repeated requests, the
appellant has refused to take such licence under the Markets Act.
It has
been contended by Mr.Agarwala that in the district of Solan, various sub-market
yards have been constructed which have been set out in the counter affidavit
filed before the High Court. It was also stated in the counter affidavit that
proposals were afloat for development of market yards and sub-market yards at
several places within the district of Solan, primarily amongst them are Jagjit Nagar,
Dharampur, Garkhal and ten other areas.
Chakki
ka More where a sub yard has been established is at a distance of 28 kilometer
from Kasauli and Jagjit Nagar is at a distance of only 11 kilometer from Kasauli.
Mr.Agarwala has informed the Court on instruction from the respondent Nos.2 and
3 that sub market yard at Jagjit Nagar has been constructed and has become
operative and sub market yard at Dharampur is likely to be completed soon
because tender for construction has already been invited. The sub-market yard
in Chakki ka More had been completed and made operative as far back as in 1981.
Mr. Agarwala
has submitted that the entire district of Solan is a hilly terrain and is not
densely populated as in other places in the plains. It is not practicable to
establish and construct sub-market yards within close distance in such hilly
terrain sparsely populated. The agricultural production is also not much so
that large volumes of transaction of such produce will take place in various
sub-market yards if constructed at close proximity.
Hence,
for appreciating the felt need of establishing sub- market yards in the
district of Solan, the test of reasonable distance of market yards which is
applicable in plain lands involving good productive activities of the
agriculturists, cannot be applied in view of geographical features and contours
of the district of Solan and volume of agricultural produce grown in the
district.
Mr. Agarwala
has submitted that the purpose of obtaining licence is to bring a trader within
the supervising control and regulation of the market committee. Licence being
issued for a particular place in the market area, the market committee knows
that a particular trader or dealer is carrying on its business in such
particular area. Question of payment of market fee arises only after a person
has obtained a licence and submits proof of the fact that particular
agricultural produce in which he is carrying on business activity has already
been subjected to levy of market fee so that further levy of market fee is not
enforced.
Mr. Agarwala
has also submitted that the question of including small traders was taken into
consideration by this Court in Arunachala Nadar's case (supra). It has been
held that "The Act is an integrated one and it regulates the buying and
selling of commercial crops. If the small traders are exempted, it creates
loopholes in the scheme through which the big trader may operate and thereby
the object itself may be defeated." Mr. Agarwala has further submitted
that the law is well settled by a series of decisions of this Court as already
referred that correlation of quantum of fees levied under the Markets Act and
extent of services rendered by the Market Committee by establishing principal
market yards and sub yards etc, is not to be scrutinized with any mathematical
precision. It will be sufficient to uphold the validity of levy of market fee
if it is established that steps for establishing market yards and sub yards
have been taken and realisation from levy or market fee is being spent for the
avowed object under the Markets Act. Mr. Agarwala has submitted that it is not
necessary to establish that traders of a particular area within the notified
area have in fact received the benefit of services and amenities envisaged by
the Markets Act and Rules framed there under.
In this
connection, Mr. Agarwala has referred to a decision of this Court in Mohammad Hussain
Gulam Mohammad 659). The attention of the Court has been drawn to the
observation at page 663 of the report to the following effect:
"The
act, however, envisages that there may be time lag between the declaration of a
market area and the establishment of a market:
therefore
the proviso to Section 4 (2) lays down that pending establishment of a market
in a market area, the Commissioner may grant a licence to any person to use any
place in the said area for the purpose of purchase and sale of any agricultural
produce." Mr. Agarwala has submitted that even though no market yard was
established, the imposition of market fee under the Bombay Act has been upheld
by this Court. Mr. Agarwala has also submitted that establishment of various
yards is reasonably expected to take some time and also involves substantial
expenditure. If steps for establishing market and sub-market yards have been
bona fide taken by a Market Committee by ensuring that collection from levy of
market fee is being spent and intended to be spent for the purposes for which
such levy has been imposed, the levy must be held to be a valid imposition
under the Markets Act and such validity is not required to be tested in the
context of quantum of levy imposed and extent of service rendered by the Market
Committee.
Mr. Agarwala
has also submitted that appellant had an obligation to take licence under the
Markets Act because admittedly he deals in agricultural produce. Not only he
failed and neglected to take licence under Section 4 (3) but even when reminded
of such obligation to take licence he filed the writ petition for contending
that levy of market fee in the absence of quid pro quo was unconstitutional and
invalid. Such contention being wholly untenable in the facts of the case and
law being clearly laid down in a series of decisions of this Court, there was
no occasion for the appellant to move this Court. The appeal being devoid of
any substance, should be dismissed with exemplary cost.
After
giving our careful consideration to the facts and circumstances of the case and
the submissions made by the learned counsel for the parties, it appears to us
that under the Markets Act any trader or dealer dealing in scheduled
agricultural produce within a notified market area is under an obligation to
obtain a licence under Section 4 (3) of the Markets Act. Such obligation is not
confined to wholesalers of agricultural produce or intermediate dealers
indulging wholesale and retailed business but also to retail traders like the
appellant.
In our
view, licence is required to be taken by a small retailer operating within a
notified market area. The question of reasonable interpretation of 'dealer'
under Section 2 (i) and provisions requiring a dealer to obtain licence under
Section 4 (3), in the context of single point levy of market fee under Rule 81
of the Rules framed under the Act, as sought to be contended by Mr. Rao, though
ingenuous, is devoid of any substance.
It has
been rightly contended by Mr. Agarwala that a licensed dealer may raise
objection against imposition of levy by establishing with reference to records
that the agricultural produce since purchased by such dealer has already been
subjected to levy. Requirement for obtaining a licence is mandatory under
Section 4 (3) of the Markets Act.
Validity
of imposition of levy on certain items of agricultural produce on the score of
exemption on account of single point levy, is entirely a different exercise and
exemption from liability on such score in respect of trading activities in
question does not entitle a dealer of agricultural produce within a specified
market area to refuse to take licence under Section 4 (3) of the Markets Act.
By a
series of decisions of this Court, reference to which have already been made,
the principles for upholding constitutional validity of imposition of levy of
market fee in a notified market area have been laid down. The Agricultural
Produce Marketing Acts have been enacted by various state legislatures. The
beneficial legislation is aimed to prevent exploitation of growers of
agricultural produce in the hands of dealers, traders and middlemen.
There
is commonness, by and large, in such legislations. The Marketing Act and the
Rules framed thereunder usually contain provisions for establishing organised
market and market yards, provisions to ensure sale and purchase of agricultural
produce at a fair price to be notified, to ensure correct weighment of such
produce brought and sold in the market yards, to ensure storage of agricultural
produce by giving reasonable advances against the produce stored in the godowns
of the Market Committee so that distress sale at a lower place at the time of
harvesting is prevented for the benefit of farmers and agriculturists, to
provide roads and pathways for transport of agricultural produce to organised
market yards, to disseminate information to the farmers about improved
techniques in cultivation, to ensure supply of good quality seeds, manures,
agricultural implements etc, for intensive cultivation, to provide place of
rest for farmers bringing their produce in the organised market yards after
ensuring sanitary conditions in and around such organised market yards etc. In
order to ensure generation of funds in the hands of Market Committee and Boards
constituted under the Marketing Act, so that organised markets and market yards
are established with necessary infrastructures involving substantial cost, the
Marketing Act invariably contains provisions for imposition of levy of market
fee at a specified rate on the traders and dealers in specified agricultural
produce operating within the specified market area and in principal and
sub-market yards established by the Market Committee. The dealers and traders
are required to take licence for their trading activities in such area in
respect of specified agricultural produce so that their trading activities are
monitored and controlled and they may not escape the liability of imposition of
market levy.
Levy
of market fee being essentially a fee and not a tax, such imposition of levy of
market fee necessarily inheres in it the essence of quid pro quo between the
fees levied and services returned to the payer of such fees. What should be the
extent of service rendered to the payers of levy of market fees so as to keep
such levy of fees within the bounds of accepted principle of fee involving
existence of reasonable quid pro quo has been a vexed question agitated before
various High Courts including this Court from time to time. Some of the
decisions of this Court on this question have been indicated. The legal
position regarding constitutional validity of levy of market fee may be summarised
as follows:-
(i)
Existence of quid pro quo is essential for retaining the character of 'fee' in
the matter of levy of market fees.
(ii)
Such quid pro quo is snot to be reckoned with any mathematical precision with
reference to quantum of fees realised by imposition of levy and the percentage
of such fees spent for establishing market yards, construction of various infra
structures etc, and providing various amenities as envisaged under the
Marketing Act and the Rules framed there under for effective implementation of
aims and objectives under the Act.
(iii)
The service to be rendered to the payers of market fee must be real and not
illusory.
(iv)
Such service must have an objective basis and have a direct link and not to be
remote in its effect.
(v) It
is not necessary that imposition of levy is to be effected only on
establishment of principal and sub market yards by completing the
infrastructures required for such establishment of market and sub-market yards.
Such construction being time consuming and expenditure oriented, it will be
sufficient to justify valid imposition of levy if it is demonstrable that after
notifying market area, effective steps not in contemplation but in reality have
been taken to identify market and sub-market yards have in fact been but to
action and the market fees levied and realised are being ploughed back for the
advancement of the purpose for which market fees have been levied and realised.
(vi)
In deciding the question of rendering of a real and not illusory service in
discharging the obligation emanating from quid pro quo, to levy of market fee,
no straight jacket formulae can be evolved. Fact situation in the matter of
establishment of principal and sub-market yards and the practical feasibility
of construction of infrastructures, roads, pathways etc, for establishment of
such market yards within a time frame and in the light of financial constraints
is bound to vary depending on various factors including imponderables. It is,
therefore, essentially necessary to take a pragmatic approach to the problems
associated with establishing market and sub-market yards with necessary
infrastructure etc, and accompanying facilities and amenities to be made
available to traders and producers coming to such yards, in order to decide
whether concrete steps have been translated into action with reasonable
sincerity in implementing the schemes envisaged under the Marketing Act and the
Rules framed there under.
In the
instant case, it has been established that the market committee in the district
of Solan after notifying market area, has taken real and effective steps to
identify various sub market yards and some of such yards have been commissioned
after constructing essential infrastructures and in respect of some of such
yards, tenders have been invited. It is true that the facility of sub-market
yards from the town of Kasauli is at some distance. But it should
be borne in mind that Solan is a hilly terrain with sparse population. The
volume of agricultural produce is also limited because of geographical features
of the area.
Consequently,
volume of transaction in agricultural produce is expected to be much less than
that in good agricultural belts in the plains. Such factors are undoubtedly
operating as constraints in establishing sub-market yards with necessary
infrastructures within a proximate distance from the place of business of
various traders in the said district. Simply on such account, the appellant
cannot be permitted to contend that he has no obligation to pay levy of market
fee for failure to comply with the obligation of quid pro quo for imposition of
levy of market fee. The appellant has failed to establish that there is total
lack of quid pro quo vis-a-vis imposition of levy of market fee in the district
of Solan and also in the town of Kasauli.
In our
view, the appellant being admittedly a dealer under Section 2 (i) of the Act
was required to take a licence. The question of liability to pay levy of market
fee is to be decided on the basis of actual business activities of the
appellant with reference to agricultural produce involved in such business
activities. If in respect of some agricultural produce the appellant has no
liability of market levy in view of single point levy, it is for the appellant
to establish such claim with reference to records.
It is
unfortunate that the appellant has not obtained licence despite reminder. The
appellant has successfully prevented the action on the complaint made against
him for not taking the licence under Section 4 (3) of the Markets Act by moving
the writ petition before the High Court and raising untenable contentions in
such writ petition. We, therefore, find no reason to interfere with the
impugned judgment. This appeal is dismissed with cost assessed at rupees ten
thousand only.
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