ORDER
Ghulam Mohammed, J.
1. Earlier, the 1st respondent without any basis and without any proper enquiry, lodged a case in CC No. 255 of 1989 on the file of Munsif Magistrate, Andole under Section 23 of the Market Committees Act, 1966 on the ground that the petitioner did not submit the returns properly and an amount of Rs. 48,900/- was due from him for the years 1985-86 to 1987-88. Against the said case, he filed a Crl. Petition No. 651 of 1990 to quash the proceedings under Section 482 Cr.PC and the same was allowed on 17-10-1990 by this Court and the said judgment has become final. Now, the 1st respondent seems to have addressed a letter to the other respondents stating that an amount of Rs. 1,47,864/- is due by the petitioner towards the arrears of market fee for the period 1985-86 to 1988-89, which is arrived at without any basis and the same is contrary to the figure arrived at earlier. Respondents 2 to 4 initiated proceedings under the provisions of the Revenue Recovery Act and issued notice under Section 8 of the Act, dated 16-7-1991 demanding to pay Rs. 1,47,864/-. Demand notice issued by the 4th respondent, is without jurisdiction. Till today, no order was served on him by the 1st respondent fixing any liability either towards the market fee or penalty for the years 1985-86 to 1988-89. The claim in question is a time barred one. The 1st respondent not being a State, cannot recover the dues by invoking the powers under Revenue Recovery Act. The condition precedent for invoking the provisions of Revenue Recovery Act, is to determine the liability by complying with the principles of natural justice and fair play. In the instant case, as there is no order yet served on the petitioner for the payment of market fee or any other amounts, the question of
straightaway invoking the provisions of the Revenue Recovery Act, does not arise. The impugned notice which is based on the letter addressed by the 1st respondent, is in violation of Article 19(I)(g) of the Constitution of India, apart from principles of natural justice. It is clear from Section 26(2) of the Act that only fee can be recovered, but not any other amount. On this ground also, the demand made by the respondents, is liable to be set aside. Hence, the writ petition has been preferred by the petitioner, challenging the demand notice dated 16-7-1991 issued by the 4th respondent.
2. The 1st respondent filed the counter contending inter alia that the 1st respondent is competent to lodge a complaint against any licensee of the agricultural commodities in the event of failure to comply with the licence conditions and any provisions of the Act, Rules and Bye-laws. The complaint was quashed on technical grounds. As required under Section 12(1) of the Act read with Rules 74(1) and Bye-law 24(8), every licensee is liable to furnish monthly return of purchases and pay the market fee on or before 25th of the succeeding month. In the instant case, the petitioner never furnished the monthly return of purchases to pay the market fee regularly. Though the petitioner received several notices, he did not respond for the same. In the absence of the returns, the 1st respondent obtained the particulars of the turn out by the petitioner from the Commercial Tax Department. The turn over of the petitioner is as under :
1. 1985-86 Rs.27,94,399/- Market fee @ 1%
2. 1986-87 Rs.20,55,857/-
3. 1987-88 Rs.68,49,258/-
4. 1988-89 Rs.41.22.7Ql/- Rs.1,58,222/-
3. Basing on the above information, market fee at the rate of 1% on ad valorem
basis under Section 12(1) of the Act read with Rule 74(1) of the A.P. Market Rules, 1969 was imposed on the petitioner duly deducting the market fee already paid i.e., Rs. 10,153/- by him, which comes to Rs. 1,47,864/-. Accordingly, a notice was served on the petitioner in the first week of September, 1990. Again, notice dated 8-2-1991 was issued for the payment of the above amount. But, the petitioner rejected to receive the notice sent through the Attender of the office. Since the petitioner rejected to receive the notice, it is deemed that the notice is served on him and the amount of market fee of Rs. 1,47,846/- is made absolute as required under Section 12(1) of the Act and the matter was preferred to the District Collector as required under Section 26(2) of the Act for immediate recovery. As such, the 4th respondent is competent to issue notice. The assessing authority is competent to levy market fee to the best of its judgment in the absence of submission of returns and accounts books under Sub-section (4) of Section 12-B of the Act. There is no bar for recovery of the market fee by revenue recovery.
4. Heard Mr. R. Subhash Reddy, the learned Counsel for the petitioner and Smt. Nanda R. Rao, the learned Standing Counsel for the 1st respondent and Government Pleader for Revenue for respondents 2 to 4.
5. The learned Counsel for the petitioner has raised three contentions viz., the amount arrived by the Market Committee is unilateral, and, there was no determination as to the sum and before determination, it requires issuance of show-cause notice to show-cause as to whether such determination is proper or not and thirdly, it is a time barred debt and the proceedings under the Revenue Recovery Act cannot be invoked to effect recovery of the market fee in the same manner as that of the arrears of land revenue.
6. In support of his contention, he relied on a Division Bench decision of this Court reported in B.C. Mulajkar v. State, , wherein it is held thus :
“The question that arises for consideration is, whether the respondents could straightaway attach the properties of the appellant without first determining the quantifying the amount alleged to be due by the appellant. Section 52 of the Act reads as follows :
“All arrears of revenue other than land revenue due to the State Government, all advances made by the State Government for cultivation or other purposes connected with the revenue and all fees or other dues payable by any person to or on behalf of the village servants employed in revenue or police duties, and cesses lawfully imposed upon the land and all sums due to the State Government, including compensation for any loans or damage sustained by them in consequence of a breach of contract, may be recovered in the same manner as arrears of land revenue under the provisions of this Act unless the recovery thereof shall have been or may hereafter be otherwise specially provided for.”
In the present case, the amounts are claimed by the Government under the loans advanced by the Industrial Trust Fund. Therefore, it cannot be disputed that the amounts sought to be recovered fall under the expression “all sums due to the State Government”. But the section itself does not expressly provide for an enquiry or determination of the sums due to the Government. According to the Dictionary the word “due” means that which is owed : What one has a right to: fee, toll charge or tribute. How much sum is owed by the appellant or what amounts the respondents have a right to recover has first to be arrived at before the same could be recovered as a sum due to the Government. When there are disputes between the alleged debtor and the Government with regard to the liability itself or as to the quantum of said
liability should be furnished with the material or data on which the liability is sought to be fixed.
Cases where the amount due is admitted or is determined by a competent authority under a special enactment providing for an enquiry in that behalf, are different and would not present much difficulty. In other cases where no enquiry is at all held and the Government seeks to recover the amount, the question arises whether such a liability could be fastened upon the alleged debtor without first determining the liability and the quantum of the said liability. It is an elementary principle that principles of natural justice require that the person who is sought to be fastened with a liability should first be apprised of the facts on which the liability is sought to be based and he should be given an opportunity to make his representations in that behalf. In our view, the expression “sums due” does imply an obligation on the part of the State Government when the liability is disputed, to hold a proper enquiry and furnish the person from whom the amount is sought to be recovered, the full particulars or facts, hold an enquiry, consider, consider the representations and first determine the liability or otherwise for the sum said to be true.
Normally in all cases where the amounts are due under a loan or contract or by way of compensation for breach of a contract, the party aggrieved has to proceed by way of a suit in a civil Court and the party sought to be made liable will then have an ample opportunity of contesting the claim. But Section 52 of the Act which is a special provision and which enables the Government to recover the amounts as arrears of land revenue, is a drastic provision and presumably this provision is made in the interests of expeditious collection of the amounts due to the Government. Even so, the provisions of Section 52 of the Act have to be interpreted in such a manner so as to accord with the principle of natural justice and that the party sought to be proceeded against should atleast have the minimum safeguard of having an opportunity to know the basis
and the material on which the liability is sought to be imposed upon him and to rebut the same by placing the necessary material in that behalf before the appropriate authority of the Government.
Whether the proceedings taken under Section 52 of the Act are quasi-judicial or administrative in character, it is incumbent upon the Government to observe the basic principle of natural justice viz., that the party affected should have a reasonable notice of the case he has to meet and a reasonable opportunity of making his representations against the same by producing the relevant material on which he relies. Justice and fair play demand that such a notice should be given even by an administrative authority. In our opinion therefore before the Government could recover the sums due under Section 52 of the Act, the appellant should be furnished with the relevant material on which the amount is said to be due, and give an opportunity to the appellant to make his representations and produce the relevant material to substantiate his representations and thereafter determine the liability. Only on such determination of the liability and the amount due there under, the Government can take proceedings under Section 52 of the Act for recovering the amount, In other words the recovery proceedings under Section 52 of the Act should be preceded by an anterior determination of the liability and the amount due towards such liability.”
7. He further relied on a decision of the Apex Court reported in State of Kerala v. V.R. Kalliyanikutti, , wherein it is held thus :
“(5) Explaining analogous provisions of the U.P. Public Moneys (Recovery of Dues) Act, 1965, this Court in Director of Industries, U.P. v. Deep Chand Agarwal, held that the said Act is passed with the object of providing a speedier remedy to the State Government to realise the loans advanced by it or by the Uttar Pradesh Financial Corporation. Explaining the need for speedy recovery, it says that the State Government while
advancing loans does not act as an ordinary banker with a view to earning interest. Ordinarily it advances loans in order to assist the people financially in establishing an industry in the State or for the development of agriculture, animal husbandry or for such other purposes which would advance the economic well-being of the people. Moneys so advanced have to be recovered expeditiously so that fresh advances may be made for the same purpose. It is with the object of avoiding the usual delay involved in the disposal of suits in civil Courts and providing for an expeditious remedy that the U.P. Act had been enacted. It was on this ground that this Court upheld the classification of loans, which are covered by the said U.P. Act in a separate category. It held that this is a valid classification and the provisions of the Act are not violative of Article 14.
(6) The same reasoning would apply to the loans which are covered by the said notifications under Section 71 of the Kerala Revenue Recovery Act. Agricultural loans and loans by the State Financial Corporation are also loans given in public interest for the purpose of economic advancement of the people of the State, to help them in agricultural operations or establishment of industries. For this reason the Kerala Revenue Recovery Act has been made applicable to such loans so that there can be a speedy recovery of such loans and the amounts can be utilised for similar objects again.”
8. It is further contended by the learned Counsel for the petitioner that under the Indian Limitation Act, limitation is for three years and as such the demand for payment of market fee for the assessment years in question, is time barred. It is further submitted that earlier a complaint was made before the Magistrate and the proceedings were quashed and under Section 482 Cr.PC, the matter was carried before this Court and the same was allowed and the 1st respondent addressed a letter to the Mandal Revenue Officer to
invoke the provisions of Revenue Recovery Act and that the provisions of Revenue Recovery Act, cannot be invoked in the instant case.
9. On the other hand, relying on Section 12-A of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 (hereinafter referred to
as “Act”), which reads as under :
“Submission of return of turnover by trader:–Every trader in the notified area, who is liable to pay fees under Section 12, shall submit such return or returns relating to his turnover in such manner, with such period and to such authority, as may be specified by the Market Committee in its bye-laws.”
It is contended by the learned Standing Counsel for the respondents that a statutory duly is caste on the petitioner to furnish the returns every month and since the petitioner has not furnished the particulars, the authority determined to the best of its judgment the turnover that has escaped assessment and the recovery was effected under Section 26(2) of the Act, under which all sums due to the market committee may be recovered in the same manner as arrears of land revenue. Notice was given and published by the Agricultural Market Committee, Jogipet demanding the market fee and the authority approached the Commercial Tax Authorities and obtained the particulars for assessment and a notice was served on the petitioner on 30-8-1990. Again a notice was issued for payment of Rs. 1,47,000/- and the petitioner refused to receive the same and as such, it shall be deemed to have been served. It is further contended that the Mandal Revenue Officer is competent to issue notice inasmuch as the Committee in exercise of its power under Section 26(2) of the Act, referred the matter to the Mandal Revenue Officer to recover the market fee under the Land Revenue Act.
10. In support of her contention that the revenue recovery proceedings can be invoked, she relied on a Division Bench decision of this Court reported in D. Venkateswara Rao v. Collector, Nizamabad, (DB), wherein it is held thus :
“In view of the notification issued under G.O. Ms. No. 261, Revenue (N) Department, dated 17-3-1987, the sum due to the 3rd respondent (A.P. State Civil Supplies Corporation Limited) can be recovered under the provisions of the Revenue Recovery Act.”
11. In support of her contention, she further relied on a decision reported in Narayana Rao and Sons v. Government of A.P., 1997 (3) ALD 458 (DB), wherein it is held as follows :
“In these cases, it is not disputed that cotton seeds were being transported through the market area. Therefore, the Market Committee is justified in invoking the presumption that there is sale or purchase of cotton seeds within the notified market area for the purpose of Section 12 of the Act. It is open to the petitioner to rebut that presumption and satisfy the market authorities that cotton seeds were in fact sold/purchased outside the market area and that on the sale/purchase of the cotton seeds, market fee has already been paid to other Market Committee. No material is placed before us to show that sale or purchase of cotton seeds was subjected to levy of market fee by another Market Committee.”
12. With due respect to the principles, the above decision has no bearing on the facts of the case on hand.
13. It is lastly contended by the learned Standing Counsel for the respondents that quash proceedings have nothing to do with the recovery of market fee to be paid by the petitioner. It is further contended that refusing to receive notice, is a deemed service
and therefore, the question of violation of principles of natural justice does not arise.
14. Section 12-A of the Act obligates the petitioner to submit his returns to the 1st respondent as may be prescribed by the Market Committee in its bye-laws. Inspite of the notices issued by the assessing authority, the petitioner failed to furnish the accounts for assessing the market fee, which aspect has driven the 1st respondent to file a charge-sheet against the petitioner in CC No. 255 of 1989 on the file of the Judicial First Class, Andole-Jogipet.
15. In the absence of returns, the 1st respondent obtained the particulars as to the turn out of business of the petitioner from the Commercial Tax Department, Sangareddy. In case of failing to furnish the returns, Section 12-B (4) confers powers on the assessing authority to assess the amount of market fee due from the trader, to the best of its judgment, in addition to imposing of penalty. The basis on which now the market fee is computed, is, in my considered view, to the best of its judgment, and, as such, I do not agree with the contention that the market fee assessed is unilateral. When the 1st respondent failed to collect the market fee inspite of the notice dated 30-8-1990, the matter was referred to the Revenue Authorities. Section 26(2) of the Act empowers the Market Committee to recover the market fee in the same manner as that of arrears of land revenue and this aspect is fortified by the legal proposition relied on by the learned Standing Counsel in the above Division Bench decision of this Court (supra). Therefore, there is no force in the contention of the petitioner that the provisions of Revenue Recovery Act cannot be invoked to recover the market fee.
16. Be that as it may, Notice dated 8-2-1991 was issued to the petitioner for payment of Rs. 1,47,864/-, but the petitioner
rejected to receive the notice. In such an event, the refusal on the part of the petitioner, amounts to deemed service and the question of violation of principles of natural justice does not arise and the legal proposition relied on by the learned Counsel in above decision (supra) has no bearing on the facts of the case.
17. When the petitioner failed to pay the market fee inspite of the notices, revenue recovery proceedings have been initiated vide order dated 8-2-1991. The demand for payment of market fee is for the years 1985-86, 1986-87, 1987-88 and 1988-89. It is pertinent to be noted here that Section 12-B of the Act contemplates that an assessment shall be made only within a period of three years from the expiry of the year to which the assessment relates. If that being the case, the assessment for the year 1985-86 has not been done in compliance with the provisions of Section 12-B of the Act and as such, the demand for market fee for the year 1985-86, cannot- be effected being time barred. However, the demand for the payment of market fee for the years 1986-87, 1987-88 and 1988-89, falls within the ambit of Section 12-B of the Act.
18. It is contended by the learned Counsel that the petitioner was prosecuted for non furnishing of the returns and accounts by filing a criminal case in CC No. 255 of 1989, but the same were quashed and confirmed by this Court and therefore, the same has bearing on the present facts of the case.
19. The Act contemplates to proceed against a trader by initiating the proceedings both under the Revenue Recovery Act under Section 26(2) and criminal prosecution under Section 25 for contravention of the provisions of the Act or rule or bye-law. In such an event, the order in the above criminal case, has no bearing to the facts of the case on hand.
20. In this view of the background, I am of the considered view that the demand for payment of market fee for the assessment year 1985-86 is not in consonance with the provisions of Section 12-B of the Act, and as such, the demand for payment of market fee for the said assessment year cannot be affected, being time barred. However, the demand for payment of market fee for the year 1986-87, 1987-88 and 1988-89, is in consonance with the provisions of Section 12-B of the Act and accordingly, the recovery under the Revenue Recovery Act can be effected for the said three years. The Notice dated 8-2-1991 is set aside insofar as the demand for payment of market fee for the assessment year 1985-86 is concerned, and consequently, the said notice dated 8-2-1991 stands operative insofar as the demand for payment of market fee for the assessment years 1986-87, 1987-88 and 1988-89 is concerned and accordingly, the respondents are directed to recover the market fee only for the above three assessment years.
21. With the above directions, this writ petition is disposed of.