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SCA/9705/2008 10/ 12 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 9705 of 2008
=========================================================
AGRICULTURE
PRODUCE MARKET COMMITTEE - VADODARA - Petitioner(s)
Versus
STATE
OF GUJARAT & 1 - Respondent(s)
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Appearance
:
MR
KG VAKHARIA WITH DILIP B RANA for
Petitioner(s) : 1,
MR PANDYA, AGP for Respondent(s) : 1,
NOTICE
SERVED BY DS for Respondent(s) : 1 - 2.
MR SN SHELAT WITH CHIRAG B
PATEL for Respondent(s) :
2,
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CORAM
:
HONOURABLE
MR.JUSTICE JAYANT PATEL
Date
: 13/11/2008
ORAL
ORDER
Heard
Mr.Vakharia, learned Sr. Counsel with Mr.Rana for the petitioner,
Mr.Pandya, learned AGP for the State and Mr.Shelat, learned Sr.
Counsel with Mr.Patel for respondent No.2.
Prima
facie it appears that the legal position can be said as continued
until the provisions of the Act were not amended by Gujarat Act
No.17 of 2007 and the rights of the parties could be said as
governed by the decision of this Court in Letters Patent Appeal
No.139 of 2006, which is, of course, the subject matter of SLP
pending before the Supreme Court, wherein the leave has been granted
by the Apex Court.
However,
it is an admitted position that the Act has been amended and Section
28 has undergone a sea-change. Section 28 as it existed prior to
the amendment was as under:-
28. The
market committee shall, subject to the provisions of the rules and
the maxima and minima from time to time proscribed levy and collect
fees on the agricultural produce bought or sold in the market area:
Provided
that the fees so levied may be collected by the market Committee
through such agents as it may appoint.
Following
is amendment in Section 28 of the Act.
Section
28
In
the principle Act, Section 28 shall be renumbered as Sub-section (1)
of that Section and after Sub-Section (1) as so renumbered, the
following sub-section shall be added, namely;-
2(a) The
market fees specified in sub-section (1) shall not be levied for the
second time in any market area from the buyer who is a processor,
grade, value addition centre or exporter of an agriculture produce
and market fee has already been paid on that agricultural produce in
any market and the information in this context has been furnished,
as prescribed, by the person concerned that the payment of market
fee has already been made in other market, provided such proof as
may be prescribed is furnished to the Director by the buyer who is
doing processing grading, packing, value addition or export within
such period as may be prescribed by the Government.
(b) On
the agricultural produce brought in the market are for commercial
transaction or for processing, if the permit issued under clause (e)
has not been submitted, the market fees shall be deposited by the
buyer or processor, as the case may be, in the office of the market
committee, within fourteen days but before sale or resale or
processing or export outside the market area. Provided that in case
any agricultural produce is found to have been processed, sold or
resold or dispatched outside the market area without payment of
market fee payable on such produce, the market fees shall be levied
and recovered on five times the market value of the processed
produced or value of the agriculture produce, as the case may be.
(c) The
market fees shall be payable by the buyer of the agricultural
produce and shall not be deducted from the price payable to the
agriculturists seller.
Provided
that where the buyer of a 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:
Provided
further that in case of commercial transactions between traders in
the market area, the market fees shall be collected and paid by the
seller.
(d) The
market functionaries, as the market committee may by bye-laws
specify and in the case of market established under chapter IV A of
this Act as the Director may specify, shall maintain accounts
relating to sale and purchase or processing or value addition in
such manner as may be prescribed and submit to the market committee,
the periodical returns, as may be prescribed.
(e) Any
agricultural produce shall be removed out of the market area only in
the manner and in accordance with the permit issued in such form, as
may be prescribed. The vehicle carrying agricultural produce shall
be accompanied by such proofs as may be prescribed:
Provided
that the producer of the agricultural produce himself may remove the
agriculture produce from once place to another without such permit.
In
light of the aforesaid amended provisions of Section 28, if the
Scheme of the Rule 48 and more particularly Rule 48(2) is
considered, it would be required for Rule Making Authority to amend
the Rule. It is true that this Court while exercising the power may
not direct for amendment of the Rules since it is a legislative
action, but it can hardly be disputed that Rule, as may exist,
cannot be permitted to travel beyond Section, which in the present
case is amended provisions of Section 28(2) of the Act.
Section
28 as amended prima facie shows levying of market fees once and
prohibits levying of market fees second time. Therefore, it cannot
be said that there will be absolute exemption if a processor has
imported the agriculture produce in the market area by purchasing
the same from outside the market area no fees whatsoever shall be
payable, but at the same time if he produces the proof showing that
the fees was already paid, he would not be liable to pay the fees
second time. It is the case of the market committee that respondent
is a processor extracting castor oil from the castor, which is an
agriculture produce, whereas the contention of respondent No.2 is
that it is an industrial concern undertaking the manufacturing
activity of castor oil.
Whether
extraction of castor oil from the castor can be said as processing
over the castor or the manufacturing activity can be concluded at
the final disposal. However, as there is amendment in the Act and
Rule 48(2) does not appear to be running in conformity with the
provisions of Section, the matter deserves consideration.
Hence,
Rule.
So
far as the interim relief is concerned, it was contended on behalf
of the respondent No.2 that there is a binding decision operating
against the Market Committee in favour of the respondent No.2,
whereby no fee is leviable. Therefore, the refund was ordered,
which is, of course, the subject matter of the SLP before the
Supreme Court. It was, therefore, submitted that even if it
pertains to the calculation of the fees like other taxation or
revenue matter, this Court may not direct for deposit of the amount
or even furnishing of the security.
Whereas,
on behalf of the Market Committee, it was submitted that if
ultimately the petitioner succeeds, the question may arise for
effecting the recovery and due to recession in the industry, it may
be difficult for the Market Committee to recover the amount and,
therefore, the Court may pass suitable directions for such purpose.
Hence,
considering the facts and circumstances, it appears that if the
payment of the Market Committee, if it is not made by the respondent
No.2 of the principal amount under the bonafide belief that the
decision is operating in their favour of this Court, at least it
will not be a case for imposition of penalty. However, so far as
the principal amount of market fee is concerned, suitable measures
deserve to be ordered, so that in the event the petitioner succeeds,
it may be in a position to realise the amount and things may not
become irreversible. If respondent No.2 succeeds, it may get back
the amount. But at the same time, as the question of interpretation
of Rule 48(2) is to be finalized in light of the amendment under
Section 28 unless such Rule is amended by the Rule Making Authority,
pending the petition, it would be just and proper to balance the
rights of both the sides, so as to control the situation at the
ultimate outcome of the petition.
Hence,
by interim order, it is directed as under:-
(a) The
operation of the impugned order Annexure A passed by the State
Government shall remain stayed with the further direction as under:-
(i) The
Market Committee shall be in a position to enforce the principal
amount of market fee from respondent No.2, unless the declaration is
given by respondent No.2 with the proof of the market fee already
paid of the agriculture produce brought into market area by
purchasing the same from outside the market area.
(ii) The
recovery of the aforesaid amount of market fee, as may be demanded
by the Market Committee after deduction of the market fee already
paid as per the declaration with the proof thereof, remain stayed on
the following conditions:-
(1) Respondent
No.2 deposits 30% of the outstanding market fees with the Market
Committee and furnishes guarantee to the Market Committee, that they
shall pay the amount with interest if ultimately it is decided that
the amount of market fees is payable by them to the Market Committee
and shall not transfer or alienate the immovable property of plant
without leave of the Market Committee. The amount as may be
deposited by respondent No.2 with the Market Committee shall be kept
by the Market Committee in a separate bank account with the
nationalized bank and shall not be utilized without leave of this
Court, but it would be open to the Market Committee to invest the
same in FDR with a nationalized Bank and the details thereof shall
be produced in the record of this Court; OR
(2) Respondent
No.2 deposits 50% of the outstanding market fees with this Court and
furnishes an undertaking before this Court for the remaining 50% of
the amount to the effect that they shall pay up the remaining market
fees with interest as and when it is so ordered by this Court. Such
amount shall be invested, if deposited, by the Registrar in the FDR
initially for a period of two years, renewable further with the
State Bank of India, Gujarat High Court Branch, Ahmedabad.
(3) Respondent
No.2 shall be at liberty to comply with either of the conditions
within two months from the date of intimation and calculation of the
Market Fees recoverable by the Market Committee from respondent
No.2.
The
aforesaid arrangement shall continue on regular basis at the end of
every month for the agriculture produce of castor oil and the
intimation shall be in each of next month and compliance thereof
shall be within 30 days thereof.
The
aforesaid interim order and the amount, if any, deposited or
guarantee, if any, furnished or the undertaking shall be subject to
final order, which may be passed by this Court in the present
proceedings.
It
is also observed and directed that it would be open to the
petitioner to make representation to the State Government, which is
Rule Making Authority, for amendment of the Rule 48 in light of the
amended provisions of Section 28 of the Agriculture Produce Market
Committee. If such representation is made, the pendency of this
petition, shall not operate as a bar to the Rule Making Authority
for bringing about amendment, as may be permissible in law.
It
would be open to either side to move this Court for final hearing if
the rules are amended or the matter before the Apex Court is finally
decided, whichever is earlier.
13.11.2008 (Jayant
Patel, J.)
vinod
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