BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 01/09/2009
CORAM
THE HONOURABLE MR.JUSTICE G.M.AKBAR ALI
CRL.O.P.(MD)No.1436 of 2007
CRL.O.P.(MD)Nos.1437, 1438, 8187, 8237,
8243, 8244, of 2007
and
M.P.(MD)Nos.2, 2, 2, 2, 2, 2 & of 2007
C.Kandasamy
Sivaraj Spinning Mills (P) Ltd.,
Thadicombu - 624 709
Dindigul (Taluk)
District. ... Petitioner in
Crl.O.P.No.1436/07
Vs
N.Chidambaram
The Superintendent
Regulated Market
Begambur (Post)
Dindigul Market Committee
Dindigul - 2. ... Respondent in
Crl.O.P.No.1436/07
PRAYER CRL.O.P.1436/07
Criminal Original Petition filed under Section 482 of
the Criminal Procedure Code, to call for the records pertaining to the Calender
Case in C.C.No.813 of 2006, pending on the file of Judicial Magistrate No.II,
Dindigul and quash the same.
!For Petitioners … Mr.S.D.Venkateshwaran
^For Respondent … Mr.R.Janakiramulu, SGP
:COMMON ORDER
These petitions are filed under Section 482 of Cr.P.C., to call for the
records pertaining to the Calender Cases in C.C.Nos.813, 815, 814, of 2006,
respectively in Crl.O.P.Nos.1436, 1437, 1438 of 2007, pending on the file of the
learned Judicial Magistrate No.II, Dindigul, and Calender Cases in
C.C.Nos.84,83,85,86 of 2007 respectively in Crl.O.P.(MD)Nos.8187, 8237, 8243,
8244, of 2007, pending on the file of the learned Judicial Munsif-cum-Judicial
Magistrate, Vedasundur, and to quash the same.
2.The brief facts of the case is as follows:-
The petitioners are the Spinning Mills located in and around Dindigul
District. They are registered and licensed under the Tamil Nadu Agricultural
Produce Marketing Regulation Act, 1987. The petitioners are producing cotton
yarn in the above said mills. The respondent is the Dindigul Market Committee,
which is a Statutory Body under the Tamil Nadu Agricultural Produce Marketing
Regulation Act, 1987. The petitioners are granted licence and they are
periodically submitted the returns as per rules. The petitioners’ Mills are
producing cotton yarn and the waste cotton generated during the process of
spinning the yarn, when sold outside is subject to levy of marketing fees at the
rate of not less than one rupee for every hundred rupees at the aggregated
amount. The petitioners are remitting the marketing fee in the case of sale of
waste cotton as per the provision of the Act. Instead of selling the entire
waste cotton in the outside market, the petitioners have been utilizing some
quantity of the waste cotton for further conversion into Open End Yarn (OE yarn)
from the Open End Spinning Mills, on job work basis. Such waste cotton,
converted into OE yarn will be returned back in the form of yarn to the
petitioners’ Mills. The respondent have erroneously considered this conversion
and accordingly issued notice to the petitioners to remit the market fee on the
value of the quantity of waste cotton sent for conversion process. The
respondent had initiated criminal prosecution by preparing complaints and the
learned Magistrate has taken on file for an offence under Sections 48(1)(a)(c)
of the Tamil Nadu Agricultural Produce Marketing Regulation Act, 1987. There is
no justification for invoking section 48(1)(a) and (c) of the above said rules
and therefore, the petitioners prayed to call for the records pertaining to all
the case pending in the Judicial Magistrate Courts and to quash the same. The
following table would reveal the case details.
3.Heard the learned counsel appearing for the petitioners as well as the
learned Special Government Pleader appearing for the respondent.
4.The learned counsel for the petitioners would submit that the waste
cotton generated during the production of cotton yarn if sold outside market,
the respondent collects fee of Rs.1 for every 100 rupees. The learned counsel
pointed out that when the waste cotton is utilized for further conversion in to
open end yarn from the open end spinning mill on job work basis, the question
of sale does not arise and it does not attract levy of Rs.1 for ever Rs.100/-.
The petitioners have been regularly filing returns and have been paying the levy
but, the respondents have subjecting the above said utilization of waste cotton
for further conversion as outside sale and it is erroneous. The learned counsel
pointed out that the waste cotton is converted into low quality yarn and is
returned back to the Mills and therefore, it would not attract levy. The
learned counsel pointed out that the petitioners are filing return in Form XX on
the job work basis and not for sale.
5.Section 24 of the Tamil Nadu Agricultural Produce Marketing
(Regulation)Act, 1987 deals with levy of fee by market committee. Section 48
deals with penalties and sub section (a) deals with evading payment of any fee
due under the Act and sub Section (c) deals with furnishing false information.
Rules 33(1) deals with levy of fee shall be Rs.1/- (Rupee one only) for every
hundred rupees of the aggregate amount of the notified agricultural produce,
which is bought or sold in the notified market area. Sub clause (2) provides
the fee referred to in sub-rule(1) shall be payable only in respect of first
purchase or sale.
6.The case of the petitioners in all these petitions is that there is no
sale of waste cotton and it is processed on a job work basis and returned back
to the Mills as open end yarn. The petitioners have also filed a delivery
notes under Form XX, which would show not for sale and returned back after
conversion. A chalan under Rule 12(b) of the Central Excise Rules, 2002 is
also filed by the open end division i.e., the mills which are doing the job
work. It is filed to show that the waste cotton was returned back after
conversion. The delivery chalan by the said open end division is also filed to
show that the open end cotton yard was delivered to the petitioners after
conversion. The petitioners have also filed Form IX for monthly transactions.
However, the respondent has sent a notice to the petitioners stating that the
petitioners’ mill have to pay the fee on the waste cotton, which was sent for
job work and they have initiated such proceedings in various case before the
Judicial Magistrate Court.
7.The following are the details of the case pending and the fees payable:
S.NO CRL.OP.NOS PETITIONERS / ACCUSED CC.NOS. FEE PENDING (In Rs.) 01 1436/2007 C.Kandasamy 813/2006 - 02 1437/2007 V.Dhanalakshmi 815/2006 57,664/- 03 1438/2008 P.S.Velusamy 814/2006 1,03,373/- 04 8187/2007 C.Kandasamy 84/2007 52,315/- 05 8237/2007 V.Dhanalakshmi 83/2007 34,284/- 06 8243/2007 K.Indira 85/2007 94,564/- 07 8244/2007 P.S.Velusamy 86/2007 1,08,965/-
8.Under Section 24(1), of the Tamil Nadu Agricultural Produce Marketing
Regulation Act, 1987, the market committee shall levy a fee on any notified
agricultural produce bought or sold in the notified market area. Under Rule 33,
the fee on a notified agricultural produce leviable under sub-section (1) of
section 24 of the Act, shall be Re.1 (Rupee one only) for every hundred rupees
of the aggregate amount of the notified agricultural produce, which is bought or
sold in the notified market area.
9.If the waste cotton is bought or sold in the notified area, it would be
subjected for levy as prescribed. The burden is on the petitioners to prove
that the waste cotton sent for conversion is not bought or sold and it is not
subjected to for levy. The petitioners have produced the Delivery Notes under
Form XX and delivery chalans and a monthly returns to show that the waste cotton
has been sent for conversion into open end yarn and they have received back
after conversion and in my considered view, this transaction will not come under
the definition “the produce bought or sold” and therefore, will not attract levy
of fee.
10.The levy payable is only on the produce bought or sold in the notified
area. If the waste cotton is sent out of the premises of the mills for a
conversion on job basis into open end yarn and is received back after such
conversion, there is no sale or purchase to attract the levy under Section
24(1), of the Tamil Nadu Agricultural Produce Marketing Regulation Act, 1987,.
11.Therefore, in the light of the foregoing discussion, I am of the
considered view that the transaction of waste cotton being subjected for
conversion on a job work basis with different mill and returned back to the
Mills as open end yard and there is no actual sale or purchase took place during
the transaction to attract levy. Therefore, the prosecution launched by the
respondent is without any basis and it is abuse of process of law. Therefore,
to meet the ends of justice, it is fit case to be interfered with.
12.In the result, the petitions are allowed and the Calender Cases in
C.C.Nos.813, 815, 814, of 2006, respectively in Crl.O.P.Nos.1436, 1437, 1438 of
2007, pending on the file of the learned Judicial Magistrate No.II, Dindigul,
and Calender Cases in C.C.Nos.84,83,85,86 of 2007 respectively in
Crl.O.P.(MD)Nos.8187, 8237, 8243, 8244, of 2007, pending on the file of the
learned Judicial Munsif-cum-Judicial Magistrate, Vedasundur, are quashed.
Consequently, connected miscellaneous petitions are closed.
MPK
To
1.The Superintendent
Regulated Market
Begambur (Post)
Dindigul Market Committee
Dindigul – 2.
2.The Judicial Magistrate No.II,
Dindigul.
3.The District Munsif-cum-Judicial Magistrate,
Vedasandur.