PETITIONER:
KRISHI UTPADAN MANDI SAMITI KANPUR, ETC.
Vs.
RESPONDENT:
GANGA DAL MILL AND CO. AND ORS. ETC.
DATE OF JUDGMENT25/09/1984
BENCH:
DESAI, D.A.
BENCH:
DESAI, D.A.
ERADI, V. BALAKRISHNA (J)
KHALID, V. (J)
CITATION:
1984 AIR 1870 1985 SCR (1) 787
1984 SCC (4) 516 1984 SCALE (2)518
ACT:
U.P. Krishi Utpadan Mandi Adhiniyam 1964, Secs. 2 (a)
and 2 (t) & State Government Notification dated January 20,
1982.
Legume' notified-'Specified agricultural Produce-Dwi
Daliya Utpadan-Whether comprehends both the whole grain of
legumes and its split part that is dal.
Words and Phrases 'Legume'-'Dwi Daliya Utpadan'-'Such
items of produce of agriculture as are specified in the
Schedule'- Meaning of Secs. 2 (a) and 2 (t) U.P. Krishi
Utpadan Mandi Adhiniyam 1964.
Practice and Procedure: Disputed question of fact-
Decision by Supreme Court-When permissible.
HEADNOTE:
The Appellant-Market Committee levied market fee on the
transaction of sale of dal of various legumes by the
respondents, on the ground that they were 'specified
agricultural produce' and the transactions of sale in
respect of them by the respondents in the Market Area would
be exigible to the levy of market fee.
The respondents opposed the aforesaid levy contending
that they were manufacturing in their factory dal from
various legumes and therefore, not only they were not
producers of agricultural commodities, but in view of the
description of legumes set out in the Schedule of the U.P.
Krishi Utpadan Mandi Adhiniyam 1964, the dal of such legumes
in the Processed form was not a specified agricultural
produce and therefore, a transaction of sale in respect of
them at the hands of the respondents even if it takes place
in the Market Area would not permit the Market Committee to
levy market fee on such transaction and that they were not
liable to buy the same. It was further contended that unless
the agricultural produce specified in the Schedule to the
Act was notified as a specified agricultural produce in
respect of a particular Market Area, the Market Committee
having jurisdiction in the Market Area would not be entitled
to levy market fee on the transaction of sale of such
agricultural produce.
The respondents approached the High Court by filing
writ petitions under Art. 226 contending that the Market
Committee continue to levy fee on the transaction of dal and
that it had no authority to do so.
788
The High Court held that lengume in its split form was not
the same thing as legume specified in the Schedule and
therefore, in the absence of a specification, dal of any of
the legumes enumerated in the Schedule cannot be said to be
specified agricultural produce and therefore, any
transaction of sale in respect of them was not exigible to
the levy of market fee.
During the pendency of the aforesaid writ petitions the
State Government issued in exercise of the power conferred
by Sec. 4A of the Act, a notification dated 20th January,
1982 which substituted the split form of legume for the
legume whole grain as specified agricultural produce.
After the issuance of the aforesaid notification, a
fresh batch of writ petitions were filed challenging both
the validity of the notification as also the eligibility of
the Market Committee to levy market fee on the transaction
of sale in respect of dal of legumes. It was contended in
the writ petitions that merely amending or adding to the
list of agricultural produce set out in the Schedule by
itself without any thing more would not enable the Market
Committee to levy market fee on the sale of such
agricultural produce because before levying market fee the
agricultural produce has to be notified as specified
agricultural produce by issuing either a notification under
Sec. 6 or addition or alteration in exercise of the power
under Sec. 8 of the Act. It was further contended that after
the amendment of the Schedule by the impugned notification,
fresh notification either under Sec 6 or Sec. 8 having not
been issued, the agricultural produce introduced in the
Schedule namely, dal of various legumes have not become
specified agricultural produce and therefore any sale in
respect of such agricultural produce even in the Market Area
will not enable the market Committee to levy market fee nor
would it oblige persons or parties to the transaction of
sale to pay the same.
The aforesaid contentions found favour with the High
Court which allowed the writ petitions and quashed the
notice issued by the Market Committee raising the demand for
market fee. It further held that till the agricultural
produce under the heading 'II Legumes' set out in the
Schedule since the amendment of January 20, 1982 are
notified as specified agricultural produce, the Market
Committee was not entitled to levy and collect market fee on
the transaction of sale of such agricultural produce.
In the appeals to this Court, on the question : whether
legume, whole grain were notified as a specified
agricultural produce within the meaning of the expression in
Sec. 2 (t) of the U.P. Krishi Utpadan Mandi Adhiniyam 1964
would also comprehend its split folds or parts, commercially
called dal so as to enable the Mandi Samiti to levy market
fee under Sec. 17 of the Act on the transaction of sale of
dal of legumes specified in the Schedule to the Act.
Allowing the Appeals:
^
HELD : 1. The High Court was in error in holding that
the legume whole grain as set out in the Schedule does not
include its split form i.e. dal and therefore, no market fee
was leviable on the transaction of sale of legume in split
form. [805D]
789
Rumesh Chandra etc. v. State of U.P. etc., [1980] 3 SCR
109, Kawai Krishna Puri & Anr. v. State of Punjab & Ors.,
[1979] 3 SCR 1217 and State of Gujarat v. Sakarwala
Brothers, [1967] 19 STC 24, referred to.
M/s Ganesh Trading Co. Karnal etc. etc. v. State of
Haryana & Anr. etc., A.I.R. 1974 S.C. 1362 and Babu Ram
Jagdish Kumar & Co. etc. etc. v. State of Punjab & Ors. etc.
etc., [1967] 3 SCR 952, in applicable.
Modi Spinning and Weaving Mills Co. Ltd., Modinagar &
Ors. etc. v. State of U.P. & Anr., [1980] All. L.J. 1137,
reversed.
2. The entries under the heading 'legumes' in the
Schedule of Sec. 2 (a) of the U.P. Krishi Utpadan Mandi
Adhiniyam 1964 as it stood prior to the amendment of January
20, 1982 through the notification issued under Sec 4-A
comprehend both the whole grain of legumes and its split
part that is dal. What was implicit has been made explicit
and therefore no fresh notification under Sec. 8 was
necessary. [798 D-E]
3. It is an indisputable canon of construction that
where an expression is defined in the statute, unless there
is anything repugnant in the subject or context, the
expression has to be construed as having the same meaning
assigned to it in the dictionary clause of the statute.
[798G]
4. The definition of the expression 'agricultural
produce' as set out in Sec. 2 (a) of the Act cannot be
construed by resort to decisions under entirely different
statutes such as the Sales Tax Laws to find out whether the
whole grain and split folds constitute the same product or
two different and independent products commercially so
recognised. Analysing the definition of the expression it
would mean not only those items of produce of agriculture as
specified in the Schedule but will also include the
admixture of two or more of such items as also any such item
in its processed form. [798 F; H]
5. 'Agricultural produce' mean a produce of agriculture
such as Gram as specified in the Schedule and would also
include Gram in its processed form. Therefore, not only Gram
is an agricultural produce but Gram in its processed form is
equally and agricultural produce. [799B]
6. When it is said in the definition 'such items of
produce of agriculture as are specified in the Schedule', it
means that not only all those items of agricultural produce
which are set out in the Schedule will constitute
agricultural produce but also the admixture of two or more
of such items of produce of agriculture as set out in the
Schedule as well as any such items of agriculture produce in
their processed form. [799B-C]
7. Legislative enactments in the State of Uttar Pradesh
are enacted in the Hindi language and its official and
authentic translation in English is primarily simultaneously
published. The notification dated April 11, 1978 specified
the legumes therein enumerated as specified agricultural
produce for various
790
Market Areas. The heading under which various legumes are
enumerated is 'Dwi Daliya Utpadan.' This tongue-twister was
explained to mean that legume itself is Dwi Daliya Utpadan
i.e. the whole grain is made of two folds. Ek daliya grain
is without a fold. Dwi Daliya is a grain composed of two
folds and certainly not many folds. On a strict
construction, the two dals i.e. two parts forming the whole
grain both are comprehended in the expression 'Dwi Daliya
Utpadan'. [799G-H; 800A]
8. While enumerating legumes in the Schedule and
reproduced in the 1978 notification to make them specified
agricultural produce, the farmers intended to include both
the grain as a whole and its split parts the dal. And when
the agricultural produce enumerated in the Schedule such as
Gram including its processed part is reproduced in the
notification as Dwi Daliya Utpadan, the dal of each of the
legumes therein mentioned became specified agricultural
produce. [800D-E]
In the instant case, it cannot be said that the
respondents-factory owners not being agricultural producers
and not being in search of any protection of the Market
Committee could not be subjected to the levy of market fee.
In fact, the primary object of the U.P. Krishi Utpadan Mandi
Adhiniyam 1964 as far as the State of U.P. was concerned was
regulation of sale and purchase of agricultural produce
irrespective of the character of the party to the
transaction save and except that as set out in sub-clauses
(1) to (4) of Sec. 17 (iii) (b). It is not a relevant
consideration whether the factory owners need any protection
but the real question is whether people dealing with them
need protection. [802F-H]
9. Redress of a grievance depending upon deciding a
disputed question of fact cannot be rendered in this Court
when there is want of a pleading in this behalf and want of
a decision by the High Court on the point.
Ramesh Chandra etc. v. State of U.P. etc., [1980] 3 SCR
104, referred to.
Writ Petitions remitted to the High Court for examining
contentions other than those dealt with by this Court.
[807E]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 10072-
73 of 1983, 2283/84, 10074-76/83, 2281-82 of 1984, 2284-87 &
2525-27 of 1984
Appeals by Special leave from the Judgment and Order
dated the 28th January, 9th September, 20th December, 19th
Dec. 1983 & 23rd February, 28th March, 1984 of the Allahabad
High Court in C.M.W. Nos. 4275, 4523, 10343, 10228 of 1981,
6758/83, 2066/81, 12388, 12785, 12400, 12874, 1470, 6681,
1490 of 1983, 68 & 1475 of 1984.
791
A. K. Sen, R.P. Bhatt, E. C. Agarwala & V.K. Pandita
for the Appellants.
Dr. Y.S. Chitale, Y.K. Jain and P.R. Agarwala for the
Respondents in C.A. Nos. 10072-73/84.
F.S. Nariman and D.K. Garg for Respondents in CAs.
2286, 3919 & 5342/84.
Shanti Bhushan and Pankaj Kalra for Respondent in CA.
2283/84.
S.N. Kacker, R.K. Jain, Suman Kapur, Ms. Sangeeta
Agarwal and P.K. Jain, for Respondents in CA. 10076/84.
N.C. Talukdar and Ms. Maya Rao for RR. in CA. 2581 of
1984.
Sudama Jha and Ms. Maya Rao for RR. in CA. 2525/84.
H.K. Puri for Respondent in CAs. 10074-75/83.
Mrs. Sobha Dikshit for the State of U.P.
The Judgment of the Court was delivered by
DESAI, J. Whether the whole includes the parts is the
core question. Whether legume, whole grain, when notified as
a ‘specified agricultural produce’ within the meaning of the
expression in Sec. 2(t) of the U.P. Krishi Utpadan Mandi
Adhiniyam, 1964 (‘Act’ for short) would also comprehend its
split folds or parts, commercially called dal so as to
enable Mandi Samiti (Market Committee for convenience of
reference) to levy market fee under Sec. 17 of the Act on
the transaction of sale of dal of legumes specified in the
schedule to the Act, is the narrow question that falls to be
determined in this group of appeals.
Appellant Market Committee levied market fee on the
transaction of sale of dal of various legumes by the
respondents, asserting that they were specified agricultural
produce and the transactions of sale in respect of them by
the respondents in the Market Area
792
would be exigible to the levy of market fee. The respondents
contended that they were manufacturing in their factory dal
from various legumes and therefore, not only they were not
producers of agricultural commodity but in view of the
description of legumes set out in the Schedule, the dal of
such legumes in the processed form is not a specified
agricultural produce and therefore, a transaction of sale in
respect of them at the hands of the respondents even if it
takes place in the Market Area would not permit the
appellant to levy market fee on such transaction and they
were not liable to pay the same. The respondents contend
that unless the agricultural produce specified in the
Schedule to the Act is notified as a specified agricultural
produce in respect of a particular Market Area, the Market
Committee having jurisdiction in the Market Area will not be
entitled to levy market fee on the transaction of sale of
such agricultural produce. In short they say that even if
legumes set out in the Schedule are specified agricultural
produce, the dal processed therefrom in the factory could
not become specified agricultural produce unless it is so
specified and therefore, the Market Committee had no
authority to levy market fee on the transaction of sale of
dal. The respondents approached the High Court of Allahabad
by filing writ petitions under Art. 226 of the Constitution
raising myriad contentions including the one as herein set
out.
The High Court by its judgment dated January 28, 1983
held that legume in its split form was not the same thing as
legume specified in the Schedule and therefore, in the
absence of a specification, dal of any of the legumes
enumerated in the Schedule cannot be said to be specified
agricultural produce and therefore, any transaction of sale
in respect of them was not exigible to the levy of market
fee. In reaching this conclusion, the High Court took note
of the fact that apart from anything else the subsequent
conduct of the Government of U.P. in issuing Notification
No. 383/12-5-600 (401)/81 dated January 20, 1982
substituting the entry under the heading ‘II Legumes’ a
description in the bracket against the name of each legume
(Saboot Aur Dala Hua) dispelled doubt, if any, lingering on
the subject.
During the pendency of the writ petitions in the High
Court, it appears that the Govt. of U.P. probably out of
panic or as contended before us out of abundant caution
issued in exercise of the power conferred by Sec. 4A of the
Act the Notification No. 383/12-
793
5-600(401)/81 dated January 20, 1982 which reads as
under:
“In exercise of the powers conferred upon him under
Section 4A of the U.P. Krishi Utpadan Mandi Adhiniyam,
1964 (U.P. Act No. 25 of 1964) the Governor is hereby
pleased to notify that with effect from the date of
publication in gazette of this Notification, in place
of items mentioned under column (1) under the Heading
(legume) in the Schedule of Section 2(a) the following
items shall be substituted, namely-
Legumes Amended Krishi Utpadan Legume
1. Chana 1. Chana (Saboot Aur Dala Hua)
2. Matar 2. Matar (Saboot Aur Dali Hui)
3. Arhar 3. Arhar (Saboot Aur Dali Hui)
4. Urad 4. Urad (Saboot Aur Dali Hui)
5. Moong 5. Moong (Saboot Aur Dali Hui)
6. Masoor 6. Masoor (Saboot Aur Dali Hui)
7. Lobhia (seeds) 7. Lobhia (Saboot Aur Dali Hui)
8. Soyabeen 8. Soyabeen
9. Khosari 9. Khosari (Saboot Aur Dali Hui)
10. Sanai (seeds) 10. Sanai (seeds)
11. Dhencha (seeds) 11. Dhencha (seeds)
12. Gwar 12. Gwar
13. Moth 13. Moth (Saboot Aur Dali Hui)
14. Kulthi 14. Kulthi.”
After taking note of this notification, the High Court
observed that by the amendment of the relevant part of the
Schedule to the Act, the Government recognised and almost
admitted that legumes whole and legumes split two different
commodities and as now by the notification both have become
specified agricultural produce, earlier only the legume
whole grain and not in the split form was the specified
agricultural produce and therefore, till the issue of the
notification the Market Committee was not entitled to levy
market fee on the transaction of sale of dal of various
legumes.
After the notification dated January 20, 1982 was
issued, a fresh batch of writ petitions were filed
challenging both the validity of the notification as also
the eligibility of the Market Committee to levy
794
market fee on the transaction of sale in respect of dal of
legumes. It was contended that merely amending or adding to
the list of agricultural produce set out in the Schedule by
itself without anything more would not enable the Market
Committee to levy market fee on the sale of such
agricultural produce because before levying market fee the
agricultural produce has to be notified as specified
agricultural produce by issuing either a notification under
Sec. 6 or addition or alteration in exercise of power under
Sec. 8 of the Act. It was contended that after the amendment
of the Schedule by the impugned notification fresh
notification either under Sec. 6 or Sec. 8 having not been
issued the agricultural produce introduced in the Schedule,
namely, dal of various legumes have not become specified
agricultural produce since the amendment of the Schedule and
therefore, any sale in respect of such agricultural produce
even in the Market Area will not enable the Market Committee
to levy market fee nor would it oblige persons or parties to
the transaction of sale to pay the same. This contention
equally found favour with the High Court. It was held that
till the agricultural produce under the heading ‘II Legumes’
set out in the Schedule since the amendment of January 20,
1982 are notified as specified agricultural produce, the
Market Committee was not entitled to levy and collect market
fee on the transaction of sale of such agricultural produce.
The High Court accordingly allowed the petitions and quashed
the notice issued by the Market Committee raising the demand
for market fee.
Hence these appeals by special leave.
If the contention raised on behalf of the appellant in
the first batch of appeals is accepted, the judgment of the
High Court in the second batch of appeals will have to be
quashed and set aside without anything more. In view of this
inter-connection between the two batches of appeals, they
were heard together though one after the other and are being
disposed of by this common judgment.
To appreciate the very narrow contention arising in
these appeals, a glance at the relevant provisions of the
Act is indispensable.
The Act was enacted as its long title shows ‘to provide
for the regulation of sale and purchase of agricultural
produce and for the establishment, superintendence and
control of markets therefore in
795
Uttar Pradesh.’ ‘Agricultural produce’ is defined in Sec.
2(a) as under:
“”agricultural produce” means such items of
produce of agriculture, horticulture, viticulture,
apiculture, sericulture, pisciculture, animal husbandry
or forest as are specified in the Schedule, and
includes admixture of two or more of such items, and
also includes any such item in processed form, and
further includes gur, rab, shakkar, khandsari and
jaggery;”
‘Market Area’ is defined in Sec. 2(k) to mean ‘an area
notified as such under Section 6, or as modified under
Section 8.’ ‘Specified agricultural produce’ is defined in
Sec. 2(t) to mean ‘agricultural produce specified in the
notification under Sec. 6 or as modified under Section 8.’
‘Sub-Market Yard’ is defined in Sec. 2(w) to mean ‘a portion
of a Market Area, declared as such under Section 7.’ Sec. 4-
A which was introduced in the Act by U.P. Act 10 of 1970
conferred power on the State Govt. to amend the Schedule. It
reads as under:
“4-A. The State Government may by notification in
the Gazette, add to, amend or omit any of the items of
agricultural produce specified in the Schedule, and
thereupon the Schedule shall stand amended
accordingly.”
Sec. 5 provides that a declaration of intention to
regulate and control sale and purchase of agricultural
produce in any area. Where the State Government is of the
opinion that it is necessary or expedient in the public
interest to regulate the sale and purchase of any
agricultural produce in any area, and for that purpose to
declare that area as a Market Area it may, by notification
in the Gazette, and in such other manner as may be
prescribed, declare its intention so to do, and invite
objections against the proposed declaration. Sec. 6 provides
for the declaration of Market Area in respect of
agricultural produce set out in the notification issued
under Sec. 5 after considering the objections. A combined
reading of Section 5 and 6 would show that in order to be an
effective declaration, the notification must set out the
Market Area that is its geographical boundaries as also the
agricultural produce in respect of which the Market Area is
so declared. Sec. 7 confers power to carve out Market Yard
and Sub-Market Yards in a Market Area.
796
Sec. 8 confers power on the State Government to alter Market
Area as also modification of the list of agricultural
produce in respect of each Market Area. If a change in the
geographical limits of a Market Area becomes necessary or
addition or omission in the list of agricultural produce in
respect of a Market Area is desired, Sec. 8 confers power on
the State Government by a notification to that effect in the
Gazette to so alter the Market Area or modify the list of
agricultural produce. Every agricultural produce set out in
notification declaring a Market Area under Sec. 6 or
alterations made under Sec. 8 becomes specified agricultural
produce for the purposes of the Act. Sec. 9 sets out the
effects of a declaration of a Market Area, the principal
being that no one within the Market Area can set up,
establish or continue or allowed to be set up, established
or continue, any place for the sale-purchase, storage etc.
of the specified agricultural produce, except under and in
accordance with the conditions of a licence granted by the
Committee. Sub-sec. (2) confers power on the Market
Committee to give licence to carry on business as a trader
etc. in the Principal Market Yard or Sub-Market Yard. Sec.
17 enumerates the powers of the Market Committee which has
to be set up for each Market Area as required by Sec. 12,
which inter alia includes the power to levy and collect
market fee in the circumstances therein mentioned. The
relevant portion of it reads as under:
“17. A Committee shall, for the Purposes of the Act,
have the power to-
………………………………………..
(iii) levy and collect:
(a)……………………………………
(b) 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
per centum and not more than one and half
percentum of the price of the agricultural produce
so sold, as the State Government may specify by
notification, and such fee shall be realised in
the following manner:-
(1) If the produce is sold through a commission agent
the commission agent may realise the market fee
from the purchaser and shall be liable to pay the
same to the Committee
797
if the produce is purchased directly by a trader
from a producer the trader shall be liable to pay
the market fee to the Committee;
(3) if 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;
Provided that no market fee shall be levied or
collected on the retail sale of any specified
agricultural produce where such sale is made to the
consumer;…………”
The schedule appended to the Act enumerates various
species of agricultural produce as required by Sec. (2) (a).
Under the heading “II Legumes’ in the Schedule 14 different
legumes such as (1) Gram (2) Peas (3) Arhar (4) Urad etc.
are specified for the purpose of Sec. 2(a) and Sec. 4A.
On the date on which the first batch of writ petitions
were filed in the High Court, the relevant notification
under Sec. 5 read with Sec. 6 provided that with effect from
May 1, 1978 the agricultural produce mention in the Schedule
‘kha’ shall be included in the list of agricultural produce
of the Market Area mentioned in Schedule ‘ka’. Amongst
others at plecitum (2) following entries are to be found:
“(2) Dwi Daliya Utpadan:
(1) Channa (2) Matar (3) Arhar (4) Urad (5) Moong
(6) Masoor (7) Lobhia (seed) (8) Soyabeen (9)
Sanai (seed) (10) Dhencha (seed) (11) Ganwar.”
set out in the Schedule which became specified agricultural
produce by being included in the notification dated April
11, 1978 could only be legume whole grain and not its split
portions which is the end product of a manufacturing
process. It was said that the dal which is obtained by
applying a process of manufacture to the
798
whole grain of legumes is neither an agricultural produce
and at any rate it is not a specified agricultural produce.
The High Court charted an easy course by merely referring to
the subsequent notification dated January 20, 1982 which
substituted entry under heading ‘II Legumes’ in the Schedule
by putting into bracket words ‘Saboot Aur Dala Hua’ and
concluded that if an amendment by a notification became
necessary to bring split folds of legume in the Schedule, by
necessary implication they could not have been included or
deemed ever to have been included in the Schedule “II
Legumes’ prior to the amendment and therefore market fee
could not be levied on the transaction of sale of split
folds of legume dal in a Market Area. We propose for the
time being to ignore this notification and concentrate on
the entry in the Schedule as it stood prior to the
notification dated January 20, 1982 and the definition of
the expression ‘agricultural produce’ to ascertain whether
any of the enumerated legumes in the condition of whole
grain or in the split folds were specified agricultural
produce comprehended with the terminological exactitude
described as Gram, Peas, Arhar Urad etc. In other words, if
Gram, Peas, Arhar Urad etc. is mentioned as specified
agricultural produce in the notification either under Sec. 5
read with Sec. 6 or under Sec. 8, would it mean only its
whole grain or would it also taken in the product known as
dal obtained by splitting the whole grain into its two
folds.
To resolve this controversy, one will have to seek
light from the definition of expression ‘agricultural
produce’ as set out in Sec. 2(a) of the Act and not by a
resort to decisions under entirely different statutes such
as the Sales Tax laws to find out whether the whole grain
and its split folds constitute the same product or two
different and independent products commercially so
recognised. It is an indisputable can-on of construction
that where an expression is defined in the statute, unless
there is anything repugnant in the subject or context, the
expression has to be construed as having the same meaning
assigned to it in the dictionary clause of the statute. This
canon of construction is to well-recognised to necessitate
any reference to precedent.
Analysing the definition of the expression
‘agricultural produce’, it would mean not only those items
of produce of agriculture as are specified in the Schedule,
but will also include the admixture of two or more of such
items as also any such item in its
799
processed form. Let us re-write the definition by
substituting one of the items in the Schedule to make
explicit what is implicit therein. Agricultural produce’
means a produce of agriculture such as Gram as specified in
the Schedule and would also include Gram in its processed
form. Therefore, not only Gram is an agricultural produce
but Gram in its processed form is equally an agricultural
produce. When it is said in the definition ‘such items of
produce of agriculture as are specified in the Schedule, it
means that not only all those items of agricultural produce
which are set out in the Schedule will constitute
agricultural produce but also the admixture of two or more
of such items of produce of agriculture as set out in the
Schedule as well as any such items of agriculture produce in
their processed form. Suppose a producer sells neither Gram
nor Peas each by itself but mixes Gram and Peas, according
to the contention canvassed on behalf of the respondents,
this mixture would be not an agricultural produce. The
contention can be negatived by referring to the definition
which says agricultural produce means such items of produce
of agriculture (omitting the words which are not necessary
for the present purpose)… as are specified in the Schedule
such as Gram and Peas as also an admixture of two or more of
such items i.e. admixture of Gram and Peas. A further step
can be taken as flowing from the definition itself.
Agricultural produce means such items of agricultural
produce namely, Gram as specified in the Schedule and it
shall include any such items i.e. Gram in its processed
form. Even the respondents did not contend, on the contrary
it was the sheet anchor of their submission that a split
legume is obtained by a manufacturing process of whole grain
of legumes, ‘Saboot’ as it is now described, and that dal i.
e. the whole grain split into two folds is its processed
form acquired by manufacturing process. Even on their own
submission dal of legume enumerated in the Schedule is any
agricultural produce.
This very conclusion can be reached by a slightly
different route. As is well-known, the legislative
enactments in the State of U.P. are enacted primarily in
Hindi language and its official and authentic translation in
English is simultaneously published. Bearing this in mind,
we turn to the notification dated April 11, 1978 specifying
legumes therein enumerated as specified agricultural produce
for various Market Areas. The heading under which various
legumes are enumerated is Dwi Daliya Utpadan.’ This tongue
twister was explained to us to mean that legume itself is
Dwi Daliya
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Utpadan i.e. the whole grain is made of two folds. Ek daliya
grain is without a fold. Dwi Daliya is a grain composed of
two folds and certainly not many folds, Concise Oxford
Dictionary specifies the meaning of legume to be fruit,
edible part pode, of leguminous plant; vegetable used for
food, ‘and leguminous’ to mean’ like of the botanical family
of pulse. And in common parlance ‘pulse’ connotes legume and
denotes dal of legume. Reverting however, to the heading
under which legumes are enumerated in 1978 notification, it
must be confessed that it clearly connotes the meaning to be
given to the whole grain and denotes dal i.e. split folds as
specified agricultural produce. The Hindi protagonists used
the expression ‘Dwi Dalia Utpadan’ meaning thereby double
folded grain called Gram, Peas, Arhar, moong, etc. On a
strict construction, the two dals i.e. two parts forming the
whole grain both are comprehended in the expression ‘Dwi
Dalia Utpadan’. Therefore, it is crystal clear that while
enumerating legumes in the Schedule and reproduced in the
1978 notification to make them specified agricultural
produce, the framers intended to include both the grain as a
whole and its splits parts the dal. And when the
agricultural produce enumerated in the Schedule such as Gram
including its processed part is reproduced in the
notification as Dwi Dalia Utpadan, the dal of each of the
legumes therein mentioned became specified agricultural
produce.
It was however, urged that if the legume in the split
form is the same as legume as a whole grain, the Market
Committee would not be entitled to levy any market fee on
the transaction of sale of legume in split form because
market fee already having been once levied in the form of
the whole grain, a second levy on the product is not
contemplated by the Act. Reference in this connection was
made to the decision in Ramesh Chandra etc. v. State of U.P.
etc. in which levy of market fee under the Act by various
Market Committee was challenged on diverse grounds, on such
being that if market fee is paid on the transaction of sale
of paddy though rice is separately enumerated in the
Schedule, no market fee could be livied on the transaction
of sale of rice. This Court has observed at page 130 that,
if paddy is purchased in a particular market area by a rice
miller and the same paddy is converted into rice and sold
then the rice miller will be liable to pay market fee on
801
his purchase of paddy from the agriculturist-producer under
sub-clause (2) of section 17 (iii) (b). He cannot be asked
to pay market fee over again under sub-clause (3) in
relation to the transaction of rice. Nor will it be open to
the Market Committee to choose between either of the two in
the example just given above. Market fee has to be levied
and collected in relation to the transaction of paddy alone.
Reliance was also placed on the observation at page 132
where the court observed ‘if Catechu is a product of khar
trees by some processing, as prima facie it appears to us to
be so, then it is plain that market fee can be charged only
on the purchase of khar wood and not on the sale of
Catechu.’ Reliance was also placed on M/s Ashok Industries
and Ors v. State of Bihar and Ors(1) where similar view
appears to have been taken. We fail to see the significance
of this submission in these appeals because this contention
was not canvassed before the High Court and the respondents
merely invited the High Court to decide that dal of legumes
enumerated in the Schedule are not specified agricultural
produce. If the respondents are entitled to any relief on
the view of the matter taken in Ramesh Chandra’s case they
may obtain appropriate relief, but as has been rightly
observed by this Court that redress of the grievance in this
behalf depending upon deciding a disputed question of fact
cannot be rendered here for want of pleading in this behalf
and for want of a decision by the High Court on this point.
But on this account it is not possible to accept the
submission of the respondent that legume in the split form
is not comprehended in the Schedule to the Act as well as in
the notification dated April 11, 1978.
Mr. Shanti Bhushan for some of the respondents urged
that the respondents have set up their factory for
processing whole grain of legumes into its split folds and
the commodity known as dal is a well recognised identifiable
commercial commodity distinct from the legume whole grain
from which it is derived by a manufacturing process and as
the Act was enacted for protecting the interest of producers
of agricultural produce, the factory owners being in no need
of such protection cannot be subjected to the levy of market
fee on the transaction of sale of legume in split form. The
submission does not commend to us because it proceeds on an
erroneous assumption that the Act was primarily enacted for
the protection of producers of scheduled agricultural
produce. In fact, as
802
pointed out earlier, the Act was enacted primarily for the
regulation of sale and purchase of agricultural produce and
for the establishment, superintendence and control of
markets therefor. In the Statement of objects and reasons
accompanying the Act, it is in terms stated that the
proposed measure to regulate the market in the State has
been designed with a view to achieving the objects therein
enumerated, only one of them being to ensure that the
agricultural producer has his say in the utilisation of
market funds for the improvement of the market as a whole.
Agricultural produce has nowhere been mentioned in the nine
objects set out therein except as mentioned above. On the
other hand, the Constitution Bench in Ramesh Chandra’s case
noticed that the ‘Act was enacted for the development of new
market areas and for efficient data collection and
processing of arrivals in the Mandis to enable the World
Bank to give a substantial help for the establishment of
various markets in the State of U.P.’ The Act was compared
with similar statutes in force in different States and a
distinguishing feature was pointed out that in other States
the Act is mainly meant to protect the agriculturist
producer from being exploited when he comes to the Mandis
for selling his agricultural produce. This Court observed in
agreement with the High Court that certain other
transactions also have been roped in the levy of market fee
in which both sides are traders and neither side is an
agriculturist and this has been done for the effective
implementation of the scheme of establishments of markets
mainly for the benefit of producers. Approving the
observation in Kewal Krishna Puri & Anr v. State of Punjab &
Ors.(1) the Court further observed that the fee realised
from the payer has by and large to be spent for his special
benefits and for the benefit of other persons connected with
the transaction of purchase and sale in various Mandis.
Therefore, it cannot be said that the respondents-factory
owners not being agricultural producers and not being in
search of any protection of the Market Committee could not
be subjected to the levy of market fee. In fact, the primary
object of the Act as far as the State of U.P. is concerned
is regulation of sale and purchase of agricultural produce
irrespective of the character of the party to the
transaction save and except that character is relevant as
set out in sub-clauses (1) to (4) of Sec. 17 (iii) (b). It
is not a relevant consideration whether the factory owners
need any protection but the real question is whether people
dealing with them need pro-
803
tection. Viewed from either angle, we find no merit in the
submission.
Dr. Y.S. Chitale referred to M/s Ganesh Trading Co.
Karnal etc. etc. v. State of Haryana & Anr. etc., Babu Ram
Jagdish Kumar and Co. etc. etc. v. State of Punjab & Ors.
etc. etc. State of Karnataka v. B Raghurama Shetty etc. and
M/s Laxmi Chand Badri Narain v. The Commissioner of sales
Tax. M.P. and urged that dehusked paddy which is rice has
been held to be not the same or identical goods but to
distinct commercially known commodities and they are
separately enumerated and therefore, one does not include
the other. In all the four judgments, the question arose
under the relevant Sales Tax law. The contention raised was
whether paddy and rice can be considered as identical goods
for the purpose of imposition of sales tax ? Under the
relevant Sale Tax Act exemption from payment of sales tax is
provided if the very paddy in respect of which purchase tax
was levied was sold and not if that paddy is converted into
rice and sold. The contention was that paddy and rice are
identical goods and therefore, when the law grants an
exemption in respect of paddy that exemption is also
available to rice. It was urged that rice is nothing but
dehusked paddy and when the paddy is dehusked, there is no
change in the identity of the goods. This contention was
negatived in all the four cases depending upon provisions of
the relevant Sales Tax Law. It was however said that the
ratio of the decision would assist us in understanding what
is the processed form of a particular agricultural produce.
Approaching the matter from this angle, it was urged that
though rice is produced out of paddy, this Court held that
it is not true to say that paddy continued to be paddy even
after dehusking, and they are two different things in
ordinary parlance. This ratio cannot assist us at all for a
very good reason. It was not pointed out to us that the
various provisions of the relevant Sales Tax Law which came
for consideration of this Court in those four decisions did
or did not have a definition such as we have of
‘agricultural produce’ in Sec. 2(a) of the Act.
In this connection, however specific reliance was
placed on the decision of Modi Spinning and Weaving Mills
Co. Ltd. Modi-
804
nagar & Ors. etc. v. State of U.P. & Anr. wherein in the
context of the Act, it was held that ‘cotton ginned and
unginned, ‘and therefore, it was held that no market fee was
leviable on the transaction of sale of cotton waste. In
reaching this conclusion, a Division Bench of the Allahabad
High Court held that if ‘cotton ginned and unginned’ was
specified as an agricultural produce yet cotton waste which
is a processed form of cotton was not so specified, the
Legislature indicated not to include the same in the
specified agricultural produce. The Court posed to itself a
question: whether cotton waste is processed from of cotton
while posing to itself another question: is cotton processed
for manufacture of cotton waste ? The Court than proceeded
to observe that in Sec. 2(b) of the Cotton Ginning and
Pressing Factories Act, 1925 ‘cotton’ is defined as “cotton
ginned or unginned or cotton waste”. While in Sec. 2(b) of
the Cotton Transport Act, 1923, ‘cotton’ has been defined to
mean every kind of unmanufactured cotton, ginned and
unginned cotton, cotton waste and cotton seed. After
referring to these definitions, the Court held that cotton
waste is not included in ‘cotton ginned or unginned.’ In our
opinion, the court has strained the language to reach an
unsustainable conclusion, holding that cotton waste is not
the processed form of cotton but it is a by-product quite
different form of cotton though containing cotton fibre
which cannot be used as ordinary cotton. As its name
indicates, cotton waste appears to be droppings, stripping
and other waste product while ginning cotton. It cannot be
said to be a bye-product of cotton but it is cotton none-
the-less minus the removed seed. In other words it is
residue of ginned cotton. We therefore, find it difficult to
agree with the view of the High Court that cotton waste is
not comprehended in the item ‘cotton ginned and unginned.’
Lastly a reference was made to the State of Gujarat v.
Sakarwala Brothers.(2) The question that came up for
consideration before this Court was: whether Sales tax was
payable in respect of sales of patasa, narda and alchidana?
The contention arose in the context of the provision
contained in Sec. 5(1) of the Bombay Sales Tax Act, 1959 in
its application to the State of Gujarat which provided that
‘notwithstanding anything contained in the Act, but subject
to the conditions or exceptions (if any) set out against
each of the goods specified in column 3 of Schedule A, no
tax shall be
805
payable on the sales or purchases of any goods specified in
the Schedule.’ The relevant entry is the ‘sugar as defined
in Item No. 8 of the First Schedule to the Central Excise
and Salt Act, 1944.’ Affirming the decision of the Gujarat
High Court this Court held that patasa, harda and alchidana
were exempt from any tax payable under the Bombay Sales Tax
Act, 1959 because they are comprehended in the expression
‘sugar’ in the entry granting exemption. This conclusion was
reached holding that the expression ‘sugar’ in Entry 47
granting exemption will comprehend within its ambit all
forms of sugar that is to say, sugar of any shape or
texture, colour or density and by whatever name it is
called. If this line of reasoning is adopted, legume whole
grain will necessary comprehend both folds of the whole
grain. But we do not propose to rest our decision on the
approach to various commodities commercially recognised
distinct under relevant Sales Tax Law.
To sum up, for the reasons herein stated, the High
Court was in error in holding that the legume whole grain as
set out in the Schedule does not include its split form i,e.
dal and therefore, no market fee was leviable on the
transaction of sale of legume in split form. This conclusion
disposes of first batch of appeals arising from writ
petitions filed prior to the issue of notification dated
January 20, 1982.
In the other batch of petitions which came to be filed
after the notification of January 20, 1982, Mr. F.S.
Nariman, learned counsel appearing in C.A. No. 2286/84 urged
that even if under Sec. 4-A of the Act, the State Government
had the power to add to, amend or omit any of the items of
agricultural produce specified in the Schedule and if by the
notification dated January 20, 1982, the State Government
purported to substitute the Schedule under the Heading
‘legumes’ by putting into bracket by the side of each
enumerated legume ‘Saboot or Dala Hua’, that by itself would
not make such agricultural produce ‘specified agricultural
produce’. It was urged and in our opinion, rightly that
before a transaction of sale, as set out in Sec. 17(iii)(b)
of the Act, of an agricultural produce becomes exigible for
the levy of market fee, the agricultural produce has to be a
‘specified agricultural produce’ and that can be done by an
appropriate notification under Sec. 5 read with Sec. 6 or
under Sec. 8 of the Act and until that is done the
agricultural produce even if it is so enumerated in the
Schedule does not become ‘specified agricultural produce’
and no market fee can be levied on the transaction of sale
of such agricultural produce. It
806
was urged that for steps have to be taken before an
agricultural produce becomes a ‘specified agricultural
produce’ in respect of a Market Area. Undoubtedly, when in
exercise of powers conferred by Sec. 5 the State Government
publishes its intention to set up a Market Area by a
notification in the Official Gazette, the State Government
is simultaneously under an obligation to specify not only
the Market Area that is its geographical limits or
boundaries but must specify the agricultural produce quay
such Market Area. After inviting objections both in respect
of the Market Area and the agricultural produce, a further
notification is required to be issued under Sec. 6 making
the requisite declaration both in respect of the Market Area
as well as the agricultural produce. When these two steps
are taken, the agricultural produce set out in the
notification issued under Sec. 6 becomes specified
agricultural produce in relation to Market Area notified in
the notification. Sec. 8 confers power to alter the Market
Area or the agricultural produce in respect of the altered
Market Area. When these steps are taken then alone those
agricultural produces enumerated in the notification under
Sec. 6 or under Sec. 8 would assume and acquire the mark or
character of ‘specified agricultural produce,’ on the sale
transaction of which market fee can be levied by the Market
Committee. Proceeding along it was urged that even though a
notification was issued under Sec. 4-A on January 20, 1982
amending the Schedule in respect of legumes, in the absence
of a notification under Sec. 8 making the agricultural
produce so introduced in the Schedule as specified
agricultural produce, those agricultural produces would not
acquire the character of specified agricultural produces
qua-Market Area and therefore, the respondents are not
liable to pay any market fee thereon. If the amended
Schedule introduced by the notification dated January 20,
1982 introduces fresh agricultural produces in the Schedule,
the contention of Mr. Nariman must carry conviction because
it was conceded that a fresh notification under Sec. 8 in
respect of the legumes has not been issued. But the view
which we have taken is that the entries under the heading
‘legumes’ in the Schedule as it stood prior to the amendment
of January 20, 1982 comprehended both the whole grain of
legumes and its split part that is dal. What was implicit
has been made explicit and therefore, no fresh notification
under Sec. 8 was necessary. Therefore, the contention has to
be negatived. As that was the only contention canvassed
before this Court in the second batch of appeals as we find
no merit in it, the second batch of appeals will also have
to be allowed.
807
Lastly, the respondents contended that if the view
taken by the High Court on the question that split grain of
legume, that is dal was not comprehended in the whole grain
of legume as set out in the Schedule and therefore, the same
was not a specified agricultural is held not to be correct
and accordingly the judgment of the High Court would have to
be upset, all the matters may be remitted to the High Court
for disposing of other contentions canvassed on behalf of
the respondents who were petitioners in the High Court as
the High Court declined to examine them, as the writ
petitions were allowed on this one narrow contention which
according to the High Court went to the root of the matter.
Before the High Court, the respondents raised various
contentions. Most of them were repelled by the High Court,
but the petitioners succeeded on the narrow contention as
herein set out. It was said by Mr. Shanti Bhushan referring
to the writ petition in which he appeared that there were
other contentions which the respondents wanted to canvass
but which the High Court declined to examine. It may be that
there might be some other contentions which the respondents
wanted the High Court to examine and the High Court having
held in favour of the respondents on one point may have
declined to examine the same. Therefore, while allowing the
appeals, all the matters are remitted to the High Court. The
High Court may examine contentions other than those which
were dealt with in the judgment from which the present
batches of appeals were preferred. All those contentions
which have been negatived by the High Court and in respect
of each one of them no attempt was made to support the
judgment of the High Court before this Court those
contentions may not be permitted to be reopened. The remand
is limited to those questions which find their place in the
writ petitions and which the High Court declined to examine.
But as the respondents have failed on almost all major
contentions, they need not have the benefit of a
discretionary order of any stay against levy of market fee
any more. With these limitations the matters are remitted to
the High Court.
All the appeals accordingly succeed and are allowed to
the extent herein indicated with costs
N.V.K. Appeals allowed.
808