HIGH COURT OF CHATTISGARH AT BILASPUR
WRIT PETITION C No. 92 of 2008
Mohan Jute Mills Ltd.
...Petitioners
VERSUS
1. State of Chhattisgarh
2. Chhattisgarh Rajya Krishi Vipanan (Mandi) Board, Raipur.
3. Krishi Upaj Mandi Samiti,Jashpur
4. Krishi Upaj Mandi Samiti,Raigarh.
5. Collector, Raigarh, District Raigarh, C.G.
6. Collector, Jashpurnagar, C.G.
! Shri Abhishek Sinha, Advocate for the petitioner
^ Shri Shashank Thakur, Panel Lawyer for the State/respondent
No. 1, 5 and 6.
Shri Y.S.Thakur, Deputy Advocate General for the respondent
No. 2 to 4.
Honble Shri Satish K Agnihotri, J
Dated: 18/10/2008
: Judgement
WRIT PETITION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA
(Passed on 18th day of October, 2008)
1. The petitioner challenges the levying and recovery of
market fee by the respondent No. 2, 3 and 4 on the jute
brought by the petitioner within the market area for
processing and manufacturing of gunny bags.
2. The brief facts, in nutshell are that the petitioner,
who is the manufacturer of gunny bags, purchases jute as raw
materials from other states namely state of West Bengal,
Bihar, Jharkhand and Orrisa. The jute brought within the
market area is subjected to processing and production of
gunny bags.
3. Shri Abhishek Sinha, learned counsel appearing for the
petitioner would submit that the market fee is not payable on
raw materials which are brought within the market area for
manufacturing gunny bags for the purpose of making the same
marketable. Shri Sinha would further submit that the nature
of the jute comes to an end when the jute are processed and
used for the purpose of manufacture of gunny bags. Shri Sinha
relies on a decision of the Hon’ble Supreme Court in the
matter of Orient Paper & Industries Ltd. v. State of M.P. and
Others1 in support of his contention that when the raw
material is used for processing and the end user is
manufacturer, levy of market fee is not attracted.
4. Shri Y.S.Thakur, learned Deputy Advocate General, per
contra would submit that the market fee is leviable fee on
the raw materials. In the present case, though the nature of
the jute changes after manufacturing of gunny bags, but the
basic material of the gunny bags remains the same i.e. jute.
Thus, market fee is leviable under the provisions of
Chhattisgarh Krishi Upaj Mandi Adhiniyam, 1972 (for short
`the Act, 1972).
5. I have heard learned counsel appearing for the parties,
perused the pleadings and documents appended thereto. It is
evident that the power to levy market fee is provided under
section 19 of the Act, 1972, which reads as under:
“19. Power to levy market fee.-[(1) Every
market Committee shall levy market fee –(i) on the sale of notified agricultural produce whether
brought from within the State or from outside the State into
the market area; and(ii) on the notified agriculture produce whether brought from
within the State or from outside the State into the market
areas and used for processing;at such rates as may be fixed by the
State Government from time to time subject to
a minimum rate of fifty paise and a maximum of
two rupees for every one hundred rupees of the
price in the manner prescribed:Provided that no Market Committee
other than the one in whose market area the
notified agricultural produce is brought for
sale or processing by an agriculturist or
trader, as the case may be, for the first time
shall levy such market fee.]
(2) The market fees shall be payable by the
buyer of the notified agricultural produce an
shall not be deducted from the price payable
to the seller:[Provided that where the buyer of a
notified agricultural produce cannot be
identified, all the fees shall be payable by
the persons who may have sold or brought the
produce for sale in the market area:Provided further that in case of
commercial transaction between traders in the
market area, the market fees shall be
collected shall be collected and paid by the
seller]:[Provided further also that no fees
shall be levied upto 31st March, 1990 on such
agricultural produce as may be specified by
the State Government by notification in this
behalf if such produce has been sold outside
the market yard or sub-market yard by an
agriculturist to a co-operative society of
which he is a member.]
[Provided also that for the
Agriculture Produce brought in the market area
for commercial transaction or for processing
the market fee shall be deposited by the buyer
or processor, as the case may be, in the
market committee office within [fourteen] days
if the buyer or processor has not submitted
the permit issued under sub-section (6) of
Section 19].xxx xxx xxx”
6. The Hon’ble Supreme Court in the matter of Orient Paper
& Industries Ltd. (supra), has considered the power to levy
market fee as prescribed under section 19 of this very Act.
Their Lordships, after having defined manufacture, came to
the conclusion that market fee is not payable if the raw
material is used for processing, where the end user is
manufacturer. In the case of Orient Paper & Industries
Ltd.(supra), it was observed as under:
“17. `Manufacture’ is a transformation of an
article, which is commercially different from the
one, which is converted. The essence of
manufacture is the change of one object to
another for the purpose of making it marketable.
The essential point thus is that in manufacture
something is brought into existence, which is
different from that, which originally existed in
the sense that the thing produced is by itself a
commercially different commodity whereas in the
case of processing it is not necessary to produce
a commercially different article.(See M/s.
Saraswati Sugar Mills and others v. Haryana State
Board and others 1992 (1) SCC 418).22. Had it been only that the goods notified are
brought into the market area to be covered by the
second category then the stand of the respondents
would have been acceptable. But the further
condition it must be `used for processing’ shows
that the emphasis is on end-user. In this case
that makes the difference. Therefore, the
appellant is correct in its stand that levy on
the notified agriculture produce being brought
within market area where end-user is manufacture
does not attract levy of market fee.”
7. In view of the foregoing, the question of law involved
in the instant petition is no longer res nova. The facts
involved in the instant case are identical to that of in the
case of Orient Paper & Industries Ltd. (supra).
8. Thus, the petition is allowed, accordingly. No order
asto costs.
JUDGE
