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2006 DIGILAW 1575 (RAJ)

Marudhar Sales Corporation v. State of Rajasthan

2006-05-09

P.S.ASOPA, S.N.JHA

body2006
Honble ASOPA, J.–By this writ petition the petitioner is mainly seeking appropriate writ order or direction to declare that entry of `Ghee under Schedule-I of the Rajasthan Agricultural Produce Markets Act, 1961 (for short `the Act of 1961) for the purpose of levying Mandi fee is illegal being contrary to the aims and object of the Act of 1961 and is further seeking appropriate writ order or direction to quash recovery notices Annexure 12 to Annexure 15 as well as the order passed in the appeal and review by the Director, Agriculture Marketing Department, Jaipur. Although vires of Section 34 of the Act of 1961 has been challenged but no arguments were advanced on the same by the petitioner. (2). In brief the relevant facts of the case are that the petitioner firm is a sole proprietorship firm and is engaged in the business of `Ghee which is manufactured by large industrial dairies and almost all the said industrial units are situated out side the State. The petitioner has stated that the main product is milk powder and `Ghee is bye-product and the same is being manufactured by the aforesaid industrial units, therefore, it would be a industrial product. The petitioner has further averred that they have filed an appeal to the Director under Section 34 of the Act of 1961 which remained undecided and the recovery proceedings were initiated, therefore, they were compelled to file a writ petition which was registered as S.B. Civil Writ Petition No. 4379/93 and the same was disposed of by this Court on 3.8.1993 with another connected writ petition with a direction to them to appear before the Director of the Board on 16.8.1993 and all efforts should be made by the Director to dispose of the appeals on that day. The petitioner has further stated that the Director has not adopted proper procedure, however, ultimately he has disposed of the same on 29.11.96 (Annexure 6) holding that the Mandi fee is leviable on `Ghee and the dealer is not entitled for exemption under Rule 58(4) of the Rajasthan Agricultural Produce Markets Rules, 1961 (for short `the Rules of 1961) because the same is not being used for industrial purpose. The petitioner has also stated that the procedure of recovery without deciding the question as to whether `Ghee is agricultural produce or not, is wholly illegal and even after the said decision on 29.11.96 by the Director, recovery proceedings cannot be initiated under Rule 34 of the Rules of 1961 as an arrear of land revenue. The petitioner has relied on Section 34(2)(b) of the Act of 1961 on the issue that the Director can decide the issue whether a particular item is agricultural product or not or any sum due or not. The petitioner also stated that some of the items have been excluded in the Schedule appended to the Rules of 1961 without any jurisdiction. (3). The respondents have filed interim reply but no final reply has been filed nor anyone appeared on behalf of the respondents to contest the writ petition. However, in the reply it has been stated that `Ghee is being produced by traditional as well as by other methods and it is incorrect on the part of the petitioner to say that the production of `Ghee now a days, is only through industries. It has been further stated by them that it is nowhere provided under the Act of 1961 that if an industrial process is involved in extracting a product, which is an agricultural product, then the same should be taken out from the scheduled items of agricultural produce. They have also stated that merely because a mechanical process is involved, the nature of the product cannot be changed. It is only the quantity which will be on large commercial scale. The respondents have laid emphasis on the word ``animal husbandry product in the definition clause as well as in classified schedule items. (4). The petitioner has filed rejoinder to the interim reply submitted by the respondents and again reiterated the stand taken in the writ petition. However, it has also been submitted that no justification is given by the respondents for including `Ghee in the Schedule as agricultural produce and to exclude some other items i.e. Tea, Paper, Herbs, Ayurvedic products etc. (5). The submission of the counsel for the petitioner is that `Ghee is not agricultural produce, therefore, its inclusion in the Schedule specified under Section 2(1)(1) of the Act of 1961 at item No. 7, is wholly illegal and contrary to aims and object of the Act of 1961. (5). The submission of the counsel for the petitioner is that `Ghee is not agricultural produce, therefore, its inclusion in the Schedule specified under Section 2(1)(1) of the Act of 1961 at item No. 7, is wholly illegal and contrary to aims and object of the Act of 1961. Even if animal husbandry produce is to be included in the Schedule, then also the animal husbandry produce, through manufacturing process, cannot be included. The counsel for the petitioner further submitted that with regard to issuance of notices for recovery of the amount without deciding the issue raised by them before the Director is wholly arbitrary and violative of principles of natural justice and further in the manner in which the issue was decided after the direction of this Court, is equally arbitrary as the copy of the reply submitted by Mandi Samiti has not been supplied to them. The petitioner has relied on Section 34 (2)(b) of the Act of 1961 on the issue that the Director can decide the issue whether a particular item is agricultural product or not or any sum due or not. The petitioner also submitted that some of the items have been excluded in the Schedule, without any justification. The petitioner has filed rejoinder to the interim reply submitted by the respondents and again reiterated the stand taken in the writ petition. However, it has also been submitted that no justification is given by the respondents for including `Ghee in the Schedule as agricultural produce and to exclude some other items i.e. Tea, Paper, Herbs, Ayurvedic products etc. (6). No one has appeared on behalf of the respondents. However, the contents of the interim reply have been taken as their submissions. As per the reply, the submission of the respondents is that `Ghee is being produced by traditional as well as by other methods and simply a manufacturing process is involved. In `Ghee imported by the petitioner from the industries situated out of the State of Rajasthan, the nature of the product will not be changed and the same remained animal husbandry product and there is no illegality in specifying the same as agricultural produce under the head of ``animal husbandry product. (7). We have heard learned counsel for the petitioner, gone through the record of the writ petition and further considered the rival submissions as well as interim reply filed by the respondents. (8). (7). We have heard learned counsel for the petitioner, gone through the record of the writ petition and further considered the rival submissions as well as interim reply filed by the respondents. (8). Before proceeding further, it would be useful to quote some of the relevant Sections of the Rajasthan Agricultural Produce Markets Act, 1961 to decide the present controversy:- 2. Definitions - (1) In this Act, unless the subject of context otherwise requires,- (i) ``agricultural produce includes all produce whether of agriculture, horticulture, animal husbandry or otherwise as specified in the Schedule. Section 17 - Power to collect market fees. - The market committee shall collect market fees from the licensees in the prescribed manner on agricultural produce brought or sold by them in the market area at such rate as may be specified by the State Government, by notification in the Official Gazette, subject to a maximum of (Substituted with effect from 24.8.1985 by Rajasthan Act No. 4 of 1986 for ``Re. 1/-) (Rs. 2/-) per rupees one hundred worth of agricultural produce.) Section 28. Penalty for contravention of certain provisions. (1)............... (2) Any person who intertionally evades the payment of any market fee payable under Section 17 shall, on conviction, be punished with simple imprisonment for a term which may extend to three months and with fine which may extend to one thousand rupees. The Magistrate shall, in addition to any fine which may be imposed recover summarily and pay to the market committee, the amount of market fees due a.05.in his discretion, also recover summarily and pay to the market committee such amount, if any, as he may fix as the cost of prosecution. Section 34. Recovery of sums due to Government or market committee.- (1) Every sum due from a market committee to the State Government shall be recoverable as an arrear of land revenue. (2)(a) Any sum due to a market committee on account of any charge costs, expense, fees, rent or any other amount under the provisions of this Act or any rule or bye-law made thereunder, shall be recoverable from the person from whom such sum is due, in the same manner as an arrear of land revenue by the government on behalf of the market committee. (b) if any question arises whether any money is due or not, to the market committee within the meaning of clause (a) it shall be referred to the Director or an officer authorised by him and the Director or the authorised office shall, after making such enquiry as he deems fit, and after giving to the person from whom the money is alleged to be due, an opportunity of being heard, decide the question and his decision shall be final. vuqlwph nsf[k;s /kkjk 2¼1½¼1½ ¼vuqlwph] jktLFkku jkt- i= vlk/kkj.k Hkkx 4 x ¼i½ fnukad 23-4-1977 ds ist 28 ij izdkfkr] vf/klwpuk fnukad 23-4-1977 }kjk dsoy fgUnh esa izfrLFkkfirA½ 1................... 2................... 3................... 4................... 5................... 6................... 7- ikqikyu mRiknu Åu vkSj ?kh ¼vf/klwpuk fnukad 18-8-1979 ds vuqlkj fnukad 23-8-1979 ls½ ¼twV ¼ÅV o cdjh ds cky½½] ¼vf/klwpuk la[;k ,Q 10¼2½ d`f"k@xzqi-2@89@11 fnukad 8-1-1998 }kjk tksMk x;kA½ ¼cVj vkW;y½ (9). The Supreme Court in the case of Om Prakash and others vs. State of Rajasthan and others, reported in 1990 (Supp) SCC 792, under the same Act has held that the definition of ``agricultural produce is an inclusive definition, which does not exclude factory produced items, sugar produced in mills of factories, fall within the expression. Hence, inclusion of sugar in the Schedule is not arbitrary. The Court has further held that legislature is competent to add or include as the word in the definition of `agricultural produce ``or otherwise as specified in the Schedule cannot also be over looked. Para No. 5 of the aforesaid judgment is as follows:- ``5. Inclusion of sugar in the Schedule was urged to be arbitrary as it was not produced out of soil the basic ingredient of agricultural produce. Fallacy of the submission is apparent as it was in complete disregard of definition of the words ``agricultural produce in the Act which includes all produce whether agricultural, horticultural, animal husbandry or otherwise as specified in the Schedule. The legislative power to add or include and define a word even artificially, apart, the definition which is not exhaustive but inclusive neither excludes any item produced in mill or factories nor it confines its width to produce from soil. If that be the construction then all items of animal husbandry shall stated excluded. It further overlooks expanse of the expression ``or otherwise as specified in the Schedule. If that be the construction then all items of animal husbandry shall stated excluded. It further overlooks expanse of the expression ``or otherwise as specified in the Schedule. Nor switch over from indigenous method or producing anything to scientific or mechanical method changes it character. Khandsari sugar, which is produced by open pan process and is not different from sugar produced by vacuum pan process except in composition, filterability and conductivity as held in Rathi Khandsari Udyog (1985) 2 SCC 485 ) was held to be agricultural produce in some decisions. No distinction was made on method of production, namely, by modern plant and machinery. To say, therefore, that sugar being produced in mill or factories could not be deemed to be agricultural produce is both against the statutory language and judicial interpretation of similar provisions of the Act in statutes of other States. Rice or dal produced in mills have been held to be agricultural produce in Ram Chandra Kailash Kumar & Co. vs. State of U.P. (1980 Supp SCC 27) and Krishi Utpadan Mandi Samiti vs. Ganga Dal Mill and Co. ( 1984 4 SCC 516 ). Even in Halsburys Laws of England, 4th Edn. Vol. 1, para 1414, the word agricultural produce for purposes of agricultural marketing schemes is understood as, including ``any product of agriculture or horticulture and any article of food or drink wholly or partly manufactured or derived from any such product and fleeces (including all kind of wool) and the skins of animals. In the same volume products covered by the provisions of EEC Treaty as to agriculture (classified according to the Brussels Nomenclature of 1965) are mentioned in paragraph 1845. Sugar is one of them. (10). There is no dispute that ``Ghee is an animal husbandry product but the dispute is with regard to the fact whether `Ghee manufactured by the industry, after applying manufacturing process, will be industrial product or agricultural product. The submission of the counsel for the petitioner is that the Act of 1961 has been enacted with aims and objects to cover the agriculture product but the definition of the agricultural produce, more particularly the words horticulture and animal husbandry or otherwise as specified in the Schedule suggests otherwise. The Supreme Court in the aforesaid case from Rajasthan has held that the said definition is inclusive and words otherwise specified in the Schedule cannot also be overlooked. The Supreme Court in the aforesaid case from Rajasthan has held that the said definition is inclusive and words otherwise specified in the Schedule cannot also be overlooked. IN the said case sugar produced in the mills and factories has been deemed to be an agricultural produce, therefore, the production of a item specified in the Schedule in mill, factory or industry involving manufacturing process in the nature of agriculture, horticulture or animal husbandry is immaterial after inclusion of the particular item in Schedule, which is in the instant case is `Ghee as the ultimate production of animal husbandry, therefore, it will be covered by the definition of agricultural produce. (11). It is settled position of law that only inclusion of the item is to be seen and not exclusion of any other item. Otherwise also, it is always open for the State Government to classify the items which are to be scheduled and which are not to be scheduled. Inclusion of `Ghee cannot be said to be arbitrary and discriminatory, as such violative of Articles 14 and 19 of the Constitution of India. (12). The next submission of the counsel for the petitioner is that without deciding their representation/appeal, recovery proceedings have been initiated. The agricultural produce is to be specified in the Schedule by the State Government in its legislative power under Section 2(i) of the Act of 1961 and other enabling provisions. Therefore, no subordinate authority/authority creature of statute can be given any power to interpret the said Gazette Notification. As per the scheme of the Act of 1961, every licensee is under an obligation to pay Mandi fee under Section 17 of the Act of 1961 for agricultural produce brought and sold by them in market area and contravention of the same is punishable under Section 28(2) of the Act of 1961. Therefore, right of appeal on issue whether product is agricultural produce or not, is rightly not provided. The item `Ghee is admittedly included in the Schedule at item No. 7 and further there is no denial to the fact that appellant is dealing in sale or purchase of `Ghee. The petitioner who was under a statutory obligation to make the payment of market fee, cannot be allowed to raise the grievance that he was not heard before issuance of recovery notices. The petitioner who was under a statutory obligation to make the payment of market fee, cannot be allowed to raise the grievance that he was not heard before issuance of recovery notices. In their earlier writ petition, final direction with interim relief was passed by the learned Single Judge on 3.8.1993, therefore, the Director passed an order on 29.11.96. There is a reference that despite intimation, no one has appeared on behalf of the firm, therefore, exparty proceedings have been initiated and further there is no reference to the effect in the writ petition that the petitioner has appeared as per the direction of this Court on 3.8.1993. Anyhow the representation/appeal of the firm in writing was on record and material available on record of Director has been considered and the order has been passed. Therefore, there is no infirmity in the order of the Director dated 29.11.96 and the recovery notices. (13). During the course of arguments, counsel for the petitioner has not raised any arguments on the validity of Section 34 of the Act of 1961. On the contrary, he has relied on Section 34(2)(b) of the Act of 1961 and the same relates to the sum due to government or market committee. Under the Scheme of the Act, market fees is to be levied under charging Section 17 of the Act of 1961 against which no specific appeal is provided as indicated in the preceding para, however, where a person is agriculturist or not or sum is due or not, representation/appeal is provided under Section 2(2) and 34(2)(b) of the Act of 1961, respectively. The provisions of appeal under Section 16 of the Act of 1961 are not applicable to the present controversy, as the same relate to grant, renew, cancel or suspend a licence. Non-payment of market fees is an offence punishable under Section 28(2) of the Act of 1961 and further under Rule 58(4) of the Rules of 1961, the petitioner has not taken permission for using the said `Ghee for industrial purpose. The representation under Section 34(2) (b) of the Act of 1961 can only be filed in case there is dispute with regard to sum due after issuance of recovery notice but not with regard to the fact whether a produce is agricultural produce or not or market fee is to be levied or not. (14). The representation under Section 34(2) (b) of the Act of 1961 can only be filed in case there is dispute with regard to sum due after issuance of recovery notice but not with regard to the fact whether a produce is agricultural produce or not or market fee is to be levied or not. (14). One of the arguments advance by the counsel for the petitioner is that Mandi fee cannot be levied in case of the petitioner, who is neither manufacturing the `Ghee within the Mandi yard nor brought the same nor sold the same in the market area. He has also not availed any kind of services from the Mandi Samiti. Therefore, he is not liable to pay Mandi fee but has not referred any notification of the State Government whereby the business premises of the petitioner has been excluded from the market area under Section 4 of the Act of 1961. Such submission was not raised by the petitioner before the Director nor it can be allowed to be raised in this writ petition in absence of the plea that the business premises are situated out side notified market area is aforesaid. Therefore, this arguments has also no substance. (15). No other issue has been raised before us. (16). In view of the above, we hold that `Ghee is agricultural produce within the meaning of Section 2(i) of the Rajasthan Agricultural Produce Markets Act, 1961 and has rightly been notified in the Schedule at item No. 7 and further the petitioner was/is liable to pay the market fees on the same and recovery notices Annexure-12 to Annexure 15 were rightly issued. (17). Accordingly, the writ petition fails and the same is hereby dismissed.