The Division Bench of Supreme Court consisting of Justices R. Subhash Reddy and Sanjiv Khanna while dealing with a case regarding to provisions under Karnataka Agricultural Produce Marketing (Regulation and Development) Act made it clear that if one merely imports notified agricultural produce from outside the State for the purpose of cleaning and processing without selling the processed produce within the market area is not liable to pay market fee.
Facts
The respondent herein is a trader engaged in the business of selling cleaned and processed spices in the name and style of M/s. Selva Foods within the market area of the appellant-APMC. During the year 2008, authorities of the Market Committee inspected the records of the respondent and found that respondent had purchased methi and mustard seeds from outside the State of Karnataka and after importing they sold the processed goods within the market area of the appellant and did not pay the market fee.
Procedural History
At first instance, order was passed by the appellant cancelling the licence of the respondent on the ground that the market fee of Rs.28,422/- and the penalty amount was not paid. When such order was questioned in writ petition, the High Court allowed the same back for fresh consideration, to the appellant. Further it was observed, the amount of Rs.28422/- which was paid pursuant to interim order would be subject to decision of the authority. Subsequently after giving opportunity, order was passed confirming the earlier demand and directed the payment of Rs.85,266/- which was payable out of the total demand of Rs.1,13,688/-. Questioning such demand again writ petition was filed in the High Court which was allowed by the learned Single Judge of the High court as against which the appellant has preferred intra-court appeal in which was dismissed by the impugned judgment and order. As against the same this appeal is preferred.
Contentions made
Appellant: The interpretation of the relevant provisions by the learned Single Judge, as confirmed by the Division Bench of the High Court, is erroneous and runs contrary to the plain reading of the Section 65 of the Karnataka Agricultural Produce Marketing (Regulation and Development) Act of 1966 (“the Act”). Reliance was placed on G. Giridhar Prabhu & Ors vs Agricultural Produce Market Committee.
Respondent: Since the respondent purchased the agricultural produce from outside the State of Karnataka as and when such produce is processed within the market area of the appellant and sell, they are not liable to pay market fee. Reference was made to the amendments made to the Act (by Act 22 of 2004) and Section 65(2) of the Act. Reliance was placed on Gujarat Ambuja Exports Limited & Anr vs State of Uttarakhand & Ors and ITC Ltd., vs State of Karnataka & Ors.
Observations of the Court
Having heard the learned counsels on both the sides and carefully perused impugned order and judgments relied upon, the Bench observed that:
“It is not a case where the respondent is denying sale of the imported agricultural produce within the market area of the appellant after processing. In that view of the matter, it is not entitled for exemption from payment of market fees. The respondent has defended the proceedings only on the ground that once the agricultural produce is processed it will not attract market fee as such the same cannot be accepted. It is the sale within the market area that attracts levy of market fee, and not the first purchase that was outside the market area. Notably the goods sold are also notified agricultural produce specified in the Schedule. Validity of the item under the Schedule is not under challenge.”
Judgment
The impugned judgment and order were set aside. Consequently, the writ petition also stood dismissed.
Case Name: APMC Yashwanthapura through its Secretary vs M/s. Selva Foods through its Managing Partner
Citation: Civil Appeal No. 7706 of 2021
Bench: Justice R. Subhash Reddy, Justice Sanjiv Khanna
Decided on: 14th December 2021
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