Gujarat High Court

Agriculture Produce Market ... vs State Of Gujarat on 29 September, 2023

Bench: Bhargav D. Karia

                                                                                      NEUTRAL CITATION




    C/SCA/1504/2021                                CAV JUDGMENT DATED: 29/09/2023

                                                                                       undefined




              IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                R/SPECIAL CIVIL APPLICATION NO. 1504 of 2021


FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE BHARGAV D. KARIA
==========================================================

1 Whether Reporters of Local Papers may be allowed to see the judgment ?

2 To be referred to the Reporter or not ?

3 Whether their Lordships wish to see the fair copy of the judgment ?

4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?

========================================================== AGRICULTURE PRODUCE MARKET COMMITTEE, VISAVADAR Versus STATE OF GUJARAT ========================================================== Appearance:

MR DIPEN DESAI(2481) for the Petitioner(s) No. 1 MR CP CHAMPANERI(5920) for the Respondent(s) No. 5 MR. BHARGAV V PANDYA(7103) for the Respondent(s) No. 6

NOTICE SERVED BY DS for the Respondent(s) No. 1,2

==========================================================

CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA

Date : 29/09/2023 CAV JUDGMENT

1. Heard learned advocate Mr. Dipen Desai

for the petitioner, learned Assistant

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

Government Pleader Mr. Dhawan Jayswal for

respondent Nos. 1 and 2-State, learned

advocate Mr. Anand M. Ranpara for learned

advocate Mr.C.P.Champaneri for respondent

No.5 and learned advocate Mr.Bhargav

Pandya for respondent No.6.

2. By this petition under Articles 226 of the

Constitution of India, the petitioner has

prayed for the following reliefs:

"A. This Hon'ble Court be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ, order or directions, quashing and setting aside the Resolution dated 04.10.2019 in so far as it does not include the petitioner market committee for payment of market cess for purchase of Groundnut (મગફળી), Pigeon Pea (તુવેર), Gram (ચણા), Green Gram (મગ), and Black Gram (અડદ) etc. under the price support scheme.

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

B. This Hon'ble Court be pleased to issue a writ of mandamus writ in the nature of mandamus or any other appropriate writ, order or directions, directing the respondent No.1-State Government to make payment of market cess to the tune of Rs. 98.65 Lacs payable to the petitioner for purchase of Groundnut (મગફળી), Pigeon Pea (તુવેર), Gram (ચણા), Green Gram (મગ), and Black Gram (અડદ) etc under the price support scheme for the year 2016-2017 to 2019-2020.

C. Pending admission, hearing and final disposal of the petition, this Hon'ble Court be pleased to direct the respondent No.1-State Government to make payment of market fees to the petitioner for purchase of Groundnut (મગફળી), Pigeon Pea (તુવેર), Gram (ચણા), Green Gram (મગ), and Black Gram(અડદ) etc. under the price support scheme for the year 2016-2017 to 2019-2020."

3. Brief facts of the case are as under:

3.1 The petitioner is Agriculture

Produce Market Committee ['APMC' for

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

short] constituted under the provisions of

the Gujarat Agriculture Produce Markets

Act,1963 [For short 'the Act']. The

petitioner-APMC is deemed to be a legal

authority within the meaning of section

3(26) of the Bombay General Clauses

Act,1904.

3.2 As per section 28 of the Act, the

Market Committee is entitled to levy and

collect fees which are called market fees/

market cess on the agriculture produce

bought and sold in the market area. As per

section 28(2)(c) of the Act market

fee/market cess is payable by the buyer of

the agricultural produce.

3.3 Rule 48 of the Gujarat Agriculture

Produce Markets Rules,1965 (For short 'the

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

Rules') provides that the Market Committee

shall levy and collect market fees on the

agricultural produce bought and sold in

the market area at such rates as may be

specified.

3.4 Earlier market fee leviable was at

0.5 paisa per 100 rupees of purchase or

sale. Thereafter, by circular dated

16.10.2003 issued by respondent No.2,

Director, Agriculture Marketing and Rural

Finance Department, Gujarat State, the

said rate of levy of market fees was

increased to Rs. 1 per Rs. 100 for

purchase or sale and accordingly, all the

market committees were instructed to amend

their respective bylaws. However, the

petitioner-Market Committee continued to

levy the market fees @ 0.5 paisa for

Rs. 100 of purchase or sale.

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

3.5 The Groundnut, Pigeon Pea, Gram,

Green Gram and Black Gram etc. are the

main agricultural produce bought and sold

in the petitioner-APMC and the main income

of the petitioner is from the cess

received from the purchase and sale of

such agricultural produce.

3.6 It is the case of the petitioner

that Central Government introduced Price

Support Scheme i.e. Minimum Support Price

Scheme with a view to ensure that farmers

get minimum basic return of their

agricultural produces as the market price

of the agricultural produces many times

tends to be unstable or volatile. As per

the said Scheme, Central Government has

appointed respondent No.3-National

Agricultural Cooperative Marketing

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

Committee Federation of India [hereinafter

to be referred to as 'NAFED'] as his

agents who purchases the agricultural

produces through the State level agencies

which are appointed as the State agents

directly from farmers at a price fixed by

the Central Government. Such mechanism is

provided because many times the production

of a particular agricultural produce is

very high and thereby the supply of

agricultural produce is more than the

local demand because of which, price that

may be offered in the market reduces and

the farmers do not even recover their cost

and suffer losses. The Central Government,

therefore, depending on the study and on

the survey introduces Minimum Support

Price Scheme of a particular agricultural

produce for a particular year.

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

3.7 The State Government, vide

notification dated 01.02.2017, exempted

the payment of tax of which/State duties

in respect of Groundnuts procured in the

Gujarat State under the Minimum Support

Price Scheme and further undertook to bear

the market cess @ 0.50 paisa for Rs. 100

for purchase and sale.

3.8 The State Government also agreed

to exempt payment of Value Added Tax [VAT]

on such produces/procurement of groundnut

under the Scheme. Thereby on the groundnut

purchased/procured under the Scheme in the

market area of the petitioner-APMC, the

petitioner is not required to levy market

cess from the purchaser as contemplated

under section 28 of the Act read with Rule

48 of the Rules. However, the State

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

Government undertook to bear the market

cess/fees @ 0.50 paisa per Rs. 100 of

purchase or sale in the market area.

Details of the agricultural produce

purchased or procured under the Minimum

Support Price Scheme the from respondent

No.4 to 6 for the years 2016-17 to 2019-20

are produced in the tabular form as under:

"Agency wise details of purchased

agricultural produce at Price Support

Scheme

(I) Gujarat State Cooperative Marketing

Federation Limited (Respondent No.4)

Name of Crop Year Quantity Purchase Market Cess (Met. Ton) Price Leviable (Lacs) (Lacs) Groundnut 2016-17 5800.65 Rs. 2447.88 Rs.12.24 Pigeon Pea 2016-17 2632.40 Rs.1329.36 Rs.6.65 Gram 2016-17 1148.20 Rs.505.21 Rs.2.53 Total Rs.21.42 Deposited Rs.1.38 Total Outstanding Market Cess Rs. 20.04

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

(2) Gujarat State Cooperative Cotton

Federation Limited (Respondent No.5)

Name of Crop Year Quantity Purchase Market Cess (Met. Ton) Price Leviable (Lacs) (Lacs) Groundnut 2016-17 15024.34 Rs.6760.95 Rs.33.80 Total Rs. 33.80

(3) Gujarat State Civil Supplies Corporation

Limited (Respondent No.6)

Name of Crop Year Quantity Purchase Market Cess (Met. Ton) Price Leviable (Lacs) (Lacs) Groundnut 2018-19 6547.77 Rs. 3273.88 Rs.16.37 Black Gram 2018-19 829.80 Rs.464.69 Rs.2.32 Green Gram 2018-19 126.05 Rs.87.92 Rs.0.44 Pigeon Gram 2018-19 2647.05 Rs.1502.19 Rs.7.51 Groundnut 2018-19 7143.00 Rs.3635.78 Rs.18.71 Total Rs.44.81 Total (1)+(2)+(3) Rs. 98.65

3.9 As per the above data, the total

amount of market cess payable to the

petitioner comes to Rs. 98.65 lakh.








                                                                                           NEUTRAL CITATION




C/SCA/1504/2021                                        CAV JUDGMENT DATED: 29/09/2023

                                                                                           undefined




     3.10                 It      is         the          case           of         the

     petitioner           that       various             representations

were made to the authorities and also to

respondent Nos. 4, 5 and 6 for payment of

the outstanding cess. However, respondent

Nos. 3 ,4 and 5 did not pay the amount of

cess stating that it is the State

Government who has to bear the market

cess.

3.11 Other Agriculture Produce

Market Committees were also claiming

payment of market cess approached this

Court by preferring various petitions

being Special Civil Application Nos.

9664/2018 and allied matters. This Court

issued notice and recorded the stand of

the State Government that it has

principally agreed to bear the market cess

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

as per the averments made in the affidavit

filed in those petitions admitting

liability to pay market cess.

3.11 The State Government by,

Resolution dated 04.10.2019, resolved to

make the payment of market cess to 44

APMCs and some of them, whom were even

Class-A APMCs, earning profits. However,

the name of the petitioner was not

included in the said list and the

petitioner was not paid any market cess.

Thus, the petitioner was treated

differently though the petitioner is

having audit class 'D'.

3.12 The petitioner has therefore,

preferred this petition with a prayer to

quash and set aside the resolution dated

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

04.10.2019 so far as it does not include

the name of the petitioner-APMC for

payment of market cess for purchase of

agricultural produce under the Minimum

Support Price Scheme.

4. Learned advocate Mr. Dipan Desai for the

petitioner submitted that under section 28

of the Act read with Rule 48 of the Rule

empowers the petitioner to collect the

market cess and because of the Scheme of

the Government for purchase of the market

produce under the Minimum Support Price

Scheme, the petitioner was not in position

to collect the market cess from the buyer

since the State Government agreed to bear

the burden of payment of market cess by

way of reimbursement @ 0.50 paisa per

Rs. 100 for purchase and sale.

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

4.1 It was submitted that as the State

Government did not pay the market cess

inspite of having purchased huge

quantities of agricultural produce from

the market areas of the petitioner-APMC,

huge loss was caused to the petitioner

which is the main income of the

petitioner-APMC and petitioner was not

able to pay salary of its staff and bear

day-to-day expenses.

4.3 Learned advocate Mr. Desai

referred to identical cases of other APMCs

of Deodar to challenge resolution dated

04.10.2019 by way of Special Civil

Application No. 20376/2019 wherein, this

Court has also issued notice. It was

further submitted that as per the

notification dated 01.02.2007, the State

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

Government agreed to reimburse the market

cess @ 0.5% for purchase of groundnut in

the Price Support Scheme for the year

2016-17 and thereafter, vide Government

Resolution dated 04.10.2019, the State

Government agreed to pay market cess to 44

Market Committees enlisted in the table

attached to the said resolution on all

kinds of agricultural produce and not

restricted to groundnut for the years

2016-17, 2017-2018 and 2018-2019. It was

pointed out that the notification dated

01.02.2017 was not cancelled and continued

to operate as far as the ground nut is

concerned.

4.4 Learned advocate Mr. Desai

submitted that thereafter, by Resolution

dated 24.08.2020, the State Government

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

decided to pay market cess of all the

market committees whether earning profit

or not for groundnut for the years 2017-

18, 2018-19 and 2019-20. It was therefore,

pointed out that the State Government

resolution intentionally does not include

the year 2016-17 because for the year

2016-17 notification dated 01.02.2017 was

already issued and was in operation

whereby the State Government agreed to

bear the market cess for 2016-17.

4.5 Learned advocate Mr. Desai

submitted that by Government Resolution

dated 27.01.2021 it was decided by the

State Government to recover the market

cess paid to the APMC by State Government

which were earning profits as in pursuance

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

to the decision taken by the State

Government dated 04.10.2019 whereby the

decision was taken to pay market cess by

the State Government only for those APMCs,

who were not earning profits.

4.6 Learned advocate Mr. Desai

therefore, submitted so far as ground nut

is concerned, the State Government is

bound to pay the cess @ 0.5%. It was

pointed out that the petitioner has been

paid the amount of Rs. 72.90 lakh pursuant

to the Resolution dated 24.08.2020 for

purchase of the groundnut under the

Minimum Support Price Scheme. However,

payment of Rs. 12.24 lakh for purchase of

groundnut for the year 2016-2017 and the

amount of Rs. 9.48 lakh for purchase of

groundnut for the year 2020-21 is still

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

outstanding and so far as the other

agricultural products purchased on Minimum

Support Price Scheme, an amount of

approximate Rs. 24 lakh is outstanding to

be paid by the State Government.

4.7 Learned advocate Mr. Desai

submitted that the State Government has

already taken the decision in concurrence

with the Finance Department and

thereafter, the notification dated

01.02.2017 was issued to bear the market

cess @ 0.5% but the State Government is

not complying with the notification dated

01.02.2017 by wrongly taking a stand that

only the loss making or non-earning

profits APMC would be entitled to market

cess.

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

4.8 Learned advocate Mr. Desai

submitted that section 48 of the Act read

with Rule 48 of the Rules entitles the

Market Committee to recover the market

fees from the buyer irrespective of

whether the Market Committee is earning

profit or not and because of the promise

given by the State Government by

notification dated 01.02.2017 prevented

the petitioner-APMC did not charge market

fees from the buyer. It was therefore

submitted that the petitioner has suffered

huge loss on account of non-reimbursement

market fees by the State Government.

4.9 Learned advocate Mr. Desai relied

upon the affidavit filed on behalf of the

State Government before this Court in

Special Civil Application No. 9664/2018

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

wherein it is admitted that the State

Government is liable to pay market fees to

the APMCs and there was no reference to

profit making or loss making APMCs.

4.10 It was therefore, submitted that

the State Government is required to be

directed to pay market cess to the

petitioner as per the notification dated

01.02.2017 and 24.08.2020 at least on the

purchase of the groundnut on Price Support

Scheme and as far as remaining

agricultural produces are concerned, if

the State Government is not willing to

make the payment of market fees to the

petitioner, then appropriate direction may

be issued to the respondent Nos. 3 to 6 to

make the payment of market cess as per

section 28 of the Act.

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

5. On the other hand, learned AGP Mr. Dhwan

Jayswal submitted that notification dated

01.02.2017 was issued by the Agriculture,

Farmers Welfare and Cooperation

Department, after cancellation of the

earlier notification dated 03.11.2016 and

after considering the guidelines issued by

the Government of India in connection with

bearing/exempt the state duties/taxes in

respect of Price Support Scheme of

groundnut in the State of Gujarat. It was

submitted that by Government Resolution

dated 04.10.2019, the State Government

through Agriculture, Farmers Welfare and

Cooperation Department resolved to pay

market cess to 44 loss making APMCs of the

State of Gujarat for purchase of groundnut

and other pulses and while taking the

policy decision vide Government Resolution

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

dated 04.10.2019, State Government had

considered the proposal dated 20.03.2018

submitted by Director of Agriculture,

Gujarat State for payment of market cess

for purchase of groundnut and other

pulses. It was therefore, submitted that

the State Government has taken a policy

decision in connection for bearing /exempt

the state duties/tax in respect of Price

Support Scheme in the State of Gujarat and

after considering the factual possession,

Government Resolution dated 04.10.2019 was

issued wherein it is resolved to pay

market cess for purchase of groundnut and

other pulses for the years 2016-17 to

2018-19 to only 44 loss making APMCs of

'A', 'B', 'C' and 'D' category and apart

from that no other APMC in the State of

Gujarat was given such benefit. It was

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

submitted that the petitioner-APMC does

not fall under the category of loss making

APMC and therefore, benefit provided

through GR dated 04.10.2019 was not

extended to the petitioner-APMC.

5.1 It was submitted that the

petitioner has been paid the market cess

on grounding @ 0.5% in view of the

Government Resolution dated 24.08.2020 for

the years 2017-18 to 2019-20. It was also

submitted that thereafter, vide Government

Resolution dated 27.01.2021, the State

Government had resolved that not to grant

payment of market cess for other pulses

other than groundnut which were covered

under the previous Government Resolution

dated 04.10.2019 and further resolved to

recover the amount of payment of market

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

cess made other than groundnut to those

44-loss making APMCs.

5.3 It was further submitted that as

per Government Resolution dated 24.08.2020

all the APMCs in the State of Gujarat were

considered as equal so far as the payment

of market cess @ 0.5% in respect of

purchase of groundnut is concerned and

benefit is extended for the years 2017-18

to 2019-20.

5.4 It was therefore submitted that

the petitioner is not entitled to get the

payment of the market cess @0.5% in

respect of purchase of groundnut is

concerned and the benefit is extended for

the years 2017-18 to 2019-2020.

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

5.5 It was therefore submitted that

the petitioner is not entitled to get the

payment of the market cess for the year

2016-17 in view of the policy decision

taken by the State Government as the same

is to be granted only qua the loss making

APMC.

5.6 It was therefore submitted that

the petition is not required to be

entertained as the petitioner is not a

loss making APMC and therefore, not

entitled to the payment of market cess by

the State Government in view of the

Government Resolution dated 04.10.2019

which is a policy decision of the State

Government.

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

6. Learned advocate Mr. N.R.Mehta for

Marketing Federation Limited [GUJCOMASOL],

respondent No.4 has filed affidavit in

reply through its Chief Executive Officer

wherein it is stated as under:

"6. I say and submit that the Central Govt. introduced the policy of Price Support Scheme (PSS). The very purpose of introducing this Scheme was to protect the interest of the farmers. For the said Purpose, NAFED, i.e. the Respondent no. 3, has been appointed as the Central Nodal Agency.

7. The State Govt. has appointed the answering Respondent as the State Agency/State Level Supporter for implementing the Price Support Scheme Strictly, as per the PSS guidelines of the Government of India. Accordingly, Agreements have been entered into by and between NAFED, i.e. the Respondent no. 3 and the answering Respondent through which, the answering Respondent has agreed to act as a State Level Supporter for NAFED in the State of Gujarat on the terms and conditions as

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

mentioned in the said Agreement. The Copy of Such Agreement is annexed hereto and is marked as "ANNEXURE - RR1".

8. It is pertinent 9 note at this juncture that as per the said Agreements that have been executed between the parties wherein, the answering Respondent has agreed to act as a State Level Supporter for the Respondent No.3 for implementation of the Price Support Scheme, it has been specifically stated that there shall be an exemption from Mandli Tax/Levy etc. It has been agreed and mentioned in the Agreement that the SLS i.e. the answering Respondent will not pay and raise any bill on account of the state duties including mandli tax for procurement made under the PSS and in the event such taxes, if charges by the State/UT Govt, the same shall not be admissible/reimbursable to the State/UT Govt, the same shall not be admissible/reimbursable to the State/UT Govt and State/Procuring Agency.

9.I say that the "Price Support Scheme (PSS) Guidelines: The Operational Guidelines" also mention that the State/UT Govt. shall exempt all the state duties in respect to PSS operations in the interest of

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

its farmers and reduce the procurement cost and that these taxes, if charged by the State/UT Government, the same shall not be admissible/reimbursable by the DAC(Department of Agriculture and Cooperation of India) to the State/UT government and State/Procuring Agency. A copy of is marked as "ANNEXURE the said Policy is annexed hereto an ~RR2".

10. It is further submitted that In order to ensure implementation of the Price Support Scheme for which the answering Respondent has been appointed as the State Level Agency it enters into Agreement with the respective Mandali wherein also, the answering Respondent clearly states that it is acting as a Nodal Agency/ State Level Supporter for implementation of the price support scheme and that the payment of Market Cess etc. is not to be made by the answering respondent and the same is subject to the decision that may be taken by the Govt and/or NAFED, i.e. the Respondent No. 3. The copy of Such Agreement is annexed hereto and is marked as "ANNEXURE ~ RR3".

11. I say and submit that in view of such Agreement being

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

entered into by the answering Respondent and in view of the fact that the answering Respondent is merely acting as a State Level Agency for NAFED, i.e. the Respondent No. 3, to ensure the implementation of the Price Support Scheme introduced by the Central Govt, the answering Respondent is not liable or under obligation to pay any amounts towards cess/taxes, etc, to the petitioner.

12. I say and submit that in the Petition, the Petitioner at Pg No. 11, the Petitioner has mentioned the details of the agricultural produce purchased or procured under the Price Support Scheme from the Respondents No. 4 to 6, for the year 2016-2017 to 2019-2020 and has produced a Agency wise detailed table of the purchased agricultural produce at price support scheme. In the said Table, the petitioner has mentioned that for the year 2016- 2017, the petitioner has purchased Ground-Nut, Pigeon Pea & Gram. I say that the same is not true and is denied by me. In fact, from the answering Respondent, for the year 2016-17, the Petitioner has only purchased Gram and no Ground-Nut and Pigeon Pea has been purchased by the petitioner from the answering Respondent for the year 2016- 17, as mentioned in the said table and paragraph. The answering respondent

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

does not admit to pay any such alleged amount to the petitioner.

13. It is further submitted that the applicability of relevant section of the Act, as sought to be made by the Petitioner would at be strictly made applicable, inasmuch as, the transactions that has taken place between the parties Is with regard to the implementation and execution of the Price Support Scheme introduced by the Government and it is not the case that the Agriculture produce are bought or sold in the principle market yard for commercial transactions. Even otherwise, the state government is empowered by the Act to exempt in whole or in part any agricultural produce brought for sale or bought or sold in the market area specified, from the payment of market fee for such period as may be specified."

7. Company Secretary of respondent No.6

Gujarat State Civil Supply Corporation

Limited has also filed affidavit-in-reply

with following averments:

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

"6. I say and submit that, vide Government Resolution dated 04.10.2019 the State Government had taken a policy decision to pay market cess to 44 loss making APMC of the State of Gujarat for purchase of groundnut and other pulses and that decision was taken by considering the core issue of granting payment on the market cess. The very issue was reflected in the Notification dated 01.02.2017 and while taking policy decision on the aspect of said issue itself it was decided that the benefit of market cess at the rate of 0.5% is to be extended on purchase of groundnut and other pulses only to the loss making APMC's of the State of Gujarat.

7. I say and submit that, para 2.28 of the draft amendment of the petitioner wherein the petitioner submits that as far as groundnut is concerned, the State Government has specifically vide resolution dated 01.02.2017 and 24.08.2020 agreed to bear the market cess of all APMCs. Therefore, the State Government be directed to make payment of market fees for the purchase of groundnut on price support scheme and as far as the remaining agriculture produces are concerned, if State Government is not willing to make the payment of market cess to the petitioner, then appropriate directions be issued that the respondent Nos. 3 to 6 shall make

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

the payment of market cess since as per Section 28 purchaser is liable to pay the market cess.

8.I say and submit that, the Price Support Scheme is of the Central Government and State Government, which is not in the purview of the office of the answering respondent. The Agriculture, Farmer Welfare and Cooperative Department had appointed the office of the answering respondent only as "Nodal Agency" from last four years j.e. 2018-19 to 2021-22 where office of the answering respondent has directed to purchase groundnut and other pulses on price support scheme. It is further submitted that each year the State Government issues Government Resolution to appoint deponent office as a "Nodal Agency." The copies of government resolution are annexed herewith and marked as ANNEXURE R-I (Colly..}

9. I say and submit that, as per the Government Resolution process of purchase has been carried out by the office of the deponent with a co-

                  ordination     of     Director                            of
                  Agriculture,   Respondent   no.1                         and
                  NAFED.







                                                                                  NEUTRAL CITATION




C/SCA/1504/2021                               CAV JUDGMENT DATED: 29/09/2023

                                                                                  undefined

10. I say and submit .that, -the central government introduced the policy of Price Support Scheme (PSS). The very purpose of introducing this scheme was to protect the interest of the farmers. For the said purpose, NAFED has been appointed as the central Nodal Agency. It is further submitted that every year Central Government fixed the price support scheme as per various commodities, and accordingly different commodities has been purchased from the farmers of the State of Gujarat. The respondent no.1 has always been provided the list of purchase centers, the quantity which is to be purchased from the farmers etc. and after getting such details/ direction by respondent no.1, according to the prescribed/ provided limits the answering respondent have to make a purchase.

11. I say and submit that, the "Price Support Scheme (PSS) introduced by Agriculture and Farmer Welfare Department, Central Government, New Delhi in October, 2018 the central government has been issued PM-AASHA Guidelines. Point No. B (ii) of the said guideline is to be looked in to, Hence same is mentioned as follows:

State/UT Govt. shall be exempt all State duties in respect of PSS

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

operations (Procurement/ Transportation/ Warehousing/ Sale etc.) in the interest of its farmers and to reduce the procurement costs. Further these taxes, if charged by the State/UT Government, shall not be admissible/ reimbursable to the State/ UT Government and State/ Procuring agency."

A copy of the said policy is annexed herewith and marked as ANNEXURE R-II.

12. I say and submit that, answering respondent has been appointed and acting as the Nodal Agency for implementation of the price support scheme and that the payment of Market Cess etc. is not to be made by the answering respondent and same is subject to the decision that may be taken by Government and/ or NAFED. Since the implementation of Price Support Scheme introduced by the Central Government, the office of the deponent is not at all liable or under an obligation to pay any amounts towards cess/ taxes, etc. to the petitioner.

13. I say and submit that, the applicability of Section 28 of the Act, as sought to be made by the petitioner would not be strictly made applicable, in as much as, the transaction (if any) that has taken

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

place between the parties is with regard to the implementation and execution of the Price Support Scheme introduced by the Government and it is not the case that Agriculture produce are brought or sold in the principle market yard for commercial transactions. Even otherwise, the State government is empowered by the Act to exempt in whole or in part any agricultural produce brought for sale or bought or sold in the market area specified, from the payment of market fee for such period as may be specified.

14. I say and submit that, as per above mentioned facts and circumstances, I humbly request to this Hon'ble court that the Hon'ble Court may not direct to the answering respondent to pay the cess and/or other taxes because the answering respondent has been appointed to work as Nodal Agency who has to only implement the Price Support Scheme as per the direction of the State Government. Therefore, Government and/or NAFED is the final authority who has to pay the market cess and/or other taxes."

8. Having heard learned advocate for the

respective parties and having considered

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

the documents produced on record

comprising of the notification dated

01.02.2017 and Government Resolution dated

04.10.2019, it appears that so far as

procurement of groundnut is concerned, for

the year 2016-17 as per the guidelines of

Government of India, the State Government

issued the notification dated 01.02.2017

bearing/exempt the state duties/taxes in

respect of Price Support Scheme of the

groundnut procurement in the Gujarat State

and the Government agreed for bearing of

APMC cess @ 0.5%. As per the said

notification, the Government also agreed

for exempt of VAT of 0.5% of

purchase/procurement of groundnut under

Price Support Scheme.

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

9. The said notification dated 01.02.2017 was

issued with concurrence of Finance

Department and Government dated 26.01.2017

by the Agriculture, Farmers Welfare and

Cooperation Department of the State of

Gujarat.

10. As per the said notification, the

petitioner is entitled to market cess @

0.5% for the year 2016-17 for the

procurement of the groundnut by the State

Government under Price Support Scheme. The

Government Resolution dated 04.10.2019,

issued pursuant to the order passed in

Special Civil Application No. 9664/2018 to

pay the market cess on groundnut and all

pulses to 44 loss-making APMCs is

concerned, cannot be considered as policy

decision of the State Government as the

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

notification dated 01.02.2017 is neither

cancelled or modified and the same has

remained in existence till date.

11. It also appears that the State Government,

by notification dated 24.08.2020, has paid

the market cess for procurement of the

groundnut for the years 2017-18 to 2019-20

and therefore the denial of payment of

market cess @ 0.5% for the procurement of

the groundnut for the year 2016-17 is in

violation of the notification dated

01.02.2017. The Government Resolution

dated 04.10.2019 also covers the period

from 2016-17 to 2018-19 for payment of

market cess on groundnut and other pulses

to 44 loss making APMCs but at the same

time, previous notification dated

01.02.2017 and Government Resolution dated

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

24.08.2020 applies to all APMCs so far as

the market cess payable on the procurement

of the groundnut under Price Support

Scheme.

12. Section 28 of the Act provides for power

of levy fees read as under:

"28. Power to levy fees.-[(1)]The market committee shall, subject to the provisions of the rules and the maxima and minima from time to time prescribe, levy and collect fees on the agricultural produce bought or sold in the principal market area:

Provided that the fees so levied may be collected by the market committee through such agents as it may appoint.

[(2) (a) The market fee specified in sub-section (1) shall not be levied for the second time in any market area from the buyer who is a processor, grader, packer, value addition centre or exporter of an agriculture produce and market fee has already been paid on that agricultural produce in any market and the information in this context has been furnished, as prescribed, by the person concerned that the

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

payment of market fee has already been paid on that agricultural produce in any market provided such proof as may be prescribed is furnished to the Director by the buyer who is doing processing, grading, packing, value addition or export within such period as may be prescribed by the Government.

(b) On the agricultural produce brought in the market area for commercial transaction or for processing, if the permit issued under clause (e) has not been submitted, the market fee shall be deposited by the buyer or processor, as the case may be, in the office of the market committee, within fourteen days but before sale or resale or processing or export outside the market area:

[Provided that in case any agricultural produce is found to have been processed, sold or resold or dispatched outside the principal market area without payment of market fee payable on such produce, the market fee or user charges shall be levied and recovered on five times the market value of the processed produce or value of the agricultural produce, as the case may be.

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

(c) The market fee shall be payable by the buyer of the agricultural produce and shall not be deducted from the price payable to the agriculturist seller:

Provided that where the buyer of a agricultural produce cannot be identified, all the fees shall be payable by the person who may have sold or brought the produce for sale in the market area:

Provided further that in case of commercial transactions between traders in the market area, the market fee shall be collected and paid by the seller.

(d) The market functionaries, as the market committee may by bye- laws specify and in the case of market established under Chapter IVA of this Act as the Director may specify, shall maintain accounts relating to sale and purchase or processing or value addition in such manner as may be prescribed and submit to the market committee, the periodical returns, as may be prescribed.

(e) Any agricultural produce shall be removed out of the market area only in the manner and in accordance with the permit issued

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

in such form, as may be prescribed. The vehicle carrying agricultural produce shall be accompanied by such proofs as may be prescribed.

Provided that the producer of the agricultural produce himself may remove the agricultural produce from one place to another without such permit.]"

13. Rule 48 provides for market fees and reads

as under:

"48. Market fees

(1) The market committee shall levy and collect fees on agricultural produce bought or sold In the market area at such areas as may be specified in the bye-laws subject to the following minima and maxima, viz.

(1) rates when levied advalorem shall not be less than (30] paise and shall not exceed (Rs. 2] per hundred rupees.

(2) rates when levied in respect of cattle, sheep or goat shall not be fess than [25] paise per animal and shall not exceed Rs. [4] per animal.

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

Explanation.-For the purposes of this rule a sale of agricultural produce shall be deemed to have taken place In a market area If It has been weighed or measured or surveyed or delivered in case of cattle In the market area for the purpose of sale; notwithstanding the fact that the property In the agricultural produce has by reason of such sale passed to a person in a place outside the market area."

14. On conjoint reading of both the

provisions, it is clear that the

petitioner-APMC is entitled to levy the

market fees on the agricultural produce

bought and sold in the market area at the

rates specified in Rule 48 of the Rules.

Hence, the State Government, by way of

policy decision, cannot refuse to pay the

market fees on the ground that the

petitioner-APMC is not a loss making APMC.

It also emerges from the record that as

per the Government Resolution dated

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

24.08.2020, the petitioner was paid the

market fees on procurement of groundnut.

Therefore, even if it is considered that

the Government Resolution dated 04.10.2019

is a policy decision then also, as per the

notification dated 01.02.2017, the

petitioner is entitled to get market fees

@ 0.5% on the groundnut procurement for

the year 2016-17. The notification dated

01.02.2017 reads as under:

"NOTIFICATION GOVERNMENT OF GUJARAT AGRICULTURE AND COOPERATION DEPARTMENT SACHIVALAYA, GANDHINAGAR

dated the 1st February,2017

Bearing/Exempt the State duties/taxes in respect of PSS of Groundnut in Gujarat State.

Assurance of a remunerative and stable price environment for growers/ farmers is the State very important for increasing agricultural production and productivity. The market price for agricultural produce many times tends to be unstable and volatile which may result into undue

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

losses to the growers and discourage adoption of the modern technology and required inputs.

The Government's price policy for agricultural commodities seeks to ensure "remunerative prices to the growers for their produce with a view to encourage higher investment and production and to safeguard the interest of consumers by making available supplies at reasonable prices with low cost of intermediation. The price policy also seeks to evolve a balanced and integrated price structure in the perspective of the overall needs of the economy.

Towards this end, the Government of India announces Minimum Support Prices (MSP) for major agricultural commodities each year in both Crop seasons after taking into account the recommendations of the Commission for Agricultural Costs and Prices (CACP).

In the scheme for the procurement of groundnut in the year of 2016-17 as per the guideline of GOI, the notification regarding bearing/exempt State duties/taxes in respect of PSS of Groundnut procurement in Gujarat State is required to be issued. Government agree for the bearing of APMC Cess i.e., 0.5%.

Government also agree for the exempt of VAT that i.e.5% (4% + 1%) on purchase

NEUTRAL CITATION

C/SCA/1504/2021 CAV JUDGMENT DATED: 29/09/2023

undefined

/procurement of Groundnuts under PSS. This should be reimbursed by NAFED to Government of Gujarat after selling the procured commodity.

This issue with the concurrence of Finance Department dated 7th January, 2017 and Government dated 26th January, 2017.

The Notification No, GH/KH/107/2016/C1S/ 102016/4015/K-7 dated 3rd November, 2016 is cancelled hereby.

By order and in the name of Governor of Gujarat,

(Y.C.Pandya) Under Secretary Department of Agriculture and Cooperation Sachivalaya, Gandhinagar, Gujarat State"

15. From the above notification it is clear

that the Government has agreed to bear the

market fees for groundnut procurement @