Madras High Court
P.Regin vs The State Of Tamil Nadu on 30 November, 2023
Author: N.Anand Venkatesh
Bench: N.Anand Venkatesh
W.P.(MD)No.22130 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 30.11.2023
CORAM
THE HONOURABLE MR.JUSTICE N.ANAND VENKATESH
Orders Reserved On Orders Pronounced On
27.11.2023 30.11.2023
W.P.(MD)No.22130 of 2021
&
W.M.P.(MD)Nos.18718 & 18719 of 2021
P.Regin ... Petitioner
Vs.
1.The State of Tamil Nadu,
Rep. by its Secretary,
Department of Agricultural Marketing and
Agricultural Business,
St. George Fort,
Chennai - 600 009.
2.The Director,
The Directorate of Agricultural Marketing
and Agriculture Business,
Thiru. Vi.Ka. Industrial Estate, CIPET – II,
Main Road, Guindy, Chennai – 600 032.
3.The Commissioner,
The Tamil Nadu Agricultural Marketing and
Agri Business,
Thiru.Vi.Ka.Industrial Estate, CIPET-II,
Main Road, Guindy, Chennai - 600 032.
1/15
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W.P.(MD)No.22130 of 2021
4.The Secretary,
Kanyakumari Market Committee,
Nagercoil - 629 001,
Kanyakumari District.
5.The Superintendent,
Regulated Market,
Monday Market,
Neyyoor Post – 629 802,
Kanyakumari District. ... Respondents
Prayer:- Writ Petition filed under Article 226 of the Constitution of India,
praying to issue a Writ of Mandamus, directing the respondents 4 and 5 to
forbear from levying 1% market fee on the cashew nuts imported by the
petitioner from foreign countries, and further direct the said respondents to
refund forthwith the amount unauthorisedly collected to a tune of
Rs.16,00,178/- (Rupees Sixteen Lakhs One Hundred and Seventy Eight
only).
For Petitioner : Mr.Isaac Mohanlal
Senior Counsel
for M/s.Isaac Chambers
For Respondents : Mr.Veera.Kathiravan
Additional Advocate General
Assisted by
Mr.B.Saravanan
Additional Government Pleader
2/15
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W.P.(MD)No.22130 of 2021
ORDER
This Writ Petition has been filed for issuance of Writ of
Mandamus, forbearing the fourth and fifth respondents from levying 1%
market fee on the cashew nuts imported by the petitioner from the foreign
countries and for a further direction to the respondents to refund the sum of
Rs.16,00,178/- (Rupees Sixteen Lakhs One Hundred and Seventy Eight
only), that was collected from the petitioner towards the market fee.
2. The case of the petitioner is that he is the Proprietor of an
Agency, which is involved in the business of importing raw cashew nuts
from other Countries, which is processed in the Factory and the processed
cashew nuts are sold across India. The petitioner is also the Managing
Director of another Company, which is involved in the same business.
3. The further case of the petitioner is that the cashew nut is an
agricultural produce, which is notified under the Tamil Nadu Agricultural
Marketing (Regulation) Act, 1987 (hereinafter referred to as ''the Act'').
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4. The market fee can be levied under the Act only when the
agricultural produce is bought or sold in the notified market area. The
grievance of the petitioner is that the agricultural produce is imported by the
petitioner and it is processed and thereafter, it is exported to the Foreign
Countries and therefore, the petitioner is not liable to pay the market fees
for the cashew nuts imported from the Foreign Countries. However, the
fourth respondent was unauthorizedly collecting the market fee from the
petitioner, by intercepting the vehicle every time and in the said process, the
sum of Rs.16,00,178/- (Rupees Sixteen Lakhs One Hundred and Seventy
Eight only) was collected from the petitioner during various times from the
years 2015 to 2021. It is under these circumstances, the present Writ
Petition has been filed before this Court to forbear the fourth and fifth
respondents from levying market fees and for refund of the market fee that
was unauthorizedly collected from the petitioner.
5. The fourth respondent has filed a counter affidavit. The
fourth respondent has taken a stand that the petitioner was involved in sale
of cashew nuts in the notified market area and therefore, the market fee was
levied from the petitioner. Therefore, the fourth respondent has justified the
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collection of the market fee from the petitioner and has sought for the
dismissal of this Writ Petition.
6. Heard the learned counsel on either side.
7. On carefully going through the Scheme of the Act, the levy
of fees by the Market Committee is dealt with under Section 24 of the Act.
In other words, Section 24 is the charging Section, which entitles the
Market Committee to levy the fees. In order to justify the levy of fees by
the Market Committee, the following conditions must be satisfied:
''(i) The agricultural produce must
form part of the schedule as defined under Section
2 (1) of the Act.
(ii) The agricultural produce must be
marketed in a declared notified area, which is dealt
with under Sections 3 and 4 of the Act.
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(iii) In the notified area, the
Government should issue a Notification and
identify the notified market area for the purposes
of the Act.
(iv) The agricultural produce must be
bought or sold in the notified market area and in
which event, the Market Committee established
under Section 5 of the Act, is entitled to levy a fee
of 1%.''
8. In the instant case, the cashew nuts in all forms is an
agricultural produce that comes within the schedule. Kanyakumari District
is a notified area as per G.O.(Ms)No.777, Food and Agriculture, dated
09.03.1964. The notified market area was done through a Notification
issued in G.O.(Ms)No.3588, Agriculture, dated 03.12.1968, and it states that
the area of 89.67 square miles around the market will fall within the notified
market area. This Notification virtually covers the entire Kanyakumari
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District. Hence, if the cashew nuts are bought or sold in the notified area, it
will attract the levy of fees by the Marketing Committee.
9. The main ground that has been urged by the learned Senior
Counsel appearing on behalf of the petitioner is that the case of the
petitioner falls within the proviso to Section 24 of the Act. To properly
appreciate the submission made by the learned Senior Counsel, Section 24
of the Act and the proviso, are extracted hereunder:-
“24. Levy of fee by market
committee:- (1).the market committee shall levy a
fee on any notified agricultural produce bought or
sold in the notified market are at a rate not less
than one rupee but not exceeding two rupees for
every hundred rupees of the aggregate amount, for
which the notified agricultural produce is bought
or sold whether for cash or for deferred payment
or other valuable consideration:
Provided that, when any agricultural
produce brought into any notified market area for
the purpose of processing only, or for export is not
processed or exported therefrom within thirty days
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from the date of its arrival therein, it shall, until
the contrary is proved, be presumed to have been
brought into such notified area for buying and
selling, and shall be subject to the levy of fee
under this Section on the value of the agricultural
produce, as if it has been bought and sold
therein.”
10. On carefully going through the proviso to Section 24 of the
Act, it is seen that the agricultural produce that is brought into any notified
market area only for the purpose of processing or for export, the same does
not attract the levy of fees. However, if the agricultural produce is not
processed or exported within thirty (30) days from the date of its arrival, it
shall be presumed to have been brought into the notified market area for
buying and selling and hence, it will attract levy of fee by the Market
Committee on the value of the agricultural produce. The proviso creates a
reverse burden in a case where the agricultural produce is kept and
unprocessed or is not exported within thirty days from the date of its arrival.
In such an eventuality, the burden of proof is upon the person dealing with
the agricultural produce to establish that the agricultural produce was not
meant for sale in the notified market area even beyond thirty days.
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11. The learned Senior Counsel appearing on behalf of the
petitioner relied upon two judgments of the Hon'ble Apex Court viz., in the
case of Gujarat Ambuja Exports Limited and Another Vs. State of
Uttarakhand and others reported in (2016) 3 SCC 601 and in the case of
APMC Yashwanthpura, through its Secretary Vs. Selva Foods through its
Managing Director reported in (2022) 3 SCC 313.
12. On carefully going through the above judgments, it is seen
that the Hon'ble Apex Court has reiterated the scope and effect of Section
24 of the Act. The Hon'ble Apex Court has held that where a person merely
exports notified agricultural produce for the purposes of cleaning and
processing, without selling the processed produce within the market area, it
is not liable for levy of market fee.
13. The petitioner claims that he has imported the cashew nuts
from other Countries and the same is being processed in the Factory and
thereafter, the cashew nuts are exported. Therefore, the petitioner is seeking
for exemption from levy of market fees in line with the proviso to Section
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24 of the Act. The grievance expressed by the petitioner is that whenever
the cashew nuts are transported through lorries or containers, the officials
belonging to the fourth respondent intercepted the vehicle and straightaway
demanded for the payment of the market fees. This is in spite of the fact
that the petitioner showed all the relevant documents to substantiate that the
cashew nuts are not meant for sale within the notified market area. In this
process, a sum of Rs.16,00,178/- (Rupees Sixteen Lakhs One Hundred and
Seventy Eight only) has been recovered from the petitioner for the period
from 2015 to 2021.
14. There is no difficulty in directing the fourth and fifth
respondents not to levy the market fees on agricultural produce, if it falls
within the scope of proviso to Section 24 of the Act. The proviso is in the
nature of an exception to the main charging Section, viz., Section 24. It is in
fact, a statutory mandate on the Market Committee not to levy the market
fee, when the agricultural produce is brought into the notified market area
only for the purpose of processing and / or for export. However, the same
has to be decided only on a case to case basis. This is in view of the fact
that the proviso to Section 24 of the Act also creates a reverse burden on the
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expiry of thirty (30) days from the date of the arrival of the agricultural
produce. On such expiry of thirty (30) days, the Market Committee can
presume that the agricultural produce is meant for purchase / sale in the
notified market area and can proceed to levy the market fees, unless the
contrary is established by the concerned person to the effect that the
agricultural produce continues at the stage of processing or at the stage of
export. This involves determination of facts in each given case. The act of
the officials belonging to the Market Committee, intercepting the vehicles
carrying agricultural produce, cannot be faulted since only at that stage, the
entire process begins for determining and levying the market fees.
However, if any person produces materials to show that the agricultural
produce is meant only for processing and / or export, the Market Committee
has to necessarily conduct an enquiry and the market fees should not be
levied on the spot.
15. The petitioner has taken a stand that the agricultural
produce, for which the market fee has been levied, was not meant for sale in
the notified market area and it was only meant for processing and exporting
to Foreign Countries. This fact has to be established only by the petitioner
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before the fourth respondent, by producing the relevant materials. If
ultimately, the Market Committee is satisfied that the agricultural produce,
for which the market fee was levied, was actually processed and exported,
then, the fee that was collected from the petitioner has to be refunded. If
this fact is not able to be established by the petitioner, then, the levy of the
market fee will be justified under Section 24 of the Act.
16. In the light of the above discussion, there shall be a
direction to the fourth and fifth respondents to conduct an enquiry in every
case, where the concerned person claims that the agricultural produce is
meant only for processing and / or export and deal with such a claim in line
with Section 24 of the Act. In all those cases, proceedings shall be issued
before the market fees is levied, so that, the application of mind on the part
of the Market Committee is evidenced by the reasons given in the
proceedings. There shall be a further direction to the petitioner to make a
fresh representation to the fourth respondent, claiming for the refund of the
market fees levied from the petitioner for the period from 2015 to 2021.
The petitioner shall place all the relevant materials before the fourth
respondent and establish that his case comes within the ambit of the proviso
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to Section 24 of the Act. If the petitioner is able to establish the same, the
market fee collected from him shall be refunded within a period of four (4)
weeks thereafter. On the other hand, if the Market Committee is not
satisfied and does not find that the claim falls under proviso to Section 24 of
the Act, an order shall be passed, by assigning reasons. In such an event, it
will be left open to the petitioner to work out his remedy in the manner
known to law.
17. This Writ Petition is disposed of in the above terms. No
costs. Consequently, connected miscellaneous petitions are closed.
Index : Yes/No 30.11.2023
NCC : Yes/No
Speaking order / Non-Speaking order
TSG
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To
1.The Secretary,
State of Tamil Nadu,
Department of Agricultural Marketing and
Agricultural Business,
St. George Fort,
Chennai - 600 009.
2.The Director,
The Directorate of Agricultural Marketing
and Agriculture Business,
Thiru. Vi.Ka. Industrial Estate, CIPET – II,
Main Road, Guindy, Chennai – 600 032.
3.The Commissioner,
The Tamil Nadu Agricultural Marketing and
Agri Business,
Thiru.Vi.Ka.Industrial Estate, CIPET-II,
Main Road, Guindy, Chennai - 600 032.
4.The Secretary,
Kanyakumari Market Committee,
Nagercoil - 629 001,
Kanyakumari District.
5.The Superintendent,
Regulated Market,
Monday Market,
Neyyoor Post – 629 802,
Kanyakumari District.
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N.ANAND VENKATESH, J.
TSG
Pre-delivery order made in
&
W.M.P.(MD)Nos.18718 & 18719 of 2021
30.11.2023
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