Telangana High Court
M/S Kavitha Paraboiled Rice Industries vs The State Of Telangana on 21 January, 2025
THE HONOURABLE SMT. JUSTICE T. MADHAVI DEVI
I.A.NO.2 OF 2024 IN W.P.NO.13907 OF 2024,
WRIT PETITION NO.13907 OF 2024,
I.A.NO.2 OF 2024 IN W.P.NO.13909 OF 2024,
WRIT PETITION NO.13909 OF 2024,
I.A.NO.2 OF 2024 IN W.P.NO.13914 OF 2024,
WRIT PETITION NO.13914 OF 2024,
I.A.NO.2 OF 2024 IN W.P.NO.13915 OF 2024,
WRIT PETITION NO.13915 OF 2024,
I.A.NO.2 OF 2024 IN W.P.NO.13946 OF 2024,
WRIT PETITION NO.13946 OF 2024,
I.A.NO.2 OF 2024 IN W.P.NO.13968 OF 2024,
WRIT PETITION NO.13968 OF 2024,
I.A.NO.4 OF 2024 IN W.P.NO.17444 OF 2024,
WRIT PETITION NO.17444 OF 2024
AND
WRIT PETITION NO.17954 OF 2024
COMMON ORDER
In these Writ Petitions, the petitioners are challenging the
assessment of the market fees payable by the petitioners on purchase of
W.P.No.13907 of 2024 & batch
(Total 8 cases)
rice/paddy from outside the State for the assessment years 2020-2021,
2021-2022 and 2022-2023 as illegal, arbitrary and unconstitutional,
without power, without jurisdiction and contrary to the provisions of the
Telangana (Agricultural Produce & Live Stock) Markets Act, 1966 and
the Rules made thereunder and also challenging the order dt.28.06.2024
rejecting the renewal of trade licences of the petitioners as illegal and
arbitrary and to set aside the same and consequently direct the
respondents to renew the trade licences of the petitioners for a further
period of three years from 2024 to 2027 and to pass such other order or
orders.
2. Brief facts leading to the filing of the present Writ Petitions are
that the petitioners are licence holders who are dealing with agricultural
produce and claim to be paying necessary market fees by producing
relevant records. It is submitted that the petitioners have been
purchasing rice from outside the State of Telangana, i.e., Bihar and Uttar
Pradesh and the 3rd respondent in W.P.Nos.13907, 13909, 13914, 13915,
13946 and 13968 of 2024 has been exempting the petitioners from
payment of market fees on purchase of rice/paddy from outside the State
and export to other countries in terms of G.O.Ms.No.96, Agriculture and
W.P.No.13907 of 2024 & batch
(Total 8 cases)
Cooperation (AM-IV) Department, dt.19.10.2013 and also in terms of
the Circular No. Projects/38/2005 dt.28.11.2013 of the 2nd respondent.
3. It is submitted that, for the first time, the 3rd respondent in
W.P.Nos.13907, 13909, 13914, 13915, 13946 and 13968 of 2024 has
assessed the market fees on the rice purchased from other States for the
assessment years 2020-2021, 2021-2022 and 2022-2023 contrary to the
instructions of the 1st and 2nd respondents. It is submitted that Sections
12(1) and 12(B) of the Telangana (Agricultural Produce & Live Stock)
Markets Act, 1966 (for short, "the Act") provide for charging and
levying of market fee on the notified agricultural produce and that the
3rd respondent in W.P.Nos.13907, 13909, 13914, 13915, 13946 and
13968 of 2024 shall assess the market fee only on purchase or sale of the
agricultural produce in the notified market area. It is submitted that
under Section 12-B of the Act, only if the return submitted by the
assessee is incorrect or incomplete, the assessing authority shall, after
giving the trader an opportunity of providing the correctness and
completeness of the return submitted by him and after making such
enquiry as it considers necessary, assess to the best of its judgment, the
amount of market fee, due from the trader. It is submitted that the
W.P.No.13907 of 2024 & batch
(Total 8 cases)
assessment under this Section shall, however, be made only within a
period of three (3) years from the expiry of the years to which the
assessment relates. It is submitted that in this case, the assessments are
made for the year 2020-2021 in the year 2024 i.e., after expiry of three
(3) years to which the assessments relate and further that no documents
were called for from the petitioners before making the assessment.
Therefore, according to the petitioners, the assessment is not only
without jurisdiction but also is in violation of the principles of natural
justice and the guidelines issued therefor.
4. At the time of admission of the Writ Petitions, this Court had
directed the respondents not to take any coercive steps for
implementation of the impugned assessment orders.
5. The 3rd respondent in W.P.Nos.13907, 13909, 13914, 13915,
13946 and 13968 of 2024 and the 4th respondent in W.P.No.17444 of
2024 have filed counter affidavits along with vacate petitions in
I.A.No.2 of 2024 in W.P.No.13907 of 2024, I.A.No.2 of 2024 in
W.P.No.13909 of 2024, I.A.No.2 of 2024 in W.P.No.13914 of 2024,
I.A.No.2 of 2024 in W.P.No.13915, I.A.No.2 of 2024 in W.P.No.13946
W.P.No.13907 of 2024 & batch
(Total 8 cases)
of 2024, I.A.No.2 of 2024 in W.P.No.13968 of 2024 and I.A.No.4 of
2024 in W.P.No.17444 of 2024 submitting that the exemption of market
fee on rice is only when market fee is paid on the paddy and paddy is
brought from other States for processing, packing and storage and unless
and until they are sold again within the State, subject to production of
certain documents and after making due enquiries and thorough
verification of the documents produced with regard to the destiny of the
commodity in question by the assessing authority, the market fee is
exempted. It is submitted that the returns filed by the petitioners never
dealt with the destiny of the purchased rice nor did the petitioners pay
the market fee as mandated and therefore, the levy of market fee by the
assessing authority is correct. It is submitted that G.O.Ms.No.96
dt.19.10.2013 clearly states that exemption was given from payment of
market fee of 1% rice being sold outside the State to other States within
India as well as being exported to other countries for the entire life time
and in para 6 thereof, it is clearly mentioned that exemption is given for
entire life time as the rice is a processed commodity and cess is already
collected on paddy. It is submitted that the petitioners have not produced
any evidence in the form of any documents to show that the market fee
W.P.No.13907 of 2024 & batch
(Total 8 cases)
has been paid on such paddy and therefore the rice is not exempted from
payment of market fee. As regards the jurisdiction of the assessing
authority in making assessment after the lapse of three years from the
end of the relevant year, the respondents have relied upon the powers
vested with the assessing authority under Section 12-B of the Act and
further submitted that an appeal would lie against such assessment under
Section 12-E of the Act and thereafter a revision under Section 12-F of
the Act and the petitioners have approached this Court without
exhausting the alternative remedy. It was therefore prayed that the Writ
Petitions be dismissed.
6. Further, as regards the contentions of the petitioners that they
have applied for renewal of licence but the respondents have not
renewed the licence, it is submitted that the said contentions are
incorrect and that the petitioners have not made any such applications
for renewal of licence except for making a prayer in these Writ
Petitions.
7. In support of the contention of the respondents that when an
alternative remedy is available, the petitioners can only avail such
W.P.No.13907 of 2024 & batch
(Total 8 cases)
alternative remedy, the learned counsel for the 3rd respondent in
W.P.Nos.13907, 13909, 13914, 13915, 13946 and 13968 of 2024 and 4th
respondent in W.P.Nos.17444 and 17954 of 2024 has placed reliance
upon a decision of the Coordinate Bench of this Court in the case of
Gayatri Bio Organics Limited Vs. The State of Telangana rep. by
the Principal Secretary, Agricultural Marketing Department and
others1. He submitted that in spite of knowing the above legal position,
the petitioners have approached this Court by these Writ Petitions to
avoid payment of admitted market fee to entertain the appeal.
8. The learned counsel for the petitioners, however, placed reliance
upon the following decisions to submit that the Writ Petition is
maintainable where the assessing authority has no jurisdiction to pass
such orders or has not followed principles of natural justice or
provisions of law.
(1) PHR Invent Educational Society Vs. Uco Bank and others 2
W.P.No.16537 of 2024 dt.28.06.2024
Civil Appeal No.___of 2024 arising out of SLP(C) No.8867 of 2022 dt.10.04.2024
: 2024 INSC 297
W.P.No.13907 of 2024 & batch
(Total 8 cases)
(2) Radha Krishan Industries Vs. State of Himachal Pradesh and
others3
(3) Godrej Sara Lee Ltd. Vs. The Excise and Taxation Officer-
cum-Assessing Authority and others 4
(4) Kranti Associates Private Limited and another Vs. Masood
Ahmed Khan and others 5
9. Having regard to the rival contentions and the material on record,
this Court finds that the petitioners have filed their returns and have
produced the records, books of accounts, statements and other relevant
records in support of their returns. The assessing authority itself has
recorded that in respect of the market fee on paddy, the petitioners have
submitted cash receipts, export permits and letters of payment to claim
market fee exemptions and they were found to be valid and the same
were considered for exemption, but has observed that while submitting
monthly purchase returns, it was found that the sum of Rs.88,672/- is
due from the petitioner in W.P.No.13907 of 2024. It was also observed
(2021) 6 SCC 771
MANU/SC/0086/2023
(2010) 9 SCC 496
W.P.No.13907 of 2024 & batch
(Total 8 cases)
that the petitioner has imported 94791.08 quintals of paddy from other
States for processing and that the petitioner has not produced evidence
or proof for 4495 quintals of paddy in support of the claim of exemption
for market fee. It was further observed that the petitioner is not entitled
for any market fee exemptions as per the market rules in vogue and the
petitioner in W.P.No.13907 of 2024 was directed to pay a sum of
Rs.88,672/- towards market fee for 4495 quintals of paddy for the
assessment year 2021-2022.
10. As regards market fee on rice, the assessing authority observed
that the petitioner in W.P.No.13907 of 2024 did not produce any cash
receipts, export permits and letters of payment towards payment of
market fee and that the petitioner has made certain purchases of rice
within the State and hence is liable to pay market fee of Rs.2,33,502/- on
the rice purchased within the State and further a sum of Rs.18,621/- on
the rice purchases made from out of the State. Thereafter, subject to the
outcome of W.P.No.31801 of 2022, a demand for Rs.18,621/- was
made.
W.P.No.13907 of 2024 & batch
(Total 8 cases)
11. As regards rice converted/processed from paddy within the State,
it was allowed and in respect of the rice converted/processed from
paddy out of the State, a demand of Rs.18,78,572/- was made.
12. In respect of the petitioners in other Writ Petitions, i.e.,
W.P.Nos.13909, 13914, 13915, 13946 and 13968 of 2024, similar
observations were made by the assessing authority in the respective
impugned orders on the four categories of commodities with varied
market fee demands vis-a-vis quintals of commodities.
13. Thus, it can be seen that the petitioners have produced the
relevant documents and if the assessing authority was of the opinion that
the said returns are incomplete or incorrect, then in accordance with
Section 12-B of the Act, he ought to have called for the petitioners'
explanations, if any. From the impugned orders, it is clear that no such
notices were given to the petitioners and no explanations were called for
from the petitioners and no show-cause notices were issued as to why
the demand should not be raised against the petitioners. Therefore, it is
in clear violation of the provisions of the Telangana (Agricultural
Produce & Livestock) Markets Act, 1966 and also in violation of the
W.P.No.13907 of 2024 & batch
(Total 8 cases)
principles of natural justice. The said provision is very clear that if the
returns submitted by the trader were to be accepted as they are, no notice
need be given, but if the assessing authority is of the opinion that the
return is incomplete or incorrect, the trader ought to be put on notice
before making any assessment.
14. The decision relied upon by the learned counsel for the 3rd
respondent in W.P.Nos.13907, 13909, 13914, 13915, 13946 and 13968
of 2024 is that when there is an efficacious alternative remedy available,
Writ Petition is not maintainable. This Court finds that the same would
be applicable if the assessment was made in accordance with the Act
and the rules made thereunder, but not where the assessing authority did
not follow the rules before finalising the assessment.
15. The Hon'ble Supreme Court in the case of Radha Krishan
Industries Vs. State of Himachal Pradesh and others (3 supra) at
para 27.4, has observed that an alternate remedy by itself does not divest
the High Court of its powers under Article 226 of the Constitution in an
appropriate case though ordinarily, a writ petition should not be
W.P.No.13907 of 2024 & batch
(Total 8 cases)
entertained when an efficacious alternate remedy is provided by law.
Further, in para 27.3, the Hon'ble Supreme Court has observed as under:
"27.3. Exceptions to the rule of alternate remedy arise where:
(a) the writ petition has been filed for the enforcement of a
fundamental right protected by Part III of the Constitution; (b) there
has been a violation of the principles of natural justice; (c) the order
or proceedings are wholly without jurisdiction; or (d) the vires of a
legislation is challenged."
16. Thus, in this case, when the assessing authority has not followed
the provisions of the Telangana (Agricultural Produce & Live Stock)
Markets Act, 1966 and has not followed the principles of natural justice,
the Writ Petition under Article 226 of the Constitution is maintainable.
This principle has been reiterated by the Hon'ble Supreme Court in
various other judgments which are relied upon by the learned counsel
for the petitioners.
17. In view of the above, this Court is of the opinion that the
impugned assessment orders in W.P.Nos.13907, 13909, 13914, 13915,
13946 and 13968 of 2024 cannot be sustained and are accordingly set
aside with a direction to the assessing authority of the respondent
Agricultural Market Committee to issue notices to the petitioners in
W.P.No.13907 of 2024 & batch
(Total 8 cases)
W.P.Nos.13907, 13909, 13914, 13915, 13946 and 13968 of 2024 along
with reasons for forming an opinion that they are incorrect and
incomplete details of the documents are furnished by the petitioners and
after giving the petitioners an opportunity to produce them and after
considering such documents, if any, the assessing authority shall re-
assess the market fee payable by the said petitioners.
18. As regards the renewal of the licences of the petitioners in
W.P.Nos.17444 and 17954 of 2024, due to the pendency of these Writ
Petitions, this Court is of the opinion that the respondents can consider
the applications of the petitioners for renewal of their licences in
accordance with rules without prejudice to the assessments being made
in respect of the petitioners in W.P.Nos.13907, 13909, 13914, 13915,
13946 and 13968 of 2024.
19. In the result,
(i) The Writ Petitions in W.P.Nos.13907, 13909, 13914,
13915, 13946 and 13968 of 2024 are allowed.
(ii) The Writ Petitions in W.P.Nos.17444 and 17954 of 2024
are disposed of.
W.P.No.13907 of 2024 & batch
(Total 8 cases)
(iii) The vacate petitions in I.A.No.2 of 2024 in W.P.No.13907
of 2024, I.A.No.2 of 2024 in W.P.No.13909 of 2024,
I.A.No.2 of 2024 in W.P.No.13914 of 2024, I.A.No.2 of
2024 in W.P.No.13915, I.A.No.2 of 2024 in W.P.No.13946
of 2024, I.A.No.2 of 2024 in W.P.No.13968 of 2024 and
I.A.No.4 of 2024 in W.P.No.17444 of 2024 are dismissed.
(iv) There shall be order as to costs in all these Writ Petitions.
(v) Pending miscellaneous petitions, if any, in all these Writ
Petitions shall stand closed.
___________________________
JUSTICE T. MADHAVI DEVI
Date: 21.01.2025
Svv
