Uttarakhand High Court

Krishi Utpadan Mandi Samiti vs M/S Century Pulp & Paper on 10 April, 2024

                                          Reserved Judgment


    IN THE HIGH COURT OF UTTARAKHAND
                AT NAINITAL


            HON'BLE THE CHIEF JUSTICE MS. RITU BAHRI
                                AND
               HON'BLE MR. JUSTICE RAKESH THAPLIYAL



                    Reserved on : 01.04.2024
                    Delivered on : 10.04.2024

                 SPECIAL APPEAL NO. 354 OF 2015



Krishi Utpadan Mandi Samiti
Haldwani and another                      ......          Appellants


Versus


M/s Century Pulp & Paper
(Prop: Century Textiles & Industries
Limited) and another                      ......         Respondents



Counsel for the appellants     :   Mr.   Maneesh     Bisht,  learned
                                   counsel holding brief of Mr. Vipul
                                   Sharma, learned counsel

Counsel for the respondent     :   Mr. Mohinder Singh Bisht, learned
                                   Brief Holder for the State




The Court made the following:


JUDGMENT:

(per Hon'ble the Chief Justice Ms. Ritu Bahri)

The appellant Krishi Utpadan Mandi Samiti has

come up in appeal against the judgment dated

23.02.2015, passed by learned Single Judge, in Writ

Petition (M/S) No. 1033 of 2007 (Old No. 4995 of 1996)

and other connected cases, whereby writ petition filed by

Century Pulp and Paper Mill (respondent herein) has

been allowed observing that no market fee can be

recovered from the respondent / purchaser in view of

Section 17(iii)(b)(3) of the U.P. Krishi Utpadan Mandi

Adhiniyam 1964 (hereinafter referred to as 'the Act').

2) Brief facts of the case are that vide Annexure

No. 1 dated 23.02.1979, the State of Uttar Pradesh had

ensured supply of Eucalyptus wood to the Century Pulp

and Paper Mill (hereinafter referred to as 'respondent

company') on the conditions laid therein, wood of

Eucalyptus was to be sold to the respondent company

through U.P. Forest Corporation by the State of Uttar

Pradesh. Mandi Samiti raised a demand of mandi fee

from the respondent company on the wood purchased by

it from the Forest Department.

3) The learned Single Judge examined the above

said issue by referring to the Constitutional Bench

judgment of the Hon'ble Supreme Court in the case of

Ram Chandra Kailash Kumar and Company & others Vs

State of U.P. & another, 1980 (Supplementary) SCC 27.

By referring to the above said judgment, the learned

Single Judge observed that the State Government was

engaged in the selling of the forest produce and, in this

backdrop, the State Government could not be said to be

simpliciter producer and fall within the definition of the

"producer-cum-trader", and it was the State who was

liable to pay the market fee, therefore, the case of the

respondent company falls within the four corners of Sub-

section (3) of Section 17(iii)(b) of the Act.

4) Sub-section (3) of Section 17(iii)(b) of the Act

reads as under:

"17(iii) Levy and collect -

(a) such fees as may be prescribed for the issue or renewal of licences and

(b) market fee which shall be payable on transaction of sale of specified agricultural produce in the market area at such rates, being not less than one percentum and not more than two and a half percentum of the price of the agricultural produce so sold as the State Government may specify by notification, and development cess which shall be payable on such transactions of sale at the rate of half percentum of the price of the agricultural produce so sold, and such fee or development cess shall be realized in the following manner:-

(1) If the produce is sold through a commission agent, the commission agent may realise the market fee and the development cess from the purchaser and shall be liable to pay the same to the Committee;

(2) If the produce is purchased directly by a trader from a producer, the trader shall be liable to pay the market fee and development cess to the Committee;

(3) If the produce is purchased by a trader from another trader, the trader selling the produce may realize it from the purchaser and shall be liable to pay the market fee and development cess to the Committee;

Provided that notwithstanding anything to the contrary contained in any judgment, decree or order of any court, the trader selling the produce shall be liable and be deemed always to have been liable with effect from June 12, 1973 to pay the market fee to the Committee and shall not be absolved from such liability on the ground that he has not realized it from the purchaser:

Provided further that the trader selling the produce shall not be absolved from the liability to pay the development cess on the ground that he has not realized it from the purchaser."

5) The plea of liability to pay market fee is a pure

legal question, and as per provisions of Sub-Section (3)

of Section 17(iii)(b) of the Act, the respondent company

had purchased the Eucalyptus wood from the State /

Forest Department, and the State and Forest

Department are the traders selling the produce, and it is

the State or the Forest Department, who are liable to

pay the market fee to the Committee.

6) With respect to connected Writ Petition (M/S)

No. 1459 of 2007 and Writ Petition (M/S) No 1551 of

2007, also preferred by the respondent company,

learned Single Judge has further observed that in these

writ petitions, the respondent company had purchased

the agricultural produce from the traders of the other

State. The respondent company had given complete

details of the traders from whom it had made the

purchase and the appellant Krishi Utpadan Mandi Samiti

did not dispute the identity of traders (sellers) as given

by the respondent company. The learned Single Judge

held that once the identity of the seller or his

commission agent was not in dispute the same has to be

recovered from the seller or his commission agent and,

in this backdrop, Sub-section (4) of Section 17(iii)(b) of

the Act cannot be pressed.

7) Sub-Section (4) of Section 17(iii)(b) of the

Act is reproduced as under :

"(4) In any case of sale of such produce, the purchaser shall be liable to pay the market fee and development cess to the Committee:

[Provided that no market fee or development cess shall be levied or collected on the retail sale of any specified agricultural produce where such sale is made to the consumer for his domestic consumption only:

Provided further that notwithstanding anything contained in this Act, the Committee may at the option of, as the case may be, the commission agent, trader or purchaser, who has obtained the licence, accept a lump sum in lieu of the amount of market fee or development cess that may be payable by him for an agricultural year in respect of such specified agricultural produce, for such period, or such terms and in such manner as the State Government may, by notified order specify:

Provided also that no market fee or development cess shall be levied on transactions of sale of specified agricultural produce on which market fee or development cess has been levied in any market area if the trader furnishes in the form and manner prescribed, a declaration or certificate that on such specified agricultural produce market fee or development cess has already been levied in any other market area.]"

8) Counsel for the appellants has not been able

to cite any judgment of the Apex Court which has taken

a different view than the one taken by the Apex Court in

the case of Ram Chandra Kailash Kumar & Company

(supra). Since the Hon'ble Supreme Court has

categorically held that the market fee is to be charged

from the trader, who sells the agricultural produce, this

Court does not find any merit in the present special

appeal, and the same is liable to be dismissed.