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Judgment
J.N. Sarma, J.—All these three Civil Rules raise the same questions of law and fact and as such they are taken up together for hearing and disposal.
I have heard Mr. N.M. Lahiri, learned Counsel for the Petitioners in all the cases and Mr. S.A. Laskar, learned Counsel for the Respondents.
CR No. 2925/93 challenges the legality and the validity of the realisation of cess by the Marketing Inspector of Srirampur Checkgate in violation of the provisions of Assam Agricultural Produce Act, 1972 and the Rules made therein (hereinafter called the Act and Rules.)
CR No. 3071/93 challenges the notices issued by the Gauripur Market Committee, Gauripur informing the Petitioners that the said Committee is going to collect cess on notified agricultural commodities and illegal and arbitrary realisation of cess by the Marketing Inspector, Dhubri Check-gate and Asstt. Secretary, Chagoli Checkgate in violation of the provisions of the Act and the Rules.
CR No. 3096/93 challenges the illegal and arbitrary realisation of cess by the Marketing Inspector, Srirampur Checkgate in violation of the provisions of the Act and the Rules.
Other prayers made in CR No. 2925/93 for a direction to the Respondent to desist from realising illegal cess from the agricultural produce including rice coming from outside the State of Assam at the Srirampur Checkgate and with a further prayer to direct to refund illegally realised cess to the extent of Rs. 23886/- with interest thereon.
In CR No. 3071/93 the prayer is for issue a mandamus directing the Respondents from realising illegal cess from the agricultral produce including rice, wheat, M. seeds, chillies coming from outside State of Assam at the Dhubri Checkgate and Baxirhat Checkgate and further directing them to cancell and/or forebear from giving effect to the impugned order dated 1.10.93 (Annexures-V to the writ application) issued by the Secretary to the Gauripur Market Committee, Gauripur to all the Petitioners and to refund the alleged illegally realised cess.
In CR No. 3096/93 the prayer is the same as in CR 2925/93. The only difference being that there is no prayer for refund of cess already realised.
The brief facts are as follows:
The Petitioners purchase different agricultural produce outside the State of Assam and bring them to the State of Assam for the purpose of sale. That the State Govt. enacted a law namely, Assam Agricultural Produce Market Act, 1972 to provide for better regulation of buying and selling of agricultural produce in the State of Assam and establishment of markets of regulated produce in the State of Assam and establishment of regulated markets for agricultural produces:
The Statement of objects and reasons of the Act are as follows as published in the Assam Gazette dated 21st July, 1972 at page 726:
The object of a market is to facilitate the marketing activities by providing fair opportunities both to the buyers and sellers to strike bargain and to complete transaction. The promotion of this object should therefore be the duty of the traders as well as of the agriculturist. Where one is unable for one reason or the other to discharge his responsibilities and the oilier anxious to exploit his rival''s ignorance and helplessness it is the avowed duly of the State to intervene and control unfair business and facilitate the fair one. The State can effectively intervene by regulation of market practices under which those using the markets are required to behave and perform their function, and under which one duly elected legal body (authority) is created to ensure that those prescribed rules of behaviours are strictly observed.
In fact, sale of agricultural produce involves a number of functions such as assembling, storing, grading, standardising, transporting and financing the producer and negotiating the sale. The individual producer docs not have the specialised knowledge and adequate resource to perform all these functions. Hence he needs to be given not only beter facilities for disposal of his produce in a well established regulated market but also proper help and advice with regard to grading and standardisation as well as adequate storage facilities and financial assistance to improve his staying power. The implementation of the provisions of the various schemes of agricultural improvement and recommendations of the Government of India from time to time for effecting the above improvements demand the establishment of Regulated markets. The plan for regulation of markets may, therefore, be said to be an intergated plan which intends to effectively link the various stages of marketing thereby brings benefit to the cultivators.
Thus is an Act to provide for belter regulation of buying and selling of agricultural produce and establishments of markets for agricultural produce in the State of Assam and for matters connected therewith, the Act received the assent of the President and it was introduced with the previous sanction of the President of India under the proviso to Article 304(b) of the Constitution of India. The Rules were framed being the Assam Agricultural Produce Market (General) Rules, 1975 which was brought into force with retrospective effect from 15.6.77. Section 21 of the Act provides as follows:
Power to levy cess.-(I) Every market committee shall levy and collect a cess on the agricultural produce bought or sold in the market area at the rate not exceeding one rupee for every one hundred rupees of the aggregate amount for which a notified agricultural produce is bought or sold whether for cash or for deferred payment or oilier valuable consideration:
Provided that no cess will be levied on goods manufactured from the Agricultural produce on which cess is proposed to be levied and which are ultimately exported out of the country.
Explanation:-1. For the purpose of this sub-section all notified agricultural produces taken out or proposed to be taken out of a market area shall unless the contrary is proved, be presumed to be bought or sole within such area,
Explanatiou-2. The cess referred to in Section 12 shall be paid by the purchaser of the notified agricultural produce concerned.
Rule 21 of the Rules provides as follows:
Levy and collection of cess on the sale and purchase in the agricultural produces.-(Section 21 and 49(2)(v)-(1)The cess levied on the sale and purchase of agricultural produce in a notified market area u/s 21 of the Act shall be applicable only once in the same notified market area, (2) The responsibility of paying the cess prescribed u/s 21 of the Act shall be the buyer and such cess shall be leviable as soon as an agricultural produce is (sic, bought) or sold by a licencee.
(3) The cess shall be paid to the Committee or to a paid officer duly authorised by the Market Committee to receive such payment within 4 days of the days of transaction.
Explanation. - In computing the period of 4 days specified in Sub-rule (3) of Rule 21 the days of transaction shall be included.
(4) A receipt in form, K. shall be granted forthwith to the person making payment in respect of any cess paid under these rules.
(5) Every Officer or servant employed by a Committee for the collection of cess shall be supplied by the Committee with a badge of office in such form as may be prescribed by it. The badge shall be worn by the officer or servant concerned while discharging his duties.
(6) Every such officer or servant shall before entering on his duties furnish such security as may be prescribed by the bye-laws of the Committee concerned.
(7) For the purpose of this rule agricultural produce shall be deemed to have been bought or sold in a notified area:
(i) if the agreement of sale or purchase thereof is entered into in the said area; or
(ii) if in pursuance of the agreement of sale or purchase the agricultural produce is weighed in the said area; or
(iii) if in pursuance of the agreement or sale or purchase the agricultural produce is delivered in the said area to the purchaser or to some other person on behalf of the purchaser.
(8) If in the case of any transaction any two or more of the acts mentioned in Sub-rule (7) have been performed within the boundary of two or more notified market area (sic, areas) the cess shall be payable to the Committee within whose jurisdiction the agricultural produce has been weighed in pursuance of the agreement of sale or, if no such weighment has taken place, to the committee, within whose jurisdiction the agricultural produce is delivered.
It is stated by the Petitioners that they purchase goods outside the States and pay the cess, at the respective States of purchase, but when the goods are brought, the Respondent did not allow the truck to proceed further from the checkgate until and unless cess is again paid with the entire truck load of goods. It is further contended that the goods are not bought and sold as defined in the Act and the Rules in that area and as such the question of realising cess docs not arise at all. It is also stated that the realisation of cess is illegal and unauthorised.
Mr. Lahiri submits as follows:
The Assam Agricultural Produce Market Act, 1972 (Assam Act XXIII of 1974) was enacted with the object to facilitate the Marketing Activities by providing fair opportunities both to buyers and sellers to strike a bargain and to complete transaction for the promotion of the object, it is the duty of the traders as well as the agriculturists. However, where one is unable for one reason or the other to discharge his responsibility, and the other is anxious to exploit his rival''s ignorance and helplessness, it is the duly of the State to intervene and control unfair business and facilitate fair one inasmuch as the State can regulate the market price. The object of the act is supervision and control of transactions of purchase by traders from agriculturists in order to prevent exploitation of the latter by the former, i.e. cultivators should get proper price of their produce. To achieve the object, market yards are to be established and facilities are to be provided. Moreover, for sale of agricultural produce, a number of functions like assembling, storing, grading, standardising, transporting and financing the purchaser and negotiation by sale is necsary which may not be possible for the individual purchaser and as such better facilities are to be provided for disposal of the produce in a well-established regulated market and offering help and advice and creating storage facilities and financial assistance. The supervision and control can be effective only in specified localities and places and not throughout the extensive market area and such supervision and control is necessary to prevent exploitation of the poor agriculturists by the traders.
Cess of fee can be levied in respect of services provided and that too by a market committee. No market committee is there in Kokrajhar and cess is being levied by the officials of the Board at the checkgate on the border of Assam & West Bengal without there being transaction of sale and as a result free flow of trade and commerce in inter state is directly affected. Moreover the goods are produced in other states and while purchasing the goods cess/fee had been paid by the Petitioners to the Marketing Committee of the said State and cess levied at the checkgate has no nexus with the cultivator of the State for whose benefit the Act was enacted.
Section (2) States that the Act will extend to such areas of Assam which are notified by the State Government from time to time. Section 4 deals with such notification and u/s 5 market areas are to be declared. As per Section 6 of the Act Market yards are to be declared and for each market area there should be one principal market yard and one or more sub-market yard. The functions of the market committee are provided u/s 14 of the Act as per which they are to maintain and manage yards and run the market in the interest of agriculturists and the traderes and to regulate and control the transaction in the market etc.
As per Section 21 of the Act cess can be levied on the agricultural produce bought or sold in the market area and cess is to be paid by the purchaser.
Section 23 deals with market committee fund and all the money received by the market committee is to be paid in the said market committee fund all expenditure are to be incurred from the said fund for achieving the purpose of the Act and the surplus is to be invested as prescribed. Section 25 of the Act prescribes the purpose for which the market committee fund is to be expended subject to the provisions of Section 23 which includes acquisition of sites or sites for the market, maintenance and improvement of the market construction and repair of the building, necessary for the purpose of such market and for health, convenience and safety of the persons using it etc.
The Assam Agricultural Market (General) Rules, 1975 were also framed by the Government and under the provisions of the said rules there are various duties and responsibilities cast on the market committee including erection of weigh bridge in the market.
Rule 21 of the rules prescribes that cess can be levied on the sale and purchases of agricultural produce in the notified market area and the same is to be paid by the buyer to the committee or the authorised officers of the committee within 4 days of the transaction. Sub-rule (7) of Rule 21 prescribes that for the purpose of due Rules agricultural produce shall be deemed to have been bought or sold if an agreement of sale or purchase is entered in the said area and in pursuance of the agreement sale or purchase of agricultural produce is weighed in the said area and if in pursuance of the agreement for sale or purchase agricultural produce is delivered in the said area to the purchaser or to some other persons "on behalf of the purchaser.
Bye-laws of the Assam State " Agricultural Marketing Board were also framed and Bye-laws 3 deals with the object which includes providing infrastructure facilities for each regulated market with amenities like godown, auction platform, traders shops, retailers shop, rest houses for farmers Bank, Post Office and Jute bailing press etc.
On examination of the various facilities of the Act, Rules and Bye-laws, it is absolutely clear that cess is a fee and such fees can be realised in lieu of rendering services only as laid down by the Hon''ble Supreme Court in Kewal Krishan Puri and Others Vs. State of Punjab and Another, various principles for satisfying the test for a valid levy of market fee (cess) on agricultural produce bought or sold by licencee in a notified area has been mentioned and as per that at least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of 2/3rd or 3/4th must be shown with reasonable certainity as being spent for rendering services of various kinds as mentioned therein. Cess levied is not on agricultural produce in the sense of imposing of any kind of tax or duties on agricultural produce, nor it is a tax on transaction or purchase or sale and the levy is an impost on buyers of the agricultural produce in the market in relation to transaction of his produce and the agriculturists are not required to share any portion of the burden of those fee. Cess can be levied by each and every market committee separately in its own area and a good and substantial portion of the said cess is to be expended for rendering services in the area to the payers of the fee in relation to the transaction taking place therein.
The Apex Court in Anr. case namely Ram Chandra Kailash Kumar and Company and Others Vs. State of U.P. and Another, held that big areas may be declared as market areas, but the whole market area is not meant where trader or licencee can be allowed to set up and carry on their business and the traders are required to take out licence for such place which is either a principal market yard or submarket yard or at any specified place in the market area and in the said case it was further held that the market fee is payable on transactions of sale of specified agricultural produce in the market area and if no transaction of sale takes place in the market area no fee can be charged by the market committee of that area and if the goods are merely brought in any market area and are despatched outside It without any transaction of sale taking place therein, then no market fee can be charged. It was also held that after bringing of the goods in a particular market area and they are despatched there from are as a result of transaction of purchase and sale taking place outside the market area, it has been claimed that no fee can be levied.
On the aforesaid background, it can be seen in the instant case that the Respondents 1, 2 and 3 are realising cess at the Srirampur checkgate in respect of the goods which are coming from outside the State of Assam to various places including Guwahati although no sale transaction takes place within the market area where checkgates falls. Moreover, cess is being realised by the marketing Board although there is no market committee and as per the affidavit the Board has brought the checkgate under its direct control which is not authorised and is illegal and without jurisdiction and as such the realisation of cess is wholly illegal. Further, cess is being realised in such a manner as if it is a tax inasmuch as no service of any sort is being provided by the Respondents inasmuch as there is no market yard-either principal or submarket yard-within the Guwahati Market area even the office of the Market committee is not within the market area. Further, the amount realised is being appropriated by the Board and is not given to the Guwahati Market Committee. Further, Rule 21(7)(iii) is not applicable in the present case inasmuch as the sale transaction takes place outside the State of Assam and goods are delivered to the various representatives of the Petitioner at that place on payment of cess of that area, Further, for the purpose of evading payment of cess, cess cannot be levied at the checkgate as has been done in the instant case which is violative of Articles 301 and 304 of the Constitution of India inasmuch as Respondents can adopt other procedures. Erection of the checkgate itself is illegal and without authority of law and the notification opening a counter at the Srirampur checkgatc is illegal, without jurisdiction and void. The statement made in the affidavit that cess is being levied for the notified area and not for the unnotified area are also incorrect inasmuch as cess is being levied on all and in respect of unnotified area cess is being not refunded and the cess is pending before this Hon''blc Court.
It is submitted that cess which is in the nature of fees is being realised compulsorily by the Respondents without providing any service therefore and such cess is being levied on the goods bought from outside the State which is not within the purview of the Act inasmuch as it is the agriculturists when they bring their goods to the market yards cess can be levied on transaction of sale and levy of cess in the nature as in the instant case is putting a burden on the consumers inasmuch as when cess is levied in very market area price of the goods goes up and the ultimate burden falls on the consumer. For instance, if rice is purchased at Rs. 10/- a kg and if cess is levied in five market areas, the price of rice will be around Rs. 10.60 per kg and the increase is only in respect of imposition of cess without providing any service. Realisation of cess in the nature as has been done in the instant case is contrary to the provisions of the Act and it is frustrating the objects and reasons for which the Act has been enacted inasmuch as there is no supervision and control on the transaction of sale by the agriculturists and the agriculturists are being not benefited in any manner inasmuch as they are to sell their articles at various places as there is no market yards and as such the Respondents are not entitled to realise cess as has been done in the instant case except as provided in the Act and the Rules and that too by rendering proper service,
On the other hand, Mr. S.A. Laskar, learned Counsel appearing for the Respondents submits as follows:
That there is adequate efficacious, alternative remedy by way of revision as provided by Section 52 of the Act and as such this application is not maintainable. (2) That market areas were declared by the Govt. as will be evident from Annexure-I to the affidavit-in-opposition filed on behalf of Respondents. The market areas are detailed in Annexure-I to the affidavit-in-opposition and they are quoted below:
Howly Market Area - Under Howly Market Committee.
Dhing Market Area - Under Dhing Market Committee.
Gauripur Market Area - Under Gauripur Market Committee.
Kharupetia Market Area - Under Kharupetia Market Committee.
Golaghat Market Area - Under Golaghat Market Committee.
North Lakhimpur Market Area - Under North Lakhimpur Market Committee.
Goreswar Market Area - Under Goreswar Market Committee.
Dhekiajuli Market Area - Under Dhekiajuli Market Committee.
Lanka Market Area - Under Lanka Market Committee.
Guwahati Sub-Divisional Market Area - Under Guwahati Sub-Divisional Market Committee.
Silapathar Market Area - Under Silapathar Market Committee.
Boharihat Market Area - Under Boharihat Market Committee.
Nalbari Market Area - Under Nalbari Market Committee.
Bijni Market Area - Under Bijni Market Committee.
Titabar Market Area - Under Titabar Market Committee.
That checkgate have been established under the provisions of Section 14(7) within the declared market areas and the respective market Committees for the purpose of preventing the evasion of cess due and further two numbers of Inter-State checkgates have been established available at Srirampur and Baxirhat and both of them are within the declared areas. These checkgates have been established for the purpose of preventing evasion of cess in respect of outgoing and incoming quantities of notified produce/goods on which no mandatory return is submitted by the traders liable for payment of cess.
That the cess is collected at the Inter-State checkgates on behalf of various Market Committees on outgoing consignment of produce which have evaded assessment by the concerned market committee and on incoming consignment of produce where evasion is almost the regular practice and takes place in the following manner:
i) Evasion by terminating the consignment at any place prior to the destination stated in the document accompanying the consignment.
ii) Evasion by splitting up the consignment into smaller consignment.
iii) Evasion by disposing of the produce at any place prior to the destination.
iv) Evasion by subsequently moving the consignment by different mode of transport.
v) Evasion by subsequently changing the name of the firm to that of a subsidiary, and in other like manner.
In the above situation, the market committees which is entitled to the cess is deprived from its collection and this results in unwarranted multiplicity of litigation and also completely frustrates and defeats the very purpose for which the above Act and the Rules were framed.
Further, the collection of cess on incoming quantities of produce at the Inter-State check gates docs not result in any disadvantage to the consignees as they are legally bound by the aforesaid provisions of the Act and the Rules to pay the cess due even at a later stage in the event of the consignment reaching their due destination.
That the cess which is realised are utilised for the development of market infrastructures in market yards within the declared market areas, purchases of land for establishment of market where no Govt. allocation is available and maintenance of officers and staff of the Board and the various market committees etc.
That all the Petitioners delivered the notified goods within the notified areas where the trading premises of the Petitioners exist and which is within the declared market area of the market committees under the Board and hence the levy of cess is justified.
The action of the authority is not arbitrary and/or illegal but within the four corners of law.
That the Petitioners are bound to give the periodical return under Rule 23(1), but the same were not furnished at any point of time.
Before we proceed further let us have a look at Rules and Sections. Section 14 provides for functions of the market committee and Section 14(vii) provides inter alia as follows:
Section 14(vii): to do such other things as may be required for the purpose of achieving the objects and requirements of the Act and the rules and bye-laws framed thereunder.
Rule 21(7)(iii) has already quoted.
Rule 23(1) provides as follows:
Every licenced dealer shall submit to the Committee a return in form M showing his purchases and sales of each transaction of agricultural produce within 4 days from the date of transaction.
Provided that in case the faria sends one copy of Form J to the Market Committee, the faria will be exempted from sending form M to the Market Committee and the buyer shall indicate in Form M only the total quantity and the gross value in respect of each commodity purchased from each seller.
Let us first take up the preliminary objection of Mr. Laskar. Section 52 on which reliance was placed by Mr. Laskar provides that the power of the State Govt. to call for proceedings of market committees and to pass orders thereon. Section 52 is quoted below:
Power of State Government to call for proceedings of Market Committees and to pass orders thereon.- (1) The State Government may at any time call for and examine the proceedings of the Board or any market committee for the purpose of satisfying itself, as to the legality or propriety of any decision or order passed by the Board or market committee under the rules. If in any case it appears to the State Government that any decision or order or proceedings so called for should be modified annulled or revised the State Government may pass such order thereon as it may think fit.
(2) That State Government may, by general or special order delegate to the Director all or any of the powers conferred upon it by this section.
A bare perusal of this section will show that it is the prerogative of the State Govt. only to call for and examine the proceedings of the Board. The Petitioner on their own do not have any right to file any appeal or revision. So, this contention of Mr. Laskar that the Petitioners have adequate, efficacious, alternative remedy cannot be accepted and as such this contention stands rejected. In this connection D.L.F. Housing Construction (P) Ltd. Vs. Delhi Municipal Corpn. and Others, DLF Housing Construction (P) Ltd. v. Delhi Municipal Corporation to argue that this is a case where the basic questions are disputed and complicated questions of law and facts depending on evidence are involved and the writ court is not the proper forum for seeking the relief. Accordingly, he also submits that this writ application should be thrown out on that ground also. Mr Laskar also places reliance in two decisions of this Court reported in (1994) 2 GLR 448 Subir Kumar Ganguli v. Accounts Officer (SBP) Telecom Deptt. Bongaigaon and (1994) 2 GLR 449 Bhanwarlal Jain v. Union of India and ors.. That cases were with regard to the dispute relating the telephone bills and the Division Bench of this Court pointed out that the dispute involves investigation of fact which may require both oral and documentary evidence to be adduced by the parties and as such it was held that it was not a case for interference under Article 226 of the Constitution of India. In the case of Bhanwarlal Jain (supra) it was further pointed out that there was remedy before the Consumer Forum as well as by way of arbitration u/s 7B of the Indian Telegraphs Act, 1885. The facts of those cases do not apply to the present case and accordingly this contention of Mr. Laskar that the matter involves disputed question of fact and the writ court is not the proper forum to decide this matter also shall stand rejected.
Next let us have a look at the desision cited at the bar Kewal Krishan Puri and Others Vs. State of Punjab and Another, The question which arose for decision in that case was the legality of the certain provisions of Punjab Agricultural Produce Market Act, 1961 as also the legality of the fixation of market fees from time to time by the various market committees in the State under the direction of Punjab State Agricultural Produce Marketing Board. The Supreme Court declined to interfere with the enhancement of market fee from Re. 1/- to Rs. 2/-, but quashed the enhancement of market fee from Rs. 2/- to Rs. 3/-. The legality and validity of the Act and the Rules were upheld by the Supreme Court. The Supreme Court in para 23 of the judgment has laid down the law as follows:
From a conspectus of the various authorities of this Court we deduce the following principles for satisfying the tests for valid levy of market fees on the agricultural produce bought or sold by licensees in a notified market area:
(1) That the amount of fee realised must be earmarked for rendering services to the licensees in the notified market area and a good and substantial portion of it must be shown to be expended for this purpose.
(2) That the services rendered to licensees must be in relation to the transaction of purchase or sale of the agricultural produce.
(3) That while rendering services in the market area for the purpose of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefits must be conferred on them which have a direct, close and reasonable correlation between the licensees and the transactions.
(4) That while conferring some special benefits on the licensee; it is permissible to render such service in the market which may be in the general interest of all concerned with transactions taking place in the market.
(5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run to increase the volume of transactions in the market ultimately benefiting the traders also. Such an indirect and remote benefit to the traders is in no sense a special benefit to them.
(6) That the element of quid pro quo may not be possible, or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee.
(7) At least a good and substantial portion of the amount collected on account of fees may be in the neighbourhood of two-thirds or three-fourths must be shown with reasonable certainty as being spent for rendering services of the kind mentioned above.
This matter again came up for consideration in Krishi Upaj Mandi Samiti and Others Vs. Orient Paper and Industries Ltd., where in the Supreme Court considering the M.P. Krishi Upaj Mandi Adhiniyam 1973, held as follows:
(a) The distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of the common burden while a fee is a payment for a special benefit or privilege. Fees confer a special capacity although the special advantage is secondary to the primary motive of regulation in the public interest. Public interest seems to be at the basis of all impositions but in a fee it is some special benefit which the individual receives.
(b) That although there can be no generic difference between a tax and fee since both are compulsory exaction of money by public authorities, there is this distinction between them that whereas the tax is imposed for public purposes and requires no consideration to support it, a fee is levied essentially for services rendered and there must be an element of quid pr quo between the person who pays it and the public authority that imposes it.
(c) While a tax invariably goes into the consolidated fund, a fee is earmarked for the specified services in a fund created for the purpose. Whether a cess is one or the other would naturally depend on the facts of each case. If in the guise of a fee, the legislature imposes a tax, it is for the court on a scrutiny of the scheme of the levy to determine its real character, The distinction is recognised by the Constitution which while empowering the appropriate legislature to levy taxes under the entries in the three lists refers to their power to levy fee in respect of any such matters except the fees taken in court.
(d) In determining whether the levy is a fee, the true test must be whether its primary and essential purpose is to render specific services to a specified area or class, it being of no consequences that the State may ultimately and indirectly be benefited by it. The amount of the levy must depend on the extent of the services sought to be rendered and if they are proportionate, it would be unreasonable to say that since the impost is high, it must be a duty of excise. Nor can the method prescribed by the legislature for recovering the levy by itself after its character. The method is a matter of convenience and though relevant, has to be tested in the light of other relevant circumstances.
Then in para 21(7) the law has been laid down as follows:
It is not a postulate of a fee that it must have relation to the actual service rendered. However, the rendering of service has to be established. The service, further, cannot be remote. The test of quid pro quo is not to be satisfied with close or proximate relationship in all kinds of fees, A good and substantial portion of the fee must, however, be shown to be expended for the purpose of which the fee is levied. It is not necessary to confer the whole of the benefit on the payers of the fee but some special benefit must be conferred on them which has a direct and reasonable correlation to the fee. While conferring some special benefits on the payers of the fees, it is permissible to lender service in the general interest of all concerned. The clement of quid pro quo is not possible or even necessary to be established with arithmetical catered. But it must be established broadly and reasonably that the amount is being spent for tendering services to those on whom the burden of the fee falls. There is no postulate of a fee that it must have a direct relation to actual services rendered by the authorities to each individual to obtain the benefit of the service. The element of quid pro quo in the strict sense is not always a sine qua non for a fee. The element of quid pro quo is not necessarily absent in every tax. It is enough if there is a broad, reasonable and general co-relationship between the levy and the resultant benefit to the class of people on which the fee is levied though no single payer of the fee receives direct or personal benefit from those services. It is immaterial that the general public may also be benefited from sonic of the services if the primary service intended is for the payers of the fee.
And in the facts and circumstances of that case, it was found that the fee which was levied was utilised in furtherance with the object of the Act, that is, to regulate the buying and selling of agricultural produce and the establishment of the proper infrastructures of the markets for the benefit of the agriculturists who are the primary producers of the said produce. The machinery and facilities for which the market fees were being expended were found to be all necessary to provide necessary infrastructures to further the object of the Act, II was further found that without those infrastructures the objects of the Act cannot be properly and adequately implemented. It was also found that the said machinery and the facilities are meant for the benefit of all the buyers and sellers of the agricultural produce within the market area.
In the instant case, it is found from the writ application itself that in para 3 it is admitted that the goods are purchased by the Petitioners and brought into;] State for the purpose of sale. So it will come within the definition of sale as provided under the Act. It is not the case of the Petitioners that the goods brought are not sold within the market area as will be evident from the affidavit-in-opposition filed on behalf of the Respondents. It is the further case of the Respondents in their affidavit in para 6 as follows:
That there is no levy of cess on consignment of notified produce which are bound for any unnotified areas in the State or where the consignments is legitimately based in such unnotified areas, Any cess levied on such consignment at the Inter-State checkgate inadvertently is always refundable fouthwith to the consignee.
So, the cess is levied only on goods brought to the notified areas and as will be evident from the provisions of the Act, the cess can be levied on the notified areas in case of notified goods. It is the further case of the Respondents that the collection of cess of (sic, on) consignment of notified agricultural produce is conducted at the Srirampur checkgate by the staff of the Board where the purchasers of the produce to whom the consignment is being delivered is shown by the documents accompanying the consignment to be based and maintaining trading premises, within a declared market areas of any market committee under the Board. In such a case the trader is a purchaser as shown by the document accompanying the consignment and the goods are delivered within the notified area (within the declared market area) the levy of cess shall be attracted under the provisions of the Act and the Rules. The Respondents have denied the detention of trucks as alleged by the Petitioners. It is further stated that the Petitioner did not obtain the necessary licences for conducting the operation of sale or purchase within the declared market areas from the market committee. Annexure -IV to the affidavit-in-opposition shows as follows:
With reference to the subject and letter quoted above, this is to inform you as follows:
The cess is being levied on transactions of notified agri. produce coining into the market areas of the Stat at the rate of 1 % per Rs. 100/- worth of such produce and the Srirampur Chekgate under the Board, as per provisions of Section 21 and Rule 31(7)(iii) of the Assam Agricultural Produce Market Act and Rules. In this connection, the Rule No. 21(7)(iii) of Assam Agricultural Produce Market (G) Rules, 1975 states as hereunder:
For the purpose of this rule the transaction of sale and purchase of any agril. produce should be declared to have taken place, in a notified area if:
(iii) In pursuance of any agreement of sale and purchase delivery of the agricultural produce to the purchaser or to some other person on behalf of the purchase takes place in the notified market area.
In view of the above, the payment of cess on consignments of notified agril produce as Rice, Wheat, etc. is mandatory as your firm/trading premises is located within a declared market area in the State, to which premises the produce is being declared. However, where such firm/trader''s premises is located in an unnotified area within the State and the produce is coming in from any area outside the State, no cess shall be levied. Where collection of cess has inadvertently been made, on consignments of notified produce delivered to an unnotified area. The amounts collected shall be adjusted against future consignments of the same firm on due application by such firm.
The above is conveyed to you for your information and valued cooperation in implementation of the Assam Agricultural Produce Market Act and the Rules.
Regarding the challenge to construct the checkgate at Srirampur and Boxirhat u/s 14(vii), a perusal of Section 14(vii) itself will show that the authority is empowered to do such other things as may be required for the purpose of achieving the objects and reasons of the Act and the Rules and Bye-laws framed therein. Levy of cess and collection of the same also must be deemed to be a purpose for achieving the objects and reasons of the Act and the Rules otherwise if proper machinery, method and manner for realisation of the cess are not made and enforced, the levy of cess itself will be an illusory one. Accordingly, this contention that erection of checkgates are illegal and without authority of law cannot be accepted.
It is established law that just as individual uses their power to create new forms, organisation to embark on new lines of activities to serve their own interest so the people as a whole through their Govt. create new forms of organisation and to embark on new field of welfare with the object of keeping of groups of private interest adjusted to each other. That is what was done in the instant case. By enacting the Act some objects were sought to be achieved to give benefit to the producers of agricultural produce and in order to do that this cess was levied and the machinery was created for collecting the same.
In the facts and circumstances of these cases and in view of the law as enunciated by the Apex Court of the land, I find that the levy of cess by the authority is legal and the collection of the same is also legal and valid. Accordingly, I find no merit in these writ applications and the same are dismissed. However, I leave the parties to bear their own costs.