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Judgment
R. Banumathi, J.—In these writ petitions, Petitioners, who are tobacco traders, seek writ of certiorari to quash the impugned proceedings of
the Respondents calling upon the Petitioners that in view of the judgment of the Supreme Court in the case of I.T.C. Limited Vs. The Agricultural
Produce Market Committee and Others, to pay licence fee and market fee for the tobacco traded by the Petitioners from 1.4.1994to 31.3.2003.
Since common points are involved, with the consent of the counsel for Petitioners and Respondents, all the writ petitions were taken up together
and shall stand disposed by this common order.
In brief, the factual matrix are as follows:
(i) The Petitioners are traders in tobacco, who purchase tobacco from the agriculturists and transport them to their god owns situated at various
places and deal with tobacco. The control of tobacco business was governed by Tobacco Board Act, 1975. The Government of Tamil Nadu
enacted Tamil Nadu Agricultural Produce Marketing (Regulation) Act (Tnapmr Act), 1987. Under the said Act, various Marketing Committees
were constituted and as per the provisions of the Act, any person carrying on business in any agricultural produce has to get a licence on payment
of prescribed fees and to remit the appropriate fees as levied by the Market Committee based on the value of the produce dealt with by the
licensee. Earlier writ petitions came to be filed challenging the acts of Respondent in including tobacco as ""agricultural produce"" within the meaning
of TNAPMR Act and levy of fees under the said Act. In case of I.T.C. Ltd. v. State of Karnataka 1985 Supp (1) SCC 476 (hereinafter referred
to as ""ITC-I case), Supreme Court has held that the levy of market fee and insisting licensee for tobacco is ultra vires the legislative competence.
Applying the ratio of the said decision, the writ petitions earlier filed by the traders were allowed by the judgment dated 31.8.1995.
(ii) The question whether the judgment in I.T.C. Ltd. and Others Vs. State of Karnataka and Others, came to be correctly decided or not was
referred to the Constitutional Bench, which rendered judgment on 24.1.2002 reported in I.T.C. Limited Vs. The Agricultural Produce Market
Committee and Others, , wherein the Supreme Court held that the I.T.C. Ltd. and Others Vs. State of Karnataka and Others, was not correctly
decided and that the tobacco producers could be subjected to levy of licence on market feeunder Agricultural Produce Marketing Regulation Act.
Subsequent to the I.T.C. Limited Vs. The Agricultural Produce Market Committee and Others, , the Respondent issued impugned notices calling
upon the Petitioners to obtain licence from 2002 and also to pay the licence fee from 1.4.1994 till 31.3.2003 clear the arrears which would have
been levied on tobacco by producing the records for the earlier period. Challenging the impugned notices and levy of licence fee retrospectively
and also calling upon the Petitioners to produce the records and pay the arrears of market fee, Petitioners have filed these writ petitions.
The Respondents have filed counter stating that in view of the subsequent decision in I.T.C. Limited Vs. The Agricultural Produce Market
Committee and Others, the Petitioners are bound to pay the market fee on tobacco and thereby comply the provisions of the Act and the Rules
framed there under to the Market Committee. According to the Respondents, the impugned notices were issued only to recover the market fee
and the other amounts due to be collected by the Market Committee as per the provisions of the said Act. Since the validity of the Agricultural
Produce Marketing Regulation Act was upheld by the judgment I.T.C. Limited Vs. The Agricultural Produce Market Committee and Others,
(dated 24.1.2002), the Petitioners are liable to comply with the demand in the impugned notices, which were issued as per the provisions of the
Act 1987 and the rules framed thereunder.
The learned Counsel for Petitioners contended that for issuing the licence, the Respondent has no jurisdiction to impose any condition and by
issuing the impugned notices, the Respondents are attempting to impose fee, which they could earlier directly impose as per the powers conferred
under the Act and the Rules. It was further contended that even in I.T.C. Limited Vs. The Agricultural Produce Market Committee and Others, ,
the Supreme Court has made it clear that arrears could not be collected and no refund could be claimed. In support of their contention, the learned
Counsel for the Petitioners would rely upon the view taken by the minority in I.T.C. Ltd. and Others Vs. State of Karnataka and Others, in
Paragraphs Nos. 27 and 28, which reads as under:
Practically the same view has been taken in Baijnath Kadio Vs. State of Bihar and Others, where the following observations were made: (SCC
p. 847 48, para 13)
It is open to Parliament to declare that it is expedient in the public interest that the control should rest in Central Government. To what extent such
a declaration can go is for Parliament to determine and this must be commensurate with public interest. Once this declaration is made and the
extent laid down, the subject of legislation to the extent laid down becomes an exclusive subject for legislation by Parliament. Any legislation by the
State after such declaration and trenching upon the field disclosed in the declaration must necessarily be unconstitutional because that field is
abstracted from the legislative competence of the State Legislature. This proposition is also self-evident that no attempt was rightly made to
contradict it.
(emphasis supplied)
Thus, it would appear that in view of the recent decisions, once the Centre takes over an industry under Entry 52 of List I and passes an Act to
regulate the legislation, the State Legislature ceases to have any jurisdiction to legislate in that field and if it does so, that legislation would be ultra
vires the powers of the State Legislature.
Mr. D. Krishna Kumar, learned Counsel appearing for Marketing committee submitted that the impugned notices were issued only to recover
the market fee and other amounts due to be collected by the Market Committee as per the provisions of the said Act. According to the
Respondents, since the validity of the TNAPMR Act has been upheld by the judgment of the Supreme Court, the Petitioner Company is liable to
comply with the demand made in the impugned notice, which was issued as per the provisions of the Act and the Rules framed thereunder.
On the above submissions, the following points arise for consideration in these writ petitions:
Whether the levy of licence fee from 1.4.2000 to 31.3.2003 (W.P. No. 45554 of 2002), 1.4.1994 to 31.3.2003 (W.P. Nos. 399 and 412 of
2003) and 1.10.1995 to 31.3.1996 (W.P. No. 454 of 2003) in the respective impugned notices is against the principles laid down by the
Supreme Court in I.T.C. Limited Vs. The Agricultural Produce Market Committee and Others, .
Whether calling upon the Petitioners to produce the accounts for the past from 1994- 1995 till 2002-2003 is beyond the purview of the
Respondents.
Whether the Petitioners are justified in raising objection to obtain licence from 2002-2003 and to pay fee levied on purchase or sale of the
tobacco?
Points No. 1 to 3: Tamilnadu Agricultural Produce Marketing (Regulation) Act, 1987 and the Rules framed thereunder came into force with
effect from 1.2.1991. As per the provisions of the said Act, many produces defined as ''agricultural produce'' were brought under the Schedule of
the Act. Even horticulture, fruit crops, seed crops, animal husbandry, apiculture, pisciculture, agriculture and sericulture etc., are included as
''agricultural produce'' in the Schedule for the propose of the said Marketing Act, 1987. The object of the Act is to provide for the better
regulation of buying and selling of agricultural produce and the establishment of proper administration of markets for agricultural produce in the
State of Tamilnadu. The regulated markets are doing service to dispose the notified agricultural produces brought to mortgage for sale by the
farmers without any remuneration. There are also provisions in the Marketing Act to regulate the buying and selling of notified agricultural produce
and its movements, to control and avoid unauthorised deduction of abnormal commission and brokerage prevalent in the trade. The enactment is
mainly intended to protect the interest of the farming community to secure a fair and reasonable price. In exercise of the powers conferred by
Section 52 of the Act, Rules were framed. Rule 25 provides for grant of licence and Rule 26 stipulates renewal of licence, Rule 27 deals with
licence fee. As per Rule 32, every licensee shall submit a monthly return. Rule 33 deals with fee leviable on sale or purchase of agricultural
produce.
In the impugned proceedings, the Petitioners were called upon to obtain licence for carrying on trade in tobacco from 2002-2003; submit
periodical returns relating to the purchase or sale of tobacco dealt with by the Petitioners from 1994-1995 till 31.10.2002; to pay the market fee
leviable on the tobacco dealt with by the Petitioners upto 31.10.2002 and also to pay the licence fee for the past i.e., from 1994-95 upto 2002-
2003.
Before considering the contentious points, we may usefully refer to the judgments of the Supreme Court in respect of tobacco. In the I.T.C.
Ltd. and Others Vs. State of Karnataka and Others, , challenge was to the constitutional validity of Karnataka Agricultural Produce Marketing
(Regulation) Amendment Act, 1980. By the amending Act, tobacco was enumerated as an ''agricultural produce'' for the purpose of Karnataka in
APMR Act 1966. The contention canvassed before the Court in the ITC-I case was in view of the Central Act viz., Tobacco Board Act, State
Legislature was not competent to bring into fold of the State Act the tobacco being matter covered under Entry 52 of Union List of 7th Schedule
of the Constitution of India. The precise question in the ITC-I case was as to whether in respect of marketing of tobacco State Government was
entitled to legislate or whether in view of the fact that there was a declaration under Entry 52 of the Union List, State Legislature has no
competence to legislate on tobacco. The Supreme Court has held that in Public Interest, once tobacco industry has been declared as such under
Entry 52 List I of VIIth Schedule of the Constitution, the State Legislatures ceased to be competent to legislate on the subject viz., ''Tobacco'' in
conflict with the laws made by the Parliament. The Supreme Court further held that the Karnataka State Act levying market fee on sale of tobacco
in the market area was thus held to be invalid. The Supreme Court took the view that the whole legislative field in relation to the subject of tobacco
including its sale as an agricultural produce was held to have vested in the Parliament.
The correctness of I.T.C. Ltd. and Others Vs. State of Karnataka and Others, came to be referred to a constitutional bench. In I.T.C. Limited
Vs. The Agricultural Produce Market Committee and Others, , the validity of Bihar Agricultural Produce Markets Act came to be challenged. In
the ITC-II case, it was argued that the Market Committee can levy market fee in respect of sale and purchase of tobacco within the notified area
as the Market Committee Act is a duly enacted law by the State Legislature within its competence to legislate under Entry 14 and Entry 28 and
therefore there is no question of conflict or repugnance between the Tobacco Board Act and Bihar Act since both the Acts operate in mtually
exclusive and different field.
The Supreme Court upholding the validity of Bihar Agricultural Produce Markets Act, the majority judges of the Hon''ble Supreme Court held
that the I.T.C. Ltd. and Others Vs. State of Karnataka and Others, was not correctly decided and held as under:
In keeping with the conclusions of the majority, expressed in the judgments of Sabharwal, Ruma Pal and Brijesh Kumar, JJ., it is held that:
(1) I.T.C. Ltd. and Others Vs. State of Karnataka and Others, was not correctly decided.
(2) The State Legislatures are competent to enact legislation providing for the levy and collection of a market fee on the sale of tobacco in a market
area. Consequently, the Market Acts enacted by the States are valid.
(3) The State legislations and the Tobacco Board Act, 1975, to the extent that they relate to the sale of tobacco in market areas, cannot co-exist
and the former prevail over the latter.
u/s 8 of TNAPMR Act,1987, no person shall, within a notified area, operate as a trader, broker, or in any other capacity in relation to buying
and selling of any notified ""agricultural produce"" except in accordance with the conditions of licence granted to him by the Market Committee.
Rules 25 and 26 of Tamil Nadu Agricultural Produce Marketing (Regulation) Rules deal with grant/renewal of licence u/s 8 of the Act in Form 3
and 4 to a place or to broker/trader. As per Rule 27, licence fee of Rs. 300/- shall be payable in respect of a licence for three years for
wholesalers specified in Section 8 Sub-section (7)(a). Licence fee of Rs. 75/- shall be payable in respect of a licence for one year for other traders
specified in Section 8 Sub-section (7)(b).
u/s 8(9) of the Act, every licensee shall keep and maintain at rue and correct account and such other records as may be specified in the by-
laws of the Market Committee and shall also submit periodical returns relating to the business transaction including processing as may be
prescribed. Rule 32 deals with submission of periodical return. As per Rule 33, the fee on a notified"" agricultural produce"" leviable under Sub-
section (1) of Section 24 of the Act shall be Re.1 for every hundred rupees of the aggregate amount of the notified agricultural produce which is
brought or sold in the notified market area. Since the legislative competence of the State to include tobacco as ""agricultural produce"" within the
meaning of ""agricultural produce Marketing (Regulation) Act has been upheld in I.T.C. Limited Vs. The Agricultural Produce Market Committee
and Others, , insofar as the period from the year2002-2003, for trading/dealing in tobacco, the writ Petitioners are statutorily bound to obtain
licence and also to pay fee levied on the purchase or sale value of the tobacco transaction dealt with by them as per the provisions of the Act.
PointNo. 3 is answered accordingly.
The main point falling for consideration is, the payment of licence fee and market fee during the interregnum period from 1994-95 till 2002-
2003. While upholding the legislative competence of the State Government for including ""tobacco"" as ""agricultural produce"" for collection of
market fee and while upholding the constitutional validity of Bihar Agricultural Produce Markets Act. In the I.T.C. Limited Vs. The Agricultural
Produce Market Committee and Others, , the Supreme Court did not say anything about the prospective overruling. In paragraph No. 28 of the
judgment, the minority judges took the view that ""Tobacco Board Act will prevail and Agricultural Produce Markets Act so far as it relates to levy
of fee for sale and purchase of tobacco within the market area must be held to go out of the purview of the said Act."" While so striking down Bihar
Agricultural Produce Markets Act so far as it relates to levy of fee for sale and purchase of tobacco, the minority judges also discussed the effect
of market fee already collected/to be collected in future. Minority view was that in different appeals arising out of the Madhya Pradesh High Court,
interim stay was granted by the Supreme Court on different dates and while referring to those appeals in paragraph No. 35 of the Judgment, having
regard to the facts and circumstances of case and also the resources of the Market Committee, the minority judges took the view that it is not
necessary to direct the Market Committee to refund the market fee already collected. At the same time, it was also observed that the Market
Committee will not be entitled to collect the levy of fee for the sale and purchase of tobacco within the market area.
Laying emphasis upon the views of the minority, the learned Counsel for writ Petitioners contended that when the majority judges did not
express any opinion on the issue, but the minority opinion examined the issue and answered the point, such opinion expressed by the minority will
have a binding force on the Courts in India. In support of his contention, the learned Counsel placed reliance upon a decision of the Supreme
Court in State of Seraikella Vs. Union of India (UOI) and Another, , which was referred to by a learned single Judge in Prem Prakash Gupta Vs.
Union of India (UOI) and Another, . Placing reliance on the above decisions, learned Counsel for the writ Petitioners contended that since the
majority judges did not express any opinion on the market fee to be collected/refunded, minority opinion in paragraph No. 35 will have binding
effect on the Courts and therefore the writ Petitioners cannot be compelled to pay the licence fee/market fee for the purchase or sale of tobacco in
the notified area and to that extent the impugned orders are vitiated. The above contention cannot be countenanced.
While upholding the legislative competence of State Government including tobacco for collection of market fee, in I.T.C. Limited Vs. The
Agricultural Produce Market Committee and Others, , the majority judges did not express any opinion on the market fee to be collected during the
interregnum period from 1994-95 till the decision in I.T.C. Limited Vs. The Agricultural Produce Market Committee and Others, . It is fairly well
settled that there is no prospective overruling unless so expressly indicated . For the first time the Supreme Court in I.C. Golak Nath and Others
Vs. State of Punjab and Another, accepted the doctrine of ''prospective overruling'' and held as under:
As this Court for the first time has been called upon to apply the doctrine evolved in a different country under different circumstances, we
would like to move warily in the beginning. We would lay down the following propositions: (1) The doctrine of prospective overruling can be
invoked only in matters arising under our Constitution; (2) it can be applied only by the highest court of the country i.e. the Supreme Court as it has
the constitutional jurisdiction to declare law binding on all the courts in India; (3) the scope of the retroactive operation of the law declared by the
Supreme Court superseding its ''earlier decisions'' is left to its discretion to be mould ed in accordance with the justice of the cause or matter
before it.
Under the doctrine of ""prospective overruling"", the law declared by the Court applies to the cases arising in future only and its applicability to
the cases which have attained finality is saved, because the repeal would otherwise work hardship on those who had trusted to its existence.
However, the invocation of the doctrine of ""prospective overruling"" is left to the discretion of the Supreme Court to mould with the justice of the
case or the matter before the Court. In M/s.Somaiya Organics (India) Ltd. V. State of Uttar Pradesh (2001 (3) CTC 434) ,the Supreme Court
observed that the Court can always direct that the declaration of invalidity of legislation would take effect from future date. Again, in the case of
P.V. George and Others Vs. State of Kerala and Others, , the Supreme Court held that the law declared by the Court will have a retrospective
effect if not otherwise stated to be so specifically. While upholding the validity of Agricultural Produce Markets Act and the legislative competence
of the State including tobacco as ""agricultural produce"" is well within the legislative competence of the State, the Supreme Court did not specifically
state that the decision in I.T.C. Limited Vs. The Agricultural Produce Market Committee and Others, will have prospective operation. In the
absence of any such specific direction by the Supreme Court, the decision in I.T.C. Limited Vs. The Agricultural Produce Market Committee and
Others, will have retrospective effect. Therefore, as per the provisions of the Act, Section 8 read with Rule 27 and Section 8(9) read with Rules
32 and 33, the writ Petitioners are bound to pay the licence fee and submit their returns and also to pay the market fee on the sale or purchase of
tobacco for the period from 1994-95 till 2002-2003.
As pointed out earlier, the licence fee is payable as per Rule 27 and there would be no difficulty in paying the licence fee for the period from
1994-95 to 2002-2003. Insofar as submitting of returns for the said period and also levy of fee on the purchase or sale value of the tobacco, the
learned Counsel for Petitioners contended that nearly after a decade, the Petitioners cannot be directed to submit their past returns and pay the fee
levied. It was also contended that because of the passage of time the writ Petitioners may or may not have all the details as to the purchase or sale
of tobacco to submit the returns. On instructions from the officials, the learned Counsel for the Market Committee Mr. D. Krishna Kumar
submitted that insofar as the returns prior to 2002-2003, the Market Committee may not have a rigid approach and the learned Counsel submitted
that the writ Petitioners can produce either returns with supporting documents like sales tax returns/income tax returns and in the absence of those
documents, the Market Committee would also accept the voluntary disclosure by the writ Petitioners. Having regard to the submissions, insofar as
the period from 1994-95 till 2001-2002, the writ Petitioners shall submit the returns along with other supporting documents as indicated by the
learned Counsel for the Market Committee.
For the foregoing reasons, all the writ petitions are dismissed with the following directions:
Insofar as the period from 2002-2003, the writ Petitioners shall pay the licence fee within six weeks from the date of receipt of copy of this order
for the said period from 2002-2003. The writ Petitioners shall also submit their returns to the Market Committee for the purchase or sale of
tobacco or in any manner dealing with the tobacco in the notified area within a period of eight weeks from the date of receipt of copy of this order
and thereafter shall pay the market fee levied by the Market Committee as and when called for. Insofar as the periods stated in the impugned
notices i.e., from 1994-1995 till2001-2002, the writ Petitioners shall pay the licence fee within six weeks from the date of receipt of copy of this
order. Insofar as the submission of returns as to the sale or purchase of tobacco or any transactions of tobacco for the said past period, all the writ
Petitioners shall submit their returns along with supporting documents like sales tax returns/income tax returns and in the absence of those
documents, their voluntary disclosure statement within a period of four months from the date of receipt of copy of this order. On submission of
such returns, the Market Committee shall examine the same and levy the fee in accordance with law. While so examining the matters, the Market
Committee shall have flexible approach, rather than being rigid.
However, there is no order as to costs.